VILLAGE OF ENDICOTT - Fiscal Advisors · 2017-08-10 · Village of Endicott to give any information...

August 10, 2017

ERRATUM NOTICE

VILLAGE OF ENDICOTT BROOME COUNTY, NEW YORK

$2,345,000 Bond Anticipation Notes, 2017

Dated: August 29, 2017 Due: August 29, 2018

PLEASE BE ADVISED THAT THE NOTICE OF SALE FOR THE ABOVE

REFERENCED ISSUE, WHICH IS SELLING VIA COMPETITIVE BID ON

AUGUST 15, 2017 AT 11:15 A.M., ERRONEOUSLY STATED THE

FOLLOWING:

The first sentence in the paragraph under the section entitled “Delivery Date and

Place of Delivery” said:

“The Notes will be delivered through the facilities of DTC located in Jersey City, New

Jersey or as may be agreed with the purchaser(s) on or about August 31, 2017.”

It should read:

“The Notes will be delivered through the facilities of DTC located in Jersey City, New

Jersey or as may be agreed with the purchaser(s) on or about August 29, 2017.”

Additionally, the Village’s Bond Counsel contact information listed in the

second paragraph under the section entitled “Contact Information” should

read as follows:

“The Village’s Bond Counsel contact information is as follows: Thomas E. Myers,

Esq., Attorney at Law, Orrick, Herrington & Sutcliffe LLP, 51 West 52nd Street,

15th Floor, New York, New York 10019, Phone: (212) 506-5212, Telefax: (212) 506-

5151, email: [email protected].”

PRELIMINARY OFFICIAL STATEMENT

NEW ISSUE BOND ANTICIPATION NOTES

In the opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel, based upon an analysis of existing laws, regulations, rulings and court

decisions, and assuming among other matters, the accuracy of certain representations and 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. In the further

opinion of Bond Counsel, interest on the Notes is not a specific preference item for purposes of the federal individual or 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 interest on the Notes is exempt from personal income taxes

imposed by the State of New York or any political subdivision thereof (including The City of New York), Bond Counsel expresses no opinion

regarding any other tax consequences related to the ownership or disposition of, or the amount, accrual or receipt of interest on, the Notes. See

“TAX MATTERS” herein.

The Notes will be designated “qualified tax-exempt obligations” pursuant to Section 265(b) (3) of the Code.

$2,345,000


GENERAL OBLIGATIONS

CUSIP BASE #: 292641

$2,345,000 Bond Anticipation Notes, 2017 (referred to herein as the “Notes”)

Dated: August 29, 2017 Due: August 29, 2018

The Notes are general obligations of the Village of Endicott, Broome County, New York (the "Village") all the taxable real

property within which is subject to the levy of ad valorem taxes to pay the Notes and interest thereon, subject to applicable

statutory limitations. See “THE NOTES - Nature of the Obligation” and “TAX LEVY LIMITATION LAW” herein.

The Notes will not be subject to redemption prior to maturity. Interest on the Notes will be calculated on a 30-day month and

a 360-day year basis, and will be payable at maturity.

The Notes may be issued in registered certificated form, in the denominations of $5,000 each or multiples thereof, as

determined by the successful bidder(s) or as stated below, without the option of prior redemption.

At the option of the purchaser(s), the Notes will be issued as book-entry registered notes, and, when issued, will be registered

in the name of Cede & Co. as nominee of The Depository Trust Company ("DTC"), New York, New York, which will act as the

securities depository for the Notes. If so issued, Noteholders will not receive certificates representing their ownership interest in

the Notes purchased. Under this option, payment of the principal of and interest on the Notes to the Beneficial Owner of the Notes

will be made by DTC Participants and Indirect Participants in accordance with standing instructions and customary practices.

Payment will be the responsibility of DTC, subject to any statutory and regulatory requirements as may be in effect from time to

time. See "BOOK-ENTRY-ONLY SYSTEM" herein.

The Notes are offered when, as and if issued and received by the purchaser(s) and subject to the receipt of the approving legal

opinion as to the validity of the Notes of Orrick, Herrington & Sutcliffe LLP, Bond Counsel, of New York City. It is anticipated

that the Notes will be available for delivery through the facilities of DTC located in Jersey City, New Jersey, or at such place as

may be agreed upon with the purchaser(s), on or about August 29, 2017.

ELECTRONIC BIDS for the Notes must be submitted on Grant Street Group's MuniAuction website ("MuniAuction")

accessible via www.GrantStreet.com, on August 15, 2017 by no later than 11:15 A.M. ET. Bids may also be submitted by

facsimile at (315) 930-2354. No other form of electronic bidding services will be accepted. No phone bids will be accepted.

Once the bids are communicated electronically via MuniAuction or via facsimile to the Village, each bid will constitute an

irrevocable offer to purchase the Notes pursuant to the terms provided in the Notice of Sale for the Notes.

August 8, 2017

THE VILLAGE DEEMS THIS OFFICIAL STATEMENT TO BE FINAL FOR PURPOSES OF SECURITIES AND EXCHANGE

COMMISSION RULE 15c2-12 ("THE RULE"), EXCEPT FOR CERTAIN INFORMATION THAT HAS BEEN OMITTED HEREFROM IN

ACCORDANCE WITH SAID RULE AND THAT WILL BE SUPPLIED WHEN THIS OFFICIAL STATEMENT IS UPDATED

FOLLOWING THE SALE OF THE OBLIGATIONS HEREIN DESCRIBED. THIS OFFICIAL STATEMENT WILL BE SO UPDATED

UPON REQUEST OF THE SUCCESSFUL BIDDER(S), AS MORE FULLY DESCRIBED IN THE NOTICE OF SALE WITH RESPECT TO

THE OBLIGATIONS HEREIN DESCRIBED. THE VILLAGE WILL COVENANT IN AN UNDERTAKING TO PROVIDE NOTICE OF

CERTAIN MATERIAL EVENTS RELATED TO THE NOTES AS DEFINED IN THE RULE. SEE "APPENDIX C - MATERIAL EVENT

NOTICES" HEREIN.

http://www.grantstreet.com/

2

VILLAGE OF ENDICOTT

BROOME COUNTY, NEW YORK

VILLAGE BOARD

JOHN BERTONI EILEEN KONECNY

Mayor Deputy Mayor

TRUSTEES

LARRY COPPOLA

CHERYL CHAPMAN

DAVID BAKER

* * * * * * * *

ANTHONY BATES

Village Clerk / Treasurer

JANICE ORLANDO

Assistant Clerk / Treasurer

CHARLES H. COLLISON, ESQ.

Village Attorney

MUNICIPAL ADVISOR

Fiscal Advisors & Marketing, Inc.

120 Walton Street, Suite 600

Syracuse, New York 13202

(315) 752-0051

BOND COUNSEL

Orrick, Herrington & Sutcliffe LLP

51 West 52nd

Street

New York, New York 10019

(212) 506-5151

3

No dealer, broker, salesman or other person has been authorized by the Village of Endicott to give any information or to make any representations other than those contained in this Official Statement; and if given or made, such other information or representations must not be relied upon as having been authorized by the Village of

Endicott. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Notes by any person in any

jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth herein has been obtained by the Village of Endicott from

sources which are believed to be reliable but is not guaranteed as to accuracy or completeness. The information and expressions of opinion herein are subject to change

without notice and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no

change in the affairs of the Village of Endicott since the date thereof.

TABLE OF CONTENTS

Page

THE NOTES ....................................................................................... 4

Description of the Notes .................................................................. 4

No Optional Redemption ................................................................. 4

Purpose of Issue ............................................................................... 4

Nature of the Obligation .................................................................. 5

BOOK-ENTRY-ONLY SYSTEM .................................................... 6

Certificated Notes ............................................................................ 7

THE VILLAGE .................................................................................. 8

General Information ......................................................................... 8

Population Trends ............................................................................ 9

Major Employers ............................................................................. 9

Banking Facilities ............................................................................ 9

Selected Wealth and Income Indicators ......................................... 10

Unemployment Rate Statistics ....................................................... 10

Financial Organization ................................................................... 10

Form of Village Government ......................................................... 10

Budgetary Procedures .................................................................... 11

Investment Policy .......................................................................... 11

State Aid ........................................................................................ 11

Employees...................................................................................... 11

Status and Financing of Employee Pension Benefits ..................... 12

Other Post-Employment Benefits ................................................... 14

Other Information .......................................................................... 14

Financial Statements ...................................................................... 15

New York State Comptroller Reports of Examination ................... 15

The State Comptroller’s Fiscal Stress Monitoring System ............. 16

TAX INFORMATION ..................................................................... 16

Taxable Assessed Valuations ......................................................... 16

Tax Rates Per $1,000 (Assessed) ................................................... 16

Tax Collection Procedure ............................................................... 16

Tax Levy and Tax Collection Record ............................................ 17

Ten Largest Taxpayers - 2017-2018 Assessment Rolls.................. 17

Sales Tax ........................................................................................ 17

Additional Tax Information ........................................................... 17

Constitutional Tax Margin ............................................................. 18

TAX LEVY LIMITATION LAW ................................................... 18

STATUS OF INDEBTEDNESS ...................................................... 19

Constitutional Requirements .......................................................... 19

Statutory Procedure ........................................................................ 19

Debt Outstanding End of Fiscal Year ............................................. 20

Details of Outstanding Indebtedness .............................................. 20

Debt Statement Summary .............................................................. 20

Bonded Debt Service ..................................................................... 21

Cash Flow Borrowings................................................................... 21

Estimate of Obligations to be Issued .............................................. 21

Energy Performance Contract ........................................................ 21

Estimated Overlapping Indebtedness ............................................. 21

Debt Ratios .................................................................................... 22

Page

SPECIAL PROVISIONS AFFECTING

REMEDIES UPON DEFAULT .............................................. 22

MARKET AND RISK FACTORS .................................................. 25

TAX MATTERS ............................................................................... 25

LEGAL MATTERS ......................................................................... 25

LITIGATION ................................................................................... 26

CONTINUING DISCLOSURE ....................................................... 26

Historical Compliance .................................................................... 26

MUNICIPAL ADVISOR ................................................................. 26

RATING ............................................................................................ 26

MISCELLANEOUS ......................................................................... 27

APPENDIX - A

GENERAL FUND - Balance Sheets

APPENDIX - A1

GENERAL FUND – Revenues, Expenditures and

Changes in Fund Balance

APPENDIX - A2


Changes in Fund Balance - Budget and Actual

APPENDIX – A3


Changes in Fund Balance - Budget

APPENDIX – A4

CHANGES IN FUND EQUITY

APPENDIX - B

BONDED DEBT SERVICE

APPENDIX – B1

CURRENT BONDS OUTSTANDING

APPENDIX – C

MATERIAL EVENT NOTICES

APPENDIX - D

AUDITED FINANCIAL STATEMENTS

For the Fiscal Year Ending May 31, 2016

APPENDIX – E

FORM OF BOND COUNSEL’S OPINION

PREPARED WITH THE ASSISTANCE OF

Fiscal Advisors & Marketing, Inc.

120 Walton Street, Suite 600

Syracuse, New York 13202

Phone: (315) 752-0051

http://www.fiscaladvisors.com

4

OFFICIAL STATEMENT

of the


Relating to


This Official Statement, which includes the cover page and appendices, has been prepared by the Village of Endicott, Broome

County, New York (the "Village," "County," and "State," respectively), in connection with the sale by the Village of its aggregate

principal amount of $2,345,000 Bond Anticipation Notes, 2017 (referred to herein as the “Notes”).

The factors affecting the Village's financial condition and the Notes are described throughout this Official Statement.

Inasmuch as many of these factors, including economic and demographic factors, are complex and may influence the Village's tax

base, revenues, and expenditures, this Official Statement should be read in its entirety.

All quotations from and summaries and explanations of provisions of the Constitution and laws of the State and acts and

proceedings of the Village contained herein do not purport to be complete and are qualified in their entirety by reference to the

official compilations thereof, and all references to the and Notes and the proceedings of the Village relating thereto are qualified in

their entirety by reference to the definitive forms of the Notes and such proceedings.

THE NOTES

Description of the Notes

The Notes are general obligations of the Village, and will contain a pledge of its faith and credit for the payment of the

principal of and interest on the Notes as required by the Constitution and laws of the State of New York (State Constitution, Art.

VIII, Section 2; Local Finance Law, Section 100.00). All the taxable real property within the Village is subject to the levy of ad

valorem taxes to pay the Notes and interest thereon, subject to applicable statutory limitations. See “THE NOTES - Nature of the

Obligation” and “TAX LEVY LIMITATION LAW” herein.

The Notes are dated August 29, 2017 and mature, without the option of prior redemption, on August 29, 2018. Interest will be

calculated on a 30-day month and 360-day year basis, payable at maturity.

The Notes will be registered in either (i) the name of the purchaser(s), in denominations of $5,000 each or multiples thereof,

as may be determined by the successful bidder(s); or (ii) at the option of the purchaser(s), as registered notes, and, if so issued,

registered in the name of Cede & Co. as nominee of DTC, which will act as the securities depository for the Notes. See "BOOK-

ENTRY-ONLY SYSTEM" herein.

No Optional Redemption

The Notes shall not be subject to redemption prior to maturity.

Purpose of Issue

The Notes are being issued pursuant to the Constitution and statutes of the State including among others, the Village Law, the

Local Finance Law and bond resolutions adopted by the Board of Trustees of the Village on June 13, 2017 authorizing the

issuance of serial bonds for the following projects:

The proceeds of the Notes will provide $2,345,000 new monies for the abovementioned purposes.

Authorization Authorization Borrowing

Date Purpose of Issue Amount This Issue

June 13, 2017 Improvements to pump stations 350,000$ 350,000$

June 13, 2017 Purchase and installation of water meters 675,000 675,000

June 13, 2017 Purchase of a heavy equipment for the DPW 610,000 610,000

June 13, 2017 Reconstruction/resurfacing of roads 600,000 600,000

June 13, 2017 Purchase of police vehicles 110,000 110,000

Total: 2,345,000$

5

Nature of the Obligations

Each Note when duly issued and paid for will constitute a contract between the Village and the holder thereof.

