standard & poor’s: sp-1+ - murphy & company & poor’s: sp-1+ final official statement...

Standard & Poor’s: SP-1+

FINAL OFFICIAL STATEMENT

Dated: October 6, 2008

TOWN OF SUDBURY

MASSACHUSETTS

$5,545,000

BOND ANTICIPATION NOTES

DATED DUE

October 15, 2008 June 15, 2009

Number Denominations Interest Rate Price or Yield

1 $3,000,000 3.00% NRO

___________________________________________________

SOVEREIGN SECURITIES CORPORATION, LLC

DATED DUE

October 15, 2008 June 15, 2009

Number Denominations Interest Rate Price or Yield

1 $2,545,000 3.50% NRO

___________________________________________________

EASTERN BANK

The provisions of the accompanying document, entitled “NOTICE OF SALE AND PRELIMINARY OFFICIAL

STATEMENT” dated September 29, 2008, as supplemented and modified hereby, are incorporated in and made a

part of the Final Official Statement.

ALLY LE

NOTICE OF SALE AND PRELIMINARY OFFICIAL STATEMENT

In the opinion of Edwards Angell Palmer & Dodge LLP, Bond Counsel, based upon an analysis of existing law and assuming, among other matters, compliance with certain covenants, interest on the Notes is

excluded from gross income for federal income tax purposes under the Internal Revenue Code of 1986. Interest on the Notes is not a specific preference item for purposes of the federal individual or corporate alternative

minimum taxes, although such interest is included in adjusted current earnings when calculating corporate alternative minimum taxable income. Under existing law, interest on the Notes is exempt from Massachusetts

personal income taxes, and the Notes are exempt from Massachusetts personal property taxes. The Notes will

be designated as “qualified tax-exempt obligations” for purposes of Section 265(b)(3) of the Code. Bond

Counsel expresses no opinion regarding any other consequences related to the ownership or disposition of, or the accrual or receipt of interest the Notes (see “Tax Exemption” herein).

TOWN OF SUDBURY

MASSACHUSETTS

$5,545,000

General Obligation Bond Anticipation Notes

Dated: October 15, 2008 Due: June 15, 2009

The Notes, in book-entry form, are offered without the option of prior redemption. The principal of and

interest on the Notes are payable at maturity in federal reserve funds by The Bank of New York Mellon Trust Company, N.A., in Boston, Massachusetts or its successor as Paying Agent. Bidders may elect to denominate

the Notes as physical registered securities or as “Book-Entry” securities to be held by The Depository

Trust Company (“DTC”). The legality of the Notes will be approved by Edwards Angell Palmer & Dodge LLP of Boston,

Massachusetts, Bond Counsel to the Town. It is expected that the Notes will be delivered to The Depository Trust Company, or its custodial agent, against payment to the account of the Town in federal reserve funds on

or about October 15, 2008.

Electronic Bids Via i-Deal®

or

Telephone Bids

at (508) 849-4222

or

Faxed Bids Received

at (508) 234-1938

UNTIL

12:00 Noon (Local Time)

Monday, October 6, 2008

UniBank Fiscal Advisory Services, Inc.

Dated: September 29, 2008

ii

ISSUE SUMMARY STATEMENT

Issuer: Town of Sudbury, Massachusetts

Date of Sale: Monday, October 6, 2008 until 12:00 Noon (local time)

Method of Sale: Electronic Bids Via i-Deal® or Telephone Bids at (508) 849-4222 or Faxed Bids

at (508) 234-1938

Issue: $5,545,000 General Obligation Bond Anticipation Notes

Dated Date of Notes: October 15, 2008

Maturity Date of Notes: June 15, 2009

Interest Calculation: 30/360 (240/360)

Rating: Standard & Poor’s: SP-1+

Security: The Notes are valid general obligations of the Town of Sudbury, Massachusetts and

the principal of and interest on the Notes are payable from ad valorem taxes which may be levied upon all taxable property within the territorial limits of the Town and

taxable by it, subject to the limitations imposed by Chapter 59, Section 21C of the General Laws (Proposition 2 ½).

Basis of Award: Lowest net interest cost (NIC) after the subtraction of any premium offered.

Tax Exemption: Refer to Tax Exemption herein.

Continuing Disclosure: Refer to Disclosure of Material Events herein.

Bank Qualification: The Town will designate the Notes as "qualified tax-exempt obligations" for

purposes of Section 265(b)(3) of the Internal Revenue Code of 1986. Accordingly, in the opinion of Bond Counsel, a deduction will be allowed to a

financial institution for eighty percent of its interest expense allocable to the Notes.

Paying Agent: The Bank of New York Mellon Trust Company, N.A., Boston, Massachusetts or its successor

Legal Opinion: Edwards Angell Palmer & Dodge LLP, Boston, Massachusetts

Delivery and Payment: It is expected that the Notes will be delivered to The Depository Trust Company, or its custodial agent, against payment to the account of the Town in federal reserve

funds on or about October 15, 2008.

Issue Contacts: Andrea L. Terkelsen, Finance Director/Treasurer,

Telephone # (978) 639-3377 David M. Eisenthal, Vice President, UniBank Fiscal Advisory Services, Inc.,

Telephone # (508) 849-4222 Roger P. Vacco, Esq., Edwards Angell Palmer & Dodge LLP, Boston, Massachusetts,

Telephone # (617) 239-0401

Additional Information: Refer to Preliminary Official Statement dated September 29, 2008

iii

Notice of Sale

TOWN OF SUDBURY

Massachusetts

$5,545,000

GENERAL OBLIGATION BOND ANTICIPATION NOTES

The Town of Sudbury, Massachusetts, will receive telephone bids at (508) 849-4222 or

faxed bids at (508) 234-

1938 or electronic bids via i-Deal® until 12:00 Noon (local time) on

October 6, 2008 for the purchase of $5,545,000 General Obligation Bond Anticipation Notes, (the “Notes”) dated October 15,

2008 and maturing June 15, 2009. Interest will be payable at maturity and will be calculated on a 30-day month, 360-day year basis (240/360). Both principal and interest will be payable in federal reserve funds to

DTC by The Bank of New York Mellon Trust Company, N.A., in Boston, Massachusetts or its successor as Paying Agent.

Bids may be for all or part of the Notes at a single or various rates of interest in a multiple of one-hundredth

(1/100) of one percent (1%). No bid of less than par and accrued interest to date of delivery will be considered.

The Notes will be awarded on the basis of the lowest net interest cost to the Town after the subtraction of any premium offered. In the event a bidder offering a premium for the Notes is awarded a lesser amount of Notes

than bid, the premium will be reduced proportionately. Bidders may elect to denominate the Notes as

physical registered securities or as “Book–Entry” securities to be held by The Depository Trust Company

(“DTC”). Bidders electing physical registered securities shall be limited to one certificate per interest rate and shall be responsible for all costs of registration and transfer. The award of the Notes to the

winning bidder will not be effective until the bid has been approved by the Treasurer and the Board of Selectmen of the Town.

Any bidder who submits a winning bid by telephone in accordance with this Notice of Sale shall be required to

provide written confirmation of the terms of the bid by faxing or e-mailing a completed, signed bid form to the financial advisor by no later than 1:00 p.m. (local time) on the date of sale.

The Notes will be issued by means of a book-entry system evidencing ownership in principal amounts of $1,000 or integral multiples thereof, and transfer of the Notes on the records of The Depository Trust Company and its

Participants.

Electronic proposals will be submitted through i-Deal®. If any provisions in this Notice of Sale conflict with

information provided by i-Deal®, this Notice of Sale shall control. Further information about i-Deal

®, including

any fees charged, may be obtained from i-Deal® at (212) 849-5000. The Town assumes no responsibility or

liability for bids submitted through i-Deal®. An electronic bid made in accordance with this Notice of Sale

shall be deemed an irrevocable offer to purchase the Notes in accordance with the terms provided in this Notice of Sale and shall be binding upon the bidder as if made by a signed and sealed written bid delivered to the

Town.

Each purchaser will be furnished the opinion of Edwards Angell Palmer & Dodge LLP of Boston, Massachusetts, approving the legality of the Notes. The opinion for the Notes will state that the Notes are valid

general obligations of the Town and that, except to the extent they are paid from the bonds in anticipation of

iv

which they are issued or from any other available monies the principal of the Notes and the corresponding interest thereon are payable from taxes which may be levied upon all property within the territorial limits of the

Town and taxable by it, subject to the limitations imposed by Chapter 59, Section 21C, of the General Laws (Proposition 2 ½). The opinion will further indicate that the interest on the Notes is exempt from Massachusetts

personal income taxes and is excludable from gross income for federal income tax purposes. (see Tax Exemption) Payment of the principal and interest on the Notes is not limited to a particular fund or source of

revenue nor is any lien or pledge for such payment created with respect to any fund or source.

On or prior to the date of delivery of the Notes, the successful bidder shall furnish to the Town a certificate acceptable to Bond Counsel to the effect that (a) as of October 6, 2008 (the “Sale Date”), the Purchaser had

offered or reasonably expected to offer all of the Notes to the general public (excluding bond houses, brokers, or similar persons acting in the capacity of underwriters or wholesalers) in a bona fide public offering at the price

set forth in such certificate, plus accrued interest, if any, (b) such price represents the fair market price of the Notes as of the Sale Date, and (c) as of the date of such certificate, all of the Notes have been offered to the

general public in a bona fide offering at the price set forth in such certificate, and at least 10% of the principal amount of the Notes actually has been sold to the general public at such price. To the extent the certifications

described in the preceding sentence are not factually accurate with respect to the reoffering of the Notes, Bond Counsel should be consulted by the bidder as to alternative certifications that will be suitable to establish the

“issue price” of the Notes for federal tax law purposes. If the Purchaser is purchasing the Notes for its own account and not on behalf of another party, and the Purchaser does not presently intend to resell the Notes, the

successful bidder will be required to so certify.

It is anticipated that CUSIP identification numbers will be printed on said Notes. All expenses in relation to the printing of CUSIP numbers on said Notes shall be paid for by the Town, provided however, that the Town

assumes no responsibility for any CUSIP Service Bureau charge or other charge that may be imposed for the assignment of such numbers.

In order to assist bidders in complying with the requirements of paragraph (b)(5)(i)(C) of Rule 15c2-12

promulgated by the Securities and Exchange Commission the Town will undertake to provide notices of certain material events. A description of this undertaking is set forth in the Preliminary Official Statement.

The Town will designate these Notes as “qualified tax-exempt obligations” for purposes of Section

265(b)(3) of the Internal Revenue Code of 1986, as amended. Accordingly, a deduction will be allowed to a financial institution for eighty percent of its interest expense allocated to the Notes.

Any questions regarding this Notice of Sale or the Preliminary Official Statement should be directed to David

M. Eisenthal, Vice President, UniBank Fiscal Advisory Services, Inc., Whitinsville, Massachusetts at (508) 849-4222 or Andrea L. Terkelsen, Finance Director/Treasurer, Town of Sudbury, Massachusetts, at (978) 639-

3377. This Preliminary Official Statement is deemed final by the Town except for the omission of the reoffering prices, interest rates, and any other items of the Notes depending on such matters and the identity of

the underwriters. Within seven business days following the award of the Notes and receipt of necessary information from the successful bidder, 10 copies of the Final Official Statement will be made available to the

successful bidder. Upon request, additional copies will be provided at the expense of the successful bidder.

The Notes will be delivered to The Depository Trust Company, or its custodial agent, against payment to the account of the Town in federal reserve funds on or about October 15, 2008.

v

TOWN OF SUDBURY

Massachusetts

/s/ Andrea L. Terkelsen Finance Director/Treasurer

Dated: September 29, 2008

Bond Counsel are not passing upon and do not assume any responsibility for the accuracy or adequacy of the following information contained in the Preliminary Official Statement other than matters expressly set forth as

the opinion of Bond Counsel.

The right is reserved to reject any or all bids and to reject any bid not complying with this Notice of Sale and, so

far as permitted by law, to waive any irregularity with respect to any proposal.

This page intentionally left blank.

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PRELIMINARY OFFICIAL STATEMENT

TOWN OF SUDBURY

MASSACHUSETTS

$5,545,000

General Obligation Bond Anticipation Notes

INTRODUCTION

This Preliminary Official Statement is provided for the purpose of presenting certain information relating to the Town of Sudbury, Massachusetts (the "Town") in connection with the sale of $5,545,000 General Obligation

Bond Anticipation Notes (the “Notes”) of the Town.

The Notes are being offered for sale at a public bidding and a Notice of Sale dated September 24, 2008, has been furnished to prospective bidders. Reference is hereby made to the Notice of Sale for the terms and

conditions of bidding.

The Notes will be general obligations of the Town for which its full faith and credit are pledged. They are not guaranteed by The Commonwealth of Massachusetts (the "Commonwealth") or any other entity. Payment of

the principal of and interest on the Notes is not limited to a particular fund or revenue source. The security for the Notes is more fully described under the caption Security and Remedies below.

Questions regarding information contained in this Preliminary Official Statement or other matters should be

directed to the following: Andrea L. Terkelsen, Finance Director/Treasurer, (978) 639-3377; David M. Eisenthal, Vice President, UniBank Fiscal Advisory Services, Inc., (508) 849-4222; or Roger Vacco, Edwards

Angell Palmer & Dodge LLP, (617) 239-0401.

The information contained herein has been obtained from the sources indicated or from the Town.

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PART I

THE NOTES

DESCRIPTION OF THE NOTES

The Notes will be dated October 15, 2008 and will mature on June 15, 2009 with interest at the rate or rates

determined upon their sale payable at maturity. The Notes will be issued in principal amounts of $l,000 or integral multiples thereof, and with transfer of the Notes on the records of The Depository Trust Company and

its Participants. Interest will be computed on the basis of 30 day months and a 360 day year (240/360). The Notes will be issued without the option of prior redemption. Both principal and interest will be payable to DTC

by The Bank of New York Mellon Trust Company, N.A., in Boston, Massachusetts or its successor as Paying Agent. Bidders may elect to denominate the Notes as physical registered securities or as “Book – Entry”

securities to be held by The Depository Trust Company (“DTC”). Bidders electing physical registered

securities shall be limited to one note per interest rate.

AUTHORIZATION AND USE OF PROCEEDS

The Notes are authorized under Chapter 44, Section 7(3), and Chapter 44B, Section 11, of the Massachusetts

General Laws, as amended, and a vote of the Town on April 8, 2008, for the purpose of acquiring a conservation restriction on a portion of the Nobscot Boy Scout Reservation, which is a 480 acre parcel of

forested land owned by the Knox Trail Council of the Boy Scouts of America (KTC-BSA). Under the terms of the conservation restriction, KTC-BSA will continue operating the reservation as a site for camping, hiking,

education programs, and retreats for the Boy Scouts and other groups, but the parcel will not be developed for residential or commercial uses in perpetuity.

The Town expects to receive a grant from the Commonwealth of Massachusetts offsetting approximately

$500,000 of the purchase price of the conservation restriction. The Town expects to issue general obligation bonds for the balance at the maturity of the Notes. Debt service for this purpose is to be paid from the

Town’s Community Preservation Fund. (See “COMMUNITY PRESERVATION ACT” below.)

SECURITY AND REMEDIES

Full Faith and Credit. General obligation bonds and notes of a Massachusetts city or town constitute a pledge

of its full faith and credit. Payment is not limited to a particular fund or revenue source. Except for "qualified bonds" (see “Serial Bonds and Notes” below) and setoffs of state distributions (see “State Distributions” below), no provision is made by the Massachusetts statutes for priorities among bonds and notes and other

general obligations, although the use of certain moneys may be restricted.

3

Tax Levy. The Massachusetts statutes direct the municipal assessors to include annually in the tax levy for the next fiscal year "all debt and interest charges matured and maturing during the next fiscal year and not

otherwise provided for (and) all amounts necessary to satisfy final judgments". Specific provision is also made for including in the next tax levy payments of rebate amounts not otherwise provided for and payment of notes

in anticipation of federal or state aid if the aid is no longer forthcoming.

The total amount of a tax levy is limited by statute. However, the voters in any municipality may vote to exclude from the limitation any amounts required to pay debt service on indebtedness incurred before

November 4, 1980. Local voters may also vote to exempt specific subsequent bond issues from the limitation (see “Tax Limitations” below). In addition, obligations incurred before November 4, 1980, may be

constitutionally entitled to payment from taxes in excess of the statutory limit. The Town has voted to exempt

the debt service on $31,525,000 of previously issued bonds from the limitations of Proposition 2 ½, subject

to the provisions of Chapter 44, Section 20 of the General Laws.

Except for taxes on the increased value of certain property in designated development districts which may be pledged for the payment of debt service on bonds issued to finance economic development projects within such

districts, no provision is made for a lien on any portion of the tax levy to secure particular bonds or notes or bonds and notes generally (or judgments on bonds or notes) in priority to other claims. Provision is made,

however, for borrowing to pay judgments, subject to the General Debt Limit (see Debt Limits below). Subject to the approval of the State Director of Accounts for judgments above $10,000, judgments may also be paid

from available funds without appropriation and included in the next tax levy unless other provision is made.

Court Proceedings. In the opinion of Bond Counsel, Massachusetts cities and towns are subject to suit on their

general obligation bonds and notes and courts of competent jurisdiction have power in appropriate proceedings to order payment of a judgment on the bonds or notes from lawfully available funds or, if necessary, to order the

city or town to take lawful action to obtain the required money, including the raising of it in the next annual tax levy, within the limits prescribed by law (see “Tax Limitations” below). In exercising their discretion as to

whether to enter such an order, the courts could take into account all relevant factors including the current operating needs of the city or town and the availability and adequacy of other remedies. The Massachusetts

Supreme Judicial Court has stated in the past that a judgment against a municipality can be enforced by the taking and sale of the property of any inhabitant. However, there has been no judicial determination as to

whether this remedy is constitutional under current due process and equal protection standards.

Restricted Funds. Massachusetts statutes also provide that certain water, gas and electric, community antenna television system, telecommunications, sewer, parking meter and passenger ferry fee, community preservation and

affordable housing receipts may be used only for water, gas and electric, community antenna television system, telecommunications, sewer, parking, mitigation of ferry service impacts, community preservation and affordable

housing purposes, respectively; accordingly, moneys derived from these sources may be unavailable to pay general obligation bonds and notes issued for other purposes. A city or town that accepts certain other statutory provisions

may establish an enterprise fund for a utility, health care, solid waste, recreational or transportation facility and for police or fire services; under those provisions any surplus in the fund is restricted to use for capital expenditures or

reduction of user charges. In addition, subject to certain limits, a city or town may annually authorize the establishment of one or more revolving funds in connection with use of certain revenues for programs that produce

those revenues; interest earned on a revolving fund is treated as general fund revenue. Also, the annual allowance for depreciation of a gas and electric plant or a community antenna television and telecommunications system is

restricted to use for plant or system renewals and improvements, for nuclear decommissioning costs, and costs of contractual commitments, or, with the approval of the State Department of Telecommunications and Energy, to pay

debt incurred for plant or system reconstruction or renewals. Revenue bonds and notes issued in anticipation of them may be secured by a prior lien on specific revenues. Receipts from industrial users in connection with

industrial revenue financings are also not available for general municipal purposes.

4

State Distributions. State grants and distributions may in some circumstances be unavailable to pay general obligation bonds and notes of a city or town in that the State Treasurer is empowered to deduct from such grants

and distributions the amount of any debt service paid on “qualified bonds” and any other sums due and payable by the city or town to the Commonwealth or certain other public entities, including any unpaid assessments for costs

of any public transportation authority (such as the Massachusetts Bay Transportation Authority (the “MBTA”) or a regional transit authority) of which it is a member, for costs of the Massachusetts Water Resources Authority (the

“MWRA”) if the city or town is within the territory served by the Authority, for any debt service due on obligations issued to the Massachusetts School Building Authority, or for charges necessary to meet obligations under the

Commonwealth’s Water Pollution Abatement or Drinking Water Revolving Loan Programs, including such charges imposed by another local governmental unit that provides wastewater collection or treatment services or

drinking water services to the city or town.

If a city or town is (or is likely to be) unable to pay principal or interest on its bonds or notes when due, it is required to notify the State Commissioner of Revenue. The Commissioner shall in turn, after verifying the

inability, certify the inability to the State Treasurer. The State Treasurer shall pay the due or overdue amount to the paying agent for the bonds or notes, in trust, within three days after the certification or one business day prior to the

due date (whichever is later). This payment is limited, however, to the estimated amount otherwise distributable by the Commonwealth to the city or town during the remainder of the fiscal year (after the deductions mentioned in

the foregoing paragraph). If for any reason any portion of the certified sum has not been paid at the end of the fiscal year, the State Treasurer shall pay it as soon as practicable in the next fiscal year to the extent of the estimated

distributions for that fiscal year. The sums so paid shall be charged (with interest and administrative costs) against the distributions to the city or town.

The foregoing does not constitute a pledge of the faith and credit of the Commonwealth. The Commonwealth has

not agreed to maintain existing levels of state distributions, and the direction to use estimated distributions to pay debt service may be subject to repeal by future legislation. Moreover, adoption of the annual appropriation act has

sometimes been delayed beyond the beginning of the fiscal year and estimated distributions which are subject to appropriation may be unavailable to pay local debt service until they are appropriated.

Bankruptcy. Enforcement of a claim for payment of principal or interest on general obligation bonds or notes

would be subject to the applicable provisions of Federal Bankruptcy laws and to the provisions of other statutes, if any, hereafter enacted by the Congress or the State legislature extending the time for payment or imposing other

constraints upon enforcement insofar as the same may be constitutionally applied. Massachusetts municipalities are not currently authorized by the Massachusetts General Laws to file a petition for bankruptcy under Federal

Bankruptcy laws.

OPINION OF BOND COUNSEL

Each original purchaser will be furnished a copy of the opinion of Edwards Angell Palmer & Dodge LLP of Boston, Massachusetts, approving the legality of these Notes. The scope of engagement of Bond Counsel does

not extend to passing upon or assuming responsibility for the accuracy of any statements made in the Official Statement other than matters expressly set forth as their opinion and they make no representation that they have

independently verified the same.

TAX EXEMPTION

In the opinion of Edwards Angell Palmer & Dodge LLP, Bond Counsel to the Town (“Bond Counsel”), based upon an analysis of existing laws, regulations, rulings, and court decisions, and assuming, among other matters,

compliance with certain covenants, interest on the Notes is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 (the “Code”). Bond Counsel is of the further

opinion that interest on the Notes is not a specific preference item for purposes of the federal individual or

5

corporate alternative minimum taxes, although Bond Counsel observes that such interest is included in adjusted current earnings when calculating corporate alternative minimum taxable income.

Bond Counsel is also of the opinion that, under existing law, interest on the Notes is exempt from

Massachusetts personal income taxes, and the Notes are exempt from Massachusetts personal property taxes. Bond Counsel has not opined as to other Massachusetts tax consequences arising with respect to the Notes.

Prospective purchasers of the Notes should be aware, however, that the Notes are included in the measure of Massachusetts estate and inheritance taxes, and the Notes and the interest thereon are included in the measure of

certain Massachusetts corporate excise and franchise taxes. Bond Counsel has not opined as to the taxability of the Notes or the income therefrom under the laws of any state other than Massachusetts.

The Code imposes various requirements relating to the exclusion from gross income for federal income tax

purposes of interest on obligations such as the Notes. Failure to comply with these requirements may result in interest on the Notes being included in gross income for federal income tax purposes, possibly from the date of

original issuance of the Notes. The Town has covenanted to comply with such requirements to ensure that interest on the Notes will not be included in federal gross income. The opinion of Bond Counsel assumes

compliance with these requirements. Bond Counsel has not undertaken to determine (or to inform any person) whether any actions taken (or not taken) or events occurring (or not occurring) after the date of issuance of the

Notes may adversely affect the value of, or the tax status of interest on, the Notes. Further, no assurance can be given that any pending, proposed or future legislation, including amendments to the Code, if enacted into law,

or any regulatory or administrative development with respect to existing law, will not adversely affect the value of, or the tax status of interest on, the Notes. Prospective holders of the Notes are urged to consult their own tax

advisors with respect to proposals to restructure the federal income tax.

Although Bond Counsel is of the opinion that interest on the Notes is excluded from gross income for federal income tax purposes and is exempt from Massachusetts personal income taxes, the ownership or disposition of,

or the accrual or receipt of interest on, the Notes may otherwise affect the federal or state tax liability of a holder of the Notes. Among other possible consequences of ownership or disposition of, or the accrual or

receipt of interest on, the Notes, the Code requires recipients of certain social security and certain railroad retirement benefits to take into account receipts or accruals of interest on the Notes in determining the portion of

such benefits that are included in gross income. The nature and extent of all such other tax consequences will depend upon the particular tax status of the holder or the holder’s other items of income or deduction. Except

as indicated in the following paragraph, Bond Counsel expresses no opinion regarding any such other tax consequences, and holders of the Notes should consult with their own tax advisors with respect to such

consequences.

The Notes will be designated as “qualified tax-exempt obligations” for purposes of Section 265(b)(3) of the Code. Accordingly, a deduction will be allowed to a financial institution for 80 percent of its interest

expense allocable to the Notes.

BOOK ENTRY TRANSFER SYSTEM

The Depository Trust Company ("DTC"), New York, NY, will act as securities depository for the Notes. The

Notes will be issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One-fully registered

Note certificate will be issued for each interest rate, each in the aggregate principal amount bearing such interest rate, and will be deposited with DTC.

DTC, the world's largest depository, is a limited-purpose trust company organized under the New York Banking

Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and

a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of

6

1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's participants

("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized

book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and

dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC,

National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also

available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either

directly or indirectly ("Indirect Participants"). DTC has Standard & Poor's highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about

DTC can be found at www.dtcc.com and www.dtc.org.

Purchases of Notes under the DTC system must be made by or through Direct Participants, which will receive a credit for the Notes on DTC's records. The ownership interest of each actual purchaser of each Note

("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however,

expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the

transaction. Transfers of ownership interests in the Notes are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive

certificates representing their ownership interests in the Notes, except in the event that use of the book-entry system for the Notes is discontinued.

To facilitate subsequent transfers, all Notes deposited by Direct Participants with DTC are registered in the

name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Notes with DTC and their registration in the name of Cede & Co. or such

other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Notes; DTC's records reflect only the identity of the Direct Participants to whose

accounts such Notes are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to

Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time

to time.

Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote with respect to the Notes unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual

procedures, DTC mails an Omnibus Proxy to the Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Notes

are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Principal and interest payments on the Notes will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon

DTC's receipt of funds and corresponding detail information from the Issuer or the Paying Agent, on the payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to

Beneficial Owners will be governed by standing instructions and customary practices, as is the case with

7

securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC (nor its nominee), the Issuer or the Paying Agent, subject to

any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the

responsibility of the Issuer or the Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the

responsibility of Direct and Indirect Participants.

DTC may discontinue providing its services as depository with respect to the Notes at any time by giving reasonable notice to the Issuer or the Paying Agent. Under such circumstances, in the event that a successor

depository is not obtained, Note certificates are required to be printed and delivered.

The Issuer may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Note certificates will be printed and delivered.

The information in this section concerning DTC and DTC's book-entry system has been obtained from sources

that the Issuer believes to be reliable, but the Issuer takes no responsibility for the accuracy thereof.

DTC Practices

The Town can make no assurances that DTC, Direct Participants, Indirect Participants or other nominees of the Beneficial Owners of the Notes will act in a manner described in this Official Statement. DTC is required to act

according to rules and procedures established by DTC and its participants which are on file with the Securities and Exchange Commission.

RATINGS

On September 26, 2008, Standard & Poor’s assigned an “SP-1+” rating to the Notes. Standard & Poor’s also

affirmed the “AAA” rating on the Town’s outstanding general obligation bonds of the Town. These ratings reflects only the rating agency’s view and is subject to revision or withdrawal, which could affect the market

price of bonds and the Notes.

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DISCLOSURE OF MATERIAL EVENTS

In order to assist underwriters in complying with the requirements of paragraph (b)(5)(i)(C) of Rule 15c2-12 (the “Rule”) promulgated by the Securities and Exchange Commission applicable to municipal securities having

a stated maturity of 18 months or less, the Town will covenant for the benefit of the owners of the Notes to file with the Municipal Securities Rulemaking Board and the appropriate state information depository, if any,

notices of the occurrence of any of the following events with respect to the Notes, if material: (a) principal and interest payment delinquencies; (b) non-payment related defaults; (c) unscheduled draws on debt service

reserves reflecting financial difficulties; (d) unscheduled draws on credit enhancements reflecting financial difficulties; (e) substitution of credit or liquidity providers, or their failure to perform; (f) adverse tax opinions

or events affecting the tax-exempt status of the Notes; (g) modifications to rights of owners of the Notes; (h) note calls; (i) defeasances; (j) release, substitution or sale of property securing the repayment of the Notes; or

(k) changes in the ratings on the Notes. (It should be noted that as of this date events of the types described in clauses (b), (c), (d), (e), (h) and (j) are not applicable to the Notes.)

The covenant will be included in a Material Events Disclosure Certificate to be executed by the signers of the

Notes and incorporated by reference in the Notes. The sole remedy available to the owners of the Notes for the failure of the Town to comply with any provision of the certificate shall be an action for specific performance of

the Town’s obligations under the certificate and not for money damages in any amount; no other person shall have any right to enforce any provision of the certificate. Any failure by the Town to comply with any

provision of the certificate shall not constitute a default with respect to the Notes. The Town has never failed to comply in all material respects with any previous undertakings to provide annual reports or notices of material

events in accordance with the Rule.

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TOWN OF SUDBURY

The Town of Sudbury, Massachusetts (the “Town”) was incorporated in 1639. The Town is located in

Middlesex County, about 20 miles west of Boston and is governed by an open Town Meeting, an elected Board of Selectmen, and an appointed Town Manager.

The Town implemented its current charter on July 1, 1996. This charter provided for appointment of a Town

Manager by the Board of Selectmen. The Town Manager has broad responsibility for day-to-day management of Town affairs, as well as preparation of annual operating and capital budgets.

CONSTITUTIONAL STATUS AND FORM OF GOVERNMENT

Massachusetts cities and towns are subject to the plenary legislative power of the Commonwealth. As stated by

the Supreme Judicial Court:

A town is not an independent sovereignty. It is merely a subordinate agency of the State government. It is a creature of the Commonwealth, from which are derived all its powers

and those of its voters and officers.

Cities and towns provide general governmental services at the local level. Municipalities were traditionally authorized to exercise only those powers granted by the State legislature, but Massachusetts adopted a Home

Rule Amendment to its Constitution in 1966, under which a city or town may exercise by ordinance or by-law any power which the State legislature could confer upon it, provided that the ordinance or by-law is consistent

with the laws enacted by the State legislature. Certain powers are excluded from home rule and may still be exercised only when authorized by State law; these powers include the power to levy taxes, the power to borrow

money, and the power to enact private or civil law governing civil relationships except as an incident to the exercise of an independent municipal power. Under the Home Rule Amendment the State legislature may enact

general laws relating to a class of two or more municipalities but (except in limited circumstances) may enact a special law relating to a particular city or town only on request of the city or town or on recommendation of the

Governor and passage by a two-thirds vote of both houses of the legislature.

An amendment to the State Constitution provides that any law imposing additional costs on two or more cities or towns by regulating aspects of municipal employment will not be effective within a city or town until the city

council or town meeting accepts the law. Local acceptance will not be required if the legislature has either passed the law by a two-thirds vote or provided that the additional costs would be assumed by the State.

Cities and towns may change their form of government by adopting home rule charters or amending existing

charters. A town of less than 12,000 population may not change to a city form of government and a town of less than 6,000 inhabitants may not change from the open town meeting form of government to a limited or

representative town meeting form.

Cities are generally governed by a city council and an elected mayor who has the power to veto council actions; the council may override a mayoral veto by a two-thirds vote of the councilors. Some cities are governed by a

city council and an appointed city manager who has no power to veto council actions; some municipalities, although still called "towns," have adopted a similar city form of government with a town council and town

manager or administrator. Provision is often made for a referendum on council actions, and for initiation of measures, upon petition of a sufficient number of voters.

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Most towns are governed by open town meetings in which any voter may participate. Others have an elected representative town meeting, often with public officers serving as ex officio members of the town meeting.

Provision is usually made for a referendum on actions of the representative town meeting upon petition of a sufficient number of voters. Administrative affairs are generally managed by a board of three or more

selectmen, sometimes with the assistance of a town manager or executive secretary.

School affairs of cities and towns are administered by an elected school committee, except in those towns whose educational functions are carried out entirely through a regional school district (see Overlapping Debt

below).

GOVERNING BODIES AND OFFICERS

The following are the Town’s principal executive officers:

Manner of Selection Term

Office Name and Term Expires Selectmen Lawrence W. O’Brien, Chair Elected/3 years 2009 William J. Keller, Jr., Vice Chair Elected/3 years 2010

John C. Drobinski Elected/3 years 2011

Town Manager Maureen G. Valente Appointed by Selectmen/5 Years 2013

Finance Director Andrea L. Terkelsen Appointed by Town Mgr./Indefinite -

Town Accountant Barbara J. Chisholm Appointed by Selectmen/Indefinite -

Town Clerk Rosemary Harvell Appointed by Town Mgr./Indefinite -

Town Counsel Paul L. Kenny Appointed by Selectmen/Indefinite -

SERVICES

The Town provides general governmental services for the territory within its boundaries, including education in grades K-8, police and fire protection, sewer and water services, streets, parks and recreation. The Lincoln-

Sudbury Regional School District provides education in grades 9 through 12. The Minuteman Regional Vocational Technical High School provides vocational technical education in grades 9 through 12.

Capacity of the Town’s elementary schools has been significantly increased in recent years. Elementary school

capacity increased from 1,804 to 2,486; capacity of the middle school increased from 769 to 1,135.

The Sudbury Water District of Sudbury, which is entirely separate from the Town, provides water services to 87% of the territory located within the Town. The District has the power to levy unlimited ad valorem taxes

upon all taxable property within its boundaries to pay debt service and operating expenses, except to the extent such expenses are paid from betterment assessments and user charges. The District has not exercised this taxing

power since 1968. The District is self-supporting and water rates have been sufficient, along with other operating revenues of the District, to pay current expenses including debt service. As of June 30, 2008, the

District had $1,890,000 in outstanding bonds.

Legislation enacted in 1997 abolished the county governments of Franklin and Middlesex Counties as of July 1, 1997, with their assets, functions, debts and other obligations being assumed by the Commonwealth. The

abolishment of the Middlesex County government was in part in response to a default by the County in the

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payment of general obligation notes of the County. The legislation also abolished the county governments of Hampden and Worcester Counties as of July 1, 1998. Legislation enacted in 1998 abolished the county

governments of Hampshire, Essex, and Berkshire counties as of January 1, 1999, July 1, 1999, and July 1, 2000, respectively. The legislation also requires the state secretary for administration and finance to establish a plan

to recover the Commonwealth’s expenditures for the liabilities and other debts assumed and paid by the Commonwealth on behalf of an abolished county. Unless these provisions are changed by further legislation,

the state treasurer shall assess upon each city and town within the jurisdiction of an abolished county an amount not exceeding or equal to the County tax paid by each such city and town for the fiscal year immediately prior

to the abolishment of the county (or two years prior in the case of Essex county) until such expenditures by the Commonwealth are recovered. It is possible that similar legislation will by sought to provide for the

abolishment of county government in all the remaining counties.

AUTHORIZATION OF GENERAL OBLIGATION BONDS AND NOTES

Serial bonds and notes are authorized by a two-thirds vote of the representative town meeting. Provision is made for a referendum on the borrowing authorization if there is a timely filing of a petition bearing the

requisite number of signatures. Refunding bonds and notes are authorized by the selectmen. Borrowings for some purposes require State administrative approval.

When serial bonds or notes have been authorized, bond anticipation notes may be issued by the officers

authorized to issue the serial bonds or notes. Temporary loans in anticipation of the revenue of the current fiscal year in which the debt is incurred or in anticipation of authorized federal and state aid generally may be

incurred by the Treasurer with the approval of the Selectmen.

DEBT LIMITS

General Debt Limit. The General Debt Limit of the Town consists of a Normal Debt Limit and a Double Debt Limit. The Normal Debt Limit is 5 percent of the valuation of taxable property as last equalized by the State

Department of Revenue. The Town can authorize debt up to this amount without state approval. It can authorize debt up to twice this amount (the Double Debt Limit) with the approval of the state Municipal Finance

Oversight Board.

There are many categories of general obligation debt which are exempt from and do not count against the General Debt Limit. Among others, these exempt categories include revenue anticipation notes and grant

anticipation notes; emergency loans; loans exempted by special laws; certain school bonds, sewer bonds, solid waste disposal facility bonds and economic development bonds supported by tax increment financing; and subject to special debt limits, bonds for water (limited to 10 percent of equalized valuation), housing, urban

renewal and economic development (subject to various debt limits), and electric, gas, community antenna television systems, and telecommunications systems (subject to a separate limit). Revenue bonds are not

subject to these debt limits. The General Debt Limit and the special debt limit for water bonds apply at the time the debt is authorized. The other special debt limits generally apply at the time the debt is incurred.

Revenue Anticipation Notes. The amount borrowed in each fiscal year by the issue of revenue anticipation

notes is limited to the tax levy of the prior fiscal year, together with the net receipts in the prior fiscal year from the motor vehicle excise and certain payments made by the Commonwealth in lieu of taxes. The fiscal year

ends on June 30. Notes may mature in the following fiscal year, and notes may be refunded into the following fiscal year to the extent of the uncollected, unabated current tax levy and certain other items, including revenue

deficits, overlay deficits, final judgments and lawful unappropriated expenditures, which are to be added to the next tax levy, but excluding deficits arising from a failure to collect taxes of earlier years (see “Taxation to Meet

Deficits” below). In any event, the period from an original borrowing to its final maturity cannot exceed one year.

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TYPES OF OBLIGATIONS

General Obligations. Massachusetts cities and towns are authorized to issue general obligation indebtedness

of these types:

Serial Bonds and Notes. These are generally required to be payable in equal or diminishing annual principal

amounts beginning no later than the end of the next fiscal year commencing after the date of issue and ending within the terms permitted by law. Level debt service is permitted for bonds or notes issued for certain

purposes, including self-supporting enterprise purposes, certain state-aided school projects, and certain community preservation and open space projects, as well as for those projects for which debt service has been

exempted from property tax limitations. The principal amounts of certain economic development bonds supported by tax increment financing may be payable in equal, diminishing or increasing amounts beginning

within 5 years after the date of issue. The maximum terms of serial bonds and notes vary from one year to 40 years, depending on the purpose of the issue. Most of the purposes are capital projects. Bonds or notes may be

made callable and redeemed prior to their maturity, and a redemption premium may be paid. Refunding bonds or notes may be issued subject to the maximum term measured from the date of the original bonds or notes.

Serial bonds may be issued as "qualified bonds" with the approval of the state Municipal Finance Oversight

Board, composed of the State Treasurer, the State Auditor, the Attorney General, and the Director of Accounts, subject to such conditions and limitations (including restrictions on future indebtedness) as may be required by

the Board. Qualified bonds may mature not less than 10 nor more than 30 years from their dates and are not subject to the amortization requirements described above. The State Treasurer is required to pay the debt

service on qualified bonds and thereafter to withhold the amount of the debt service from state aid or other state payments; administrative costs and any loss of interest income to the State are to be assessed upon the city or

town.

Bond Anticipation Notes. These generally must mature within two years of their original dates of issuance but may be refunded from time to time for a period not to exceed five years from their original dates of issuance,

provided that for each year that the notes are refunded beyond the second year they must be paid in part from revenue funds in an amount at least equal to the minimum annual payment that would have been required if the

bonds had been issued at the end of the second year. For certain school projects, however, notes may be refunded from time to time for a period not to exceed seven years without having to pay any portion of the

principal of the notes from revenue funds. The maximum term of bonds issued to refund bond anticipation notes is measured (except for certain school projects) from the date of the original issue of the notes.

Revenue Anticipation Notes. These are issued to meet current expenses in anticipation of taxes and other

revenues. They must mature within one year but, if payable in less than one year, may be refunded from time to time up to one year from the original date of issue.

Grant Anticipation Notes. These are issued for temporary financing in anticipation of federal grants and state and county reimbursements. They must generally mature within two years but may be refunded from time to

time as long as the municipality remains entitled to the grant or reimbursement.

Revenue Bonds. Cities and towns may issue revenue bonds for solid waste disposal facilities, for projects financed under the Commonwealth's Water Pollution Abatement or Drinking Water Revolving Loan Programs

and for certain economic development projects supported by tax increment financing. In addition to general obligation bonds and notes, cities and towns having electric departments may issue electric revenue bonds, and

notes in anticipation of such bonds, subject to the approval of the State Department of Telecommunications and Energy.

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DEBT (1)

The following shows the direct debt to be outstanding as of October 15, 2008:

General Obligation Bonds Outstanding

Within General Debt Limit (2) Land Acquisition $10,945,000

Athletic & Recreational Facilities 120,000 Other Building 2,125,000

Departmental Equipment 250,000 Other Inside General 42,000

Total Within the General Debt Limit $13,482,000

Outside General Debt Limit Schools (3) 24,418,000

Total Outside the General Debt Limit $24,418,000 Total Outstanding General Obligation Bonds $37,900,000 (1)

Temporary Loans in Anticipation of: Revenue 0

Bonds (4) 5,545,000 Grants 0

Total Temporary Loans $ 5,545,000 Total Direct Debt $43,445,000 __________________ (1) Principal amount only. Excludes lease and installment purchase obligations, overlapping debt and unfunded pension liability. The

debt service payable on $31,525,000 of the Town’s outstanding debt is exempt from the limitations of Proposition 2 ½. The

remaining debt is payable from the Town’s Community Preservation Fund. (2) At the present time, the normal General Debt Limit is $213,045,095 and the double General Debt Limit is $426,090,790. (3) School debt is currently reimbursed by the Massachusettts School Building Authority at a rate of 64% of approved construction

and interest costs. Such grants are payable in equal annual installments over the life of the school bonds.

(4) This issue. Debt service for the Notes and any subsequent issue of bonds for this purpose is to be paid from the Town’s

Community Preservation Fund.

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Authorized Unissued Debt

The Town has $6,308,800 authorized unissued debt. $5,545,000 is for acquisition of the conservation restriction at the Nobscot Boy Scout Reservation that is temporarily funded by the Notes. (See “AUTHORIZATION

AND USE OF PROCEEDS” above for further discussion.) $420,000 is for acquisition for conservation purposes of a parcel of land along a rail right-of-way. This purpose is to be funded from the Community

Preservation Fund. The Town’s plans for financing this purpose are uncertain at this time. The remaining authorizations are for a variety of purposes. The Town has no plans to issue debt for these purposes.

Five Years Outstanding Debt (1)

As of June 30

Long-Term Indebtedness: 2008 2007 2006 2005 2004 Within the General Debt Limit

Sewers & Drains $ 0 $ 0 $ 3,717 $ 7,462 $ 11,236 Land Acquisition 11,500,000 12,570,000 13,640,000 14,733,500 12,745,000

Schools 0 0 406,436 815,998 1,478,687 Other Building 2,125,000 2,550,000 3,214,517 3,880,877 4,554,079

Streets, Sidewalks & Parking 0 0 0 75,000 150,000 Other Inside General 42,000 57,000 72,000 87,000 102,000

Departmental Equipment 250,000 375,000 505,000 636,500 0 Athletic & Recreational Facilities 120,000 160,000 205,330 262,663 319,998

Total Within the General Debt Limit $14,037,000 $15,712,000 $18,047,000 $20,499,000 $19,361,000

Outside the General Debt Limit: Schools $24,418,000 26,328,000 28,258,000 30,201,000 31,169,000

Total Outside General Debt Limit $24,418,000 26,328,000 28,258,000 30,201,000 31,169,000 Total Long-Term Indebtedness $38,455,000 $42,040,000 $46,305,000 $50,700,000 $50,530,000 ______________________

(1) Outstanding principal on general obligation bonds. Excludes lease and installment purchase obligations, overlapping debt and

unfunded pension liability.

Bonded Debt vs. Population, Valuations, and Income

(000 omitted)

As of June 30

2008 2007 2006 2005 2004 Amount (1) $38,455 $42,040 $46,305 $50,700 $50,530 Per Capita (2) $2,241 $2,463 $2,713 $2,971 $2,944

Percent of Assessed Valuation (3) 0.92% 0.99% 1.17% 1.41% 1.42% Percent of Equalized Valuation (4) 0.90% 0.99% 1.23% 1.35% 1.65%

Per Capita as a percent of Personal Income Per Capita (2) 4.21% 4.62% 5.09% 5.58% 5.52% ___________________ (1) Outstanding principal on general obligation bonds. Excludes lease and installment purchase obligations, overlapping debt and

unfunded pension liability.

(2) Source: U.S. Department of Commerce, Bureau of the Census - Latest applicable actuals or estimates.

(3) Source: Board of Assessors - Assessed valuation as of the prior January 1.

(4) Source: Massachusetts Department of Revenue. The equalized valuation used here is the equalized valuation in effect for that fiscal year.

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Revenue Anticipation Borrowing

The Town has not borrowed in anticipation of revenue during the past five years.

Annual Debt Service (1)

Cumulative

Fiscal Outstanding as of 10/15/08 Total Debt % Principal

Year Principal (2) Interest (2) Service Retired 2009 $ 2,945,000 $ 1,397,151 $ 4,342,151 7.8% 2010 3,540,000 1,396,058 4,936,058 17.1

2011 3,585,000 1,254,020 4,839,020 26.6 2012 3,420,000 1,106,739 4,526,739 35.6

2013 3,305,000 980,860 4,285,860 44.3 2014 2,760,000 857,660 3,617,660 51.6

2015 2,680,000 752,679 3,432,679 58.7 2016 2,565,000 647,841 3,212,841 65.4

2017 2,485,000 545,664 3,030,664 72.0 2018 2,470,000 442,651 2,912,651 78.5

2019 2,230,000 343,820 2,573,820 84.4 2020 2,310,000 253,645 2,563,645 90.5

2021 2,380,000 125,395 2,505,395 96.8 2022 365,000 54,585 419,585 97.7

2023 365,000 38,458 403,458 98.7 2024 365,000 22,050 387,050 99.7

2025 130,000 5,525 135,525 100.0% Total $37,900,000 $10,224,800 $48,124,800 ____________________________

(1) Excludes revenue anticipation notes, grant anticipation notes, bond anticipation notes, lease and installment purchase

obligations, overlapping debt and unfunded pension liability.

(2) Principal totaling $31,525,000 and interest totaling $7,961,721 has been exempted from the provisions of Proposition 2 ½.

OVERLAPPING DEBT (1)

The following table indicates the portion of overlapping long-term debt relating to the Town:

Assessment

for Operations

Authorized and Debt Service

Outstanding Unissued Fiscal Year 2009 Lincoln-Sudbury Regional School District (2) $18,550,000 $0 $18,823,226

_________________ (1) Excludes debt of the Commonwealth.

(2) Debt is as of October 15, 2008. The shares of the member municipalities vary from year to year according to pupil enrollment. The share shown here has been estimated by the District based on present circumstances,

which are subject to change.