Holders of any series of notes or bonds of the Village may bring an action or commence a proceeding in accordance with the

civil practice law and rules to enforce the rights of the holders of such series of notes or bonds.

The Notes will be general obligations of the Village and will contain a pledge of the faith and credit of the Village for the

payment of the principal thereof and the interest thereon as required by the Constitution and laws of the State. For the payment of

such principal and interest, the Village has power and statutory authorization to levy ad valorem taxes on all real property within

the Village subject to such taxation by the Village, subject to applicable statutory limitations.

Although the State Legislature is restricted by Article VIII, Section 12 of the State Constitution from imposing limitations on

the power to raise taxes to pay “interest on or principal of indebtedness theretofore contracted” prior to the effective date of any

such legislation, the New York State Legislature may from time to time impose additional limitations or requirements on the

ability to increase a real property tax levy or on the methodology, exclusions or other restrictions of various aspects of real

property taxation (as well as on the ability to issue new indebtedness). On June 24, 2011, Chapter 97 of the Laws of 2011 was

signed into law by the Governor (the “Tax Levy Limitation Law”). The Tax Levy Limitation Law applies to local governments

and school districts in the State (with certain exceptions) and imposes additional procedural requirements on the ability of

municipalities and school districts to levy certain year-to-year increases in real property taxes.

Under the Constitution of the State, the Village is required to pledge its faith and credit for the payment of the principal of

and interest on the Notes and is required to raise real estate taxes, and without specification, other revenues, if such levy is

necessary to repay such indebtedness. While the Tax Levy Limitation Law imposes a statutory limitation on the Village’s power

to increase its annual tax levy with the amount of such increase limited by the formulas set forth in the Tax Levy Limitation Law,

it also provides the procedural method to surmount that limitation. See “TAX LEVY LIMITATION LAW” herein.

The Constitutionally-mandated general obligation pledge of municipalities and school districts in New York State has been

interpreted by the Court of Appeals, the State’s highest court, in Flushing National Bank v. Municipal Assistance Corporation for

the City of New York, 40 N.Y.2d 731 (1976), as follows:

“A pledge of the city’s faith and credit is both a commitment to pay and a commitment of the city’s

revenue generating powers to produce the funds to pay. Hence, an obligation containing a pledge of the

Village’s “faith and credit” is secured by a promise both to pay and to use in good faith the city’s general

revenue powers to produce sufficient funds to pay the principal and interest of the obligation as it becomes due.

That is why both words, “faith” and “credit” are used and they are not tautological. That is what the words say

and this is what the courts have held they mean... So, too, although the Legislature is given the duty to restrict

municipalities in order to prevent abuses in taxation, assessment, and in contracting of indebtedness, it may not

constrict the Village’s power to levy taxes on real estate for the payment of interest on or principal of

indebtedness previously contracted... While phrased in permissive language, these provisions, when read

together with the requirement of the pledge and faith and credit, express a constitutional imperative: debt

obligations must be paid, even if tax limits be exceeded”.

In addition, the Court of Appeals in the Flushing National Bank (1976) case has held that the payment of debt service on

outstanding general obligation bonds and notes takes precedence over fiscal emergencies and the police power of political

subdivisions in New York State.

The pledge has generally been understood as a promise to levy property taxes without limitation as to rate or amount to the

extent necessary to cover debt service due to language in Article VIII Section 10 of the Constitution which provides an exclusion

for debt service from Constitutional limitations on the amount of a real property tax levy, insuring the availability of the levy of

property tax revenues to pay debt service. As the Flushing National Bank (1976) Court noted, the term “faith and credit” in its

context is “not qualified in any way”. Indeed, in Flushing National Bank v. Municipal Assistance Corp., 40 N.Y.2d 1088 (1977)

the Court of Appeals described the pledge as a direct constitutional mandate. In Quirk v. Municipal Assistance Corp., 41 N.Y.2d

644 (1977), the Court of Appeals stated that, while holders of general obligation debt did not have a right to particular revenues

such as sales tax, “with respect to traditional real estate tax levies, the bondholders are constitutionally protected against an attempt

by the State to deprive the city of those revenues to meet its obligations.” According to the Court in Quirk, the State Constitution

“requires the city to raise real estate taxes, and without specification other revenues, if such a levy be necessary to repay

indebtedness.”

6

In addition, the Constitution of the State requires that every county, city, town, village, and school district in the State

provide annually by appropriation for the payment of all interest and principal on its serial bonds and certain other obligations, and

that, if at any time the respective appropriating authorities shall fail to make such appropriation, a sufficient sum shall be set apart

from the first revenues thereafter received and shall be applied to such purposes. In the event that an appropriating authority were

to make an appropriation for debt service and then decline to expend it for that purpose, this provision would not apply. However,

the Constitution of the State does also provide that the fiscal officer of any county, city, town, village, or school district may be

required to set apart and apply such first revenues at the suit of any holder of any such obligations.

In Quirk v. Municipal Assistance Corp., the Court of Appeals described this as a “first lien” on revenues, but one that does

not give holders a right to any particular revenues. It should thus be noted that the pledge of the faith and credit of a political

subdivision in New York State is a pledge of an issuer of a general obligation bond or note to use its general revenue powers,

including, but not limited to, its property tax levy to pay debt service on such obligations, but that such pledge may not be

interpreted by a court of competent jurisdiction to include a constitutional or statutory lien upon any particular revenues.

While the courts in New York State have historically been protective of the rights of holders of general obligation debt of

political subdivisions, it is not possible to predict what a future court might hold.

BOOK-ENTRY-ONLY SYSTEM

DTC will act as securities depository for the Notes, if book-entry-only format is chosen by the successful bidder(s). 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. Fully-registered note certificate will be issued for Notes

bearing the same rate of interest and CUSIP number, 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 1934. DTC holds and provides asset servicing for over 3.5 million

issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 110

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, in turn, is owned by a number of Direct Participants of DTC and Members of the National Securities Clearing

Corporation, Government Securities Clearing Corporation, MBS Clearing Corporation, and Emerging Markets Clearing

Corporation, (NSCC, GSCC, MBSCC, and EMCC, also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc.,

the American Stock Exchange LLC, and the National Association of Securities Dealers, Inc. 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”). 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.

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 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.

http://www.dtcc.com/

7

Redemption notices shall be sent to DTC. If less than all of the Notes within an issue are being redeemed, DTC’s practice is to

determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.

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 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 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 or the Village, subject to any statutory or regulatory requirements

as may be in effect from time to time. Payment, principal and interest to DTC is the responsibility of the Village, 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 Village. Under such circumstances, in the event that a successor depository is not obtained, note certificates are required to be

printed and delivered.

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

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

Source: The Depository Trust Company.

THE VILLAGE CANNOT AND DOES NOT GIVE ANY ASSURANCES THAT DTC, DIRECT PARTICIPANTS OR

INDIRECT PARTICIPANTS OF DTC WILL DISTRIBUTE TO THE BENEFICIAL OWNERS OF THE NOTES (1)

PAYMENTS OF PRINCIPAL OF OR INTEREST OR REDEMPTION PREMIUM ON THE NOTES (2) CONFIRMATIONS OF

THEIR OWNERSHIP INTERESTS IN THE NOTES OR (3) OTHER NOTICES SENT TO DTC OR CEDE & CO., ITS

PARTNERSHIP NOMINEE, AS THE REGISTERED OWNER OF THE NOTES, OR THAT THEY WILL DO SO ON A

TIMELY BASIS, OR THAT DTC, DIRECT PARTICIPANTS OR INDIRECT PARTICIPANTS WILL SERVE AND ACT IN

THE MANNER DESCRIBED IN THIS OFFICIAL STATEMENT.

THE VILLAGE WILL NOT HAVE ANY RESPONSIBILITY OR OBLIGATIONS TO DTC, THE DIRECT

PARTICIPANTS, THE INDIRECT PARTICIPANTS OF DTC OR THE BENEFICIAL OWNERS WITH RESPECT TO (1) THE

ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY DIRECT PARTICIPANTS OR INDIRECT

PARTICIPANTS OF DTC OR ANY AMOUNT DUE TO ANY BENEFICIAL OWNER IN RESPECT OF THE PRINCIPAL

AMOUNT OF OR INTEREST OR REDEMPTION PREMIUM ON THE NOTES, (3) THE DELIVERY BY DTC OR ANY

DIRECT PARTICIPANTS OR INDIRECT PARTICIPANTS OF DTC OF ANY NOTICE TO ANY BENEFICIAL OWNER

THAT IS REQUIRED OR PERMITTED TO BE GIVEN TO OWNERS; OR (4) ANY CONSENT GIVEN OR OTHER ACTION

TAKEN BY DTC AS THE REGISTERED HOLDER OF THE NOTES.

THE INFORMATION CONTAINED HEREIN CONCERNING DTC AND ITS BOOK-ENTRY SYSTEM HAS BEEN

OBTAINED FROM DTC AND THE VILLAGE MAKES NO REPRESENTATIONS AS TO THE COMPLETENESS OR THE

ACCURACY OF SUCH INFORMATION OR AS TO THE ABSENCE OF MATERIAL ADVERSE CHANGES IN SUCH

INFORMATION SUBSEQUENT TO THE DATE HEREOF.

Certificated Notes

DTC may discontinue providing its services with respect to the Notes at any time by giving notice to the Village and

discharging its responsibilities with respect thereto under applicable law, or the Village may terminate its participation in the

system of book-entry-only system transfers through DTC at any time. In the event that such book-entry-only system is utilized by

a purchaser of the Notes upon issuance and later discontinued, the following provisions will apply:

The Notes will be issued in bearer form in denominations of $5,000 or integral multiples thereof. Interest on the Notes will

remain payable at maturity. Principal of and interest on the Notes will be payable at a principal corporate trust office of a bank or

trust company located and authorized to do business in the State to be named as fiscal agent by the Village. The Notes will remain

not subject to redemption prior to their stated final maturity date.

8

THE VILLAGE

General Information

The Village of Endicott is located in upstate New York in the geographical location known as the Southern Tier. It is situated

in the Town of Union, Broome County, approximately five miles west of the City of Binghamton and part of the metropolitan area

of that City running along with Susquehanna River Valley through the Villages of Johnson City and Endicott and the

unincorporated areas of Endwell and Vestal. Major expressways in and around the Village include State Highways 17, 88 and 434

as well as Interstate Expressway # 81 which extends from the Canadian border through Pennsylvania.

The Village encompasses 3.1 square miles of land area and has an estimated population of 13,500. It is residential in

character with two shopping districts within its boundaries. Both IBM Corporation and Endicott Johnson Company, Inc.

originated in Endicott. IBM currently has around 200 employees at the Endicott facility. I3, formally EIT Corporation, currently

has 400 employees. Also, BAE Systems has moved into the old IBM facility bringing 1,200 employees into the area.

In addition to the above, Village residents may be employed in any of the following businesses in the area. Lockheed Martin

engineering positions, The Raymond Corporation, Bae, Rockwell Collions, Nelson Holdings Corporation, manufacturing

mechanisms used for aircraft, marine, automotive and atomic energy applications; manufacturing narrow-aisle electric fork-lift

trucks; and Binghamton Container Company, manufacturing shipping containers, a large utility company also has offices in the

County including New York State Electric and Gas Corporation. In addition to these businesses, Village employees may be

employed locally in the education or healthcare sector. Binghamton University, a top 10 rated university, is located in a

neighboring municipality and is a major employer of the area. Also SUNY Broome, a local community college is a place of

employment of Village residents as well as numerous public school systems such as Union-Endicott, Maine-Endwell, Johnson

City, Vestal and Binghamton, all of which are in close proximity to the Village of Endicott. Other larger employers of the area are

in the healthcare sector which includes Lourdes Hospital and UHS Services and the multiple medical offices of both Lourdes and

UHS. The Center for Advanced Microelectronic Manufacturing (CAMM) is a partnership between Binghamton University, i3

Electronics, Cornell University and the Flex Tech Alliance, and is the nation’s first prototype research and development (R&D)

facility in large area flexible electronics. The 10,000 square foot facility is located in The Huron Campus and has received multi-

million dollars of investment to grow.

The Village owns and operates a library and an airport which accommodates private and corporate aircraft. The Village also

owns the En-Joie Public Golf Club which is the site of the PGA Champions Tour “Dick’s Sporting Goods” Open Golf

Tournament. The Village has an agreement with Broome County, effective January 1, 2006, to maintain and operate the En-Joie

Public Golf Club.

The Village's Municipal Light Department furnishes electric power to approximately one-third of the Village. Electric power

for the remaining portion of the Village is furnished by New York State Electric and Gas Corporation.

Water Department and Wastewater Treatment Plant

It is the responsibility of the Endicott Municipal Water Department to provide safe, sanitary, quality water that is free from

harmful or objectionable taste, color, odor, and turbidity in the most cost efficient manner possible. Present water use is 5 to 7

million gallons per day at an average cost of $2.76 per 1,000 gallons. The Water Treatment Plant serves approximately 48,000

customers and there are approximately 950 fire hydrants and 165 miles of water main. There are 13 storage tanks which store

more than 6.5 million gallons of water. Owned and operated by the Village, the 10 MGD (million gallons daily) sewage treatment

plant serves 35,000 residents in the Village, Town of Union and the Town of Vestal. Located on the banks of the Nanticoke Creek

and the Susquehanna River, the plant features primary/secondary wastewater treatment, in-vessel bio-solids composting and

industrial waste treatment.

Economic Development

Sonostics, a medical device company, is located in the Washington Avenue area in downtown Endicott along with 7 current

employees, with a growth plan of up to 70+ employees.