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CONTRACTS

Municipal contracts are generally limited to currently available appropriations. A city or town generally has authority to enter into contracts for the exercise of any of its corporate powers for any period of time deemed to

serve its best interests, but generally only when funds are available for the first fiscal year; obligations for succeeding fiscal years generally are expressly subject to availability and appropriation of funds. Municipalities

have specific authority in relatively few cases to enter into long-term contractual obligations that are not subject to annual appropriation, including contracts for refuse disposal and sewer treatment and disposal.

Municipalities may also enter into long-term contracts in aid of housing and renewal projects. There may be implied authority to make other long-term contracts required to carry out authorized municipal functions, such

as contracts to purchase water from private water companies.

Municipal contracts relating to solid waste disposal facilities may contain provisions requiring the delivery of minimum amounts of waste and payments based thereon and requiring payments in certain circumstances

without regard to the operational status of the facilities.

Municipal electric departments have statutory power to enter into long-term contracts for joint ownership and operation of generating and transmission facilities and for the purchase or sale of capacity, including contracts

requiring payments without regard to the operational status of the facilities. The Town does not have an electric department.

Pursuant to the Home Rule Amendment to the Massachusetts Constitution, (see Constitutional Status and Form

of Government above), cities and towns may also be empowered to make other contracts and leases.

The Town has a solid waste disposal agreement with BP Trucking in Hudson, Massachusetts. The current agreement expires June 30, 2009. The disposal fee according to the contract is set for fiscal 2009 at $83.00 per

ton. The Town’s appropriation for the BP Trucking contract in fiscal 2009 is $89,000.

The Town has an inter-municipal septage disposal facility agreement with the Town of Wayland. The facility is operated as an enterprise fund; however, the Town remains liable for its portion of the debt (50 percent) in the

event of a revenue shortfall. The facility currently has no debt outstanding.

RETIREMENT PLAN

The Massachusetts General Laws provide for the establishment of contributory retirement systems for state employees, for teachers and for county, city and town employees other than teachers. Teachers are assigned to a

separate statewide teachers’ system and not to the city and town systems. For all employees other than teachers, this law is subject to acceptance in each city and town. Substantially all employees of an accepting city or town are

covered. If a town has a population of less than 10,000 when it accepts the statute, its non-teacher employees participate through the county system and its share of the county cost is proportionate to the aggregate annual rate

of regular compensation of its covered employees. In addition to the contributory systems, cities and towns provide non-contributory pensions to a limited number of employees, primarily persons who entered service prior to July 1,

1937 and their dependents. The Public Employee Retirement Administration Commission (“PERAC”) provides oversight and guidance for and regulates all state and local retirement systems.

The obligations of a city or town, whether direct or through a county system, are contractual legal obligations and

are required to be included in the annual tax levy. If a city or town, or the county system of which it is a member, has not established a retirement system funding schedule as described below, the city or town is required to provide

for the payment of the portion of its current pension obligations which is not otherwise covered by employee contributions and investment income. “Excess earnings,” or earnings on individual employees’ retirement accounts

in excess of a predetermined rate, are required to be set aside in a pension reserve fund for future, not current,

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pension liabilities. Cities and towns may voluntarily appropriate to their system’s pension reserve fund in any given year up to five percent of the preceding year’s tax levy. The aggregate amount in the fund may not exceed ten

percent of the equalized valuation of the city or town.

If a city or town, or each member city and town of a county retirement system, has accepted the applicable law, it is required to annually appropriate an amount sufficient to pay not only its current pension obligations, but also a

portion of its future pension liability. The portion of each such annual payment allocable to future pension obligations is required to be deposited in the pension reserve fund. The amount of the annual city or town

appropriation for each such system is prescribed by a retirement system funding schedule which is periodically reviewed and approved by PERAC. Each system’s retirement funding schedule is designed to reduce the unfunded

actuarial pension liability of the system to zero by not later than June 30, 2028, with annual increases in the scheduled payment amounts of not more than 4.5 percent. City, town and county systems which have an approved

retirement funding schedule receive annual pension funding grants from the Commonwealth for the first 16 years of such funding schedule.

Under legislation enacted in 2003, cities and towns that accepted its provisions and that obtained certain state

approvals therefor could, within limits, reduce the amount of their scheduled appropriations for fiscal year 2004 and fiscal year 2005 for the unfunded portion of their pension liability to offset recent reductions in state aid. Cities and

towns that reduced such appropriations were required to revise their retirement system funding schedule for eliminating their unfunded pension liability and could extend such schedule by one year, provided that in no event

could such funding schedule extend beyond June 30, 2028.

City, town and county systems may choose to participate in the Pension Reserves Investment Trust Fund (the “PRIT Fund”), which receives additional state funds to offset future pension costs of participating state and local

systems. If a local system participates in the PRIT Fund, it must transfer ownership and control of all assets of its system to the Pension Reserves Investment Management Board, which manages the investment and reinvestment

of the PRIT Fund. Cities and towns with systems participating in the PRIT Fund continue to be obligated to fund their pension obligations in the manner described above. The additional state appropriations to offset future

pension liabilities of state and local systems participating in the PRIT Fund are required to total at least 1.3 percent of state payroll. Such additional state appropriations are deposited in the PRIT Fund and shared by all participating

systems in proportion to their interests in the assets of the PRIT Fund as of July 1 for each fiscal year.

Cost-of-living increases for each local retirement system may be granted and funded only by the local system, and only if it has established a funding schedule. Those statutory provisions are subject to acceptance by the local

retirement board and approval by the local legislative body, which acceptance may not be revoked.

The Town participates in the contributory retirement system of Middlesex County, which has a schedule

approved by PERAC for funding the unfunded accrued liability by 2028. The annual contributions to the retirement system for the most recent years are set forth below:

Year Total

2009 (budgeted) $2,621,713 2008 2,321,646 2007 2,075,487

2006 1,828,403 2005 1,726,606

Sudbury’s share of the estimated unfunded actuarial accrued liability of the Middlesex County Retirement System

as of January 1, 2006 was approximately $27,375,824 (1).

_____________

(1) Source: Commonwealth of Massachusetts Retirement Law Commission report.

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OTHER POST-EMPLOYMENT BENEFITS

In addition to pension benefits, cities and towns may provide retired employees with health care and life insurance benefits. The portion of the cost of such benefits paid by cities and towns is generally provided on a pay-as-you-go

basis. The Governmental Accounting Standards Board (“GASB”) recently promulgated its Statement Nos. 43 and 45, which will for the first time require public sector entities to report the future costs of these non-pension, post-

employment benefits in their financial statements. These new accounting standards do not require pre-funding the payment of these costs as the liability for such costs accrues, but the basis applied by the standards for measurement

of costs and liabilities for these benefits is conservative if they continue to be funded on a pay-as-you-go basis and will result in larger yearly cost and liability accruals than if the cost of such benefits were pre-funded in a trust fund

in the same manner as traditional pension benefits. Although cities and towns that choose to self-insure all or a portion of the cost of the health care benefits they provide to employees and retirees may establish a trust fund for

the purpose of paying claims, Massachusetts General Laws do not currently provide cities and towns with general legal authority to establish a trust fund for the purpose of pre-funding this liability in the same manner as traditional

pension benefits.

The Town is required to implement the new GASB reporting requirements for other post-employment benefits beginning in fiscal year 2009. The Town has recently performed an actuarial valuation of its non-pension, post-

employment benefit liability, the results of which will be included in the Town’s FY08 audited financials.

PROPERTY TAXATION

Tax Rate and Valuation - General. Property is classified for the purpose of taxation according to its use. The legislature has in substance created three classes of taxable property: (1) residential real property, (2) open space

land, and (3) all other (commercial, industrial and personal property). Within limits, cities and towns are given the option of determining the share of the annual levy to be borne by each of the three categories. Until fiscal year

2004, the share required to be borne by residential real property was at least 50 percent of its share of the total taxable valuation; under legislation enacted in the beginning of 2004, however, cities and towns were authorized to

reduce the required share to be borne by residential real property to at least 45 percent of its share of the total taxable valuation in fiscal year 2004, 47 percent in fiscal year 2005, 49 percent in fiscal year 2006 and 50 percent

thereafter. The effective rate for open space must be at least 75 percent of the effective rate for residential real property. Until fiscal year 2004, the share of commercial, industrial and personal property was limited to not more

than 175 percent of their share of the total valuation; under legislation enacted in the beginning of 2004, however, cities and towns were authorized to increase the limit on the share of the total taxable valuation of such property to

not more than 200 percent in fiscal year 2004, 197 percent in fiscal year 2005, 190 percent in fiscal year 2006, 183 percent in fiscal year 2007, 175 percent in fiscal year 2008, and, if the share of such property in a particular city or

town exceeded 175 percent in any of fiscal years 2004 through 2007, 170 percent in fiscal years 2009 and thereafter. Under legislation recently enacted, for fiscal years 2008 and thereafter, the share of the annual levy to be

borne by residential real property must be at least 50 percent of its share of the total taxable valuation; the effective rate for open space must be at least 75 percent of the effective rate for residential real property; and the share of

commercial, industrial, and personal property must not exceed 175 percent of their share of the total valuation. A city or town may also exempt up to 20 percent of the valuation of residential real property (where used as the

taxpayer’s principal residence) and up to 10 percent of the valuation of commercial real property (where occupied by certain small businesses). Property may not be classified in a city or town until the State Commissioner of

Revenue certifies that all property in the city or town has been assessed at its fair cash value. Such certification must take place every three years. The Town applies the same tax rate to all property classifications.

Related statutes provide that certain forest land, agricultural or horticultural land (assessed at the value it has for these purposes) and recreational land (assessed on the basis of its use at a maximum of 25 percent of its fair

cash value) are all to be taxed at the rate applicable to commercial property. Land classified as forest land is valued for this purpose at five percent of fair cash value but not less than ten dollars per acre.

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In order to determine appropriate relative values for the purposes of certain distributions to and assessments

upon cities and towns, the Commissioner of Revenue biennially makes his own redetermination of the fair cash value of the taxable property in each municipality. This is known as the "equalized valuation" (see Debt Limits

above).

VALUATIONS

The following shows the assessed and equalized valuations for the most recent fiscal years:

For Fiscal Year

2008 2007 2006 2005 2004 (3)

Real Property (1) $4,114,834,679 $4,187,565,817 $3,914,839,565 $3,564,249,051 $3,512,749,265 Personal Property (1) 48,125,120 43,965,520 42,090,996 36,724,221 33,246,870

Total $4,162,959,799 $4,231,531,337 $3,956,930,561 $3,600,973,272 $3,545,996,135

Equalized Valuation (2)$4,260,907,900 $4,260,907,900 $3,753,910,600 $3,753,910,600 $3,068,275,800 Percent of Total

Assessed Valuation to Equalized Valuation 97.7% 99.3% 105.4% 95.9% 115.6% _____________________ (1) As of January 1, of the prior fiscal year.

(2) Based on equalized valuation in effect for each year as determined biennially by the State Department of Revenue as of January 1

of even numbered years effective for the next two fiscal years.

(3) Revaluation year.

The following table shows the breakdown of the total assessed valuation for fiscal years 2008, 2007 and 2006 by classification:

Fiscal 2008 % of Total Fiscal 2007 % of Total Fiscal 2006 % of Total

Type of Assessed Assessed Assessed Assessed Assessed Assessed

Property Valuation Valuation Valuation Valuation Valuation Valuation Residential $3,892,876,521 93.5% $3,990,378,334 94.3% $3,734,317,130 94.4% Commercial 159,918,858 3.8 140,407,383 3.3 128,328,335 3.2

Industrial 62,039,300 1.5 56,780,100 1.3 52,194,100 1.2 Personal 48,125,120 1.2 43,965,520 1.1 42,090,996 1.2

Total $4,162,959,799 100.0% $4,231,531,337 100.0% $3,956,930,561 100.0%

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Tax Rates

The following shows the actual tax rates per $l,000 of assessed valuation and the full value rate for the most recent fiscal years:

Fiscal Actual Average Full Value

Year Tax Rate Tax Rate Rate (1) 2008 $14.27 Residential/Open Space $14.54 $14.21

18.47 All Others 2007 13.12 Residential/Open Space 13.53 13.44




20.81 All Others _________________

(1) Based on the equalized valuation in effect for each year.

Largest Taxpayers (1)

The following is a list of the ten largest taxpayers for fiscal 2008:

Total Assessed Percent

Nature of Valuation for Amount of of Total

Name Business Fiscal 2008 Tax(1) Levy Raytheon Corporation Research & Development $ 29,621,400 $547,107 0.91%

Boston Edison Utility 25,267,780 466,696 0.78 Paris Trust LLC Manufacturer 14,036,400 259,252 0.43

Sudbury Crossing, Ltd Shopping Center 12,123,200 223,916 0.37 Longfellow Glen Apartments Apartments 13,132,800 187,405 0.31

Sudbury Plaza Gravestar Shopping Center 9,808,900 181,170 0.30 William Dowie Trust Real Estate Holdingas 12,068,900 172,223 0.29

Richard J. Bosse Holdings LLC Health Club 7,771,300 140,735 0.23 1776 Plaza Limited Partnership Shopping Center 7,195,000 132,892 0.22

E B Realty Trust Real Estate Holdings 6,816,300 125,897 0.21 Total $137,841,980 $2,437,293 4.05%

________________ (1) All these taxpayers are current on payment of real estate and personal property taxes to the Town.

TAX LEVIES

Levy-General. The principal tax of Massachusetts cities and towns is the tax on real and personal property. The amount to be levied in each year is the amount appropriated or required by law to be raised for municipal

expenditures less estimated receipts from other sources and less appropriations voted from funds on hand. The total amount levied is subject to certain limits prescribed by law; for a description of those limits see "Tax

Limitations" below. As to the inclusion of debt service and final judgments, see Security and Remedies above.

The estimated receipts for a fiscal year from sources other than the property tax may not exceed the actual receipts during the preceding fiscal year from the same sources unless approved by the State Commissioner of

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Revenue. Excepting special funds the use of which is otherwise provided for by law, the deduction for appropriations voted from funds on hand for a fiscal year cannot exceed the "free cash" as of the beginning of

the prior fiscal year as certified by the State Director of Accounts plus up to nine months' collections and receipts on account of earlier years' taxes after that date. Subject to certain adjustments, free cash is surplus

revenue less uncollected overdue property taxes from earlier years.

Although an allowance is made in the tax levy for abatements (see “Abatements and Overlay” below) no reserve is generally provided for uncollectible real property taxes. Since some of the levy is inevitably not

collected, this creates a cash deficiency which may or may not be offset by other items (see “Taxation to Meet Deficits” below).

Taxation to Meet Deficits. As noted elsewhere (see “Abatements and Overlay” below) overlay deficits, i.e. tax

abatements in excess of the overlay included in the tax levy to cover abatements, are required to be added to the next tax levy. It is generally understood that revenue deficits, i.e. those resulting from non-property tax

revenues being less than anticipated, are also required to be added to the tax levy (at least to the extent not covered by surplus revenue).

Amounts lawfully expended since the prior tax levy and not included therein are also required to be included in

the annual tax levy. The circumstances under which this can arise are limited since municipal departments are generally prohibited from incurring liabilities in excess of appropriations except for major disasters, mandated

items, contracts in aid of housing and renewal projects and other long-term contracts. In addition, utilities must be paid at established rates and certain established salaries, e.g. civil service, must legally be paid for work

actually performed, whether or not covered by appropriations.

In the opinion of Bond Counsel, cities and towns are authorized to appropriate sums, and thus to levy taxes, to

cover deficits arising from other causes, such as "free cash" deficits arising from a failure to collect taxes. This is not generally understood, however, and it has not been the practice to levy taxes to cover free cash deficits.

Except to the extent that such deficits have been reduced or eliminated by subsequent collections of uncollected taxes (including sales of tax titles and tax possessions), lapsed appropriations, non-property tax revenues in

excess of estimates, other miscellaneous items or funding loans authorized by special act, they remain in existence.

Tax Limitations. Chapter 580 of the Acts of 1980, which was proposed by an initiative petition known as

“Proposition 2½”, was adopted at the November 4, 1980 general election and took effect on December 4, 1980. The law is subject to amendment or repeal by the legislature. The legislation (as subsequently amended) imposes

two separate limits on the annual tax levy of a city or town.

The primary limitation is that the tax levy cannot exceed 2½ percent of the full and fair cash value. If a city or town

exceeds the primary limitation, it must reduce its tax levy by at least 15 percent annually until it is in compliance, provided that the reduction can be reduced in any year to not less than 7½ percent by majority vote of the voters, or

to less than 7½ percent by two-thirds vote of the voters.

For cities and towns at or below the primary limit, a secondary limitation is that the tax levy cannot exceed the maximum levy limit for the preceding fiscal year as determined by the State Commissioner of Revenue by more

than 2½ percent, subject to exceptions for property added to the tax rolls or property which has had an increase, other than as part of a general revaluation, in its assessed valuation over the prior year’s valuation.

This “growth” limit on the tax levy may be exceeded in any year by a majority vote of the voters, but an increase in

the secondary or growth limit under this procedure does not permit a tax levy in excess of the primary limitation, since the two limitations apply independently. In addition, if the voters vote to approve taxes in excess of the

“growth” limit for the purpose of funding a stabilization fund, such increased amount may only be taken into account for purposes of calculating the maximum levy limit in each subsequent year if the board of selectmen of a

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town or the city council of a city votes by a two-thirds vote to appropriate such increased amount in such subsequent year to the stabilization fund.

The applicable tax limits may also be reduced in any year by a majority vote of the voters.

The State Commissioner of Revenue may adjust any tax limit “to counterbalance the effects of extraordinary,

non-recurring events which occurred during the base year”.

The statute further provides that the voters may exclude from the taxes subject to the tax limits and from the calculation of the maximum tax levy (a) the amount required to pay debt service on bonds and notes issued before

November 4, 1980, if the exclusion is approved by a majority vote of the voters, and (b) the amount required to pay debt service on any specific subsequent issue for which similar approval is obtained. Even with voter approval, the

holders of the obligations for which unlimited taxes may be assessed do not have a statutory priority or security interest in the portion of the tax levy attributable to such obligations. It should be noted that Massachusetts General

Laws Chapter 44, Section 20 requires that the taxes excluded from the levy limit to pay debt service on any such bonds and notes be calculated based on the true interest cost of the issue. Accordingly, the Department of Revenue

limits the amount of taxes which may be levied in each year to pay debt service on any such bonds and notes to the amount of such debt service, less a pro rata portion of any original issue premium received by the city or town that

was not applied to pay costs of issuance.

Voters may also exclude from the Proposition 2½ limits the amount required to pay specified capital outlay expenditures. In addition, the city council of a city, with the approval of the mayor if required, or the board of

selectmen or the town council of a town may vote to exclude from the Proposition 2½ limits taxes raised in lieu of sewer or water charges to pay debt service on bonds or notes issued by the municipality (or by an independent

authority, commission or district) for water or sewer purposes, provided that the municipality’s sewer or water charges are reduced accordingly.

In addition, Proposition 2½ limits the annual increase in the total assessments on cities and towns by any county,

district, authority, the Commonwealth or any other governmental entity (except regional school districts, the MWRA and certain districts for which special legislation provides otherwise) to the sum of (a) 2½ percent of the

prior year’s assessments and (b) “any increases in costs, charges or fees for services customarily provided locally or for services subscribed to at local option”. Regional water districts, regional sewerage districts and regional

veterans districts may exceed these limitations under statutory procedures requiring a two-thirds vote of the district’s governing body and either approval of the local appropriating authorities (by two-thirds vote in districts

with more than two members or by majority vote in two-member districts) or approval of the registered voters in a local election (in the case of two-member districts). Under Proposition 2½, any State law to take effect on or after

January 1, 1981 imposing a direct service or cost obligation on a city or town will become effective only if accepted or voluntarily funded by the city or town or if State funding is provided. Similarly, State rules or regulations

imposing additional costs on a city or town or laws granting or increasing local tax exemptions are to take effect only if adequate State appropriations are provided. These statutory provisions do not apply to costs resulting from

judicial decisions.

Pledged Taxes. Taxes on the increased value of certain property in designated development districts may be pledged for the payment of costs of economic development projects within such districts and may therefore be

unavailable for other municipal purposes (see “Tax Increment Financing for Development Districts” below.)

Initiative Petitions. Various proposals have been made in recent years for legislative amendments to the Massachusetts Constitution to impose limits on state and local taxes. To be adopted such amendments must be

approved by two successive legislatures and then by the voters at a state election.

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CALCULATION OF TAX LEVIES AND LEVY LIMITS

The following table shows the details of the calculation of the tax levies for the most recent fiscal years:

(000 omitted)

For Fiscal Year

2008 2007 2006 2005 2004 Gross Amount to be Raised:

Appropriations $79,571 $76,288 $71,865 $66,018 $64,574 Other Local Expenditures 38 139 521 362 343

State & County Charges 165 193 233 175 218 Overlay Reserve 491 435 593 893 644

Total Gross Amount to be Raised 80,265 77,055 73,212 67,448 65,779 Less Estimated Receipts & Other Revenue:

Estimated Receipts from State 8,853 8,441 8,471 8,081 8,340 Estimated Receipts - Local 8,426 8,932 7,651 7,301 6,627

Available Funds Appropriated: Free Cash 1,952 1,475 855 1,146 942

Other Available Funds 494 960 802 958 669 Free Cash & Other Revenue

Used to Reduce the Tax Rate 0 0 0 0 0 Total Estimated Receipts & Revenue 19,725 19,808 17,779 17,486 16,578

Net Amount To Be Raised (Tax Levy) (1) $60,540 $57,247 $55,433 $49,962 $49,201 ________________

(1) Does not include surcharge imposed under the Community Preservation Act.

The following shows the calculation of levy limits for the most recent fiscal years:

(000 omitted)

For Fiscal Year

2008 2007 2006 2005 2004

Primary Levy Limit (1) $104,074 $105,788 $98,923 $90,024 $88,650

Prior Fiscal Year Levy Limit 52,034 50,102 45,184 43,446 41,685

2.5% Levy Growth 1,301 1,253 1,130 1,086 1,042 New Growth (2) 499 680 738 652 719

Overrides 2,519 0 3,050 0 0 Growth Levy Limit 56,354 52,035 50,102 45,184 43,446

Debt Exclusions 4,146 5,226 5,367 4,783 5,863 Capital Expenditure Exclusions 405 0 0 0 0

Other Adjustments 0 0 0 0 0 Tax Levy Limit 60,905 57,261 55,469 49,967 49,309

Tax Levy (3) 60,540 57,247 55,433 49,962 49,201 Unused Levy Capacity (4) $ 365 $ 14 $ 36 $ 5 $ 108

Unused Primary Levy Capacity (5) $47,720 $53,753 $48,821 $44,840 $45,204 ______________ (1) 2.5% of assessed valuation.

(2) Allowed addition for new valuations certified by the Department of Revenue.

(3) Does not include surcharge imposed under the Community Preservation Act.

(4) Tax Levy Limit less Tax Levy. The additional amount which may be levied without voter approval.

(5) Primary Levy Limit less Growth Levy Limit.

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TAX COLLECTIONS & ABATEMENTS

Payment Dates. Preliminary tax payments are due on August 1 and November 1 with payment of the actual tax bill (after credit is given for the preliminary payments) in installments on February 1 and May 1 if actual tax

bills are mailed by December 31. Interest accrues on delinquent taxes at the rate of 14 percent per annum.

Lien. Real property (land and buildings) is subject to a lien for the taxes assessed upon it subject to any paramount federal lien and subject to bankruptcy and insolvency laws. (In addition, real property is subject to a

lien for certain unpaid municipal charges or fees.) If the property has been transferred, an unenforced lien expires on the fourth December 31 after the end of the fiscal year to which the tax relates. If the property has

not been transferred by the fourth December 31, an unenforced lien expires upon a later transfer of the property. Provision is made, however, for continuation of the lien where it could not be enforced because of a legal

impediment.