There is a large residential project underway with a developer who is building 28 two-family homes for individuals age 55 or

older. This is being done in three phases. Phase one has been completed and phase two is currently underway. The new

construction will be added onto the Village’s tax base.

9

Pollution Issues

Approximately 377 homes and businesses stretching over 320 acres in the Village are being vented for industrial toxic

substances by IBM Corporation who may be responsible for at least a part of the contamination. Property owners claimed that a

1979 documented leak of 4,100 gallons of liquid cleaning agents used in IBM’s circuit board assembly operation was at least

partially to blame. Some home and business owners in the affected area claimed that this spill negatively affected the value and

salability of their properties and filed suit against the IBM Corporation. Older news articles indicated that IBM offered to settle

these suits for $10,000 or 8% of value of property whichever is larger. The assessed taxable values of the Village were negatively

impacted by declining market values of these properties. In 2015, an out-of-court settlement was reached. Today, the

contaminated space is over 90% cleaned up, and the remediation efforts have been successful.

Source: Village officials.

Population Trends

Year Village of Endicott Broome County New York State

1970 16,556 221,815 18,236,882

1980 14,457 213,648 17,558,072

1990 13,531 212,160 17,990,455

2000 13,038 200,536 18,976,457

2010 13,392 200,600 19,378,102

2012 13,184 198,060 19,570,261

2013 13,151 198,203 19,695,680

2014 13,083 197,349 19,746,227

2015 13,083 197,349 19,746,227

2016 12,992 195,334 19,745,289

Source: U.S. Census Bureau.

Major Employers

The following are the larger employers within or in close proximity to the Village.

Employer Employees Type

BAE Systems 1,200 Mission Systems

i3 Electronics 1,100 Electronics

I.B.M. Corporation 1,100 Technology

Union-Endicott Central School District 714 Education

Ideal Senior Living Center 300 Nursing Home

Village of Endicott 150 Government

Source: Village Officials and Broome County Industrial Development Agency. www.bcida.com

Banking Facilities

The following commercial banks are located in the Village:

JPMorgan Chase Bank, N.A.

Citizens One

Manufacturers & Traders Trust Company

NBT Bank (National Bank & Trust of Norwich)

First Niagara Bank


http://www.bcida.com/

10

Selected Wealth and Income Indicators

Per capita income statistics are available for the Village, County and State. Listed below are select figures from the 2000

Census reports and 2006-2010 and 2011-2015 American Community Survey data.

Per Capita Income Median Family Income

2000 2006-2010 2011-2015 2000 2006-2010 2011-2015

Village of:

Endicott $ 17,274 $ 20,712 $ 20,243 $ 35,858 $ 42,470 $ 39,736

County of:

Broome 19,168 24,314 25,105 45,422 57,545 62,558

State of:

New York 23,389 30,948 33,236 51,691 67,405 71,913

Note: 2012-2016 American Community Survey estimates are not available as of the date of this Official Statement.

Unemployment Rates

Unemployment statistics are not available for the Village as such. The smallest area for which such statistics are available

(which includes the Village) is Broome County and New York State. The information set forth below with respect to the County

and State is included for informational purposes only. It should not be implied from the inclusion of such data in this Official

Statement that the County and State is necessarily representative of the Village, or vice versa.

Annual Average

2010 2011 2012 2013 2014 2015 2016

Broome County 8.7% 8.6% 8.7% 7.8% 6.6% 6.0% 5.4%

New York State 8.6 8.3 8.5 7.7 6.3 5.3 4.9

2017 Monthly Figures

Jan Feb Mar Apr May Jun Jul Aug

Broome County 6.2% 6.3% 5.4% 5.3% 5.0% 5.6% N/A N/A

New York State 4.9 5.0 4.4 4.2 4.3 4.5 N/A N/A

Note: Unemployment rates for the months of July and August of 2017 have not been released as of the date of this Official

Statement.

Source: State of New York, Department of Labor. (Note: Figures not seasonally adjusted).

Financial Organization

The Village Treasurer is the Chief Fiscal Officer and the accounting officer. It is the Village Treasurer's duty to receive,

disburse and account for all financial transactions. The Mayor is the budget officer of the Village.

Form of Village Government

The Chief executive officer of the Village is the Mayor who is elected for a term of four years and is eligible to succeed

himself. He is also a member of the Board of Trustees. The legislative and administrative body of the Village is the Board of

Trustees, composed of the Mayor and four Trustees. Pursuant to a referendum held in November 2006, the number of trustees was

reduced to five members on January 1, 2008, and four members effective January 1, 2009. Trustees are elected for a term of two

years. Each term is staggered so that every year two Trustees run for election. There is no limitation as to the number of terms

which may be served by members of the Board of Trustees.

The Village Mayor is the chief administrative and executive officer of the Village and is the chief administrator of all Village

departments. The Mayor, with the approval of the Board of Trustees appoints the Village Treasurer (Clerk/Treasurer) to serve a

one-year term.

11

Budgetary Procedures

The budget officer prepares the proposed budget each year, pursuant to the laws of the State of New York, and a public

hearing is held thereon. Subsequent to the public hearing revisions, if any, are made and the budget is then adopted by the Village

Board of Trustees as its final budget for the coming fiscal year. The budget is not subject to referendum.

Investment Policy

Pursuant to the statutes of the State of New York, the Village is permitted to invest only in the following investments: (1)

special time deposits or certificates of deposits in a bank or trust company located and authorized to do business in the State of

New York; (2) obligations of the United States of America; (3) obligations guaranteed by agencies of the United States of America

where the payment of principal and interest is guaranteed by the United States of America; (4) obligations of the State of New

York; (5) with the approval of the New York State Comptroller, tax anticipation notes and revenue anticipation notes issued by

any New York municipality or district corporation, other than the Village; (6) obligations of a New York public corporation which

are made lawful investments by the Village pursuant to another provision of law; (7) certain certificates of participation issued on

behalf of political subdivisions of the State of New York; and, (8) in the case of Village moneys held in certain reserve funds

established pursuant to law, obligations issued by the Village. These statutes further require that all bank deposits, in excess of the

amount insured under the Federal Deposit Insurance Act, be secured by either a pledge of eligible securities, an eligible surety

bond or an eligible letter of credit, as those terms are defined in the law.

Consistent with the above statutory limitations, it is the Village's current policy to invest in: (1) certificates of deposit or time

deposit accounts that are fully secured as required by statute, (2) obligations of the United States of America or (3) obligations

guaranteed by agencies of the United States of America where the payment of principal and interest is guaranteed by the United

States of America. In the case of obligations of the United States government, the Village may purchase such obligations pursuant

to a written repurchase agreement that requires the purchased securities to be delivered to a third party custodian with regular

valuation.

State Aid

The Village receives financial assistance from the State. In its budget for the 2017-2018 fiscal year, approximately 4.11% of

the revenues of the Village are estimated to be received in the form of State aid. If the State should experience difficulty in

borrowing funds in anticipation of the receipt of State taxes in order to pay State aid to municipalities and school districts in the

State, including the Village, in any year, the Village may be affected by a delay in the receipt of State aid until sufficient State

taxes have been received by the State to make State aid payments. Additionally, if the State should not adopt its budget in a timely

manner, as is the case this year, municipalities and school districts in the State, including the Village, may be affected by a delay in

the payment of State aid.

The State is not constitutionally obligated to maintain or continue State aid to the Village. No assurance can be given that

present State aid levels will be maintained in the future. State budgetary restrictions which eliminate or substantially reduce State

aid could have a material adverse effect upon the Village requiring either a counterbalancing increase in revenues from other

sources to the extent available, or a curtailment of expenditures.

Employees

The Village currently employs approximately 145 full-time employees. The following is a breakdown of employee

representation by collective bargaining agents which represent them and the dates of expiration of their agreements (not all

employees are represented by collective bargaining agents):

Employees Contract

Represented Union Representation Expiration Date

22 Firefighters' Local 1280 May 31, 2020

29 AFSCME Local 826 May 31, 2017 (1)

26 Police Benevolent Association May 31, 2019

14 CSEA - Clerical May 31, 2018

19 Teamsters Local 693 May 31, 2021

9 CSEA Supervisors May 31, 2018

6 CSEA Endicott Light Employees May 31, 2017 (1)

(1)

Currently under negotiation. The Village is hopeful to settle these contracts prior to interest arbitration.


12

Pension Payments

Substantially all employees of the Village are members of the New York State and Local Employees’ Retirement System

(“ERS”) or the New York State and Local Police and Fire Retirement System (“PFRS”; with ERS, the “Retirement Systems”).

The ERS is generally also known as the “Common Retirement Fund”. The Retirement Systems are cost-sharing multiple public

employer retirement systems. The obligation of employers and employees to contribute and the benefit to employees are governed

by the New York State Retirement System and Social Security Law (the “Retirement System Law”). The Retirement Systems

offers a wide range of plans and benefits which are related to years of service and final average salary, vesting of retirement

benefits, death and disability benefits and optional methods of benefit payments. All benefits generally vest after five years of

credited service. The Retirement System Law generally provides that all participating employers in each retirement system are

jointly and severally liable for any unfunded amounts. Such amounts are collected through annual billings to all participating

employers. Generally, all employees, except certain part-time employees, participate in the Retirement Systems.

The ERS is non- contributory with respect to members hired prior to July 27, 1976 (Tier 1 & 2); members hired from July 27,

1976 through December 31, 2009 (Tier 3 & 4) contribute 3% for the first 10 years of service and then become non-contributory;

members hired from January 1, 2010 through March 31, 2012 (Tier 5) must contribute 3% for their entire careers; members hired

April 1, 2012 (Tier 6) or after will contribute between 3 and 6 percent for their entire careers based on their annual wage.

The PFRS is non- contributory with respect to members hired prior to January 8, 2010 (Tier 1, 2 & 3); members hired from

January 9, 2010 through March 31, 2012 (Tier 5) must contribute 3% for their entire careers; members hired April 1, 2012 (Tier 6)

or after will contribute between 3 and 6 percent for their entire careers based on their annual wage.

For both ERS & PFRS, Tier 5 provides for:

Raising the minimum age at which most civilians can retire without penalty from 55 to 62 and imposing a

penalty of up to 38% for any civilian who retires prior to age 62

Requiring employees to continue contributing 3% of their salaries toward pension costs so long as they

accumulate additional pension credits.

Increasing the minimum years of service required to draw pension form 5 years to 10 years.

Capping the amount of overtime that can be considered in the calculation of pension benefits for civilians at

$15,000 per year, and for police & firefighters at 15% of non-overtime wages.

For both ERS & PFRS, Tier 6 provides for:

Increase contribution rates of between 3% and 6% base on annual wage

Increase in the retirement age from 62 years to 63 years

A readjustment of the pension multiplier

A change in the period for final average salary calculation from 3 years to 5 years

The Village has made retirement contributions to ERS and PFRS as follows:

Fiscal Year ERS PFRS Total

2011-12 $ 690,525 $ 929,423 (1)

$ 1,619,948

2012-13 840,418 914,015 (2)

1,754,433

2013-14 953,481 854,402 1,807,883

2014-15 952,310 1,050,000 (3)

2,002,310

2015-16 950,773 1,100,000 (4)

2,050,773

2016-17 725,078 1,037,570 1,762,648

2017-18 (Budgeted) 713,394 1,076,209 1,789,603

(1)

Amortization payment of $14,615 (installment 6 of 10) is due February 1, 2018. (2)

Amortization payment of $32,857 (installment 5 of 10) is due February 1, 2018.

(3) Amortization payment of $10,202 (installment 3 of 10) is due February 1, 2018.

(4) Amortization payment of $26,715 (installment 2 of 10) is due February 1, 2018.

The Village amortized its 2011-12, 2012-13, 2014-15 and 2015-16 contribution of its PFRS retirement obligation as a result of

the increased contribution rates over the last couple of years. Contribution increases were anticipated and budgeted for during the

development of the annual budgets. The Village has not amortized its ERS pension payments.

The Village did not amortize or smooth any pension payments for the 2016-17 fiscal year nor does it intend to do so for the

2017-18 fiscal year.

13

Pursuant to various laws enacted between 1991 and 2002, the State Legislature authorized local governments to make

available certain early retirement incentive programs to its employees. The Village does not have any early retirement incentives

outstanding.

Historical Trends and Contribution Rates: Historically there has been a State mandate requiring full (100%) funding of the

annual actuarially required local governmental contribution out of current budgetary appropriations. With the strong performance

of the Retirement System in the 1990s, the locally required annual contribution declined to zero. However, with the subsequent

decline in the equity markets, the pension system became underfunded. As a result, required contributions increased substantially

to 15% to 20% of payroll for the employees’ and the police and fire retirement systems, respectively. Wide swings in the

contribution rate resulted in budgetary planning problems for many participating local governments.

A chart of average ERS and PFRS rates (2013 to 2018) is shown below:

Year ERS PFRS

2013 18.9% 25.8%

2014 20.9 28.9

2015 20.1 27.6

2016 18.2 24.7

2017 15.5 24.3

2018 15.3 24.4

Chapter 49 of the Laws of 2003 amended the Retirement and Social Security Law and Local Finance Law. The amendments

empowered the State Comptroller to implement a comprehensive structural reform program that establishes a minimum

contribution for any employer equal to 4.5% of pensionable salaries for required contributions due December 15, 2003 and for all

years thereafter where the actual rate would otherwise be 4.5% or less. In addition, it instituted a billing system that will advise

employers over one year in advance concerning actual pension contribution rates.

Chapter 57 of the Laws of 2010 (Part TT) amended the Retirement and Social Security Law to authorize participating local

government employers, if they so elect, to amortize an eligible portion of their annual required contributions to both ERS and

PFRS, when employer contribution rates rise above certain levels. The option to amortize the eligible portion began with the

annual contribution due February 1, 2011. The amortizable portion of an annual required contribution is based on a “graded” rate

by the State Comptroller in accordance with formulas provided in Chapter 57. Amortized contributions are to be paid in equal

annual installments over a ten-year period, but may be prepaid at any time. Interest is to be charged on the unpaid amortized

portion at a rate to be determined by State Comptroller, which approximates a market rate of return on taxable fixed rate securities

of a comparable duration issued by comparable issuers. The interest rate is established annually for that year’s amortized amount

and then applies to the entire ten years of the amortization cycle of that amount. When in any fiscal year, the participating

employer’s graded payment eliminates all balances owed on prior amortized amounts, any remaining graded payments are to be

paid into an employer contribution reserve fund established by the State Comptroller for the employer, to the extent that

amortizing employer has no currently unpaid prior amortized amounts, for future such use.

Stable Rate Pension Contribution Option: The 2013-14 Adopted State Budget included a provision that authorized local

governments, including the Village, with the option to “lock-in” long-term, stable rate pension contributions for a period of years

determined by the State Comptroller and ERS and PFRS. For 2014 and 2015 the rate is 12.0% for ERS and 20% for PFRS; the

rates applicable to 2016 and thereafter are subject to adjustment. The pension contribution rates under this program would reduce

near-term payments for employers, but require higher than normal contributions in later years.

The investment of monies and assumptions underlying same, of the Retirement Systems covering the Village’s employees is

not subject to the direction of the Village. Thus, it is not possible to predict, control or prepare for future unfunded accrued

actuarial liabilities of the Retirement Systems (“UAALs”). The UAAL is the difference between total actuarially accrued

liabilities and actuarially calculated assets available for the payment of such benefits. The UAAL is based on assumptions as to

retirement age, mortality, projected salary increases attributed to inflation, across-the-board raises and merit raises, increases in

retirement benefits, cost-of-living adjustments, valuation of current assets, investment return and other matters. Such UAALs

could be substantial in the future, requiring significantly increased contributions from the Village which could affect other

budgetary matters. Concerned investors should contact the Retirement Systems administrative staff for further information on the

latest actuarial valuations of the Retirement Systems.

14

Other Post-Employment Benefits

Healthcare Benefits. School districts and boards of cooperative educational services, unlike other municipal units of

government in the State, have been prohibited from reducing retiree health benefits or increasing health care contributions received

or paid by retirees below the level of benefits or contributions afforded to or required from active employees since the

implementation of Chapter 729 of the Laws of 1994. Legislative attempts to provide similar protection to retirees of other local

units of government in the State have not succeeded as of this date. Nevertheless, many such retirees of all varieties of municipal

units in the State do presently receive such benefits.

GASB 45 and OPEB. OPEB refers to "other post-employment benefits," meaning other than pension benefits. OPEB consist

primarily of health care benefits, and may include other benefits such as disability benefits and life insurance. Until now, these

benefits have generally been administered on a pay-as-you-go basis and have not been reported as a liability on governmental

financial statements.

GASB 45 will require municipalities and school districts to account for OPEB liabilities much like they already account for

pension liabilities, generally adopting the actuarial methodologies used for pensions, with adjustments for the different

characteristics of OPEB and the fact that most municipalities and school districts have not set aside any funds against this liability.

Unlike GASB 27, which covers accounting for pensions, GASB 45 does not require municipalities or school districts to report a

net OPEB obligation at the start.

Under GASB 45, based on actuarial valuation, an annual required contribution ("ARC") will be determined for each

municipality or school district. The ARC is the sum of (a) the normal cost for the year (the present value of future benefits being

earned by current employees) plus (b) amortization of the unfunded accrued liability (benefits already earned by current and

former employees but not yet provided for), using an amortization period of not more than 30 years. If a municipality or school

district contributes an amount less than the ARC, a net OPEB obligation will result, which is required to be recorded as a liability

on its financial statements.

GASB 45 does not require that the unfunded liability actually be amortized nor that it be advance funded, only that the

municipality or school district account for its unfunded accrued liability and compliance in meeting its ARC.

Actuarial Valuation will be required every 2 years for OPEB plans with more than 200 members, every 3 years if there are

less than 200 members.

The Village originally contracted with Health Economics Group to calculate its “other post-employment benefits” (“OPEB”)

in accordance with GASB 45 but was not able to complete the report. The Village is working with Health Economics Group again

and expects that the report will be completed within the coming months and anticipates that it will be in compliance with GASB 45

in the near future. For additional information, please contact the Village.

Other Information

The statutory authority for the power to spend money for the object or purpose, or to accomplish the object or purpose, for

which the Notes are to be issued is the Local Finance Law.

The Village is in compliance with the procedure for the validation of the Notes as provided in Title 6 of Article 2 of the Local

Finance Law.

No principal or interest upon any obligation of the Village is past due.

The fiscal year of the Village is June 1st to May 31st.

Except for as shown under “STATUS OF INDEBTEDNESS – Estimated Overlapping Indebtedness”, the Official Statement

does not include the financial data of any political subdivision having power to levy taxes within the Village.

15

Financial Statements

The (unaudited) Annual Financial Report Update Document is attached hereto as “APPENDIX – C”. Certain financial

information of the Village may be found in the Appendices to this Official Statement. The Village expects the audited financial

statements for the fiscal year ending May 31, 2017 to be completed and publically available in December 2017.

The Village complies with the Uniform System of Accounts as prescribed for Villages in New York State. Except for the

accounting for fixed assets, this system conforms to generally accepted accounting principles as prescribed by the American

Institute of Certified Public Accountants' Industry Audit Guide, "Audits of State and Local Governmental Units", and codified in

Government Accounting, Auditing and Financial Reporting (GAAFR), published by the Governmental Accounting Standards

Board (GASB).

New York State Comptroller Report of Examination

The State Comptroller's office, i.e., the Department of Audit and Control, periodically performs a compliance review to

ascertain whether the Village has complied with the requirements of various State and Federal statutes. These audits can be found

by visiting the Audits of Local Governments section of the Office of the State Comptroller website.

The State Comptroller’s office released an audit report of the Village on April 15, 2016. The purpose of the audit was to

determine whether the significant revenue and expenditure projections in the Village’s tentative budget for the 2016-17 fiscal year

are reasonable.

Key Findings:

Based on the results of our review, we found that the significant revenue and expenditure projections in the tentative

budget for the general, electric and parking funds are reasonable.

The water and sewer funds’ tentative budgets are not balanced and include a deficit of approximately $236,000 and

$206,000, respectively. Village officials plan to raise water and sewer rates.

The Village has adopted a local law to override the tax levy limit.

Key Recommendations:

Address the deficits in the water and sewer funds to avoid adopting unbalanced budgets that include appropriations

without sufficient financing sources.

Additionally, the State Comptroller’s office released an audit report of the Village on April 13, 2015. The purpose of the audit

was to determine whether the significant revenue and expenditure projections in the Village's tentative budget for the 2015-16

fiscal year are reasonable.

Key Findings:

Based on the results of our review, we found that the significant revenue and expenditure projections in the tentative

budget for the general, electric, library and parking funds are reasonable.

The water and sewer funds’ tentative budgets are not balanced and include a deficit of approximately $257,000 and

$155,000, respectively. Village officials told us they recognized the deficits and planned to raise water and sewer rates to

make up the difference.

The Village’s tentative budget exceeds the property tax levy limit set by statute.

Key Recommendations:

Address the deficits in the water and sewer funds to avoid adopting unbalanced budgets that include appropriations

without sufficient financing sources.

Ensure compliance with the tax levy limit law by either adopting a local law to override the tax cap or lowering the

budget totals to be within the allowable levy limits.

Copies of the above referenced reports can be found via the website of the Office of the New York State Comptroller.

There are no other State Comptroller audits of the Village that are currently in progress or pending release.

Note: Reference to website implies no warranty of accuracy of information therein.

16

The State Comptroller’s Fiscal Stress Monitoring System

The New York State Comptroller has reported that New York State’s school districts and municipalities are facing significant

fiscal challenges. As a result, the Office of the State Comptroller has developed a Fiscal Stress Monitoring System (“FSMS”) to

provide independent, objectively measured and quantifiable information to school district and municipal officials, taxpayers and

policy makers regarding the various levels of fiscal stress under which the State’s school districts and municipalities are operating.

The fiscal stress scores are based on financial information submitted as part of each school district’s ST-3 report filed with the

State Education Department annually, and each municipality’s annual report filed with the State Comptroller. Using financial

indicators that include year-end fund balance, cash position and patterns of operating deficits, the system creates an overall fiscal

stress score which classifies whether a school district or municipality is in “significant fiscal stress”, in “moderate fiscal stress,” as

“susceptible to fiscal stress” or “no designation”. Entities that do not accumulate the number of points that would place them in a

stress category will receive a financial score but will be classified in a category of “no designation.” This classification should not

be interpreted to imply that the entity is completely free of fiscal stress conditions. Rather, the entity’s financial information, when

objectively scored according to the FSMS criteria, did not generate sufficient points to place them in one of the three established

stress categories.

The reports of the State Comptroller for the past four fiscal years of the Village are as follows:

Fiscal Year Ending In Stress Designation Fiscal Score

No Designation 12.9%

2015 No Designation 12.9%

2014 No Designation 14.6%

Source: Website of the Office of the New York State Comptroller.

Note: Reference to website implies no warranty of accuracy of information therein. Information for the Fiscal Year Ending in

2017 for the Village is unavailable as of the date of this Official Statement.

TAX INFORMATION

Taxable Assessed Valuations

Note: For the 2014 year, Huron which occupies the former IBM facility (approximately 32 buildings) came off a PILOT

program and was successful in a 72% reduction in their assessment. This reduction accounts for the entire reduction in

assessed value. Prior taxes collected were approximately $2.4 million and the new amount is approximately $600,000.

Tax Rate Per $1,000 (Assessed)

Tax Collection Procedure

Tax payments are due on June 1 to and including June 30 in each year without penalty. Penalties for tax delinquencies are

imposed at the rate of 5% for the first month delinquent and an additional 1% for each month or fraction thereof thereafter. At the

beginning of November settlement is made by the Treasurer with the Village Board and unpaid taxes are returned to Broome

County by November 15 for enforcement. The County remits to the Village the amount of uncollected taxes, and then administers

the delinquent collections, so that the Village receives its entire levy in the same fiscal year.

Fiscal Year Ending May 31: 2014 2015 2016 2017 2018

Assessed Valuation 21,504,921$ 21,449,367$ 21,380,114$ 21,169,166$ 21,062,155$

New York State

Equalization Rate 4.85% 4.97% 4.60% 4.27% 4.38%

Total Taxable Full Valuation 443,400,433$ 431,576,801$ 464,785,087$ 495,765,012$ 480,871,119$


$ 353.73 $ 362.43 $ 369.52 $ 377.55 $ 385.14

17

Tax Levy and Tax Collection Record

(1) See 'Tax Collection Procedure' herein.

Sales Tax Comparison

The following table sets forth a comparison of the budgeted and actual total sales tax collected during each of the five six

fiscal years and the budgeted amount for the current fiscal year:


Ten Largest Taxpayers – 2017-2018 Assessment Roll

Name Type Assessed Valuation

Huron Real Estate Association Industrial $ 1,744,000

New York State Electric & Gas Utility 838,319

Nantucket Drive Properties LLC Nursing Home 297,000

Feinberg & Feinstein (Price Chopper) Commercial 243,600

Marilyn Alessi Apartments 105,379

West Village Apartments 869,670

DDL Associates Apartments 85,300

Norfolk Southern Rail Depot Track Switches 84,328

JNFERA, LLC Catholic Charity 83,300

Bilaw Partners, LLC Business Building 82,200

The top ten taxpayers listed above have a total assessed valuation of $3,653,096, which represents 17.34% of the Village tax

base.

As of the date of this Official Statement, the Village currently does not have any pending or outstanding tax certioraris that are

known or believed to have a material impact on the Village.

Source: Village Officials.

Assessment Information

Real property in the Village is assessed by the Town of Union.

Veterans' and senior citizens' exemptions are offered to those who qualify.

The assessment roll of the Village is constituted approximately as follows: 60% Commercial and 40% Residential.

The estimated total village property tax for an average residence valued at $100,000 is $1,612 per year.


Total Tax Levy $ 7,606,837 $ 7,773,979 $ 7,900,328 $ 7,992,469 $ 8,111,916

Amount Uncollected (1) - - - - -

% Uncollected 0.00% 0.00% 0.00% 0.00% 0.00%

Fiscal

Year

Budgeted

Amount Actual

% of

Budget

2012-13 2,668,000$ 2,702,596$ 101.30

2013-14 2,708,000 2,763,137 102.04

2014-15 2,795,000 2,825,464 101.09

2015-16 2,845,000 2,887,353 101.49

2016-17 2,895,000 2,995,148 103.46

2017-18 2,990,000 N/A N/A

18

Constitutional Tax Margin

Computation of Constitutional Tax Margin for fiscal years ending May 31:


TAX LEVY LIMITATION LAW

On June 24, 2011, Chapter 97 of the Laws of 2011 was signed into law by the Governor (as amended, the “Tax Levy

Limitation Law”). The Tax Levy Limitation Law applies to virtually all local governments, including school districts (with the

exception of New York City, Yonkers, Syracuse, Rochester and Buffalo, the latter four of which are indirectly affected by

applicability to their respective city). It also applies to independent special districts and to town and county improvement districts

as part of their parent municipalities tax levies.