Personal Liability. The persons against whom real or personal property taxes are assessed are personally liable for the tax (subject to bankruptcy and insolvency laws.) In the case of real property, this personal liability is

effectively extinguished by sale or taking of the property as described in “Taking and Sale” below.

The following shows the total tax levy, the reserve for abatements, the net levy and the amounts collected during each fiscal year for the current and most recent fiscal years:

The following shows the total tax levy, the reserve for abatements, the net levy and the amounts collected for the most recent fiscal years:

Collections During Collections as of Overlay Net Fiscal Year Payable 07/31/08

Fiscal Gross Tax Reserve for Tax Dollar % of Dollar % of

Year Levy Abatements Levy Amount Net Levy Amount Net Levy

2008 $60,539,786 $490,898 $60,048,888 $57,543,514 95.8% $57,782,652 96.2% 2007 57,246,758 434,881 56,811,877 56,065,618 98.7 56,811,877 100.0

2006 55,432,935 592,765 54,840,170 54,228,673 98.9 54,840,170 100.0 2005 49,961,616 893,450 49,068,166 49,066,241 100.0 49,398,969 100.7

2004 49,200,858 643,556 48,557,302 48,553,813 100.0 48,675,723 100.2 ________________ Note: Over 100% collection reflected when actual abatements for a given year is less than overlay reserve.

The following shows the abatements granted during the fiscal year for each of the most recent fiscal years:

Abatements and Overlay. A city or town is authorized to increase each tax levy by an amount approved by

the State Commissioner of Revenue as an "overlay" to provide for tax abatements. If abatements are granted in excess of the applicable overlay, the excess is required to be added to the next tax levy.

Abatements are granted where exempt real or personal property has been assessed or where taxable real or

personal property has been overvalued or disproportionately valued. The assessors may also abate uncollectible personal property taxes. They may abate real and personal property taxes on broad grounds (including inability

to pay) with the approval of the State Commissioner of Revenue. But uncollected real property taxes are ordinarily not written off until they become municipal "tax titles" by purchase at the public sale or by taking, at

which time the tax is written off in full by reserving the amount of the tax and charging surplus.

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The following shows the abatements granted during the fiscal year as well as through a more recent date for each of the most recent fiscal years:

Overlay Reserve

Fiscal Net Tax Dollar % of Abatements

Year Levy (1) Amount Net Levy Granted (1) 2008 $60,048,888 $490,898 0.8% $184,241

2007 56,811,877 434,881 0.8 176,303 2006 54,840,170 592,765 1.1 557,764

2005 49,068,166 893,450 1.8 877,498 2004 48,557,302 643,556 1.3 N/A ________________ (1) Total actual abatements granted for each tax levy year.

Taking and Sale. Massachusetts law permits a municipality either to sell by public sale (at which the municipality may become the purchaser) or to take real property for nonpayment of taxes. In either case the

property owner can redeem the property by paying the unpaid taxes, with interest and other charges, but if the right of redemption is not exercised within six months (which may be extended an additional year in the case of

certain installment payments), it can be foreclosed by petition to the Land Court. Upon foreclosure, a tax title purchased or taken by the municipality becomes a "tax possession" and may be held and disposed of in the same

manner as other land held for municipal purposes.

Sale of Tax Receivables. Cities and towns are authorized to sell delinquent property tax receivables by public sale or auction, either individually or in bulk.

TOWN FINANCES

Budget and Appropriation Process

The annual appropriations of a town are ordinarily made at the annual meeting which takes place in February,

March, April or May. Appropriations may also be voted at special meetings. Every town must have an appropriation, advisory or finance committee. The committee is required to submit a budget of proposed

expenditures at the annual town meeting.

Under certain circumstances and subject to certain limits and requirements, the city council of a city, upon the

recommendation of the mayor, may transfer amounts appropriated for the use of one department (except for a municipal light department or a school department) to another appropriation for the same department or for the

use of any other department. In a town, town meeting may at any time vote to transfer any amount previously appropriated to any other authorized use by law, and, under certain circumstances and subject to certain limits

and requirements, the selectmen of a town, with the concurrence of the finance committee, may transfer amounts appropriated for the use of any department to any other appropriation for the same department or to

any other department.

Water and sewer department expenditures are generally included in the budgets adopted by town meetings but electric and gas department funds may be appropriated by the municipal light boards. Under legislation, any

city or town which accepts the legislation may provide that the appropriation for the operating costs of any department may be offset, in whole or in part, by estimated receipts from fees charged for services provided by

the department. It is assumed that this general provision does not alter the pre-existing power of an electric or gas department to appropriate its own receipts.

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The school budget is limited to the total amount appropriated by the town meeting, but the school committee retains full power to allocate the funds appropriated. State legislation known as the Education Reform Act of

1993, as amended, imposes certain minimum expenditure requirements on municipalities with respect to funding for education. The requirements are determined on the basis of formulas affected by various measures

of wealth and income, enrollments, prior levels of local spending and state aid, and other factors. In fiscal years 1994 through 2008, and as budgeted for fiscal 2009, the Town’s net school spending exceeded the minimum

required local contribution.

State and county assessments, abatements in excess of overlays, principal and interest not otherwise provided for and final judgments are included in the tax levy whether or not included in the budget. Revenues are not

required to be set forth in the budget but estimated non-tax revenues are taken into account by the assessors in fixing the tax levy. (See Property Taxation and Valuation above.)

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Budget Comparison

The following table sets forth the final budgets for fiscal years 2005 through 2009:

Categories 2009 2008 2007 2006 2005 General Government $2,253,566 $ 2,288,472 $ 2,091,735 $ 2,011,226 $ 1,965,410

Public Safety 6,018,975 6,377,174 6,091,379 5,733,642 5,289,182 Health and Human Services 603,724 607,659 558,369 537,382 503,523

Public Works 3,279,124 3,376,966 3,068,845 2,883,083 2,591,406 Schools 52,903,119 52,794,844 49,436,378 46,523,627 42,005,128

Culture and Recreation 1,112,696 1,089,936 1,027,672 994,242 931,316 Unclassified 4,559,804 4,026,900 3,979,519 3,437,652 3,249,846

Debt Service 4,347,060 4,481,929 5,502,208 5,589,344 6,014,574 Total $75,078,068 $75,043,880 $71,756,105 $67,710,198 $62,550,385

STATE AID

In addition to grants for specified capital purposes (some of which are payable over the life of the bonds issued

for the projects), the Commonwealth provides financial assistance to cities and towns for current purposes. Payments to cities and towns are derived primarily from a percentage of the State's personal income, sales and

use and corporate excise tax receipts, together with the net receipts from the State Lottery. A municipality's state aid entitlement is based on a number of different formulas, of which the "schools" and "lottery" formulas

are the most important. Both of the major formulas tend to provide more state aid to poorer communities. None of the major local aid programs has a termination date under existing law and while a formula might

indicate that a particular amount of state aid is owed, the amount of state aid actually paid is limited to the amount appropriated by the state legislature. The state annually estimates state aid, but the actual state aid

payments may vary from the estimate.

In the fall of 1986, both the State Legislature (by statute, repealed as of July 1, 1999) and the voters (by initiative petition) placed limits on the growth of state tax revenues. Although somewhat different in detail,

each measure essentially limited the annual growth in state tax revenues to an average rate of growth in wages and salaries in the Commonwealth over the three previous calendar years. If not amended, the remaining

measure could restrict the amount of state revenues available for state aid to local communities in future years.

The following table sets forth the amount of state aid to the Town in recent years:

Fiscal Year Total From State (1) 2008 $8,808,035

2007 8,378,947 2006 7,897,883

2005 6,889,907 2004 8,339,001

_______________ (1) Includes School Building Assistance.

State School Building Assistance Program

Under its school building assistance program, the Commonwealth of Massachusetts provides grants to cities, towns and regional school districts for school construction projects. Until July 26, 2004, the State Board of

Education was responsible for approving grants for school projects and otherwise administering the program. Grant amounts ranged from 50% to 90% of approved project costs. Municipalities generally issued bonds to

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finance the entire project cost, and the Commonwealth disbursed the grants in equal annual installments over the term of the related bonds. Approved project costs included the interest expense incurred on debt issued by a

municipality to finance the school project. In recent years, demand for school building assistance grants far exceeded available funds. As of July 1, 2004, a total of 425 projects for which completed grant applications had

been submitted were still on the Department of Education’s project priority list awaiting approval of a grant.

Pursuant to legislation which became effective on July 26, 2004, the state legislature created the Massachusetts School Building Authority (the “Authority”) to finance and administer the school building assistance program.

The Authority has assumed all powers and obligations of the Board of Education with respect to the program. In addition to certain other amounts, the legislation dedicates a portion of Commonwealth sales tax receipts to

the Authority to finance the program.

Projects previously approved for grants by the State Board of Education are entitled to receive grant payments from the Authority based on the approved project cost and reimbursement rate applicable under the prior law.

The Authority has paid and is expected to continue to pay the remaining amounts of the grants for such projects in annual installments to reimburse debt service on bonds issued by the municipalities to finance such projects.

Projects on the priority waiting list as of July 1, 2004 are also entitled to receive grant payments from the

Authority based on the eligible project costs and reimbursement rates applicable under the prior law. With limited exceptions, the Authority is required to fund the grants for such projects in the order in which they

appear on the waiting list. The Authority expects to pay grants for all of the projects on the priority waiting list by the end of fiscal year 2008. Grants for any such projects that have been completed or substantially

completed have been paid and are expected to continue to be paid by the Authority in lump sum payments, thereby eliminating the need for the Authority to reimburse interest expenses that would otherwise be incurred

by the municipalities to permanently finance the Authority’s share of such project costs. Interest on debt issued by municipalities prior to July 1, 2004 to finance such project costs, and interest on temporary debt until receipt

of the grant, is included in the approved costs of such projects. Grants for any such projects that have not yet commenced or that are underway have been and are expected to continue to be paid by the Authority as project

costs are incurred by the municipality pursuant to a project funding agreement between the Authority and the municipality. In most cases, the receipt of these progress payments from the Authority eliminates the need for

the municipality to borrow even on a temporary basis to finance the Authority’s share of the project costs.

Grant applications for new projects may not be submitted to the Authority until July 1, 2007. The range of reimbursement rates for such projects has been reduced to between 40% and 80% of approved project costs.

The Authority recently promulgated new regulations with respect to the application and approval process for new projects. The Authority expects to pay grants for such projects as project costs are incurred pursuant to

project funding agreements between the Authority and the municipalities. None of the interest expense incurred on debt issued by municipalities to finance their portion of the costs of new projects will be included in the

approved project costs eligible for reimbursement.

MOTOR VEHICLE EXCISE (1)

An excise is imposed on the registration of motor vehicles (subject to exemptions) at the rate of $25 per $1,000 of valuation. The excise is collected by and for the benefit of the municipality in which the motor vehicle is

customarily kept. Valuations are determined by a statutory formula based on manufacturer's list price and year of manufacture. Bills are payable in 30 days of their issue, and when not paid when due bear interest at 12

percent per annum. Provision is also made, after notice to the owner, for suspension of the owner's operating license or registration by the registrar of motor vehicles.

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The following table shows the actual receipts in each of the most recent fiscal years:

Fiscal Year Receipts (1) 2008 $2,957,724

2007 2,589,563 2006 2,965,914

2005 2,678,448 2004 2,742,929 ________________ (1) Net after refunds. Includes receipts for prior years.

UNDESIGNATED GENERAL FUND BALANCE AND FREE CASH

Under Massachusetts law an amount known as "free cash" is certified as of the beginning of each fiscal year by

the State Bureau of Accounts and this, together with certain subsequent tax receipts, is used as the basis for subsequent appropriations from available funds, which are not required to be included in the annual tax levy.

Subject to certain adjustments, free cash is surplus revenue less uncollected and overdue property taxes from prior years. The Town Accountant may certify as available for appropriation an adjusted free cash figure by

adding back those uncollected and overdue property taxes which are subsequently collected between July 1 and the following March 31 of any year.

The following table sets forth the undesignated general fund balance and certified free cash for the most recent

fiscal years:

Undesignated General

July 1, Fund Balance Free Cash 2008 NA NA

2007 $ 996,718 $ 294,110 2006 2,225,604 1,527,243

2005 2,431,034 1,475,243 2004 1,404,527 855,226

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STABILIZATION FUND

The Town has maintained a Stabilization Fund for several years. Under Massachusetts statutes, funds may be appropriated by a two-thirds vote of the town meeting from the Fund for any municipal purpose.

The following is the balance in the account at the end of the most recent fiscal years:

Fiscal Year Amount

2008 $1,796,146 2007 1,682,125

2006 1,597,991 2005 1,555,862

2004 1,515,169

INVESTMENTS

Investments of funds of cities and towns, except for trust funds, are generally restricted by Massachusetts

General Laws Chapter 44, section 55. That statute permits investments of available revenue funds and bond and note proceeds in term deposits and certificates of deposits of banks and trust companies, in obligations

issued or unconditionally guaranteed by the federal government or an agency thereof with a maturity of not more than one year, in repurchase agreements, with a maturity of not more than 90 days secured by federal or

federal agency securities, or in participation units in the Massachusetts Municipal Depository Trust (“MMDT”) or in shares of Securities and Exchange Commission registered money market funds, that have the highest

possible rating from at least one nationally recognized rating organization.

MMDT is an investment pool created by the Commonwealth under the supervision of the State Treasurer’s office. According to the State Treasurer the Trust’s investment policy is designed to maintain an average

weighted maturity of 90 days or less and is limited to high-quality, readily marketable fixed income instruments, including U.S. Government obligations and highly-rated corporate securities with maturities of one

year or less.

Trust funds, unless otherwise provided by the donor, may be invested in accordance with section 54 of Chapter

44, which permits a broader range of investments than section 55, including any bonds or notes that are legal investments for savings banks in the Commonwealth. The restrictions imposed by sections 54 and 55 do not

apply to city and town retirement systems.

COMMUNITY PRESERVATION ACT

The Massachusetts Community Preservation Act (the “CPA”) permits cities and towns that accept its provisions to levy a surcharge on its real property tax levy and to receive state matching funds for the acquisition, creation,

preservation, rehabilitation and restoration of open space, historic resources and affordable housing. The provisions of the CPA must be accepted by the voters of the city or town at an election after such provisions

have first been accepted by either a vote of the legislative body of the city or town or an initiative petition signed by 5% of its registered voters.

A city or town may approve a surcharge of up to 3% of the real property tax levy, and it may accept one or

more exemptions to the surcharge under the CPA, including an exemption for low-income individuals and families and for low and moderate-income senior citizens, an exemption for $100,000 of the value of each

taxable parcel of residential real property, and an exemption for commercial and industrial properties in cities and towns with classified tax rates. The surcharge is not counted in the total taxes assessed for the purpose of

determining the permitted levy amount under Proposition 2½ (see “Tax Limitations” under “PROPERTY TAX”

31

above). A city or town may revoke its acceptance of the provisions of the CPA at any time after 5 years from the date of such acceptance and may change the amount of the surcharge or the exemptions to the surcharge at

any time, provided that any such revocation or change must be approved pursuant to the same process as acceptance of the CPA.

Any city or town that accepts the provisions of the CPA will receive annual state matching grants to supplement

amounts raised by its surcharge on the real property tax levy. The state matching funds are raised from certain recording and filing fees of the registers of deeds. Those amounts are deposited into a state trust fund and are

distributed to cities and towns that have accepted the provisions of the CPA, which distributions are not subject to annual appropriation by the state legislature. The amount distributed to each city and town is based on a

statutory formula which requires that 80% of the amount in the state trust fund be used to match an equal percentage of the amount raised locally by each city and town, and that the remaining 20% of the amount in the

fund be distributed only to those cities and towns that levy the maximum 3% surcharge based on a formula which takes into account equalized property valuation and population, resulting in larger distributions to those

communities with low valuations and small populations. The total state distribution made to any city or town may not, however, exceed 100% of the amount raised locally by the surcharge on the real property tax levy.

The amounts raised by the surcharge on real property taxes and received in state matching funds are required to

be deposited in a dedicated community preservation fund. Each city or town that accepts the provisions of the CPA is required to establish a community preservation committee to study the community preservation needs of

the community and to make recommendations to the legislative body of the city or town regarding the community preservation projects that should be funded from the community preservation fund. Upon the

recommendations of the committee, the legislative body of the city or town may appropriate amounts from the fund for permitted community preservation purposes or may reserve amounts for spending in future fiscal years,

provided that at least 10% of the total annual revenues to the fund must be spent or set aside for open space purposes, 10% for historic resource purposes and 10% for affordable housing purposes.

The CPA authorizes cities and towns that accept its provisions to issue bonds and notes in anticipation of the

receipt of surcharge revenues to finance community preservation projects approved under the provisions of the CPA. Debt service for the Notes and any subsequent bonds issued for this purpose is payable from the

Community Preservation Fund. Bonds and notes issued under the CPA are general obligations of the city or town and are payable from amounts on deposit in the community preservation fund. In the event that a city or

town revokes its acceptance of the provisions of the CPA, the surcharge shall remain in effect until all contractual obligations incurred by the city or town prior to such revocation, including the payment of bonds or

notes issued under the CPA, have been fully discharged.

The Town accepted the provisions of the CPA in fiscal 2003 and has a dedicated community preservation fund (the “Community Preservation Fund”). In addition to the Notes, the Town has issued $8,315,500 general

obligation bonds, the debt service of which is paid from the Community Preservation Fund. $6,375,000 of these bonds are outstanding. The Town levies the maximum property tax surcharge of 3 percent under the CPA. As of

June 30, 2008, the Community Preservation Fund had a balance of $8,228,748.

TAX INCREMENT FINANCING FOR DEVELOPMENT DISTRICTS

Under recent legislation, cities and towns are authorized to establish development districts to encourage increased residential, industrial and commercial activity. All or a portion of the taxes on growth in assessed

value in such districts may be pledged and used solely to finance economic development projects pursuant to the city or town’s development program for the district. This includes pledging such “tax increments” for the

payment of bonds issued to finance such projects. As a result of any such pledge, tax increments raised from new growth properties in development districts are not available for other municipal purposes. Tax increments

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are taken into account in determining the total taxes assessed for the purpose of calculating the maximum permitted tax levy under Proposition 2 ½ (see “Tax Limitations” under “PROPERTY TAXATION” above.)

COLLECTIVE BARGAINING

City and town employees (other than managerial and confidential employees) are entitled to join unions and to

bargain collectively on questions of wages, hours and other terms and conditions of employment.

The Town currently has 645 full and part-time employees, of which approximately 63 percent belong to unions or other collective bargaining groups as follows:

Number Contract

Department of People Expires Police 18 06/30/2009

Fire 30 06/30/2009 Engineering 2 06/30/2010

Highway 20 06/30/2010 Supervisory 13 06/30/2009

Teachers 228 06/30/2009 Support Staff 80 06/30/2009

Custodial/Maintenance 14 06/30/2009

OTHER DATA

General

The Town of Sudbury located approximately 20 miles west of Boston is bordered on the east by the Town of

Wayland, on the south by the Town of Framingham, on the west by the City of Marlborough and Towns of Hudson, Maynard, and Stow, on the northeast by the Town of Concord, and on the north by the Town of Acton.

The Town occupies a land area of 24.4 square miles.

The Town of Sudbury is known for both its affluence and its history. The Town is among the wealthiest

suburbs of Boston, as measured by per capita and median household income. High residential housing values also reflect the wealth of the Town. This affluence is complemented by active commercial and industrial

sectors.

Among the historic highlights of Sudbury is The Wayside Inn, celebrated in Longfellow’s Tales of a Wayside Inn. The Inn was owned at one time by Henry Ford, who also owned other significant properties in the Town in

the early twentieth century. Among the well-known historical residents of the Town was Babe Ruth, who lived in the Town during his days with the Boston Red Sox.

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Employment and Payrolls (1)

Calendar Year Average

2007 2006 2005 2004 2003 Construction & Natural Resources 313 614 644 358 374

Manufacturing (2) NA NA NA NA NA Trade, Transportation & Utilities 1,265 1,268 1,303 1,411 1,414

Financial Activities 210 221 206 193 193 Professional & Business Services 872 847 847 828 952

Education & Health Services 1,602 1,533 1,488 1,442 1,465 Leisure & Hospitality 729 698 650 653 504

Information & OtherServices 457 520 480 424 447 Public Administration 471 460 416 402 340

Total Employment 8,141 7,954 7,690 7,481 7,508

Number of Establishments 604 603 608 652 651

Total Annual Wage (000) $483,008 $444,468 $410,979 $386,408 $374,337 Average Weekly Wage $1,141 $1,075 $1,028 $993 $959

_______________________ (1) Source: Massachusetts Division of Unemployment Assistance.

(2) Employment data not reported because of the number of firms.

Unemployment (1)

Year Sudbury Massachusetts United States 2008 (July) 3.7% 5.2% 6.0%

2007 3.1 4.5 4.6 2006 3.8 5.0 4.6

2005 3.3 4.8 5.1 2004 3.8 5.2 5.5

_____________ (1) Massachusetts Department of Employment and Training. Full year annual averages except for 2008 which

is for the month indicated.

Population (1)

Sudbury Middlesex County Massachusetts Year Number % Change Number % Change Number % Change

2020 (Proj.) 15,050 (10.2)% 1,469,494 (0.4)% 6,767,712 3.2% 2010 (Proj.) 16,753 (2.4) 1,474,917 0.1 6,557,001 1.7

2007 (Est.) 17,159 1.9 1,473,416 0.5 6,449,755 1.6 2000 16,841 17.3 1,465,396 4.8 6,349,097 5.5

1990 14,358 2.4 1,398,468 2.3 6,016,425 4.9 1980 14,027 3.9 1,367,034 (2.2) 5,737,037 0.8

1970 13,506 1,398,397 5,689,170 __________

(1) Source: U.S. Department of Commerce for actuals, Massachusetts Institute for Social & Economic Research for projections.

34

Population Density (1)

Sudbury Middlesex County Massachusetts Year Number Density (2) Number Density Number Density

2020 (Proj.) 15,050 617.6 1,469,494 1,784.3 6,767,712 863.5 2010 (Proj.) 16,753 687.4 1,474,917 1,790.9 6,557,001 836.6

2007 (Est.) 17,159 704.1 1,473,416 1,789.1 6,449,755 822.9 2000 16,841 691.1 1,465,396 1,779.4 6,349,097 810.0

1990 14,358 589.2 1,398,468 1,698.1 6,016,425 767.6 1980 14,027 575.6 1,367,034 1,659.9 5,737,037 732.0

1970 13,506 554.2 1,398,397 1,698.0 5,689,170 725.8 ___________________

(1) Source: U.S. Department of Commerce. Density is stated as population per square mile. (2) Based on 24.4 square miles.

35

Population Composition 2000 (1)

Sudbury Middlesex County Massachusetts Age Number Percent Number Percent Number Percent

Under 5 Years 1,489 8.8% 92,008 6.3% 397,268 6.3% 5 Years to 19 Years 4,223 25.1 274,315 18.7 1,277,845 20.1

19 Years to 65 Years 9,476 56.3 911,766 62.2 3,813,822 60.1 65 Years & Over 1,653 9.8 187,307 12.8 860,162 13.5

Total 16,841 100.0% 1,465,396 100.0% 6,349,097 100.0%

Median Age 38.8 36.4 36.5 Median Age (1990) 37.1 33.6 33.6

___________________ (1) Source: U.S. Department of Commerce.

Income Levels (1)

Sudbury Middlesex County Massachusetts

% Change from % Change from % Change from

Year Amount Previous Census Amount Previous Census Amount Previous Census

Per Capita-Personal 1999 $53,285 59.3% $31,199 53.4% $25,952 50.7%

1989 33,441 177.2 20,343 141.1 17,224 131.0 1979 12,063 8,439 7,457

Median Family

Income (1999) $130,399 $74,194 $61,664 Median Household

Income (1999) $118,579 $60,821 $50,502 % Below Poverty

Level (1999) 2.8% 6.5% 9.3% ______________________________

(1) Source: U.S. Department of Commerce.