The Tax Levy Limitation Law restricts, among other things, the amount of real property taxes (including assessments of

certain special improvement districts) that may be levied by or on behalf of a municipality in a particular year, beginning with

fiscal years commencing on or after January 1, 2012. It expires on June 15, 2020 unless extended. Pursuant to the Tax Levy

Limitation Law, the tax levy of a municipality cannot increase by more than the lesser of (i) two percent (2%) or (ii) the annual

increase in the consumer price index ("CPI"), over the amount of the prior year’s tax levy. Certain adjustments would be permitted

for taxable real property full valuation increases due to changes in physical or quantity growth in the real property base as defined

in Section 1220 of the Real Property Tax Law. A municipality may exceed the tax levy limitation for the coming fiscal year only

if the governing body of such municipality first enacts, by at least a sixty percent vote of the total voting strength of the board, a

local law (resolution in the case of fire districts and certain special districts) to override such limitation for such coming fiscal year

only. There are exceptions to the tax levy limitation provided in the Tax Levy Limitation Law, including expenditures made on

account of certain tort settlements and certain increases in the average actuarial contribution rates of the New York State and Local

Employees’ Retirement System, the Police and Fire Retirement System, and the Teachers’ Retirement System. Municipalities are

also permitted to carry forward a certain portion of their unused levy limitation from a prior year. Each municipality prior to

adoption of each fiscal year budget must submit for review to the State Comptroller any information that is necessary in the

calculation of its tax levy for each fiscal year.

The Tax Levy Limitation Law does not contain an exception from the levy limitation for the payment of debt service on either

outstanding general obligation debt of municipalities or such debt incurred after the effective date of the Tax Levy Limitation Law

(June 24, 2011).

While the Tax Levy Limitation Law may constrict an issuer’s power to levy real property taxes for the payment of debt

service on debt contracted after the effective date of said Tax Levy Limitation Law, it is clear that no statute is able (1) to limit an

issuer’s pledge of its faith and credit to the payment of any of its general obligation indebtedness or (2) to limit an issuer’s levy of

real property taxes to pay debt service on general obligation debt contracted prior to the effective date of the Tax Levy Limitation

Law. Whether the Constitution grants a municipality authority to treat debt service payments as a constitutional exception to such

statutory tax levy limitation outside of any statutorily determined tax levy amount is not clear.

Fiscal Year Ending May 31: 2018 2017 2016 2015

Five Year Average Full Valuation….…………… 463,279,690$ 481,097,416$ 503,470,919$ 536,399,720$

Tax Limit - (2%)………………………………….… 9,265,594 9,621,948 10,069,418 10,727,994

Total Additions………………...………………..… 1,791,626 1,603,938 1,356,621 1,209,381

Total Taxing Power……………...……………….… 11,057,220$ 11,225,886$ 11,426,039$ 11,937,375$

Total Levy for General Village Purposes……………...….8,111,916 7,992,469 7,900,328 7,773,979

Constitutional Tax Margin…………………...….. 2,945,304$ 3,233,417$ 3,525,711$ 4,163,396$

Fiscal Year Ending May 31: 2014 2013 2012 2011

Five Year Average Full Valuation….…………… 567,713,800$ 560,859,085$ 519,710,143$ 467,295,449$

Tax Limit - (2%)………………………………….… 11,354,276 11,217,182 10,394,203 9,345,909

Total Additions………………...………………..… 1,431,195 1,659,762 1,819,864 1,583,783

Total Taxing Power……………...……………….… 12,785,471$ 12,876,944$ 12,214,067$ 10,929,692$

Total Levy for General Village Purposes……………...….7,606,837 9,268,781 9,133,492 9,007,240

Constitutional Tax Margin…………………...….. 5,178,634$ 3,608,163$ 3,080,575$ 1,922,452$

19

STATUS OF INDEBTEDNESS

Constitutional Requirements

The New York State Constitution limits the power of the Village (and other municipalities and certain school districts of the

State) to issue obligations and to otherwise contract indebtedness. Such constitutional limitations in summary form, and as

generally applicable to the City and its indebtedness (including the Notes), include the following provisions:

Purpose and Pledge. Subject to certain enumerated exceptions, the Village shall not give or loan any money or property to or

in aid of any individual, private corporation or private undertaking or give or loan its credit to or in aid of any foreign or public

corporation. The Village may contract indebtedness only for a Village purpose and shall pledge its faith and credit for the payment

of the principal of any interest thereon.

Payment and Maturity. Except for certain short-term indebtedness contracted in anticipation of taxes or to be paid within three

fiscal year periods, indebtedness shall be paid in annual installments commencing no later than two years after the date such

indebtedness shall have been contracted and ending no later than the expiration of the period of probable usefulness of the object

or purpose as determined by statute; no installment may be more than fifty per centum in excess of the smallest prior installment,

unless substantially level or declining debt service is utilized. The Village is required to provide an annual appropriation for the

payment of interest due during the year on its indebtedness and for the amounts required in such year for amortization and

redemption of its serial bonds and such required annual installments on its bonds.

Debt Limit. The Village has the power to contract indebtedness for any Village purpose so long as the principal amount

thereof, subject to certain limited exceptions, shall not exceed seven per centum of the average full valuation of taxable real

property of the Village and subject to certain enumerated exclusions and deductions such as water and certain sewer facilities and

cash or appropriations for current debt service. The constitutional method for determining full valuation is by taking the assessed

valuation of taxable real estate as shown upon the latest completed assessment roll and dividing the same by the equalization rate

as determined by the State Office of Real Property Services. The State Legislature is required to prescribe the manner by which

such ratio shall be determined. Average full valuation is determined by taking the sum of the full valuation of the last completed

assessment roll and the four preceding assessment rolls and dividing such sum by five.

Pursuant to Article VIII of the State Constitution and Title 9 of Article 2 of the Local Finance Law, the debt limit of the

Village is calculated by taking 7% of the latest five-year average of the full valuation of all taxable real property.

Statutory Procedure

In general, the State Legislature has authorized the power and procedure for the Village to borrow and incur indebtedness by

the enactment of the Local Finance Law subject, of course, to the provisions set forth above. The power to spend money,

however, generally derives from other law, including specifically the Village Law and the General Municipal Law.

Pursuant to the Local Finance Law and Village Law, the Village authorizes the issuance of bonds by the adoption of a bond

ordinance approved by at least two-thirds of the members of the Common Council, the finance board of the Village. Customarily,

the Common Council has delegated to the Village Controller, as chief fiscal officer of the Village, the power to authorize and sell

bond anticipation notes in anticipation of authorized bonds.

The Local Finance Law also provides that when a bond resolution is published with a statutory form of notice, the validity of

the bonds authorized thereby, including bond anticipation notes issued in anticipation of the sale thereof, may be contested only if:

(1) Such obligations are authorized for a purpose for which the Village is not authorized to expend money, or

(2) There has not been substantial compliance with the provisions of law which should have been complied with in the

authorization of such obligations, and

(3) An action contesting such validity, is commenced within twenty days after the date of such publication, or,

Such obligations are authorized in violation of the provisions of the Constitution.

The Village generally issues its obligations after the time period specified in 3, above has expired with no action filed that has

contested validity. It is a procedure that is recommended by Bond Counsel and followed by the Village, but it is not an absolute

legal requirement.

Each bond resolution usually authorizes the construction, acquisition or installation of the object or purpose to be financed,

sets forth the plan of financing and specifies the maximum maturity of the bonds subject to the legal (Constitution, Local Finance

Law and case law) restrictions relating to the period of probable usefulness with respect thereto. The Village has authorized bonds

for a variety of Village objects or purposes.

20

Statutory law in New York permits bond anticipation notes to be renewed each year provided annual principal installments are

made in reduction of the total amount of such bonds outstanding, commencing no later than two years from the date of the first of

such bonds and provided that such renewals do not exceed five years beyond the original date of borrowing. (See “Payment and

Maturity” under “Constitutional Requirements” herein.)

In general, the Local Finance Law contains provisions providing the Village with power to issue certain other short-term

general obligation indebtedness including revenue and tax anticipation notes and budget, deficiency and capital notes (see “Details

of Outstanding Indebtedness” herein).

Debt Outstanding End of Fiscal Year

Fiscal Years Ending May 31: 2013 2014 2015 2016 2017

Bonds $ 9,135,400 $ 9,986,900 $ 9,039,700 $ 8,071,700 $ 7,116,800

Bond Anticipation Notes 1,146,000 0 0 0 667,000

Other Debt 0 0 0 0 0

Totals $ 10,281,400 $ 9,986,900 $ 9,039,700 $ 8,071,700 $ 7,783,800

Details of Outstanding Indebtedness

The following table sets forth the indebtedness of the Village evidenced by bonds and notes as of August 8, 2017:

Amount

Type of Indebtedness Maturity Outstanding

Bonds 2017-2031 $ 7,116,800

Bond Anticipation Notes

Purchase of equipment and concrete repairs October 13, 2017 667,000 (1)

Total Indebtedness $ 7,783,800 (1)

To be renewed at maturity with bond anticipation notes.

Debt Statement Summary

Summary of Indebtedness, Debt Limit and Net Debt-Contracting Margin as of August 8, 2017:

Five-Year Average Full Valuation ....................................................................................................... $ 463,279,690

Debt Limit - 7% thereof ........................................................................................................................ 32,429,578

Inclusions:

Bonds ............................................................ $ 7,116,800

Bond Anticipation Notes ............................... 667,000

Total Inclusions ............................. $ 7,783,800

Exclusions:

Appropriations (1)

............................................$ 721,800

Sewer Debt (2)

..................................................... 0

Water Debt (3)

.................................................... 0

Total Exclusions ............................ $ 721,800

Total Net Indebtedness ......................................................................................................................... $ 6,395,000

Net Debt-Contracting Margin ............................................................................................................... $ 26,034,578

The percent of debt contracting power exhausted is ............................................................................. 19.72%

(1)

Appropriations are excluded pursuant to Section 136.00 of the Local Finance Law. (2)

Sewer Debt is excluded pursuant to section 124.10 of the Local Finance Law. Exclusion certificate dated February 12, 2010. (3)

Water Debt is excluded pursuant to Article VIII, Section 5B of the New York State Constitution.

Note: The issuance of the Notes will increase the Village’s net indebtedness by $2,345,000.

21

Bonded Debt Service

A schedule of Bonded Debt Service may be found in “APPENDIX – B” to this Official Statement.

Cash Flow Borrowings

The Village has not found it necessary to borrow revenue anticipation notes or tax anticipation notes in the recent past, and

has no other plans to borrow for such in the future.

Estimate of Obligations to be Issued

The Village reviews annual improvement projects and needs and develops a plan on repair and/or replacement of equipment

and facilities.

The Village has no other projects authorized or contemplated at this time.

Capital Leases

The Village entered into a capital leases for equipment and vehicles. Below is a summary of the payments to be made:

Fiscal Year Principal Interest

2018 $ 2,675 $ 30

Totals $ 2,675 $ 30

Source: Audited Financial Statements.

Estimated Overlapping Indebtedness

In addition to the Village, the following political subdivisions have the power to issue obligations and to levy taxes or cause

taxes to be levied on taxable real property in the Village. Estimated bonds and bond anticipation notes are listed as of the close of

the 2014 fiscal year of the respective municipalities.

(1)

Pursuant to applicable constitutional and statutory provisions, this indebtedness is deductible from gross indebtedness for debt

limit purposes. (2)

Source: Most recent official statement of the municipality which can be found on the Electronic Municipal Market Access

(EMMA) website. (3)

Sewer and water indebtedness and appropriations. (4)

Estimated State Building aid of 86.1%.

Status of Gross Estimated Net Village Applicable

Municipality Debt as of Indebtedness (1)

Exclusions Indebtedness Share Indebtedness

County of:

Broome 4/12/2017 122,765,000$ (2)

16,466,561$ (3)

106,298,439$ 5.91% 6,282,238$

Town of:

Union 4/10/2017 7,137,632 (2)

982,059 (3)

6,155,573 22.61% 1,391,775

School District:

Union-Endicott 6/1/2017 58,785,620 (2)

50,614,419 (4)

8,171,201 41.14% 3,361,632

Total: 11,035,645$

22

Debt Ratios

The following table sets forth certain ratios relating to the Village’s net indebtedness as of August 8, 2017:

Per Percentage of

Amount Capita (a)

Full Value (b)

Gross Direct Indebtedness (c)

........................................................... $ 7,783,800 $ 599.12 1.62%

Net Direct Indebtedness (c)

.............................................................. 6,395,000 492.23 1.33

Gross Direct Plus Net Overlapping Indebtedness (d)

....................... 19,206,336 1,448.54 3.91

Net Direct Plus Net Overlapping Indebtedness (d)

........................... 17,817,536 1,371.64 3.62

(a)

According to the 2016 Census, the population of the Village is 12,992. See “THE VILLAGE - Population Trends” herein. (b)

The Village's full value of taxable real estate for 2017-2018 fiscal year is $480,871,119. See “TAX INFORMATION -

Taxable Assessed Valuations” herein. (c)

See Computation of “Debt Statement Summary”, herein. (d)

The Village's estimated applicable share of net underlying indebtedness is $11,035,645. See "Estimated Overlapping

Indebtedness" herein.

SPECIAL PROVISIONS AFFECTING REMEDIES UPON DEFAULT

General Municipal Law Contract Creditors’ Provision. Each Bond when duly issued and paid for will constitute a

contract between the Village and the holder thereof. Under current law, provision is made for contract creditors of the Village to

enforce payments upon such contracts, if necessary, through court action. Section 3-a of the General Municipal Law provides,

subject to exceptions not pertinent, that the rate of interest to be paid by the Village upon any judgment or accrued claim against it

on an amount adjudged due to a creditor shall not exceed nine per centum per annum from the date due to the date of payment.

This provision might be construed to have application to the holders of the Notes in the event of a default in the payment of the

principal of and interest on the Notes.

Execution/Attachment of Municipal Property. As a general rule, property and funds of a municipal corporation serving the

public welfare and interest have not been judicially subjected to execution or attachment to satisfy a judgment, although judicial

mandates have been issued to officials to appropriate and pay judgments out of certain funds or the proceeds of a tax levy. In

accordance with the general rule with respect to municipalities, judgments against the Village may not be enforced by levy and

execution against property owned by the Village.