Family Income Distribution 1999 (1)

Sudbury Middlesex County Massachusetts Income for Families Families Percent Families Percent Families Percent

Less than $10,000 82 1.7% 10,477 2.9% 71,198 4.5% $10,000 - $24,999 174 3.6 28,719 7.9 175,120 11.0

$25,000 - $49,999 379 7.8 68,642 18.9 368,418 23.2 $50,000 - $74,999 423 8.7 76,277 21.0 359,202 22.6

$75,000 - $99,999 562 11.6 63,038 17.3 251,231 15.8 $100,000 - $149,999 1,183 24.5 66,670 18.3 222,234 14.0

$150,000 or more 2,033 42.1 50,110 13.7 140,134 8.9 Total 4,836 100.0% 363,933 100.0% 1,587,537 100.0%

___________________________________ (1) Source: U.S. Department of Commerce.

36

Household Income Distribution 1999 (1)

Sudbury Middlesex County Massachusetts Income for Households Households Percent Households Percent Households Percent

Less than $10,000 164 3.0% 35,322 6.3% 214,700 8.8% $10,000 - $24,999 299 5.4 70,085 12.5 385,395 15.8

$25,000 - $49,999 509 9.2 123,239 21.9 608,320 24.9 $50,000 - $74,999 584 10.6 111,358 19.8 490,998 20.1

$75,000 - $99,999 645 11.7 81,462 14.5 312,741 12.8 $100,000 - $149,999 1,256 22.7 81,558 14.5 267,300 10.9

$150,000 or more 2,066 37.4 58,482 10.5 165,134 6.7 Total 5,523 100.0% 561,506 100.0% 2,444,588 100.0%

________________ (1) Source: U.S. Department of Commerce.

Value Distribution Of Specified Owner-Occupied Housing Units 2000 (1)


Units Number Percent Number Percent Number Percent Less than $100,000 0 0.0% 6,376 2.4% 113,263 9.5%

$100,000 - $149,999 35 0.7 24,823 9.2 277,571 23.4 $150,000 - $199,999 124 2.6 54,887 20.4 273,542 23.0

$200,000 - $299,999 900 18.7 89,469 33.3 286,599 24.1 $300,000 - $499,999 2,146 44.6 64,563 24.0 170,536 14.4

$500,000 or more 1,608 33.4 28,424 10.7 66,360 5.6 Total 4,813 100.0% 268,542 100.0% 1,187,871 100.0%

Median Value $422,400 $247,900 $185,700


Age Distribution Housing Units 2000 (1)


Year Built Number Percent Number Percent Number Percent 1990 to March 2000 744 13.3% 41,638 7.2% 218,407 8.3%

1980 to 1989 738 13.2 55,619 9.6 292,701 11.2 1940 to 1979 3,625 64.8 267,134 46.3 1,205,183 46.0

1939 or Earlier 483 8.7 212,290 36.9 905,698 34.5 Total 5,590 100.0% 576,681 100.0% 2,621,989 100.0%


37

Housing Unit Inventory 2000 (1)

Sudbury Middlesex County Massachusetts Units in Structure Number Percent Number Percent Number Percent

1, Detached 5,322 95.2% 282,013 48.9% 1,374,479 52.4% 1, Attached 14 0.3 25,690 4.5 104,129 4.0

2 to 4 95 1.7 143,215 24.8 603,917 23.0 5 to 9 6 0.1 29,425 5.1 156,135 6.0

10 to 19 5 0.1 28,727 5.0 113,697 4.3 20 or More 148 2.6 65,095 11.3 244,892 9.4

Mobil Home, Trailer, or Other 0 0.0 2,516 0.4 24,740 0.9 Total 5,590 100.0% 576,681 100.0% 2,621,989 100.0%

_______________________ (1) Source: U.S. Department of Commerce.

Educational Attainment 2000 (1)


Years of School Completed Number Percent Number Percent Number Percent Less than 9th Grade 81 0.7% 43,564 4.3% 247,556 5.8%

9th to 12th Grade, No Diploma 317 2.9 72,502 7.2 403,537 9.4 High School Graduate 970 9.0 235,369 23.4 1,165,489 27.3

Some College, No Degree 1,058 9.8 152,585 15.2 730,135 17.1 Associate’s Degree 617 5.7 63,744 6.3 308,263 7.2

Bachelor’s Degree 3,719 34.4 236,568 23.5 834,554 19.5 Graduate or Professional Degree 4,062 37.5 202,165 20.1 583,741 13.7

Total 10,824 100.0% 1,006,497 100.0% 4,273,275 100.0%

High School Graduate or Higher 10,426 96.3% 890,431 88.5% 3,622,182 84.8% Bachelor’s Degree or Higher 7,781 71.9% 438,733 43.6% 1,418,295 33.2%

_______________________ (1) Source: U.S. Department of Commerce.

APPENDIX A

The following Balance Sheets for fiscal years ending June 30, 2003 through 2007, and the Comparative

Statements of Revenues and Expenditures for fiscal years ending June 30, 2003 through 2007, have been excerpted from the audited financial statements of the Town for those years.

TOWN OF SUDBURY, MASSACHUSETTS

Balance Sheets (1)

General Fund

Fiscal Year Ended June 30,

2007 2006 2005 2004 2003

ASSETS

Cash/Investments $13,139,207 $12,933,928 $11,595,284 $10,971,964 $9,792,391

Receivables:

Real Estate and Personal Property 709,421 571,244 594,885 583,654 497,224

Real Estate Tax Deferrals 822,234 542,530 418,655 293,910 236,673

Tax Liens 415,291 454,499 723,047 862,537 757,339

Motor Vehicle and Other Excises 109,586 113,555 181,173 115,408 87,215

Intergovernmental 22,156,000 24,133,000 26,038,000 27,872,000 30,083,140

Tax Foreclosures 32,827 36,195 32,267 14,393 17,454

Working Capital Deposits 642,996 53,496 53,496 56,496 53,385

Total Assets $38,027,562 $38,838,447 $39,636,807 $40,770,362 $41,524,821

LIABILITIES AND FUND EQUITY

Liabilities:

Warrants Payable $272,106 $240,534 $517,153 $407,587 $367,445

Accrued Payroll 2,466,230 2,162,859 1,711,611 1,604,146 1,511,556

Tax Refunds Payable 104,390 85,358 201,342 78,500 179,196

Other Liabilities 651,034 568,163 848,595 528,545 1,217,945

Abandoned Property 254 70,563 172,975 135,219

Deferred Revenue 23,955,286 25,489,454 27,607,360 29,508,402 31,402,244

Acrrued Health Claims Payable 377,864 789,132 739,668 713,000

Workers Compensation Claims 63,742 87,300 74,484 57,000 76,000

Total Liabilities 27,890,652 29,423,054 31,770,776 33,070,155 34,889,605

Fund Equity:

Reserved for Encumbrances and

Continuing Appropriations $1,363,925 $991,728 $1,492,127 $1,753,309 $1,543,719

Reserved for Employee Benefits 5,638,267 3,984,025 2,914,850 2,632,958 2,038,255

Unreserved:

Designated for Subsequent Year

Expenditures 2,138,000 1,986,362 1,343,450 1,830,858 1,213,138

Undesignated 996,718 2,453,278 2,115,604 1,483,082 1,840,104

Total Fund Equity 10,136,910 9,415,393 7,866,031 7,700,207 6,635,216

Total Liabilities and Fund Equity $38,027,562 $38,838,447 $39,636,807 $40,770,362 $41,524,821

(1) Excerpted from audited financial statements.

A-1


Statement of Revenues, Expenditures, and Changes in Fund Balance

General Fund (1)

Year Ending June 30,

2007 2006 2005 2004 2003

Revenues:

Real and Personal Property Taxes $56,629,289 $55,331,010 $49,439,489 $48,914,601 $48,385,196

Excise Taxes 2,589,563 2,965,914 2,789,223 2,577,518 2,701,943

Tax Liens 251,389 506,697 395,482 123,423 249,585

Payments in Lieu of Taxes 123,777 65,409 70,688 94,772 72,573

Intergovernmental 12,627,161 11,956,532 11,368,452 11,372,268 11,014,045

Penalties and Interest on Taxes 200,005 338,103 253,752 183,035 172,237

Licenses, Permits, and Fees 872,593 930,259 892,316 833,197 946,102

Fines and Forfeitures 146,078 167,833 123,779 111,837 95,183

Departmental 199,973 188,173 269,496 203,604 176,038

Investment Income 857,260 620,763 376,609 171,136 333,558

Total Revenues $74,497,088 $73,070,693 $65,979,286 $64,585,391 $64,146,460

Expenditures:

General Government 2,426,349 2,459,513 2,210,774 1,848,406 1,968,245

Public Safety 6,116,708 5,747,803 5,591,016 5,379,069 5,091,502

Education 43,428,234 42,073,179 37,275,684 35,203,185 34,057,235

Public Works 3,042,071 3,249,681 2,788,873 2,468,156 2,641,484

Health and Human Services 557,712 532,049 483,133 475,805 453,898

Culture & Recreation 1,045,953 978,460 923,717 862,179 867,422

Pension Benefits 6,303,237 5,665,164 5,218,335 4,885,994

Employee Benefits (2) 5,560,952 5,363,527 5,224,482 4,496,359 8,548,396

Property and Liability Insurance 185,587 164,957 152,348 124,932 103,707

State and County Charges 170,512 167,557 187,786 212,442 266,096

Debt Service

Principal 3,750,000 3,861,500 3,990,000 5,645,000 7,120,000

Interest 1,559,598 1,679,487 1,876,360 2,255,686 2,504,358

Total Expenditures 74,146,913 71,942,877 65,922,508 63,857,213 63,622,343

Excess of Revenues Over

(Under) Expenditures 350,175 1,127,816 56,778 728,178 524,117

Other Financing Sources:

Operating Transfers In 379,342 458,757 362,165 433,625 438,516

Operating Transfers (Out) (8,000) (37,211) (253,119) (96,812) (147,531)

Total Other Financing Sources

(Uses) 371,342 421,546 109,046 336,813 290,985

Excess of Revenues and Other

Sources Over (Under)

Expenditures and Other Uses 721,517 1,549,362 165,824 1,064,991 815,102

Fund Balance, Beginning 9,415,393 7,866,031 7,700,207 6,635,216 5,820,114

Fund Balance, Ending $10,136,910 $9,415,393 $7,866,031 $7,700,207 $6,635,216

(1) Excerpted from the Town's Audited Financial Statements

(2) Employee Benefits disaggregated into Pension Benefits and Employee Benefits after fiscal 2003.

A-2

Appendix B

There follows in this Appendix the audited financial statements of the Town for the fiscal year ended June 30,

2007 with the report of Sullivan, Rogers & Company LLC of Burlington, Massachusetts.

T

I I

ED SUPPLEMENT

SSACHUSETTS

ENDED JUNE 30,2007

APPENDIX B


IN U EFEN V ENTAUDITORS` REPORT ON BASIC FINANCIAL STATEMENTS AND

REQUIRED SUPPLEMENTARY INFORMATION

FOR THE FISCAL YEAR ENDED JUNE 30, 2Q0?

TABLE OF CONTENTS

Page

Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Management's Discussion and Analyst

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. . . . . . . . . . . . . Basic Pinancial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Statement of net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Staten-tent of activities . . . . . . . . .

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. . . . . . . . . . Governmental funds - balance sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

.

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Governmental funds - statement of revenues, expenditures and changes in fund balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Reconciliation of the governmental funds balance sheet total hind balances to the statement of net assets . . . . . . . . .

Reconciliation of the statement of revenues, expenditures and changes in fund balances of governmental fun

to

the statement of activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Proprietary funds - statement of net

.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Proprietary funds - statement of revenues, expenses and changes in fund net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Proprietary funds - statement of cash flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- . . . . . . . . . . . . . . . . . . . .

Fiduciary funds - statement of fiduciary net assets

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Fiduciary hinds -- statement of changes in fiduciary net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . --- . . . . . . . . . . . . . . . . TOM

to

basic financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . - . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Required Supplementary Information . . . . . . . . . . . . . . . . . . . .

. . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . General fund - schedule of revenues, expenditures and change in fund balance - budget and actual . . . . . . . . . . . . . . . . .

Notes to required supplementary information . . . . . . . . . . . .

. . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . --- . . . . . . . . . . . . . .

B-1

B-4

-B 14

-B 1

-B 1

-B 1

-B

-B

-B

-B

-B

-B

-B

-B

-B

-B

-B

-B 54

52

51

29

28

27

26

25

24

23

22

20

8

6

5

Certified Public Accouniaws

To the Honorable Board of Selectmen Town of Sudbury, Massachusetts

I statements of the governmental activities, the business-type jor fund, and the aggregate remaining fund information of the "Town of Sudbury,

seas, as of and for the fiscal year ended June 30, 2007, which collectively comprise the Town of Sudbury, Massachusetts' basic financial statements as listed in. the table of contents . These financial statements are the responsibility of me Town of Sudbury, Massachusetts' management . Our responsibility is to express opinions on these financial statements based on our audit.

e have audited the accom

Except as discussed in the following paragraph, we concluded our audit in accordance with auditing standards applicable to financial audits contained in

General of the United States . Those standards require easonable assurance about whether the financial statements are free

of material misstatement . An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements . An audit also includes assessing the accounting principles used and

nt estimates made by management, as well as evaluating the overall financial statement presentation . believe that our audit provides a reasonable basis for our opinions .

generally accepted in Governnient Auditing Stanch that we plan and perform the audit to obta

We were unable to obtain audited financial statements supporting the Town's investment in the Way;and-Sudbury Septage Facility (the Facility) stated at $578,000 at June 30, 2007, or its equity in the Facility's change

assets ; nor were we able to satisfy ourselves about the carrying value of the investment or the equity change in net assets by other auditing procedures .

lur opinion, except for the effects of such adjustments, if any, as might have been determined to be necessary had the Facility's financial statements been audited, the financial statements referred to in the first paragraph present fairly, K all material respects, the respective financial position of the governmen tal activities of the Town of Sudbury, Massachusetts, as of June 30, 2007, and me respective changes in financial position thereof for the fiscal year then ended in conformity with accounting principles generally accepted in the United States of

ddition, in our opinion, the financial statements referred to in the first paragraph present respects, the respective financial position of the business-type activities, each major fund, and the aggregate remair-dng fund information of the Town of Sudbury, Massachusetts, as of June 30, 2007, and the respective changes in financial position and cash flows, where applicable, thereof for the fiscal year then ended in conformity with accounting principles generally accepted in the United States of America,

Independent Auditors

SULLIVAN, ROGERS & COMPANY, LLC Corporate Place L Suite 204 - 99 South Bedford Street

Burlington, Massachusetts 01803 P - 781-229-5600 F - 781-229-5610 www.sullivan-rogers .com

As more fully described in Note 13, the Town has implemented the retroactive infrastructure repor requirements of Governmental Accounting Standards Board Statement #34, Basic Management's Discussion and Analysis -for State and Local Governments.

B-2

In accordance with Government Auditing Standards, we have also issued our report dated February 26, 2008, on our consideration of the Town of Sudbury, Massachusetts' 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 to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing and not to provide an opinion on the internal control over financial reporting or on compliance, That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.

February 26, 2008

The management's discussion and analysis (located on pages 4 through 13) and budgetary compar information (located on pages 51 through 54) are not a required part of the basic financial statements but are supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the supplementary information. However, we did not audit the information and express no opinion on it.

B-3

lvsi s

As management of the Town of Sudbury, Massachusetts (Town), we offer readers of these financial statements this narrative overview and analysis of the Town's financial activities for the fiscal year ended June 30, 2007 .

Financial Highlights

>

The assets of the Town exceeded its liabilities at the close of the most recent fiscal year by $95,319,031 (no assets). Of this amount, $17,201,728 (unrestricted net assets) may be used to meet the governments ongoing obligations to citizens and creditors.

oven's total net assets increase

>

As of the close of the fiscal year, the Town's governmental funds reported combined ending fund balances totaling $25,417,982, an increase of $1,925,833 in comparison with the prior year . Approximately $17,169,000 represents unreserved fund balance.

>

At the end of the fiscal year, undesignated fund balance for the general fund totaled $996,718 or 1.3 percent of total general fund expenditures .

The Town's total bonded debt issued .

Statements

1 .

Government-wide financial statements 2.

Fund financial statements 3.

Notes to the basic financial statements .

,223 .

oss) decreased by $4,265,000 during the fiscal year; no new debt was

This discussion and analysis is intended to serve as an introduction to the basic of the following three components :

This report also contains other supplementary information in addition to the basic

ancial stag -

The governe-- t-wide financial statements are designed to provide readers with a broad overview of the Town's finances, in a manner similar to a private-sector business .

The statement of net assets presents information on all

of the

Town's non-fiduciary assets and liabilities, with the difference between the two reported as net assets . Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the Town is improving or deteriora

Town of Sudbury, Massachusetts

The statement of activities presents information showing how the government' s net assets changed dun most recent fiscal year . All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows . Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes, earned but unused vacation leave, etc.) .

Both of the government-wide financial statements distinguish functions of the Town that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities), Governmental activities include general government, public safety, education, public works, health and human

ure and recreation and debt service (interest) . Business-type activities include the Town's swimming pool and landfill operations .

Fiscal Year Ended Tune 3f) V0

vial statements .

fired Supplementary Information

B-5

The government-wide financial statements can be found on pages 1&17 of this report.

1 .

Governmental funds 2.

Proprietary funds 3 .

Fiduciary funds

Governmental Funds

The has

Proprietary funds

Fiduciary funds

a sion and Analvs


The Town maintains one type of proprietary fund .

For the Fiscal Year Ended tune 30,

A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives . The Town, like other state and local governments, uses fund accoun ensure and demonstrate compliance with finance-related legal requirements . All of the funds can be divided the following categories and are described below:

Governmental funds are used to account for essentially the same functions reported as governmental ac the government-wide financial statements . However, unlike the government-wide financial statements, governmental funds financial statements focus on near-term inflows and outflows of expendable resources, as well as on balances of expendable resources available at the end of the fiscal year . Such information may be useful in evaluating a governments near-term financing requirements .

Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements . By doing so, readers may better understand the long-term effect of the government's near-term financing decisions. Both the governmental funds balance sheet and the governmental funds statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities .

The Town maintains 326 individual governmental funds. Information is presented separately in the governmental funds balance sheet and in the governmental

funds statement of revenues, expenditures, and

changes in fund balances for the general, stabilization, community preservation (special revenue) and affordable housing (special revenue) funds, each of which are considered to be major funds. Data from the other 322 governmental funds are combined into a single, aggregated presentation titled nonmajor governmental funds .

overnmental funds financial statements can be found on pages 1423 of this report .

Enterprise funds are used to report the same functions presented as business-type activities in the governin wide financial statements . The Town uses enterprise funds to account for its swimming pool and Ian

ides, each of which are considered to be major funds .

proprietary funds financial statements can be found on pages 24-26 of this report.

0

Fiduciary funds are used to amount for resources held far the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the Town's programs . The accounting used for fiduciary funds is similar to that used for proprietary funds.

elementary Information

B-6

h4anagement's Discussion a

Private-purpose trust funds and agency funds are reported and combined into a single, aggregate presentation fin the

fiduciary fund financial statements under We captions "private purpose trust funds" and "agency funds", respectively .

Notes to the basic financ

Other Information

Government-Wide Financial Analysis


ments

The bake fiduciary funds financial statements can be found on pages 27-28 of this report .

Fiscal Year Ended T---(, 30, 2007

The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements . The notes to the financial statements can be found on pages 29-

50 of this report .

Jn addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information. Presented in this information is the budget comparison for the general fund, whic can be found on pages 51-54 of this report.

The following tables present current and prior year data on the government-wide financial statements .

As noted earlier, net assets may serve over time as a useful indicator of a government's financial position . The

Town's assets exceeded liabilities by $95,319,031 at the close of the fiscal year and are summarized as follows:

B-7

Current assets . . . . . � . . . . . . � , . . ., ., . . $

32,478,517

$

28,907,079

$

287,4

)

$

2

,7

$

32,766,007

$ Noncurrent assets

tat asset Capital assets (net) . . . . . . . . . . . . . . . . . .

Total liabilities . . . .

Net Assets

Restricted . . . . . . . . . . . . . � . . � , . . ., . . . . .

Total net amets . ., . . . . . . , -

Changes in Net Assets

t'own's total net assets


Governmental Activities

2007 2006

Liabilities

Current liabilities (excluding debt) ., . . .

Noncurrent liabilities t} . ., . . . . . � . . . . . ., .

. . . . . . . . .- . . . . Noncurrent debt . . . . . ., . . . . � , . . . ��

3- 911

41311206

F7,6 511

°""`

more fully d

- v - in Note

64,554,277 884,783 13,37 793

the Fiscal Year Ended June 30, 2007

peActivities Total

2006 *

lion of the Town's net assets (72.4%) reflects its investment in capital assets (e .g ., lani construction in progress, land improvements, buildings and improvements, machinery and equipment, vehicles and infrastructure), less any related outstanding debt used to acquire those assets . 'these capital assets are used to provide services to citizens ; consequently, these assets are not available for future spending . Although the

capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities .

An additional portion of the Town's not assets (9.5%) represents resources that are subject to external restrictions on how they may be used . The remaking balance of unrestricted net assets (18.1% or $17,201,728) may be used to meet the Town's ongoing obligations to citizens and creditors . Of this amount, $16,942,180 may be used to support governmental activities and $259,548 may by used to support business-type activities .

by $4,795,223 during the current fiscal year and are summarized as follows :

upplementary Information

4,308,139 40,706 4,336,081 4,388,11

771342 911,592 776,342 911,542

3,--5473 4,025,673 4X21673

B-8

Revenues

Real estate, poured property taxes and Motor vehicle and other excise taxes........................... Penalties and interest on taxes. .

or

human

. . . .. . . . . . . ___

As mshted and more fully described in Note 13 .

Business-type ac increased the Town

lawn of Sudbury, Massachusetts

A-149 zw%ni;

56,684,168 54,524,814 4,281,069 4,070,174 773,297 751,824

Z480,583 1,94Z08 zmzn8

Governmental activities increased the Town's net assets by $4,797,125 . In the d the Town's net assets by $5,403,067 . The key

approximately $462,000 resulting from the Town's required by Governmental Accounting Stan

U%709 246,552 Land K -

Total expenses . .

St...................................................

on transfers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Transfers, net. . . . . . . . . . . . . . . . . . . . . . . . . . .

O"Mi

nmental activi of this change is an increase in depreciation of

mentation of retroactive infrastructure reporting as tatement #34 (see Note 13) .

sed the Town's net assets by $1,902 . In the prior year, business-type activi net assets by $55,967. The key element of this change is a decrease in usage of the

ill durina fiscal year 2007.

3,229,179 3,033,86o 7,929,198 7,547,355 51684A68 51524Y14 4,281,064 4,07%1?4 773,297 1,EE24

Z48M583 1,94Z08 zu%ys zolms uIng M1

78,137,003

ed Supplementary Infonna

GovernmentalActivities Total

H%* 2007

4,088,408 $ Injug S 694,359 $ 721,544 $ Ii ."7 4,774,663

11,926,642 10,993,718 - - 11, i 10,993,718

LWKWO Lu%x()

51330,784 55,69b,151 57,330,784 55,696,151

Z58150 Z898,295 Z585,595 Z89EW05

200,005 200,005 33EO103

123,777 65,409 1__.277 65,409

1,3a5,841 1,243,198 " 1 1,243,58

1S7,626 1,67Z142 - - 1,747,6 6

WU125 %006,4125 HAH QM9 TP° -3 10%M4

1 IN2 CLANT TQ2)

C 5,403,067 000) 55,967 4,795, 3 5,09,04

Ll

8%3n>75 $ 1,144,331 $ III= $ TWO1

B-9

N&1p .qement`sDisr !scion and Analysis

requirements .

ancial Statement Analysis

, the Town uses fund accounting to ensure and demonstrate compliance with finance-related legal

mental funds

The focus of the governmental funds is to provide information on near-term inflows, outflows, and balances of expendable resources. Such information is useful in assessing the Town's financing requirements . In particular, unreserved fund balance may serve as a useful measure of a government' s net resources available for spending at the end of the fiscal year .