Authority to File For Municipal Bankruptcy. The Federal Bankruptcy Code allows public bodies, such as the Village,

recourse to the protection of a Federal Court for the purpose of adjusting outstanding indebtedness. Section 85.80 of the Local

Finance Law contains specific authorization for any municipality in the State or its emergency control board to file a petition under

any provision of Federal bankruptcy law for the composition or adjustment of municipal indebtedness.

The State has consented that any municipality in the State may file a petition with the United States District Court or court of

bankruptcy under any provision of the laws of the United States, now or hereafter in effect, for the composition or adjustment of

municipal indebtedness. Subject to such State consent, under the United States Constitution, Congress has jurisdiction over such

matters and has enacted amendments to the existing federal bankruptcy statute, being Chapter 9 thereof, generally to the effect and

with the purpose of affording municipal corporations, under certain circumstances, with easier access to judicially approved

adjustment of debt including judicial control over identifiable and unidentifiable creditors.

No current state law purports to create any priority for holders of the Notes should the Village be under the jurisdiction of any

court, pursuant to the laws of the United States, now or hereafter in effect, for the composition or adjustment of municipal

indebtedness.

The rights of the owners of Notes to receive interest and principal from the Village could be adversely affected by the

restructuring of the Village’s debt under Chapter 9 of the Federal Bankruptcy Code. No assurance can be given that any priority of

holders of debt obligations issued by the Village (including the Notes) to payment from monies retained in any debt service fund

or from other cash resources would be recognized if a petition were filed by or on behalf of the Village under the Federal

Bankruptcy Code or pursuant to other subsequently enacted laws relating to creditors’ rights; such monies might, under such

circumstances, be paid to satisfy the claims of all creditors generally.

Under the Federal Bankruptcy Code, a petition may be filed in the Federal Bankruptcy court by a municipality which is

insolvent or unable to meet its debts as they mature. Generally, the filing of such a petition operates as a stay of any proceeding to

enforce a claim against the municipality. The Federal Bankruptcy Code also requires that a plan be filed for the adjustment of the

municipality’s debt, which may modify or alter the rights of creditors and which could be secured. Any plan of adjustment

confirmed by the court must be approved by the requisite number of creditors. If confirmed by the bankruptcy court, the plan

would be binding upon all creditors affected by it.

23

State Debt Moratorium Law. There are separate State law provisions regarding debt service moratoriums enacted into law

in 1975.

At the Extraordinary Session of the State Legislature held in November, 1975, legislation was enacted which purported to

suspend the right to commence or continue an action in any court to collect or enforce certain short-term obligations of The City of

New York. The effect of such act was to create a three-year moratorium on actions to enforce the payment of such obligations.

On November 19, 1976, the Court of Appeals, the State’s highest court, declared such act to be invalid on the ground that it

violates the provisions of the State Constitution requiring a pledge by such Village of its faith and credit for the payment of

obligations.

As a result of the Court of Appeals decision in Flushing National Bank v. Municipal Assistance Corporation for the City of

New York, 40 N.Y.2d 731 (1976), the constitutionality of that portion of Title 6-A of Article 2 of the Local Finance Law,

described below, enacted at the 1975 Extraordinary Session of the State legislature authorizing any county, city, town or village

with respect to which the State has declared a financial emergency to petition the State Supreme Court to stay the enforcement

against such municipality of any claim for payment relating to any contract, debt or obligation of the municipality during the

emergency period, is subject to doubt. In any event, no such emergency has been declared with respect to the Village.

Right of Municipality or State to Declare a Municipal Financial Emergency and Stay Claims Under State Debt Moratorium

Law. The State Legislature is authorized to declare by special act that a state of financial emergency exists in any county, city,

town or village. (The provision does not by its terms apply to school districts or fire districts.) In addition, the State Legislature

may authorize by special act establishment of an “emergency financial control board” for any county, city, town or village upon

determination that such a state of financial emergency exists. Thereafter, unless such special act provides otherwise, a voluntary

petition to stay claims may be filed by any such municipality (or by its emergency financial control board in the event said board

requests the municipality to petition and the municipality fails to do so within five days thereafter). A petition filed in supreme

court in county in which the municipality is located in accordance with the requirements of Title 6-A of the Local Finance Law

(“Title 6-A”) effectively prohibits the doing of any act for ninety days in the payment of claims, against the municipality including

payment of debt service on outstanding indebtedness.

This includes staying the commencement or continuation of any court proceedings seeking payment of debt service due, the

assessment, levy or collection of taxes by or for the municipality or the application of any funds, property, receivables or revenues

of the municipality to the payment of debt service. The stay can be vacated under certain circumstances with provisions for the

payment of amounts due or overdue upon a demand for payment in accordance with the statutory provisions set forth therein. The

filing of a petition may be accompanied with a proposed repayment plan which upon court order approving the plan, may extend

any stay in the payment of claims against the municipality for such “additional period of time as is required to carry out fully all

the terms and provisions of the plan with respect to those creditors who accept the plan or any benefits thereunder.” Court

approval is conditioned, after a hearing, upon certain findings as provided in Title 6-A.

A proposed plan can be modified prior to court approval or disapproval. After approval, modification is not permissible

without court order after a hearing. If not approved, the proposed plan must be amended within ten days or else the stay is vacated

and claims including debt service due or overdue must be paid. It is at the discretion of the court to permit additional filings of

amended plans and continuation of any stay during such time. A stay may be vacated or modified by the court upon motion of any

creditor if the court finds after a hearing, that the municipality has failed to comply with a material provision of an accepted

repayment plan or that due to a “material change in circumstances” the repayment plan is no longer in compliance with statutory

requirements.

Once an approved repayment plan has been completed, the court, after a hearing upon motion of any creditor, or a motion of

the municipality or its emergency financial control board, will enter an order vacating any stay then in effect and enjoining of

creditors who accepted the plan or any benefits thereunder from commencing or continuing any court action, proceeding or other

act described in Title 6-A relating to any debt included in the plan.

Title 6-A requires notice to all creditors of each material step in the proceedings. Court determinations adverse to the

municipality or its financial emergency control board are appealable as of right to the appellate division in the judicial department

in which the court is located and thereafter, if necessary, to the Court of Appeals. Such appeals stay the judgment or appealed

from and all other actions, special proceedings or acts within the scope of Section 85.30 of Title 6-A pending the hearing and

determination of the appeals.

Whether Title 6-A is valid under the Constitutional provisions regarding the payment of debt service is not known.

However, based upon the decision in the Flushing National Bank case described above, its validity is subject to doubt.

While the State Legislature has from time to time adopted legislation in response to a municipal fiscal emergency and

established public benefit corporations with a broad range of financial control and oversight powers to oversee such municipalities,

generally such legislation has provided that the provisions of Title 6-A are not applicable during any period of time that such a

public benefit corporation has outstanding indebtedness issued on behalf of such municipality.

24

Fiscal Stress and State Emergency Financial Control Boards. Pursuant to Article IX Section 2(b)(2) of the State Constitution,

any local government in the State may request the intervention of the State in its “property, affairs and government” by a two-

thirds vote of the total membership of its legislative body or on request of its chief executive officer concurred in by a majority of

such membership. This has resulted in the adoption of special acts for the establishment of public benefit corporations with

varying degrees of authority to control the finances (including debt issuance) of the cities of Buffalo, Troy and Yonkers and the

County of Nassau. The specific authority, powers and composition of the financial control boards established by these acts varies

based upon circumstances and needs. Generally, the State legislature has granted such boards the power to approve or disapprove

budget and financial plans and to issue debt on behalf of the municipality, as well as to impose wage and/or hiring freezes and

approve collective bargaining agreements in certain cases. Implementation is left to the discretion of the board of the public

benefit corporation. Such a State financial control board was first established for New York City in 1975. In addition, on a

certificate of necessity of the governor reciting facts which in the judgment of governor constitute an emergency requiring

enactment of such laws, with the concurrences of two-thirds of the members elected in each house of the State legislature the State

is authorized to intervene in the “property, affairs and governments” of local government units. This occurred in the case of the

County of Erie in 2005. The authority of the State to intervene in the financial affairs of local government is further supported by

Article VIII, Section 12 of the Constitution which declares it to be the duty of the State legislature to restrict , subject to other

provisions of the Constitution, the power of taxation, assessment, borrowing money and contracting indebtedness and loaning the

credit of counties, cities, towns and villages so as to prevent abuses in taxation and assessment and in contracting indebtedness by

them.

In 2013, the State established a new state advisory board to assist counties, cities, towns and villages in financial distress.

The Financial Restructuring Board for Local Governments (the “FRB”), is authorized to conduct a comprehensive review of the

finances and operations of any such municipality deemed by the FRB to be fiscally eligible for its services upon request by

resolution of the municipal legislative body and concurrence of its chief executive. The FRB is authorized to make

recommendations for, but cannot compel improvement of fiscal stability, management and delivery of municipal services,

including shared services opportunities and is authorized to offer grants and/or loans of up to $5,000,000 through a Local

Government Performance and Efficiency Program to undertake certain recommendations. If a municipality agrees to undertake

the FRB recommendations, it will be automatically bound to fulfill the terms in order to receive the aid.

The FRB is also authorized to serve as an alternative arbitration panel for binding arbitration.

Although from time to time, there have been proposals for the creation of a statewide financial control board with broad

authority over local governments in the State, the FRB does not have emergency financial control board powers to intervene such

as the public benefit corporations established by special acts as described above.

Several municipalities in the State are presently working with the FRB. The Village has not requested FRB assistance nor

does it reasonably expect to do so in the foreseeable future. School districts and fire districts are not eligible for FRB assistance.

Constitutional Non-Appropriation Provision. There is in the Constitution of the State, Article VIII, Section 2, the

following provision relating to the annual appropriation of monies for the payment of due principal of and interest on indebtedness

of every county, city, town, village and school district in the State: “If at any time the respective appropriating authorities shall fail

to make such appropriations, a sufficient sum shall be set apart from the first revenues thereafter received and shall be applied to

such purposes. The fiscal officer of any county, city, town, village or school district may be required to set aside and apply such

revenues as aforesaid at the suit of any holder of obligations issued for any such indebtedness.” This constitutes a specific non-

exclusive constitutional remedy against a defaulting municipality or school district; however, it does not apply in a context in

which monies have been appropriated for debt service but the appropriating authorities decline to use such monies to pay debt

service. However, Article VIII, Section 2 of the Constitution of the State also provides that the fiscal officer of any county, city,

town, village or school district may be required to set apart and apply such revenues at the suit of any holder of any obligations of

indebtedness issued with the pledge of the faith of the credit of such political subdivision. See “General Municipal Law Contract

Creditors’ Provision” herein.

The Constitutional provision providing for first revenue set asides does not apply to tax anticipation notes, revenue

anticipation notes or bond anticipation notes, such as the Notes.

Default Litigation. In prior years, certain events and legislation affecting a holder’s remedies upon default have resulted in

litigation. While courts of final jurisdiction have upheld and sustained the rights of bondholders, such courts might hold that future

events including financial crisises as they may occur in the State and in political subdivisions of the State require the exercise by

the State or its political subdivisions of emergency and police powers to assure the continuation of essential public services prior to

the payment of debt service. See “THE NOTES - Nature of the Obligation” and “State Debt Moratorium Law” herein.

No Past Due Debt. No principal of or interest on Village indebtedness is past due. The Village has never defaulted in the

payment of the principal of and interest on any indebtedness.

25

MARKET AND RISK FACTORS

The financial condition of the Village as well as the market for the Notes could be affected by a variety of factors, some of

which are beyond the Village's control. There can be no assurance that adverse events in the State and in other jurisdictions in the

country, including, for example, the seeking by a municipality or large taxable property owner of remedies pursuant to the Federal

Bankruptcy Code or otherwise, will not occur which might affect the market price of and the market for the Notes. If a significant

default or other financial crisis should occur in the affairs of the State or another jurisdiction, or any of its agencies or political

subdivisions thereby further impairing, the acceptability of obligations issued by borrowers with the State, both the ability of the

Village to arrange for additional borrowings, and the market for and market value of outstanding debt obligations, including the

Notes, could be adversely affected. The Village is dependent in part on financial assistance from the State. However, if the State

should reduce or eliminate State aid to municipalities and school districts in the State, including the Village, in any year, the

Village may be affected. In several recent years, the Village has received delayed payments of State aid which resulted from the

State's delay in adopting its budget and appropriating State aid to municipalities and school districts. (See also "THE VILLAGE -

State Aid" herein.)

TAX MATTERS

In the opinion of Orrick, Herrington & Sutcliffe LLP (“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”)

and is exempt from personal income taxes imposed by the State of New York (or any political subdivision thereof, including The

City of New York). 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 corporate alternative minimum taxes, although Bond Counsel observes that such interest is included in

adjusted current earnings when calculating corporate alternative minimum taxable income. A complete copy of the proposed form

of opinion of Bond Counsel is set forth in “APPENDIX - E” hereto.

The Code imposes various restrictions, conditions and requirements relating to the exclusion from gross income for federal

income tax purposes of interest on obligations such as the Notes. The Village has covenanted to comply with certain restrictions

designed to insure that interest on the Notes will not be included in federal gross income. Failure to comply with these covenants

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 opinion of Bond Counsel assumes compliance with these covenants. 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 pending or future legislation or amendments to the Code, if enacted into law, or any proposed

legislation or amendments to the Code, will not adversely affect the value of, or the tax status of interest on, the Notes.

Certain requirements and procedures contained or referred to the in the Arbitrage Certificate, and other relevant documents

may be changed and certain actions (including, without limitation, economic defeasance of the Notes) may be taken or omitted

under the circumstances and subject to the terms and conditions set forth in such documents. Bond Counsel expresses no opinion

as to any Notes or the interest thereon if any such change occurs or action is taken or omitted.

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 personal income taxes imposed by the State of New York or any political subdivision thereof

(including The City of New York), the ownership or disposition of, or the amount, accrual or receipt of interest on, the Notes may

otherwise affect an Owner’s federal or state tax liability. The nature and extent of these other tax consequences will depend upon

the particular tax status of the Owner or the Owner’s other items of income or deduction. Bond Counsel expresses no opinion

regarding any such other tax consequences.

Current and future legislative proposals, if enacted into law, clarification of the Code or court decisions may cause interest on

the Notes to be subject, directly or indirectly, to federal income taxation or to be subject to or exempted from state income

taxation, or otherwise prevent Beneficial Owners from realizing the full current benefit of the tax status of such interest. In recent

years, legislative proposals have been made which generally would limit the exclusion from gross income of interest on

obligations like the Notes to some extent for taxpayers who are individuals and whose income is subject to higher marginal income

tax rates. Other proposals have been made that could significantly reduce the benefit of, or otherwise affect, the exclusion from

gross income of interest on obligations like the Notes. The introduction or enactment of any such legislative proposals,

clarification of the Code or court decisions may also affect the market price for, or marketability of, the Notes. Prospective

purchasers of the Notes should consult their own tax advisors regarding any pending or proposed federal or state tax legislation,

regulations or litigation, as to which Bond Counsel expresses no opinion.”

LEGAL MATTERS

Legal matters incident to the authorization, issuance and sale of the Notes are subject to the approving legal opinion of Orrick,

Herrington & Sutcliffe LLP, Bond Counsel. Bond Counsel’s opinion will be in substantially the form attached hereto as

“APPENDIX - E”.

26

LITIGATION

The Village, like any municipality, may be subject to a number of lawsuits in the ordinary conduct of its affairs. The Village

does not anticipate that any current, pending or threatened litigation, individually or in the aggregate, are likely to have a material

adverse effect on the financial condition of the Village.

There is no action, suit, proceedings or investigation, at law or in equity, before or by any court, public board or body pending

or, to the best knowledge of the Village, threatened against or affecting the Village to restrain or enjoin the issuance, sale or

delivery of the Notes or the levy and collection of taxes or assessments to pay same, or in any way contesting or affecting the

validity of the Notes or any proceedings or authority of the Village taken with respect to the authorization, issuance or sale of the

Notes or contesting the corporate existence or boundaries of the Village.

CONTINUING DISCLOSURE

In order to assist the purchasers in complying with Rule 15c2-12 promulgated by the Securities and Exchange Commission

under the Securities Exchange Act of 1934, as amended (“Rule 15c2-12”), the Village will enter into an Undertaking to provide

notice of certain Material Events, the form of which is attached hereto as “APPENDIX – C”.

Historical Compliance

Except as noted below, the Village is in compliance in all material respects within the last five years with all previous

undertakings made pursuant to Rule 15c2-12.

The Village failed to file within a timely manner its Audited Financial Statements for the fiscal year ending May 31,

2013. The Audited Financial Statements are dated December 23, 2013 and were published to Electronic Municipal

Market Access (“EMMA”) website on November 3, 2014.

The Village failed to file within a timely manner its Audited Financial Statements for the fiscal years ending May 31,

2009, 2010, 2011 and 2012. These Audited Financial Statements were published to EMMA on November 11, 2014.

Due to a clerical error, the Village failed to file within a timely manner its Annual Financial Information and Operating

Data (“AFIOD”) for the fiscal year ending May 31, 2011. The 2011 AFIOD was published to EMMA on November 11,

2014.

A material event notice disclosing the Village’s failure to file the above referenced information was posted to EMMA on

November 13, 2014.

MUNICIPAL ADVISOR

Fiscal Advisors & Marketing, Inc. (the "Municipal Advisor"), is a Municipal Advisor, registered with the Securities and

Exchange Commission and the Municipal Securities Rulemaking Board. The Municipal Advisor serves as independent municipal

advisor to the Village on matters relating to debt management. The Municipal Advisor is a municipal advisory and consulting

organization and is not engaged in the business of underwriting, marketing, or trading municipal securities or any other negotiated

instruments. The Municipal Advisor has provided advice as to the plan of financing and the structuring of the Notes and has

reviewed and commented on certain legal documents, including this Official Statement. The advice on the plan of financing and

the structuring of the Notes was based on materials provided by the Village and other sources of information believed to be

reliable. The Municipal Advisor has not audited, authenticated, or otherwise verified the information provided by the Village or

the information set forth in this Official Statement or any other information available to the Village with respect to the

appropriateness, accuracy, or completeness of disclosure of such information and no guarantee, warranty, or other representation is

made by the Municipal Advisor respecting the accuracy and completeness of or any other matter related to such information and

this Official Statement.

RATING

The Notes are not rated. The purchaser(s) of the Notes may choose to have a rating completed after the sale at the expense of

the purchaser(s) pending the approval of the Village, including any fees to be incurred by the Village, as such rating action will

result in a material event notification to be posted to EMMA which is required by the Village’s Continuing Disclosure

Undertakings. (See “APPENDIX - C”, attached hereto.)

Moody's Investors Service, Inc. (“Moody’s”) has assigned their bond rating of “A3” to the Villages outstanding bonds. A

rating reflects only the view of the rating agency assigning such rating and any desired explanation of the significance of such

rating should be obtained from Moody's, 99 Church Street - 9th Floor, New York, New York 10007, Phone: (212) 553-0038, Fax:

(212) 553-1390. Generally, rating agencies base their ratings on the information and materials furnished to it and on

investigations, studies and assumptions by the respective rating agency. There is no assurance that a particular rating will apply

for any given period of time or that it will not be lowered or withdrawn entirely if, in the judgment of the agency originally

establishing the rating, circumstances so warrant. Any downward revision or withdrawal of the rating of the outstanding bonds

may have an adverse effect on the market price of the Notes.

27

MISCELLANEOUS

So far as any statements made in this Official Statement involve matters of opinion or estimates in good faith, no assurance

can be given that the facts will materialize as so opined or estimated. Neither this Official Statement nor any statement that may

have been made verbally or in writing is to be construed as a contract with the holders of the Notes.

Statements in this official statement, and the documents included by specific reference, that are not historical facts are

forward-looking statements, which are based on the Village management’s beliefs as well as assumptions made by, and

information currently available to, the Village’s management and staff. Because the statements are based on expectations about

future events and economic performance and are not statements of fact, actual results may differ materially from those projected.

Important factors that could cause future results to differ include legislative and regulatory changes, changes in the economy, and

other factors discussed in this and other documents that the Village’s files with the repositories. When used in Village documents

or oral presentation, the words “anticipate”, “estimate”, “expect”, “objective”, “projection”, “forecast”, “goal”, or similar words

are intended to identify forward-looking statements.

To the extent any statements made in this Official Statement involve matters of opinion or estimates, whether or not expressly

stated, they are set forth as such and not as representations of fact, and no representation is made that any of the statements will be

realized. Neither this Official Statement nor any statement which may have been made verbally or in writing is to be construed as

a contract with the holder of the Notes.

Orrick, Herrington & Sutcliffe LLP, New York, New York Bond Counsel to the Village, expressed no opinions as to the

accuracy or completeness of information in any documents prepared by or on behalf of the Village for use in connection with the

offer and sale of the Notes, including but not limited to, the financial or statistical information in this Official Statement.

References herein to the Constitution of the State and various State and federal laws are only brief outlines of certain

provisions thereof and do not purport to summarize or describe all of such provisions.

Concurrently with the delivery of the Notes, the Village will furnish a certificate to the effect that as of the date of the Official

Statement, the Official Statement did not contain any untrue statement of a material fact or omit to state a material fact necessary

to make the statements herein, in the light of the circumstances under which they were made, not misleading, subject to a

limitation as to information in the Official Statement obtained from sources other than the Village.

The Official Statement is submitted only in connection with the sale of the Notes by the Village and may not be reproduced or

used in whole or in part for any other purpose.

The Village hereby disclaims any obligation to update developments of the various risk factors or to announce publicly any

revision to any of the forward-looking statements contained herein or to make corrections to reflect future events or developments

except to the extent required by Rule 15c2-12 promulgated by the Securities and Exchange Commission.

Fiscal Advisors & Marketing, Inc. may place a copy of this Official Statement on its website at www.fiscaladvisors.com.

Unless this Official Statement specifically indicates otherwise, no statement on such website is included by specific reference or

constitutes a part of this Official Statement. Fiscal Advisors & Marketing, Inc. has prepared such website information for

convenience, but no decisions should be made in reliance upon that information. Typographical or other errors may have occurred

in converting original source documents to digital format, and neither the Village nor Fiscal Advisors & Marketing, Inc. assumes

any liability or responsibility for errors or omissions on such website. Further, Fiscal Advisors & Marketing, Inc. and the Village

disclaim any duty or obligation either to update or to maintain that information or any responsibility or liability for any damages

caused by viruses in the electronic files on the website. Fiscal Advisors & Marketing, Inc. and the Village also assumes no

liability or responsibility for any errors or omissions or for any updates to dated website information.

The Village’s contact information is as follows: Mr. Anthony Bates, Village Clerk/Treasurer, 1009 East Main Street,

Endicott, New York 13760 telephone (607) 757-5337, fax (607) 757-2432, email: [email protected].

This Official Statement has been duly executed and delivered by the Village Controller of the Village of Endicott, Broome

County, New York.

VILLAGE OF ENDICOTT

Dated: August 8, 2017 ANTHONY BATES

VILLAGE CLERK/TREASURER

APPENDIX - A

Village of Endicott


ASSETS

Unrestricted Cash 1,599,545$ 2,062,126$ 2,700,622$ 1,821,376$ 2,139,068$

Resricted Cash 78,006 78,006 78,006 78,006 78,006

Taxes Receivable, Net - - - - -

Accounts Receivables 150,732 155,183 116,071 274,243 94,978

Due from Other Funds 1,259,895 1,524,177 1,260,905 259,685 276,175

Due from Other Governments 465,247 463,252 472,976 482,034 490,320

State and Federal Aid 55,892 21,833 59,397 61,786 23,118

Inventories - 54,381 40,387 35,079 26,619

Prepaid Expenses - 42,731 - 811 2,623

TOTAL ASSETS 3,609,317$ 4,401,689$ 4,728,364$ 3,013,020$ 3,130,907$

LIABILITIES AND FUND EQUITY

Accounts Payable 657,141$ 44,927$ 267,155$ 206,861$ 372,784$

Accrued Liabilities - 274,071 240,482 241,821 344,209

Compensated Absences - - - - -

Due to Other Funds 29,610 108,383 1,001,221 - -

Due to Other Governments 3,544 4,417 3,147 4,893 5,931

Notes payable 31,000 - - - -

Deferred Revenue - - - - -

Other Liabilities - - - - -

TOTAL LIABILITIES 721,295$ 431,798$ 1,512,005$ 453,575$ 722,924$

FUND EQUITY

Reserved 78,006$ 78,006$ 118,393$ 113,085$ 26,619$

Unreserved:

Appropriated - 210,310 128,071 38,061 78,006

Unappropriated 2,810,016 3,627,194 2,969,895 2,408,299 2,303,358

TOTAL FUND EQUITY 2,888,022$ 3,915,510$ 3,216,359$ 2,559,445$ 2,407,983$

TOTAL LIABILITIES & FUND EQUITY 3,609,317$ 4,347,308$ 4,728,364$ 3,013,020$ 3,130,907$

Source: Audited Financial Statements of the Village. This Appendix itself is not audited

GENERAL FUND

Balance Sheets

APPENDIX - A1

Village of Endicott


REVENUES

Real Property Taxes 8,969,380$ 9,126,372$ 9,274,924$ 7,615,921$ 7,751,542$

Real Property Tax Items 88,512 69,755 212,777 83,368 71,638

Non-Property Tax Items 2,791,139 2,859,585 2,883,563 3,052,506 3,141,129

Departmental Income 977,351 1,058,153 1,070,282 1,095,376 1,076,760

Intergovernmental Charges 384,979 467,194 367,275 342,982 269,412

Use of Money & Property 37,220 41,530 33,580 35,768 30,522

Gift & Donations 3,800 3,741 3,488 - 1,651

Licenses and Permits 23,884 21,677 20,455 28,105 18,628

Fines and Forfeitures 132,533 111,492 108,406 99,032 112,966

Sale of Property and

Compensation for Loss 23,305 429,939 83,988 35,325 18,607

Miscellaneous 33,904 125,584 216,166 58,248 117,012

Interfund Revenues - - - - -

Revenues from State Sources 582,567 572,500 625,293 917,268 367,575

Revenues from Federal Sources 273,741 198,283 189,889 38,719 44,395

Total Revenues 14,322,315$ 15,085,805$ 15,090,086$ 13,402,618$ 13,021,837$

EXPENDITURES

General Government Support 1,400,963$ 1,425,434$ 1,453,277$ 1,541,816$ 1,415,875$

Public Safety 8,731,888 8,710,693 8,373,583 7,520,174 8,322,705

Transportation 2,256,319 2,208,951 2,240,465 2,461,908 2,270,562

Economic Assistance and

Opportunity - - - - -

Culture and Recreation 189,454 200,862 209,202 232,553 220,237

Home and Community Services 393,063 716,854 594,406 466,341 425,747

Employee Benefits 420,832 720,567 535,418 432,879 332,277

Debt Service 549,973 559,891 567,325 1,574,479 652,428

Total Expenditures 13,942,492$ 14,543,252$ 13,973,676$ 14,230,150$ 13,639,831$

Excess of Revenues Over (Under)

Expenditures 379,823 542,553 1,116,410 (827,532) (617,994)

Other Financing Sources (Uses):

Operating Transfers In 57,000 57,000 74,000 74,000 -

Operating Transfers Out - - - - (38,920)

Total Other Financing 57,000 57,000 74,000 74,000 (38,920)

Excess of Revenues and Other

Sources Over (Under) Expenditures

and Other Uses 436,823 599,553 1,190,410 (753,532) (656,914)

FUND BALANCE

Fund Balance - Beginning of Year 1,379,675 2,288,469 2,779,481 3,969,891 3,216,359

Prior Period Adjustments (net) - - - - -

Fund Balance - End of Year 1,816,498$ 2,888,022$ 3,969,891$ 3,216,359$ 2,559,445$

(1) Restated Fund Balance.