At the end of the current fiscal year, the governmental funds reported combined ending fund balances totaling $25,417,982, an increase of $1,21833 in comparison with the prior year . Approximately $15,031,000 represents undesignated fund balance. The remainder of fund balance is reserved or designated to indicate that it is not

ble for new spending because it has already been committed to :

V

Liquidate contracts and purchase orders of Employee benefits ($5,638,267) Perpetual permanent funds ($941,155) Other specific purposes ($305,911)

A

Fund a portion of the fiscal year 2008 budget ($2,138,000)

period ($1,363,925)


The general fund is the chief operating fund of the Town. At the end of the current fiscal year, undesignated. fund balance of the general fund totaled $996,718, while total fund balance was An'130910. As a measure of the general fund's liquidiq, it may be useful to compare both undesignated fund balance and total fund balance to total general fund expenditures . Undesignated fund balance represents 13%) of total general fund expenditures, while total fund balance represents 13.7% of that same amount .

The fund balance of the Town's general fund increased $721,517 during the current fis attributable to the following:

Use of unreserved fund balance ($2,875,443) Conservative spending against budgeted appropriations (positive va encumbrances and continuing appropriations) Unbudgeted collections of revenue ($138,616)

~

Net increase of self-insurance activities reported in the general fund for GAAP ($1,654,282)

Financial highlights of the Town's other major governmental funds are as follows :

ear. This is

of $1,894,627 before

The fund balance of the stabilization fund (special revenue) increased by $81134 during the current attributable to investment income earned by the fund .

The fund balance of the community preservation fund (special revenue) increased by $729,639 during the current fiscal year . The fund recognized $1,303,239 in surcharges, $1,248,806 in intergovernmental revenues and $295,283

$1,982,689 were incurred during the fiscal year . Transfers out of $135,000 and were made during the fiscal year .

The fund balance of the affordable housing fund (special revenue) increased by $158,655 during the current fiscal year . This is primarily attributable to transfers in from the community preservation fund .


Required Supplementary Information

B-10

Praprietary

The Town's proprietary funds provide the same type of information found in the government-wide financial statements, but in more det

Capital assets

Unrestricted net assets of the

swimming pool and landfill enterprise funds at the end of the year amounted to $101978 and $155,574, respectively . The swimming pool and landfill enterprise funds had a decrease/ increase in net assets for the year of $21,414 and $19,508, respectively . Other factors concerning the finances of these two funds have already been addressed in

the discussion of the Town's business-type activi

Asset and Debt Administration


general fund budget was $73,248,766 (including prior year encumbrances and cantinu

ar, general fund revenues exceeded budgetary estimates and expenditures and encumbrances and priations were less, resulting in an actual increase in fund balance that exceeded the

amended budget amount by $66%318.

The T'own's investment in capital assets for its governmental and business type activities at the end of the fiscal year totaled $87,473,419 (net of accumulated depreciation). This investment in capital assets includes land, construction in progress, land improvements, buildings and improvements, machinery and equipment, vehicles, and infrastructure . The total increase in the investment in capital assets for the current fiscal year totaled $265,072 or (WIS {a (14% increase for governmental activities and a 01% decrease for business-type activities) .

Major capital asset events that occurred during the current fiscal year include the follo

>

Construction of community athletic field complex ($960,000) >

Various roadway and other infrastructure improvements ($950,000) ehicles ($385,000)

Contributions of land ($252,000) HVAC system upgrades ($180,000)

The following table summar

I_ Vehicles . Infrastructure . . .,,,

Total capi W . . .

Not

S 2%501502 $ ogress . . . . . . . . ; :,. . -

- nts . . . . . . . . . .- .- . . .

2,139,761

e Town's capital assets (net of accumulated depreciation):


Business-Type Activities

Total

2007

_1

__ 31 *

2007

2006

192,500 $ 3, J02 812,368

-

- 1,713,825

-

- 51,645,913 575,000 603,750

767,116 786,947 117,2 130" 1,7; ,744

q

)A g

,)nor *

* As restated and more fully described ''i Note 13,



- 812,368 zn%ni 1X%B25

51,633,264 52,249,663 767,116 786,947

1,852,027 1, 6 5,305,249

B-11

Management's Discussion

Economic

tional information on the Town's capital "set can be found in Note 5 on pages 42-43 of this report .

Long-Term Debt

At the end of the current fiscal year, the total gross bonded debt outstanding was $42,040,000, which is backed by the full faith and credit of the 'Town and consists entirely of general obligation bonds.

The Town's total gross bonded debt decreased by $4,265,000 (9.2%) during the current fiscal year, with no now debt issuances.

The Town's bond rating from Standard & was AAA.

tional information on the Town's long-term debt can be fou

ors and Next Year's Budgets and Rates

"

Approved tax override and capital exclusion for a combined $2,900,000; "

Free cash from the prior year, up a significant $372,000 over fiscal year 2007 .

05 bond issue (the Town's most recent bond issue

For the Fiscal Year Ended Tune 30, 2007

ote 9 on pages 4Y48 of this report.

The development of the fiscal year 2008 general fund operating budget was hampered by limited growth in the Town's major revenue sources . Changes in State aid and local receipts for fiscal year 2008 are expected to essentially cancel each other out, leaving Free Cash (savings and surplus from prior years) as the only lion-tax revenue source to help fund the Town's increased operating costs .

s the primary local-source revenue for the Town. Property taxes in Massachusetts ies are limited to a levy growth of 2'I2% plus a factor for new construction, unless the voters at an

tion approve an increase for operating expenses or debt service for a specific project. Due to the rise in costs, especially having to do with wages and benefits, the Town sought and received approval of a proposition 2 1/2 override for fiscal year 2008 .

it h approval of the override budget, fiscal year 2008 projections for general fund revenues increased by $3.6 million, primarily due to the following:

Capital needs for the Town continue to be an area of concern. The fiscal year 2008 capital spending plan included a moderate $99,053 increase over fiscal year 2007, With a variety of old equipment and needed building improvements still stacking up under the weight of meager increases for other operating expenses, the Town may need to ask for future capital exclusion funding or override dollars earmarked for infrastructure in order to

ether erosion of public assets and continue meeting the needs of the community as a whole .

I debt The 2008 budget included an approved Capital Exclusion of $405,000 to purchase a new fire en service for Town of Sudbury debt continues to decline as we pay off the bonds issued for expansion of the Sudbury Public Schools . This decline in excluded debt will provide room in the Town's tax levy for other much-needed building improvement projects . The timing of these new significant projects will allow the Town to upgrade their facilities without having to increase the debt-related component of the tax rate during fiscal year 0908 and beyond .



B-12

The permanent increase to the levy limits during the last override in fiscal year 2006 and once again in fiscal year

2008 has allowed more flexibility for the Town during the fiscal year 2007 budget cycle. However, the budget

outlook for fiscal year 2008 and beyond remains guarded as operating expenses, in particular, the areas of

utilities, fuel, supplies and health insurance costs, continue to rise year-to-year at a much greater pace than the

Town's aggregate revenues and receipts . A particular cautionary footnote for Sudbury and other communities is

the uncertainty of State aid from year-to-year . Whereas fiscal year 2007 showed a bump up in this area, recent

indications suggest just the opposite going forward as the State's own budget difficulties remain closely tied to

local aid is distributed . Free Cash for the Town is also expected to steadily decline in

non-recurring receipts continue to dwindle. As such, using Free Cash to help fund

recurring operating costs is more risky than in past years.

Management continues to take steps to protect the Town's financial health in fiscal year 2008 and beyond .

Sudbury's comprehensive budget policies and practices earned the Town top-honors again in fiscal year 2008 by

being awarded me National Government Finance Officers Association's "Distinguished Budget Award." The financial policies require us to avoid making short-term decisions that solve the problems only for today but

jeopardize the future . Such actions that have been avoided include using our Stabilization Fund, designated for

emergency reserves, to cover operating costs, further postponing funds for capital and building maintenance, or

"raiding" trust fund balances . These types of actions could be tremendously harmful to the Town over the long-

run. The Board of Selectnien continues working on strategies to increase our tax base by working on alternatives

to provide wastewater treatment in the downtown area . This has been identified as the major inhibitor for any

growth of our commercial sector .

Finally, elected and appointed officials remain committed to using a forecasting model we developed to project

long-range costs as well as adhering to long-term financial principles for decision-making. We believe this

approach will serve the Town well in managing our way out of the current financial difficulties and any future

ones . The model allows us to focus not just on the balance between revenues and expenditures in the current

year but also on those of future years because it isolates the primary drivers of future costs. As part of this

inking, Sudbury's management has successfully identified several key revenue-enhancing and cost-

savings measures that have positively impacted the financial results for the Town in fiscal year 2007 and

fter . The Town remains committed to these efforts as outlined in Sudbury's C.A.R.E, program (Cost ce and Revenue Enhancement) and others like it .

The key to maintaining our excellent financial condition and retaining our hard won AAA credit rating from

Standard & Poor's is to continue to make decisions with multi-year sustainability in mind, and to respec voters of me Town as to the service levels and property tax overrides they approve.

Requests for Information


Discussion and Analysis

For 41-e Fiscal Year Ended June 30, 2007

ial report is designed to provide a general overview of me Town's finances for all those with an

interest in its finances . Questions concerning any of the information provided in this report or requests for

additional financial information should be addressed to the Finance Director, Town Hall, 288 Old Sudbury Road,

Sudbury, Massachusetts 01776.

pplementary Information

B-13

Howul

I Cu 0

Noncum

Uni

taw M"Momts

)n

ioraa nonce

,mr,

W Wbifi

rents,

mw 9 s 5,94,, .,,

_ , 3 7,524,080

7,52 30 2,4i . __ . z A

192,500 61283

1MM%03

Bmk Fhmn6d SMWUmds

B-15

Pri r ry _ Governmental activit

General

)v ___l ment . . . . . . . . . . .

$

122%179

,

1,149,249

-

238,260

S Public safeq, . . - . . . . . . . . . . . . . --- . . .

7,929,198

444,694

288,501 56,684,168 1,172,865 10,158,223

98,005 81 32,560

944,261 271,887 206

Public works Health and hum Culture and rE Debt service -

Total governmental ac

Total primary government . . . - . . . . . . . . . . . . . .

See notes to basic financial statements .

FOR

of........................ 433,7 dfill . .

246,5

4,088,408 11,926,642 2,071,92

412,299 282,060

VITA

MZM $ QS%270) - (1200003) - (41351080)

570,723 (3,279,983) (687,756)

1,248,806 (19,629) - (1,240,

B-16

STATEMENT OF ACTIVITIES (Continued)

R -FN]nFn ITJNP -10 9On7

net assets : et {expense}/revenue (from previous page} . . . . . . . . . . . . . . . . . . . . .

General revenues : Real estate, personal property taxes and tax hens . . . . . . . . . . . .

57,330,784 Motor vehicle and other excise taxes . . . . . . . . . . . . . . . . ., . . . . . . . . . .

:L581595 Penalties and interest on taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ., .

200,005 Payments in lieu of taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12%777 Community preservation surcharges . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,305,841 Grants and contributions not restricted to specific programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . Unrestricted investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Transfers, net . . . . . . . . . . . . . . . . . .


Governmpnt

1,747,626 857,260

00

64 .1 W88

4,795,223

90,523,80

(16,000)

57,330,784 2,585,595 200,005 123,777

1,305,841

1,747,626 857,260

Financial Statements

d transfers 64,166,888 ..... (16,000)

Change ets . . . . . . . . - . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,797,125 (1,902)

assets - beginning of year (as restated} . . . . . . . . . . . . . . . . . . . . . . . . . 89.377.575 1,146,233

Net assets - end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ MI 7nn

B-17

TOTAL ASSETS . . . . . . . . . . . . . . . .

LIABILITIES AND FUND BALK

TOTAL LIABILITIES . :

Cash and cash equivalentInvestments . . . . . . . . . . . .

bles, net of allowestate and person

estate tax de&rraa . . . . . . . - . . . . . . -

Motor vehicle and ot

Tax foreclosures . - .- . . . .

. . . . . . .

. . . . . . Working capital deposit . . .

. . . . . . . .

. . . . . . .

. . . . . . . Restricted assets:

Cash and cash eq ivalents .

. . . . . . -- . . . . . .

ILITIES: nts payable . . .

. . . . . . .

$

272,1 ed payrolL .

MEMO Tax refunds

. . . . . . . .

104,390 Own HAMhes ..-

. . . . . . . . . .

651,034 Deferred revenue . . - . . . . . . -- . . . .

. . . . . .

. . . . . .

2195%286 Accrued health claims payable . . . . . . .

. . . . . . . . . . . . . . . . . . .

377,864 rs'compensation cla' ns . . .

63 74?

bans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Employee benefih--

. . . . . . Perpetual permanent funds .- . . . . . . . . . . . . . . . Other specific purpos

Designated for subsequent year's expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Undesignated, reported in:

General hmd . . . . . . . . . . . . . . .

. . . . . . .

996,718 Special revenue f Linds . . . . - . . . . .

. . . . . . . .

. . . . . . . . . . . Capital projects funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Permanent fur c-

TOTAL FUND BALANCES..

TOTAL LIABILITIES AND FUND BALANCES..............................,............

$ 38,u-

See notes to basic vial statements,

$

1,363,925 5,638,267

1,947 30,173

1,682,125 6,873,939

Basic Financial Statements

s . . . . . . . . . . . . . . . . . 7,263,882 . . . . . . . . . . . . . . . . 5,875,325 ance for uncollectible amounts : al property taxes . . . . ., . . . ., . . . . . . . . . . . ., . . � . . . . . . . . . . . . . . . . . . . . . 709,421 ls . . . . . . . . . . . . . . . . . . . . . . . . . -- 822,234 -- . . . . . . . . . . . . . . 415,291 er excise taxes, 109,586 ion surcharges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22,156,000

B-18

AL YF ~ TZ FNTT11T1 YT 'xJF 3n 2nn7

General REVENUES

Red estate and personal proper, taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

5162%289

$ they excise tam" .

2,589,563 . . . . . -------

251,389 Payments in lieu of taxes . . . . . . . . . . . . . . . . . .

. . . . . . . .

. . . . ___

123,777 Community preservation surcharges . ., . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

- Charges for services . , , - ." . . . . . . . . . --- . . . . . -- . . . . . .

. . . __- . . . . . . tergovermnental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12,627,161 allies and interest on taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Contributions . . . .

TOTAL REVENU

RES Current:

General government . . . . . . . . . . . . . . Public safety . . . . . . - - . . . .

. . . . . .

. . . . . . . . .

. . . . . . . . Education, . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . Public works . . - , . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . .

. . . . . . .

. . . . . . . . . . Health and human services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

redion . . . .

. . . . . . . . . . . . . . . . . . - nefite . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . . --Employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Property and liability insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

State and county charge, . . . . . . .. . . . - . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . --

170,512 Debt service :

princlat . . . . . . . . . . . . . .

. . . . . . .

. . . . . . . . . . . . . . . . . . . .

. . . . . . . . .

. . . . . . . . .

TOTAL EXPENDITURES . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . .

-Y) OF REVENUES TUBES . ... . . . . . .. . . . . . .. . . . . .. . . . . . . . .

OTHER FINANCING SOURCES (USES) Transfers A . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transfers ouk. . . . .

See notes to basic financial statements,


Community

1,303,239

1,248,806

68,40

721,517 84,134 729,639

) ------ I

-

7193

1 5Q7 991

6,144,300

LANCES AT END OF YEAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

sic Financial Statements

. . . . . . . . . . . . . . . . . . . . 200, ---------- - 872593 ,

. . . . . . . . . . . . . . . . . . . . 141078 19%973

B-20

Nonmajor Total Affordable Governmental

34,836 2,540,060

Town of Sudbunj, Massachusetts

56,629,289 2,589,563 251,389 123,777

1,303,239 340,514 340,514

2,689,338 16,565,305

238,484

184,996 166,585

3,304,094 40732,328 "78q252

50,580 619,979 946,592 3,095,329

- 6,303,237 - 5,560,952

185,587 170,512

221,839 2A484

- 514,342 (351342) (4 98,342)

158,655 231,888 1,925,833

B-21

ONCILIATION TOTAL FUN

ERNMENTAL FUNDS BALANCE SHEET VES TO THE STATEMENT OF NET ASSETS

Total governmental fund balances {page 19} . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

25,417,982

Capital assets (net of accumulated depreciation) used in governmental activities are not financial resources and, therefore, are not reported in the governmental funds. . . . . . . . . . . . . . . .

86,588,636

The equity interest in the assets of the governmental joint venture is not reported in the governmental funds . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . . . . . . .

See notes to basic

Other assets are not available to pay for current period expenditures and, therefore, are deferred in the governmental funds. . . . . . . . . . . . . ., . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24,047,736

In the statement of activities, interest is accrued on outstanding long-term debt, whereas in the governmental funds interest is not reported until due. . . . . . . . . . . . . . . . . . . . . . . ., . . .

(162,267)

Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the governmental funds.

Bonds and notes payable.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(41,315,206) al lease obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(447,207) Compensated absences . . . . . . . .

. . . . . . . . . .

. . . . . .

. . . . . . . . .

. . . . . . . . . . . . . .

. . . . . . . . .

. . . . . . . . . . . . . . . . . . . .

(';"?, Q74)

Net assets of governmental activities (page 15} . . . . . . . . . . . . . . . . . � . . . . . . . . . . . . . . . . . . . .


tements.

578,000

94 . 174,700

inancial Statements

B-22

See mates to basic

Net change in fund balances - print governmental funds (page 21} . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Governmental funds report capital outlays as expenditures . However, in the statement of a cost of those assets is allocated over their estimated useful lives and

as depreciation expense. These amounts represent the related activity period .

Capital outlays and contributiony . . .. . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . - . . . . . . . --- . . . . . . . . -- . . . . . . . . - Depreciation . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . .. . . .

. . . . . . . . . . .

. . . . . . . . . . . . .

. . . . . . . . -- . . . . . . . . . . . . . . . . . . . .

the statement of ac whereas in net assets differs from the change in

int venture accounts for the equ Since a majority of the equ

or

The roves Septage investment it the net change in the investment in joint venture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

TO THE STATEMENT OF ACTIVITIES

qCAI,YFARFNr-T) JNE30,2007

or loss on the disposal of capital assets is reported, at is not reported. As a result, the change

by the net book value of the cap

the Wayland-Sudbury rest is invested in capital assets, the

e statement of net assets . This represents

statement of activ are

fully deferred in the statement of revenues, expenditures and changes in

ces . Therefore, the recognition of revenue for various types of accounts recciv (i .e ., real estate and personal property, mom vehicle excise, etc.) differ between the two statements . This amount represents the net change in deferred revenue. . . . . . . . . . . . . . . . . . . . . . : . . . . . . . . . . . . . . . .

(IA61903)

uance of long-term debt (e .g ., bonds and leases) provides current to governmental funds, while the repayment of the principal of long-term debt consumes the financial resources of governmental funds. Neither transaction, however, has any

ernmental funds report the effect of i

Some expenses reported in the statement of activities do not req financial resources and, Therefore, am no reported 0 do gove This amount represents the net change :

absences . . . . . . . . . . . . . . .

e of current ds .

Capital lease maturities . . . . . . . . . . . . . . . . . . . . . . . ., . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,921,374 1,793)

(136,000)

4,265,000 (23%327) 187,032

To the statement of activities, interest is accrued on outstanding long-term debt, e governmental funds interest is not reported until due. This amount

represents the net change in accrued interest payable ., .

. . .

16,474

7)

. . . . . . .

. . . . . . . ___

$

4,797,125

B-23

TARYFU STATEMENT OF NET ASSETS

s-Tvpe Activities - Fntelri!e Funds

ASSETS

Pool Landfill Total Current asset:

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

set: pital assets not being depreciates'

Capital assets, net of accumulated depreciatior.

Total noncurrent assets .

LIABILITIES Current liabilities :

Warrants payable Accrued payroll

NET ASSETS Invested in capital assets, net of related deb Unrestricted

Total current Iiabi1i

net assets . . . . . . . . .



15&01

8,929 6,672

192,500 192,500 ,283 692,283

Total asset,

AQ4. r,7Q

477,694

1,172,273

7,3 4,994

884,783

16,276

575,000 309,783 884,783 155,570 259,548

financial Statements

B-24

19324193,242 56%804 3%647 77,043

- 1%664

__ 41A

TRANSFE Transfers Transfers out . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

S

See notes to basic financia

PROPRMTARYFUN STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS

E (LOSS) BEFORE TRA


'RANSFERS . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . .

tements.

Business-Type Activities - Enterprise Fun

Pool

246,552 690,261

a is Financial Statements

PERATING REVENUES Charges for services . . . . . . . . . . . . . ., . ., . . . . . . . . . . . . . . . . . . . . . . . . . . . $ . 412 299

TING EXPENSES Cost of service and administration . . . . . . . . . . . . . . . . . . . . . . . . . . . 30563 Repairs and maintenance . . . . . . . . . . . . . . ., . ., . . . . . . . . . . . . . . . . . . . 37,396 Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . _ . . . . . . . . 28,750

TOTAL OPERATING EXPENSES. . . . . . . . . . . . 4'aq;70Q

CHANGE 1N NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (21,410) 19,508 (1002)

NING OF 700,388 415145 1/140233

NET' ASSETS AT END OF YEAR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ., . $ 465,353 $ 1 14"Im,

B-25

D

FLOWS FROM OP

Payments Payments

,O Transfers Transfers

E RATING INCOM FROM OPERATING AC

See notes to ba

Total adjustments, . . .


Operating income (loss) . . . . . . ---- . . . . . .

. . . . . . . . . . . Adjustments to reconcile operating Mcome (loss) M net

cash from operating activities : n. . . . . .

. . . . .

. . . . . . . -- . . . -- . . . . . . . .

28,750 d liabilities :

ES . . . . .

. . . . . . . . . . . . .

. . . -

R. ....-

R-- R...............................

rom customers and users . . . . . . . . . . . . . . . . . $ 412,299 $ 282,O60 $ 694,359 to vendors. . (191,648) (151,226) (342,874) to employees . . . . . . . . . . . . . . . � . . . . . . . . . . . . . . . (111 209 (96,532) (307,737)

S FROM NON CAPITAL FINANCING ACTIVFI in . . . . . . . . . . . . . . . . . . . . . -- . . . . . . . . . . . 00 W0 out . . . . . . . . . . . . . . . . . . (24,000) (24,000)

11 3 . (1,000)

I'S................................... 9,446 18,302 27,748

B-26

SETS

Cash and cash equivalents. . , . . . . . . . . . . . . . . . . .

. . . . . . . . - . .

, Receivables, net of allowance for uncollectible amounts:

Departmental and other. . . . . . . . . . . . . . . . .

ES Warrants payable Liabilities due depositors . . . . . . . ., . ., .

Total liabilities



U STATEMENT OF FIDUCIARY NET ASSETS

Total assets...................................................

NET ASSETS Held in trust for other purposes . . . . . . . . . . . . . . ., . .

Private Purpose Agency

Trust Funds

Funds

134,287 $ 965,310

4287

- 1a70,720

114287 $

60,485 (1225

sic Financia I Statements

B-27

A Contributions :

Private donations . .

. . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

42,480

DITI NS

Net investment income : Interest . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . .

. . . . . . . . . . . . . . . . . . .

7,987

TOTAL ADDITIONS . . . . . . . . . . . .

. . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

DEDUCTIONS Scholarships awarded . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . .

4,925

NGE IN NETASSETS . . . . . . . . . . . . . . . . . . . .

NET ASSETS ATBEGINNING OF YEAR

88,745

NET ASSETS AT END OF YEAR . . . . . . . . . . . . . .

$

14 287



FIDUCIARY FUNDS STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS

FOR THE FISCAL YEAR ENDED TUNE 30, 2007

Private Purpose -ust D.mds

50,467

. . . I . . . . . . . I . . . . . . . . . . . . . . . . -

45,542

ial Statements

B-28

Notes to Basic Financial Sta'--,ie-ts =-- . . ....... --

N

YL General

The basic financial statements have been prepared in accordance with accounting principles generally accepted in

the United States of America (GAAP) . The Governmental Accounting Standards Board (GASB) is the standard-

setting body for establishing governmental accounting and financial reporting principles . The significant elides are described herein .

The 'Town of Sudbury, Massachusetts (Town) is a municipal corporation that i Selectmen.

For financial reporting purposes, the basic financial statements include all

funds, organizations, agencies, boards, ions and institutions that are not legally separate from the Town .

The ̀ Town has also considered all potential component units for which it is financially accountable as well as e nature and/or significance of their relationship with the Town are such that s basic financial statements to be misleading or incomplete, It has been

in the basic financial statements .

other organiza exclusion would cause the

there are no component units that require in

joint Ventures

retain an ongoing t has the ability to u ni

Wayland-Sudbunj Septage Disposal Facility (,

coln Sudbunj Regional High School Distric

$18,036,782. Separate financ Lincoln Road, Sudbury,


ANT ACCOUNTING :,IC

For the Fiscal Year Enc' ~d Tune 30, 2007 .. . . . . . . . . . .

ted Board of

A joint venture is an organization (resulting from a contractual arrangement) that A owned, operated or governed

by two or more participants as a separate and specific activity subject to joint control in which the participants ongoing financial responsibility . Joint control means that no single Ily control the financial or operating policies of the joint venture.

The Town participates in the following joint ventures with other municipalities to pool resources and share the

costs, risks and rewards of providing goods and services to venture participants directly, or for the benefit of the

general public or specified recipients,

The Town is a participant in a joint venture with the Town of Wayland for the operation of a septage disposal

ty . The Towns of Sudbury and Wayland each appoint five members of the Operational Review Committee who oversee the operations . Each town has a 50 percent interest in the venture. The Town of Sudbury is the

custodian of the Facility's cash and investments, which is reported in the Agency Fund . As of June 30, 2007, the

Town's unaudited equity interest (departure from GAAP) in the operation of the Facility totaled $578,000 and is

reported in governmental activities .

is governed by a six member school district committee consisting of three elected representatives of

the Town . The ̀ Town is indirectly liable for the LSRFISD debt and expenditures and is assessed annually for its

share of operating and capital costs . For the fiscal year ended June 30, 2007, the Town's assessment totaled tatements may be obtained by writing to the Treasurer of the LSRHSD at 390

a Financial Statements

B-29

Notes to Basic FinanciF!I Statements

C

though fiduc govern en

TO

n me

a 1M;A

A U P 77

"M!

Grants and contribu or segment.


Minuteman Regional High School (MRHS)

overned by a seventeen member school committee consisting of one elected representative from the Town . The Town is indirectly liable for the MRI-IS debt and expenditures and is assessed annually for its share of operating and capital costs. For the fiscal year ended June 30, 2007, the Town's assessment totaled $312,280 . Separate financial statements may be obtained by writing to the Treasurer of the MRHS at 758 Marrett

d, Lexington, MA 024210313 .

Ka"Al qO&MPPfiz

The government-wide financial statements (statement of net assets and the statement activities) report information on all non-fiduciary activities of the primary government and its component units, Governmental

sported by taxes and intergovernmental revenues, are reported separate

from primarily supported by user fees .

Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even excluded from the government-wide financial statements . Major individual jor individual enterprise funds are reported as separate columns in the fund financial

statements . Non major funds are aggregated and displayed in a single column . Fiduciary funds are reported by fund type .

D. Measiirr~nentFocitsPaFisofAccoiin

offset by program revenues, segment. Program revenues includ

Wancial Statements

prise fund financial statements apply all applicable Financial Accounting pronouncements issued on or prior to November 30, 1989, unless

contradict GASB pronouncements .

The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting . Under this method, revenues are recorded when earned and expenses are recorded when the liabilities are incurred . Real estate and personal property taxes are recognized as revenues in the fiscal year for which they are levied . Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have

The statement of activities demonstrates the degree to which the direct expenses of a function or segment are ose that are clearly identifiable with a specific function or

Grants and contributions that are restricte segment.

msentation

restricted to meeting the opera


Charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment.

equirements of a specific function or

is Financ

Lion

B-30

A Ph

naqir Hn~lrr-i7l qfaforner

Taxes and other items not ide

Except for charges between the general fund and enterprise funds, the effect of interfund activity has been

eliminated from the government-wide financial statement,; . Elimination of these charges would distort the direct

costs and program revenues reported for the functions affected .

Governmental f u As fir Ancial statements are reported using an flow of current financial resources measurement focus and the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are

ceptible to accrual (i .e ., measurable and available) . Measurable means the amount of the

transaction can be determined and available means collectible within the current period or soon enough thereafter to pay liabilities of the current period . Expenditures are recorded when the related fund liability is

e d, except for unmatured interest on general long-term debt which is recognized when due, and certain

compensated absences, capital lease obligations, claims and judgments which are recognized when the obligations are expected to be liquidated with current expendable available resources.

Real estate and personal property tax revenues are considered available if they are collected within 60-days after

the end of the fiscal year . Investment income is susceptible to accrual. Other receipts and tax revenues become

ilable when the cash is received and are recognized as revenue at that ti

The special revenue funds or permanen purposes .

Entitlements and shared revenues are recorded at the time of receipt or earlier if the susceptible to accrual criteria

is met. Expenditure driven grants recognize revenue when the qualifying expenditures are incurred and all other grant requirements are met.

he following major governmental funds are reported :

The general fund is the primary operating fund . It is used to account for all financial resources, except those aired to be accounted for in another fund .

enues are reported as general revenues .

For the Fiscal Year Ended lane 30, 2007

`The stabilization fund is a special revenue fund used to account for the accumulation of resources to provide

I and capital reserves . Use of this fund is subject to Town Meeting approval.

The community preservation fund is a special revenue fund used to account for the 3 % local real estate tax surcharge

on nonexempt property (and matching state trust fund distribution) that can be used for open space, historic

resource and affordable housing purposes . Property exempt from the surcharge consists of the first $100,000 of

all residential property and also property owned by low-income residents or seniors with low or moderate

income as defined by Massachusetts Department of Revenue (DOR) guidelines . Disbursements from this fund must originate from the Community Preservation Committee and be approved by Town Meeting.

The affordable housing fund is a special revenue fund used to provide for the creation and preservation of affordable housing within the Town.

The nonmajor governmental funds consist of other special revenue, capital projects and permanent fund aggregated and presented in the nonmajor governmental funds column on the governmental funds financial

statements . The following describes the general use of these fund types:

Town of Sac bury, Massachusetts

ed to account for the proceeds of specific revenue sources (other than capital projects

are restricted by law or administrative action to expenditures for spa

The capital projects fund is used to account for financial resources to be used for the acquisition or construction of

major capital facilities (other than those financed by enterprise funds) .

asic Financial Statements

B-31

Proprietary funds financial statements are reported using use the accrual basis of accounting, whereby revenues are recorded when earned and expenses are recorded when the liabilities are incurred,

operating revenues and expenses from non-operating and expenses generally result from providing services and producing and delivering goods in connection with the proprietary funds principal ongoing operations . All revenues and expenses not meeting this definition are

s non-operating revenues and expenses .

The swimming pool enterprise find is used to account for recreational s

The landfill enterprise fund is use

Fiduciary funds financial statements are reported using the flow of economic resources measurement focus and use the accrual basis of accounting . Fiduciary funds are used to account for assets held in a trustee capacity for others that cannot be used to support the government's taro rams .

E.

Cash an

F?PV-V7n-v

anent fund is used to account gs, and not principal, may be used for purposes that support the governmental programs .

flowing major proprietary funds are reported :

F.

Accounts Rece


_ " ?° ,and T � nA Financial State

o

ount for landfill activities .

The following fiduciary fund types are reported :

e3%2W7

es that are legally restricted to the extent that only

flow of economic resources measurement focus and

001 ac

The private-purpose trust fund is used to account for trust arrangements, other than those repeated in the

rmanent fund, under which principal and investment income exclusively benefits individuals, private bans, or other governments.

is Financia

The agency fund is used to account for assets, held in a custodial capacity . Such assets consist primarily of performance bonds, bid deposits and cash receipt collections for the Facility . Agency funds do not present the results of operati

Cash and cash equivalents are considered to be cash on hand, demand deposits and short-term investments with an original maturity of three months or less from the date of acquisition . Investments are carried at fair value.

The recognition of revenue related to accounts receivable reported A the government-wide financial statements and fund financial statements are reported under the accrual basis of accounting and the modified accrual basis of

ely.

B-32

to Basic Financial Statements

For the Fiscal Year E

Real Estate Taxes,

Real estate and personal property taxes are levied and based on values assessed on January 1st of every year .

Assessed values are established by the Board of Assessor's for 100% of the estimated fair market value. Taxes are

due on August 1st, November Is', , February 11t, and May 11 and are subject to penalties and interest if they are not

paid by the respective due date. Real estate and personal property taxes levied are recorded as receivables

fiscal year of the levy .

Wor Vehicle and When Excise Taxes

Motor vehicle excise taxes are assessed annually for each vehicle registered in the Town and are recorded as

receivables in the fiscal year of the levy . The Commonwealth is responsible for reporting the number of vehicles

registered and the fair values of those vehicles to the Town. The tax calculation is the fair value of the vehicle

$25 per $1,000 of value.

Community Preservation Surcharges

Community preservation surcharges are levied annually and at a rate W 3% of residents' real estate tax bills with

exemptions for the first $100,000 of residential property and property owned by qualified persons with low

income and seniors (60+) with low or moderate income as defined by DOR guidelines . The surcharge is due with

the real estate tax on August ls', November is', February 1 ,, t, and May 1st and are subject to penalties and interest

if they are not paid by the respective due date . Overdue surcharges are included on the tax liens processed on

real estate taxes. Surcharges are recorded as receivables in the fiscal year of the levy .

art mental and Othe

Intergovernmental

are processed approximately one-year after the close of the valuation year on delinquent

and are recorded as receivables in the fiscal year they are processed.

state Tax


r Uncollectible Accounts

The allowance for uncollutible anoun the following accounts receivable :

eferrals, Personal Property Taxes and Tax Liens

>

Personal property taxes Motor vehicle and other excise taxes Departmental and other

Departmental and other receivables represent amounts due for the Facility and from vendors related to pol

details and are recorded as receivables in the fiscal year accrued .

Various state and federal operating and capital grants are applied for and received annually . For non-expenditure driven grants, revenue is recognized as soon as all eligibility requirements imposed by the provider

een met. For expenditure driven grants, revenue is recognized when the qualifying expenditures are

nd all other grant requirements are met.

ated based on historical trends and specific account analysis for

As of June 30, 2007, the allowance for uncollectible amounts for departmental and other receivables is immaterial

and therefore not reported .

The following types of accounts receivable are secured via the lien process and are considered 100% collectible .

Accordingly, an allowance for uncollectible accounts is not reported .

rile Financial Statements B-33

Intergovernmental receivables are considered 100% collectible .

Government-Wide and Fund Financial Statements

Inventories are recorded as expenditures at the time of purchase . Such inventories are not material in total to the government-wide and fund financial statements and therefore are not reported .

L

ac~r Fir- icial

Y

Real estate taxes and real estate tax deferrals

>

Community preservation surcharges

tones

ed Assets

Government-Wide and

Assets are reported as restricted when limitations on their use change the nature of the

availability of the asset. Such constraints are either externally imposed by creditors, contributors, grantors, or laws of other governments,

through constitutional provisions or enabling legislation .

Government-Wide and Proprietary

Capital assets, which consist of land, construction machinery and equipment, vehicles and infrastructure (e .g ., ro

s-type activities column of r

Capital assets am recorded at historical cost or at estimated historical cost if actual historical cost is not availab Donated capital assets are recorded at the estimated fair market value at the date of donation .

ets (excluding land) are depreciated on a straight-line basis. The estimated useful lives of ca are as follows:

The cost of normal maintenance and reps lives are not capitalized and am treated as ex


mor-'-q

costs in excess of $5,000 are capitalized at the date of acquisition or construction, eful lives of greater than one year,

ants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

30 Buildings and improvements . . . . . . . . . . . . . . . . . . . . . ., .

20- my and equipment. . . . . . . . . . . . . . . . . .. . . . . . . . . . . .

5-20 Vehicles . . . . . . . . . . . . . . . . . .

. . . . . . .

. . . . . .

4-20 Infrastructure . . . . . . . . . . . . . . .

. . . . . . . . . . . . .

. . .

20

improvements, buildings and ants, re reported in

overnment-wide financial statements .

Estimated

Useful

of add to the value of the assets or materially extend asset hen incurred . Improvements are capitalized .

ants

B-34

Notes to Basic Financial Statements

OrTMr-7-e7W OF? TOWT11

Cali tal asset costs are recorded as expenditures in the acquiring fund in the fiscal year of the purchase .

X Interfund Receivables and Payables

During the course of its operations, transactions occur between and within funds that may result

owed between funds.

L.

_FTir 11.1. 7; n! ~,"V

~~ -nfc

nrbl

sfers

erred Revenue

nci al Str -mqn

W-Whie Finance? Sta

Transactions of a buyer/seller nature between and within governmental funds are eliminated from the

governmental activities in the statement of net assets . Any residual balances outstanding between the governmental activities and business-type activities are reported in the statement of net assets as "internal

balances".

Transactions of a buyer/ seller nature between and within funds are not eliminated from the individual fund

statements . Receivables and payables resulting from these transactions are classified as "Due from other funds"

or "Due to other funds" on the balance sheet.

During the course of its operations, resources are permanently reallocated between and within funds.

Transfers between and within governmental funds are eliminated from the governmental activities in the

statement of net assets. Any residual balances outstanding between the governmental activities and busi orted in the statement of activities as "Transfers, net" .

Transfers between and within funds are not eliminated from the individual fund statements and are reported as

transfers in and transfers out.

Deferred revenue at the fund financial statement level represents billed receivables that do not meet the available

criterion in, accordance with the current financial resources measurement focus and the modified accrual basis of

accounting. Deferred revenue is recognized as revenue in the conversion to the government-wide financial

statements (full accrual) .

s and Fund Equity

Government-Wide Financial Statements

Net assets are reported as restricted when amounts are restricted by outside parties for a specific future use.

Net assets have been "restricted" for the following:

"Investment in joint venture" represents the Town's equity


Assets)

r- .r the Fiscal Year Fnde(4 June 30, 2007

in the operation of the Facility .

ounts

ss-

I Statements

B-35

Notes to Basic Financial Sfafernpnts

"Other specific purposes

reservation" represents amounts restricted for aff purposes .

"Permanent funds -- expendable" represents amounts held in trust for which the expenditures are restricted by

"Permanent funds - nonexpendable" represents amounts held in be expended .

resents restrictions place

Fund Financial Statements (Fund Balances)

trust for which only investment ear

n assets from outside parties.

Fr)r ffle, Fiscal Yp;-- Ended June 30, 2007

housing, open space and Kist

Fund balances are reserved for amounts that are not available for appropriation or are legally restricted by outside parties for a specific future use. Designations of fund balance represent tentative management plans that are subject to change.

Fund balances have been

Fund balances have been "designated for" the following:

"Subsequent year's expenditures" represents amounts appro

-term Debt

mpnt

P.

Investment Income

Town of Sudbury,

Government-Wide and Proprietar

sachusetts

the following:

ial State---

"Encumbrances and continuing appropriations" represents amounts obligated under purchase orders, contracts and other commitments for expenditures that are being carried over to the ensuing fiscal year .

"Employee benefits" represents amounts accumulated for self-insurance activities .

"Perpetual permanent funds" represents amounts held in trust for which only expended .

purposes" represents restrictions placed on assets from on S .

igs may be

e fiscal year 2008 operating budget .

Long-term debt is reported as liabilities in the government-wide and proprietary fund statements of net asset. Material bond premiums and discounts are deferred and amortized over the lit W the bonds using the straight-fine method . Bonds payable are reported net of

the applicable bond premium or discount.

The face amount of governmental funds long-term debt is reported as other financing sources when the debt is sued . Bond premiums and discounts, as well as issuance costs, are recognized in the current period . Bond

premiums are reported as other financing sources and bond discounts are reported as other financing uses . nce costs, whether or not withheld from the actual bond proceeds received, are reported as general

government expenditures .

Excluding the permanent funds, investment income derived from major and non major governmental funds is legally assigned to the general hand unless otherwise directed by Massachusetts General Law (MGL) .

B-36

Notes to Basic Financial Statements

Investment income from propri

Compensated Absences

Employees are granted vacation and sick leave in varying amounts based on collective bargaining agreements,

state laws and executive policies .

Governmen -Wide and Proprietary Fund Financial Statements

Vested or accumulated vacation and sick leave are reported as liabilities and expensed as incurred .

ed or accumulated vacation and sick leave, which will be liquidated with expendable available financial

resources, are reported as expenditures and fund liabilities upon employee retirements and resignations .

In addition to providing pension benefits, health insurance coverage is provided (on a pay-as-you-go basis) for red employees and their survivors in accordance with MGL Chapter 32 . These costs are recognized by

recording the employer's 50% share of insurance premiums in the general fund in the fiscal year paid . For the

fiscal year ended June 30, 2007, this expenditure totaled approximately $721,000 . There were approximately 260 ipants eligible to receive benefits at June 30, 2007.

+7 1 _F� T". '

Owment

S.

We of Estimates

-anf_jA1j,!,z! -7d F� °-.d

Column

en,Gts

The preparation of basic financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure for contingent assets and

liabilities at the date of the basic financial statements and the reported amounts of the revenues and expenditures/ expenses during the fiscal year . Actual results could vary from estimates that were used .

e Fin spriv! 9047M

The total column presented on the government-wide financial statements represents consolidated financial

information.


+A+r ,Mr,nfq

temerdts

unds is voluntarily assigned to the general fund.

I Ypar Ended June 30 . 20

The total column presented on the fund financial statements is presented only to facilitate financial analysis . Data

in this column is not the equivalent of consolidated financial information.


B-37

etary Information

Municipal Law requires the adoption of a balanced budget that is approved by Town Meeting vote. Committee presents an annual budget to Town Meeting, which includes estimates of revenues and other financing sources and recommendations of expenditures and other financing uses . Town Meeting, which has full authority to amend and/or reject the budget or any appropriation at the functional level, adopts the expenditure budget by majority vote .

Increases to

meras. separately from o

sic Financial Slatemen

sequent to Anna

The majority of appropriations are non-continuing which lapse at the end of each fiscal year . Others are ppropriations for which the governing body has authorized that an unspent balance from a prior

year be carried forward and made available for spending in the current fiscal year .

Generally, expenditures may not exceed the level of spending (salarie appropriation account. However, the Town is statutorily required to pay debt service, regardless of whether such amounts are appropriated,

An annual budget is adopted for the general fund in conformity with the guidelines described a inal fiscal year 2007 approved budget for the general fund authorized $7Z251038 in appropriations and other

amounts to be raised . During fiscal year 2007, no supplemental appropriations were authorized .

The Accountant's office has the responsibility to ensure that budgetary con is exercised through the accounting system .

STMENTS

The municipal finance laws of the Commonwealth authorize the Town to invest temporarily idle cash in bank term deposits and certificates of deposits, and treasury and agency obligations of the United States government, with maturities of one year or less; U.S . treasury or agency repurchase agreements with maturities of not more than 90 days; money market accounts ; and the state treasurer's investment pool - the Massachusetts Municipal Depositorry Trust (

e criteria of an external investment pool and operates in accordance with app laws and regulations. 'the Treasurer of the Commonwealth serves as Trustee. The reported value of the pool is the same as the fair value of Pool shares .

Deposits - Custodial Credit Risk

Town of Sudburij, Massachusetts

TAZ -.-ITY

own Meeting require Special Town Meeting approval .

expenses and capital) authorized for an

ool is maintained that is available for use by all funds with unrestricted cash and investments of the permanent funds and private purpose trust funds are held

unds .

tart' control

Custodial credit risk for deposits is the risk that, in the event of a bank failure, the Town's deposits may not be recovered. The Town's policy for custodial credit risk is to rely on FDIC and DIF insurance coverage . As of ; 30, 2007, $6,10110 of the Town's bank balance of $11561798 was uninsured, uncollateralized and exposed to custodial credit risk .

20n7

B-38

Investments Summarv

..t qfn f omen -- :_:N=MW V I -

-

The Town's investments at June 30, 2007 are presented below. All investments are presented by investment type, with debt securities presented by maturity .

U.S . "treasuries . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ gencies . . . . . . . . . . . . . . . . . . . . . . .

Corporate bonds. . . . . . . . . . . . . . . . . . . . . . . . . funds . . . . . . . . .

ternal investment pools. . . . . . . . . . . . .

Total debt scour

Equity mutual funds

f7vect7- i

Rate Risk of

Corporate bon

Town of Sudbunj, Massachusetts

hf C .̂rijrifie-,

Fair

e Fiscal Y -r Ended Tune 30, 2007

Total investments . . . . . . . . . . . . . . . . . . . . . . . . $

16507636

975,530 $

99,297 $

876,233 Z36%387 4,847,896 2,512,491 1A78,858 493,858 1,181000 4,574,169 4,574, 1A29,833 1A29,833

16,018,777 $ MOM $

488,859

Interest rate risk for debt securities is the risk that changes in interest rates of debt securities will adversely affect

the fair value of an investment . The Town's policy for interest rate risk of debt securities is to follow the municipal finance laws of the Commonwealth, which requires (with the exception of certain trust funds)

the

Town to limit investments to U.S . backed securities with a maturity of one year or less .

I -field by Fair Counterparty's Value

49? .g~g $

493,S58

Custodial credit risk for investments is the risk that, in the event of the failure of the coon not be able to recover the value of its investments or collateral securities that are in the possession of an au

party. The Town does not have a policy for custodial credit risk of investments. As of June 30, 2007, $493,858 of the Town's investments of $16,507,636 was uninsured, not registered in the name of the Town, held by a

counterparty and exposed to custodial credit risk, as follows:

ic Financial Statements

B-39

T

Concentration ( issuer. The Town

Deposits and Investments - Fore

- ACCOUNTS RECEIVABL

Tbwn of Sudbury, Mass

Credit risk for debt securities is the risk that an issuer or other counterparty to a debt security will not fulfill its obligations. The Town does not have a policy for credit risk of debt securities . As of Julie 30, 2007, the credit

T' eowns debt securities are as follows :

Corporate bands . . . . . . . . . . . . .

. . . . . $ Money market mutual funds. . . . . . . . External investment peals. . . . .

TowTotal . . . . . . . . . . . . . . . . . . . . . . . . . � . � . . . ., . . . . .

OPICTArab . Dan of Crpfiif Risk

* Per the rating scale of Standard and Poor's {a national credit rating organ

Foreign currency risk is the risk that fluctuations in exchange rates wil investment or a deposit. The Town does not have a policy for fore Town was not exposed to foreign currency risk .


1,678,858 $ L671858 $

-

4,574,169

4,574,169 1,429,833

lion}

air value of an envy risk. As of June 30, 2007, the

is the risk of loss attributed to the magnitude of be Town's investment in a single a policy for concentration of credit risk . As of June 30, 2007, the Town was not

exposed to concentration of credit risk .

At June 30, 2007, receivables for the individual major governmental funds and non major governmental and fiduciary funds in the aggregate, including the applicable allowances for uncollectible accounts, are as follows:

Allowance for Net

UncollectihIps A, ir

(28,133)

70%421 822,234 431,402 10%586 14,062

305,400 22,218,277

$

(90,533) $ 24,610,382

'c Financial Statements

Gross . molmf

Real estate and personal property taxes . . . . . . . . . 771,821 Real estate tax deferrals 822,234 Tax liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . � . . . . . . . ., . . . . . . . . . 431,402 Motor vehicle and other excise taxes. . . . . . . . . . . . . 137,719 Community preservation surcharges............. 14,062 Departmental and other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 305,400 Intergovernmental . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 24,700,915

B-40

Nofp!q to 13asir Finan Fate Tnpnfs

Governmental funds report deferred revenue in connection with receivables and other assets (tax foreclosures)

revenues that are not considered to be available to liquidate liabilities of the current period . The following

identifies the various components of deferred revenue reported in the governmental funds:

(a) Community preservation fund (major fund) (b) Nonmajor governmental funds


approximately $12,295,000 represents rei represents reimbursement of approv receivable and corresponding defame statements . The deferred revenue has been recognized as revenue in the conveys

Istakirents.

For the Fiscal Year Ended June 30, 2007

The Commonwealth has approved school construction assistance to the Town. The assistance program, which is

ed by the Massachusetts School Building Authority (MSBA), provides resources for future debt service

general obligation school bonds outstanding. During fiscal year 2007, approximately $2,816,000 of such

assistance was received . Approximately $34,451,000 will be received in future fiscal years . Of this amount, ment of long-term interest costs, and approximately $22,156,000

construction costs. Accordingly, a $22,156,000 intergovernmental e have been reported in the governmental fund financial

government-wide

atements

ble

General Other

Governmental 7nds Total

Real estate and personal property taxes. . . . . . . . . . . . . . . $ 419,348 $ 419,348

Real estate tax deferrals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 822,234 - 822,234

Tax hens . . . 415,291 16,111 (a) 431AO2

Motor vehicle and other excise taxes . . . . . . . . . . . . . . . . . . . 109,586 - 109,586

Community preservation surcharges . . . . . . . . . . . . . . . . . . - 14,062 (a) 14,062

Intergovernmental (state school construction). 22/154000 - 24156,OOO

Intergovernmental (other state and federal) . . . 62,277 (b) 62,277

Tax foreclosures . . . . . . . . . . . . . . . . . . . . 32.8% : 32 827

Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 .955.286 92,450

B-41

racial Statements . . . . . . .

. . .. I

:

.... . . . . . . . .

. .... : ...

..... . .

. : :

E TS

Capital asset activity for the fiscal year ended June 30, 2007, was as follows :

Governmental Activities : Capital assets not being depreciated :

Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ., . . . . . . . . . . . . $ 25,331,102 Construc Lion in progress . . . . . . . . . . . . . . . . . . . . . . . . . ., . . . . . .

812,368

Total capital assets not being depreciated . . . . . .

26.14"470

252,400

(812,368)

Capital assets being depreciated : Land

ildi

MachinerVehicles, .Infrastru

s

Total

Total accumulated depreciation . . . . . . . . . ., . . . . . . .,

Total capital assets being depreciated, net. . . . . . . . . . ., . . .

Total governmental activities cap

* As restated and more fu


scribe

asset, net. . . . . . . .

ote 13 .

F(-- the Fiscal Year Ended Tune 30, 2007

86,281, 1 .90

$

1,? 97,1 94

Less accumu

uildings

MachinerVehicles .

(899.708) $ 86,588,636


ts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,522,093 1,083,889 2,605,982

and n improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . 66,251,291 1,036,335 67,287,626 y and equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,344,843 141,636 4,486,479 . . . . . . . . . . . . . . . . . . - . . . . . . . . . . . . . . . . . . . 4,311146 384,527 (279,630) 4,421§43 ture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 294 1 91;0,200

capital assets being depreciated . . . . . . . . . . . (279,630) 8 9.975 /1 Q3

ated depreciation for: rove mcnis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- (408,268) (57,953) (466,221) and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . (14,605,378) (1,623,984) (16,229,362) y and equipment. . . . . . . . . . . . . . . . . . ., . . . . . . . . . . (3,557,896) (161,467) - (3,719,363) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,560,207) (328,382) 202,290 (2,686,299)

e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . {5,389,107} {480,00'n N RrIQ I I

B-42

Notes to Basic Financial Statern-I

Depreciation

LEASES



Business-Type Activities : Swimming pool . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . .

Landfill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total depreciation expense - business-type activities, . . . . . . . . . . . . .

19MO

1,150,000 4%000 136,640

,335h4O

(57tOOO) (4%000)

(19,357)

The Town has entered into certain capital lease agreements for vehicles under which the vehicles will become the

property of the Town when all terms of the lease agreements are met. The agreements also contain early purchase options which would allow the Town to purchase the vehicles before the end of the lease terms .

is Financial Statements

usiness-Type Activities : Capital assets not being depreciate

Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 192,500

Ca "tal anew being depredated : Buildings and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,150,000

Machinery and _equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . ., . 49,000

Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total capital assets being depreciated . . . . . . . . . . . 1,335,640

Less accumulated depreciation for. Buildings and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . (546,250) (28,750)

chinery and equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (49,000)

Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,693)

Total accumulated depreciation . ., . ., . . . . . ., . . . . . . (600,943)

sets being depreciated, net. . . . . . . . . . . . . . . 734,697 (42,414)

ess-type activities capiUil assets, net. . . . . . . . $ 927,197 $ {4Z4M}

s charged to functions/ programs of the primary government

Governmental Activities:

as follows:

General government . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . $ 7%194

Public safety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 254,726

Education, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . 1,311,340

Public works . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 873,086

Health and human services . . . . . . . . . . . . . . . . . . . . . . . . . . 4,805

Culture and recreation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12%642

Tool depreciation expense - governmental activities . . . . . . . . . . . . . . $ 24 51n3

B-43

to Basic Financial StatemerfQ


The following schedule presents future minimum lease payments as of June 30, 2007 :

Transfers Out


Vehicles and related accumulated amortization under capital lease are as follows:

s.,.........................,..,..,.....,.................. $ 959,509 Less : accumulated amortization-- . . . . . . . . . . . . . . . . . . .

Total. . . . . . . . . . . . . . . . . . . . . . .

Amortization of leased vehicles under capital assets is inclu


NOTE 7 - INTERFUND TRANS

Interfund transfers for the fiscal year ended June 30, 2007, are summarized as follows:

Transfers In :

General Fund . . . . . . . . . . . . . . . . . . . . . . . . . . ., . . . . . .

$ Community Preservation Fund . . . . . . . . . .

135,000 Non major Governmental Funds. . . . . . . . .

355,342 HI Enterprise Fund . . . . . . . . . . .

24,00

with depreciation expense.

Affordable Landfill

$ 379,342 ;,

135,000

Total

ancial Statements

$ 8,000 $ 8,000 (1) - 135,000 (2)

355,342 (3) 24,000 (4)

- 8,000 $ 522,342

Fiscal Years Ending June 30

Governmental

2008 . . . . . . . . . . . . . . . . . . . . . . . . . . - _ , , _ $ 21%545 2M9........................................................... 151,187 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... . . 9%027 2x11 . . . . . . . . . . ., . ., . . . � . . . . . . . . . . . . . . . . . . . ., . . . . . . . . . . . . . . . . . . 25234

Total minimum lease payments . . . . . . . . . . . . . . . . . . . . 485,993

Less : amounts representing interest . . . . . . . . . . . . . . . (38,786)

Present value of minimum lease payments . . . . . . . $ 447207

B-44

Notes to Basic Financial StF .ements - . .......... _---

I . . . . . . . . ... . .

:-

N

(1) Represents budgeted transfer to fund the landfill enterprise fund

(2) Represents budgeted transfer to fund the affordable housing fund

(3) Represents budgeted transfers from the ambulance receipts special revenue ($230,342), DP W mining special

revenue ($100,000) and the retirement special revenue ($25,000) funds to fund the fiscal year 2007 operating

budget


ants budgeted indirect cost transfer

8 - SHORT-TERM FINANCING

Short-term debt may be authorized and issued to fund the following:

Current operating costs prior to the collection of revenues through issuance of revenue anticipation notes (RAN) or tax anticipation notes (TAN).

Capital project costs and other approved expenditures incurred prior to obtaining permanent financing

through issuance of bond anticipation notes (BAND or grant anticipation notes (GAN).

Short-term loans are general obligations and carry maturity dates that are limited by statute. Interest expenditures and expenses for short-term borrowings are accounted for in the general fund and enterprise funds,

The Town did not issue or retire any short-term debt din outstanding at June 30, 2007 .

Chapter 44, Section 10, of the MGL authorizes indebtedness up to a limit of 5% of the equalized valuation. Debt

issued in accordance with this section of the law is designated as being "inside the debt limit" . However, debt may be authorized in excess of that limit for specific purposes . Such debt, when issued, is designated as being

"outside the debt limit" .

fiscal year 2005, certain general obligation bonds were defeased by placing the proceeds of bonds irrevocable trust to provide for all future debt service payments on the refunded bonds . Accordingly, the trust account's assets and liabilities for the defeased bonds are not included in the basic financial statements . At June 30, 2007, $16,525,000 of bonds outstanding from this advance refunding are considered defeased .

nr the Fiscal Year Ended Tune 30, 2007

2007 nor was there any short-term debt

B-45

Payable - Governmental Funds

al Purpose . . . . . . . . . . . . . . ., . . . . . . . . . . . . . . . . . . . . ion . . . . . . . . . . . . . . . . . . . . . ., . . . . . . . . . . . ., . . .

School Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . School Construction. . . . . . . . . . . . . . . . . . . . . . ., . . . ., . . . . . . School Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Municipal I'urpose . . . . . . . . . . ., . . . . . . . . . . . . . . . . . . . . . . . . . rpose . . . . . . . . . . .

th9don Refunding . . . . . . . . . . . . . . . . . . . . . . . Construction . . . . . . . . . . .

Land Acquisition . . . . . . . . ., . . . . . . . . . . . . . . . . . . . . . . . . . . . . . zSchool Construction Refunding . . . . . . . . . . . . . . . . ., . Land Acquisition Refunding . . . ., . . . . . . . . . . . . . . . . . .


ndebtedness at June 30, 2007, and the debt service requirements are as follows :

Deferred loss on refundings . . . . . - . . . . . . . . . . . . . . . .

Total governmental funds {net} . . . . . . . . . . . . . . ., . . .

ncial Statements

Interest Rate M

Outstanding at June 30,

2006 Additions Reductions

Outstanding at June 30,

2007

65%000 $ - $ (65%000) $ 4.63 1,320,000 - (440,000) 880,000 5.00 1,665,508 - (331348) 1,327,160 5.00 4,684,492 - (951,652) 3,732,840 4.44 7,808,000 - (540,000) 7,268,000 4.00 101000 - {25,000} 80,000 4.00 72,000 - (15,00) 57,000 4.00 100,000 - (20,000) 80,000 3150 565,000 - (115a00) 450,000 189 3,675,000 - (525,000) 3,150,000 4.18 4,880,000 (380,000) 3.81 13,400,000 13,400,000 3.60 4,350,000 4,350,000 193 3,030,000 (265,000) 2,765,000

46,305,000 (4,265,000) 42,040,000

(96tl2l) 239,327 (724,794)

$ 45,340,879 $ $ (4,025,673) . $ 41,315,206

B-46

Notpq to Basic Financial Stateme

Debt service requirements for fiscal years are as follows:

d and TTnjcc-ed Debt


Fiscal

201T .-

201T .-

2016----

201T .-- . .

2010 - - -

2011 . ---

2MO-

202t .

2021 .---

2021-.--

2021 .---

202T . ...

2008 . . . . . . . .

$ 2009 . . . . . . . . 2010 . . . . . . . . 2011 . . . . . . . . 2012 . . . .

interest for governmental bonds and notes

Interpst

otal . . . . . . $

'The Town is subject to various debt limits by statute and may issue additional general obligation debt under the

normal debt limit. At June 30, 2007, the Town had the following authorized and unissued debt :

Purpose

Amount

septic system . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wastewater feasibility study. . . . . Libby land . . . . . . . . . . . . . . . . . . . . . . . . ., . . . . . . . . . Capital equipment/renovation . . . . . . . Dickson land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Public works facility . . . . . ., . . . . . . . . . . . . . . .

Total, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .


200,000

90,000

30,000

13,500

6,500

3,800

ayable (gross) in future

sic 14na

3,585,000 1,680,449 $ 5,265,449

3,500,000 1,537,133 5,037,133

3,540,000 1&6,039 1936,039

3,585,000 1,251000 1839,000

3,420,000 1J06,738 1526,738

3,305,000 980,863 4,285,863

&55,000 857,663 161>63

2,680,000 75Z679 143Z679

2,565,000 647,842 3,212,842

2,490,000 545,664 1035,664

Z47f),000 44Z652 Z91>52

2,230,000 343,822 Z571822

2,31 0,000 253,646 Z563V46

2,380,000 125,396 Z505a96

365,000 54,584 419,584

365,000 38,458 403,458

365,000 2Z050 387,050

i 3o ono 526 235,526

42,040,000 $ 12,045,204 $ ; 51081204

B-47

of-Ps to Basic Financial State

g the

A.

LiabilAes

ies : Bonds and notes payable (net) . . . Capital lease obligations . . . . . . . . . . . . .

518,994 Workers' comps nsation claims . . . . .

87,300 Compensated absences . . . . . . . . . . . . . . .

584,82

self-insured far its


ear ended June 30, 2007, the following changes occurred in long-term habili

$

46,532,002

$

148961

$

(4 '?21 .8341

$

42359129

$

3113,254

Except for bonds issued for the community preservation fund, long-term liabilities are g nerally liquidated by the general fund . Long-term debt issued for the community preservation fund is liquidated by the comma preservation fund,

various risks of loss related to torts ; theft of, damage to and destruction of assets ; errors and omissions; and natural disasters for which the Town carries commercial insurance .

e, workers' compensation (excluding public safety employees on duty), and municipal building insurance activities . These activities are accounted for in the

d, where revenues are recorded when earned and expenses are recorded when incurred .

curved But Not Reported (IBNR)" claims are based on actual and historical lag claims . The liability at June 30, 2007 totaled $377,864, Changes in the reported liability since July 1, 2005, areas follows :

Balance June 30, 2006

115,245 33,716

Current Year

Changes in

Claims timate Payments

ca , `!ear Ended Jim : :30, 2007

Balance June 30, 2007 Portion

3) $ 41,315,206

3,345,673 2) 447,207 189,948 4) 63,742 24,336

32,974 53297

Fiscal year 20Q6 . . . . . . . . . . . . . . . . . . .

$

73%668

6,251,207

$

(6,201,743)

$

789,132 Fiscal year 2007 . . . . . . . . . . . . . . . . . .,

789,132

6,789,965

(n201033)

377,864

ic Financ B-48

tes to Basic 17inancial Stateme-ts

Workers' compensation claims are administered by a third party administrator and are funded on a pay-as-you-go basis from annual appropriations . The Town has recorded a liability of $63,742 at June 30, 2007, which represents air estimate of

all outstanding claims as of that date . Changes in the reported liability since July 1,

2005, are as follows:

11 - PE

'Compensa, ;on


SION PLAN

of

Current Year Balance at

Claims and Changes inClaims

Fiscal Y97-'

Estimite

al year 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

74,484

$

6%872

$

(4805q

$

Fiscal year 2MV

87,300

33,716

(5T20)

~A Year Ended li , ne 30, 2007

Balance at Fiscal

Year-end

87,300 63,742

ctiption - The Town contributes to the Middlesex Retirement System (System), a cost-sharing multiple-employer defined benefit pension plan administered by the Middlesex Retirement Board. Substantially all

employees of the Town are members of the System, except for public school teachers and certain administrators who are members of the Massachusetts' Teachers Retirement System (MTRS), to which the Town does not

Pension benefits and administrative expenses paid by the Teachers Retirement Board are the legal possibility of the Commonwealth . The amount of these on-behalf payments totaled $4,227,750 for the fiscal

year ended June 30, 2007, and, accordingly, are reported W die general fund as intergovernmental revenues and enditures.

The System provides retirement, disability and death benefits to plan members and beneficiaries . Chapter 32 of igns authority to establish and amend benefit provisions of the plan . Cost-of-living adjustments

granted between 1981 and 1997 and any increases in other benefits imposed by the Commonwealth's state law during those years are borne by the Commonwealth and are deposited into the pension fund . Cost-of-living adjustments granted after 1997 must be authorized by the Middlesex Retirement Board and are borne by the System . The System issues a publicly available report in accordance with guidelines established by the Commonwealth's public Employee Retirement Administration Commission . That report may be obtained by contacting the System located at 25 Linnell Circle, Billerica, Massachusetts 01865.

Funding Policy - Plan members are required to contribute to the System at rates ranging from 5% to 11 % of covered compensation . The Uwn A required to pay W& the System its share of the system-wide actuarial

determined contribution that is apportioned among the employers based on active current payroll. Chapter 32 of MGT, governs the contributions of plan members. The Town's contributions to the System for the fiscal years ended June 3, 2007, 2006, and 2005 were $2,075,487, $1,82%401 and $1§2C606, respectively, which equaled its

required contribution for each fiscal year,

legal actions and claims are pending against the Town . Litigation is subject to many uncertainties, and the outcome of individual litigated matters is not always predictable. Although the amount of liability, if any, at June 30, 2007, cannot be ascertained, management believes any resulting liability should not materially affect the financial position of the Town at June 30, 2007.


B-49

Notes to Basic F;--nci-1State men

articipates in a number of federal award programs . Although the grant programs have been audited rdance with the provisions of the Single Audit Act Amendments of 1996 through June 30, 2007, these

programs are still subject to financial and compliance audits . The amount, if any, of expenditures which may be disallowed by the granting agencies cannot be determined at this time, although the Town expects such amounts, if any, to be immaterial .

The Town's beginning net assets of its governmental activities has been restated from $86,011,882 to $89,377,575 piementation of retroactively reporting its infrastructure assets, in accordance with GASB

Statement #34.

The GAS

Statement #51, Accounti T

on its basic

cuts will be


ECLASSUIC

IMPLEMENTATI

mg statements :

Statement ##49, Accounting artd be implemented during fiscal year will have on its basic financial statements .

CTIVE INFRASTRUCTURE REPORT

I> Statement #48, Sales and Pledges of Recei Future Revenues, which is required to

feet that this Statement w

ing fund balances of the school construction, public works facilities and non major governmental }stated from $347,469, $85513 and $510083, respectively, to zero, zero, and $6,334,465, respectively,

to reflect the reclassification of the school construction and public works facilities funds from major funds to al funds.

zcial Reporting far Posternployment Benefit Plans Other Than Pension Plans, which is be implemented during fiscal year 2008 . This Statement will not impact the 'T'own's basic

~

Statement #45, Accounting and Financial Reporting by Employers for Posternploymen t Benefits Other Than which is required to be implemented during fiscal year 2009 . The .

this Statement will have on the basic financial statements .

2010, The Town is current ncial statements .

7 ,ntity Transfers of Assets an ed during fiscal year 2008 . The Town is currently

ve on its basic financial statements .

cvhngpr Pollution Re mediation Obligations, which is required to tly evaluating the effect that this Statement

ent #50 Pension Disclosures, which is required to be implemented during fiscal year 2008 . 'the ; currently evaluating the effect that this Statement will have on its basic financial statements .

irrespective due dates.

he'Fi-cal Year F.ndod T-ne 30 . 2007

to be ing the effect that this Statement will

nts

B-50

pu I

KPQ

JAN' .IN Mrs in . . . . . . .

Transfers out-,

UND BALANCE..........,

TOTAL OTI IER FINANCING SOURC

GENERAL FUND EVENUES, EXPENDEFURES AND

BUF

I A

AL

Encumbrances and Conti -Appro

c fate and personal pngerty

$

56,711,877 Motorvchit'ee lot- - - to ^s . . . . . . . . ., . . . . . . . . . . . . . . . . . . . . .,, .

3,031,914 liens,

77P

2,592,555 138,401 6,163,274

(56,129) 43,805,650

(13,817) 3,203,045

(122.9 8) 16,672

558,369

1 0) 1,027,672 Z12(j,937 1905,610 11~919 182,925

2,662 185,587 194,793

194,793

1754C 9

{991,728} (2,263,057)

(L . 1715)

(80M)

56,711,877 3,031,314

37%342

B-52

Cummit Year Encumbrances and Continuin ¬

ions Appropriations

56,719,814 $

56,719,814 Z58%563

Z58%563 251,389

251a89 123,777

123,777 8,399,411

8,399,411 200,005

200,005 872,593

872,593 146,078

146,078 r j473

199,973

za%wg 6,116,708

43,428,234 3,042,071 557,712

1,045,953 2,075,487 6181368

371349

Town of Sudbuqj, Massachusetts

2,850

2,662,322 161,418 6,197,837 7,856

18,745 58,968 4,033 1,280

61,511

24,281

11,363,925)

(2,577, , )7)

669,318

Q201125)

B-53

Notes to Reou~-°d Sc.-)?® me

For budgetary {establis. reconcilia 2007, is


Infor-n? For the Fiscal Year Fnderi Tune 30. 20

ncial reporting purposes, the Uniform Massachusetts Accounting System basis of accounting ommonwealth) is followed, which differs from the GAAP basis of accounting. A

udgetary-basis to GAAP-basis results for the general fund for the fiscal year ended June 30,

Budgetary basis as reported on the schedule of revenues, expenditures and changes in fund balance - budget and actual . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ., . . . . . .,

ce and workers' compensation general fund for GAAP purposes . . .

Ad justments Net change in recording 60 day race Net change in recording tax refunds payable. . . . . . . . . . . . . . . __ To record activity for MT RS on-behalf payments . . . . . . . . .

ported on the statement of revenues, expenditures and changes in fund balances . . . . . . . . . . . .

lemante ry Information

$ 7%13Z597 $ 7Z71%064

227,266 (142V976)

(71,493) (19,032)

1227,750 4,221750

(L361925)

$ 74,497,088 $

B-54

APPENDIX C

Facsimile Bid Form


$5,545,000

BOND ANTICIPATION NOTES

Andrea L. Terkelsen, Finance Director/Treasurer Sale Date: October 6, 2008 c/o UniBank Fiscal Advisory Services, Inc. Dated Date: October 15, 2008

49 Church St. Whitinsville, MA 01588

By Fax to: (508) 234-1938

Dear Ms. Terkelsen:

For all or a portion of the principal amount of $5,545,000 Bond Anticipation Notes, legally issued as described in the Notice of Sale dated September 29, 2008, we will pay the Town a price of not less than par as follows,

plus accrued interest to date of delivery, provided the Notes bear the following interest rate:

Principal Amount Interest Rate Premium NIC NIC

$_____________ ____________% $_____________ ________% $____________

$_____________ ____________% $_____________ ________% $____________

$_____________ ____________% $_____________ ________% $____________

Interest is payable at maturity of the Notes on June 15, 2009. The Notes are not subject to redemption prior to maturity.

In making this bid, we accept the terms and conditions as defined in the Notice of Sale dated September 29, 2008. All blank spaces

in this bid are intentional and are not to be construed as an omission.

All Bids are subject to verification prior to award

Submitted by: Phone:

Mailing Address:

standard & poor’s: sp-1+ - murphy & company & poor’s: sp-1+ final official statement...

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