Source: Audited Financial Statements 2011-2015 of the Village. This Appendix itself is not audited

GENERAL FUND

Revenues, Expenditures and Changes in Fund Balance

APPENDIX - A2

Village of Endicott

Fiscal Years Ending May 31: 2017 2018

Adopted Revised Adopted Adopted

Budget Budget Actual Budget Budget

REVENUES

Real Property Taxes 7,900,328$ 7,900,328$ 7,887,814$ 7,992,469$ 8,111,916$

Real Property Tax Items 85,000 85,000 76,703 85,000 85,000

Non-Property Tax Items 3,155,000 3,155,000 3,111,970 3,195,000 2,990,000

Departmental Income 1,312,000 1,312,000 1,075,237 1,288,840 1,619,341

Intergovernmental Charges 338,800 338,800 259,896 - -

Use of Money & Property 28,700 28,700 28,913 85,360 60,160

Gift & Donations - - 1,020 - -

Licenses and Permits - - 17,151 - 29,400

Fines and Forfeitures 160,000 160,000 85,140 160,000 160,000

Sale of Property and

Compensation for Loss 85,100 85,100 15,927 182,100 85,100

Miscellaneous 92,000 92,000 358,929 - 97,000

Interfund Revenues - - - 452,200 412,200

Revenues from State Sources 576,230 553,421 857,330 571,230 586,230

Revenues from Federal Sources - 63,546 14,416 - 10,000

Total Revenues 13,733,158$ 13,773,895$ 13,790,446$ 14,012,199$ 14,246,347$

EXPENDITURES

General Government Support 1,395,791$ 1,393,501$ 1,400,981$ 1,406,570$ 1,517,896$

Public Safety 8,359,357 8,636,008 8,126,954 8,601,454 8,919,835

Health - - - - 3,000

Transportation 2,443,425 2,443,425 2,445,410 2,481,475 2,494,700

Economic Assistance and

Opportunity - - - - -

Culture and Recreation 224,120 224,120 200,580 215,994 230,025

Home and Community Services 397,265 362,668 497,798 397,965 418,000

Employee Benefits 467,800 467,800 688,338 478,900 485,000

Debt Service 644,400 644,400 644,039 594,841 327,891

Total Expenditures 13,932,158$ 14,171,922$ 14,004,100$ 14,177,199$ 14,396,347$

Excess of Revenues Over (Under)

Expenditures (199,000) (398,027) (213,654) (165,000) (150,000)

Other Financing Sources (Uses):

Operating Transfers In 74,000 74,000 74,000 - -

Operating Transfers Out - - (11,808) - -

Total Other Financing 74,000 74,000 62,192 - -

Excess of Revenues and Other

Sources Over (Under) Expenditures

and Other Uses (125,000) (324,027) (151,462) (165,000) (150,000)

FUND BALANCE

Fund Balance - Beginning of Year 125,000 324,027 2,559,445 165,000 150,000

Prior Period Adjustments (net) - - - - -

Fund Balance - End of Year -$ -$ 2,407,983$ -$ -$

Source: Annual financial reports for 2016 and the adopted budget of the Village. This Appendix itself is not audited

2016

GENERAL FUND

Revenues, Expenditures and Changes in Fund Balance - Budget and Actual

APPENDIX - A3

Village of Endicott


WATER FUND

Fund Equity - Beginning of Year 935,069$ 717,001$ 779,065$ 480,198$ 8,030,743$ (1)

Prior Period Adjustments (net) - 103,169 (35,767) - -

Revenues & Other Sources 2,740,644 2,747,562 2,745,150 3,032,765 3,260,740

Expenditures & Other Uses 2,958,712 2,788,667 3,008,250 3,000,478 3,371,888

Fund Equity - End of Year 717,001$ 779,065$ 480,198$ 512,485$ 7,919,595$

SEWER FUND

Fund Equity - Beginning of Year 226,319$ 154,866$ 724,265$ 1,063,833$ (655,850)$ (1)

Prior Period Adjustments (net) 330,000 281,433 (37,380) - -



Fund Equity - End of Year 154,866$ 724,265$ 1,063,833$ 1,135,445$ (506,657)$

PARKING AUTHORITY FUND

Fund Equity - Beginning of Year 11,832$ 7,793$ 14,067$ 15,428$ 21,456$

Prior Period Adjustments (net) - - 146 - 1

Revenues & Other Sources 24,013 24,900 22,958 22,376 16,037

Expenditures & Other Uses 28,052 18,626 21,743 16,348 17,858

Fund Equity - End of Year 7,793$ 14,067$ 15,428$ 21,456$ 19,636$

LIBRARY FUND

Fund Equity - Beginning of Year 1,326,739$ 1,263,616$ 1,275,153$ 1,235,469$ 1,263,334$

Prior Period Adjustments (net) - 37,028 (20,504) - -



Fund Equity - End of Year 1,263,616$ 1,275,153$ 1,235,469$ 1,263,334$ 1,342,306$

ENTERPRISE FUND

Fund Equity - Beginning of Year 6,503,421$ 6,821,145$ 6,757,776$ 7,093,138$ 7,228,422$

Prior Period Adjustments (net) 1 10,082 58,070 - (95,982)



Fund Equity - End of Year 6,821,145$ 6,757,776$ 7,093,138$ 7,228,422$ 7,016,244$

CAPITAL PROJECTS FUND

Fund Equity - Beginning of Year (885,326)$ (1,228,993)$ (289,122)$ 1,164,468$ (162,076)$ (1)

Prior Period Adjustments (net) (370,000) 349,786 - - -

Revenues & Other Sources 643,582 1,111,703 4,026,432 1,744,122 417,929

Expenditures & Other Uses 617,249 340,963 2,572,842 2,076,164 635,766

Fund Equity - End of Year (1,228,993)$ (108,467)$ 1,164,468$ 832,426$ (379,913)$

(1) Reinstated, See Independent Auditor's Report and Notes to the Financial Statements, "Appendix - D" attached hereto.

Source: Annual financial reports of the Village. This Appendix itself is not audited

CHANGES IN FUND EQUITY

APPENDIX - B

Village of Endicott

Fiscal Year

Ending

May 31st Principal Interest Total

2018 721,800$ 571,158.37$ 1,292,958.37$

2019 450,000 314,227.60 764,227.60

2020 435,000 293,719.75 728,719.75

2021 450,000 273,832.75 723,832.75

2022 460,000 253,255.35 713,255.35

2023 475,000 231,350.55 706,350.55

2024 485,000 208,464.35 693,464.35

2025 495,000 184,946.75 679,946.75

2026 505,000 159,891.50 664,891.50

2027 505,000 134,261.10 639,261.10

2028 515,000 108,433.60 623,433.60

2029 515,000 82,074.70 597,074.70

2030 480,000 55,584.40 535,584.40

2031 495,000 30,997.00 525,997.00

2032 65,000 5,525.00 70,525.00

2033 65,000 2,762.50 67,762.50

TOTALS 7,116,800$ 2,910,485.27$ 10,027,285.27$

BONDED DEBT SERVICE

APPENDIX - B1

Village of Endicott

Fiscal Year

Ending

May 31st Principal Interest Total Principal Interest Total

2018 235,000$ 5,052.50$ 240,052.50$ 46,800$ 2,031.12$ 48,831.12$

TOTALS 235,000$ 5,052.50$ 240,052.50$ 46,800$ 2,031.12$ 48,831.12$

Fiscal Year

Ending

May 31st Principal Interest Total Principal Interest Total Principal Interest Total

2018 65,000$ 27,918.75$ 92,918.75$ 285,000$ 203,980.36$ 488,980.36$ 90,000$ 49,562.50$ 139,562.50$

2019 65,000 24,587.50 89,587.50 290,000 196,410.76 486,410.76 95,000 47,312.50 142,312.50

2020 40,000 21,256.25 61,256.25 300,000 187,789.04 487,789.04 95,000 44,937.50 139,937.50

2021 40,000 19,206.25 59,206.25 310,000 178,168.04 488,168.04 100,000 42,562.50 142,562.50

2022 40,000 17,106.25 57,106.25 320,000 167,566.04 487,566.04 100,000 40,062.50 140,062.50

2023 40,000 14,956.25 54,956.25 330,000 155,370.84 485,370.84 105,000 37,312.50 142,312.50

2024 40,000 12,756.25 52,756.25 340,000 141,966.24 481,966.24 105,000 34,162.50 139,162.50

2025 35,000 10,456.25 45,456.25 350,000 127,438.04 477,438.04 110,000 31,012.50 141,012.50

2026 35,000 8,400.00 43,400.00 360,000 111,831.56 471,831.56 110,000 26,612.50 136,612.50

2027 35,000 6,300.00 41,300.00 375,000 95,552.36 470,552.36 95,000 22,212.50 117,212.50

2028 35,000 4,200.00 39,200.00 385,000 77,901.12 462,901.12 95,000 18,412.50 113,412.50

2029 35,000 2,100.00 37,100.00 395,000 59,421.12 454,421.12 85,000 14,612.50 99,612.50

2030 - - - 410,000 40,125.36 450,125.36 70,000 11,212.50 81,212.50

2031 - - - 425,000 19,826.24 444,826.24 70,000 8,412.50 78,412.50

2032 - - - - - - 65,000 5,525.00 70,525.00

2033 - - - - - - 65,000 2,762.50 67,762.50

TOTALS 505,000$ 169,243.75$ 674,243.75$ 4,875,000$ 1,763,347.12$ 6,638,347.12$ 1,455,000$ 436,687.50$ 1,891,687.50$

1998 2007

Fire Pumper Truck

CURRENT BONDS OUTSTANDING

2011

EFC - Refunding

2014

Various Projects

2009

Various Projects

Public Improvement

APPENDIX - C

MATERIAL EVENT NOTICES

In accordance with the provisions of Rule 15c2-12, as the same may be amended or officially interpreted from time to time

(the "Rule"), promulgated by the Securities and Exchange Commission (the "Commission") pursuant to the Securities Exchange

Act of 1934, the Village has agreed to provide or cause to be provided, in a timely manner not in excess of ten (10) business days

after the occurrence of the event, during the period in which the Notes are outstanding, to the Electronic Municipal Market Access

("EMMA") system of the Municipal Securities Rulemaking Board (“MSRB”) or any other entity designated or authorized by the

Commission to receive reports pursuant to the Rule, notice of the occurrence of any of the following events with respect to the

Notes:

(a) principal and interest payment delinquencies

(b) non-payment related defaults, if material

(c) unscheduled draws on debt service reserves reflecting financial difficulties

(d) in the case of credit enhancement, if any, provided in connection with the issuance of the Notes,

unscheduled draws on credit enhancements reflecting financial difficulties

(e) substitution of credit or liquidity providers, or their failure to perform

(f) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations

of taxability, Notices of Proposed Issue (IRS Form 5701 TEB) or other material notices or

determinations with respect to the tax status of the Notes, or other material events affecting the tax

status of the Notes

(g) modifications to rights of Note holders, if material

(h) note calls, if material and tender offers

(i) defeasances

(j) release, substitution, or sale of property securing repayment of the Notes

(k) rating changes

(l) bankruptcy, insolvency, receivership or similar event of the Village

(m) the consummation of a merger, consolidation, or acquisition involving the Village or the sale of all or

substantially all of the assets of the Village, other than in the ordinary course of business, the entry into

a definitive agreement to undertake such an action or the termination of a definitive agreement relating

to any such actions, other than pursuant to its terms, if material

(n) appointment of a successor or additional trustee or the change of name of a trustee, if material

Event (c) is included pursuant to a letter from the SEC staff to the National Association of Bond Lawyers dated September 19,

1995. However, event (c) is not applicable, since no "debt service reserves" will be established for the Notes.

With respect to event (d) the Village does not undertake to provide any notice with respect to credit enhancement added after

the primary offering of the Notes.

With respect to event (l) above, the event is considered to occur when any of the following occur: the appointment of a

receiver, fiscal agent or similar officer for the Village in a proceeding under the U.S. Bankruptcy Code or in any other proceeding

under state or federal law in which a court or government authority has assumed jurisdiction over substantially all of the assets or

business of the Village, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in

possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a

plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over

substantially all of the assets or business of the Village.

The Village may from time to time choose to provide notice of the occurrence of certain other events, in addition to those

listed above, if the Village determines that any such other event is material with respect to the Note; but the Village does not

undertake to commit to provide any such notice of the occurrence of any material event except those events listed above.

The Village reserves the right to terminate its obligation to provide the aforedescribed notices of material events, as set forth

above, if and when the Village no longer remains an obligated person with respect to the Note within the meaning of the Rule.

The Issuer acknowledges that its undertaking pursuant to the Rule described under this heading is intended to be for the benefit of

the holders of the Notes (including holders of beneficial interests in the Notes). The right of holders of the Notes to enforce the

provisions of the undertaking will be limited to a right to obtain specific enforcement of the Village’s obligations under its material

event notices undertaking and any failure by the Village to comply with the provisions of the undertaking will neither be a default

with respect to the Notes nor entitle any holder of the Notes to recover monetary damages.

The Village reserves the right to modify from time to time the specific types of information provided or the format of the

presentation of such information, to the extent necessary or appropriate in the judgment of the Village; provided that the Village

agrees that any such modification will be done in a manner consistent with the Rule, with the approving opinion of nationally

recognized bond counsel.

An "Undertaking to Provide Notice of Material Events" to this effect shall be provided to the purchaser(s) at closing.

See “CONTINUING DISCLOSURE – Historical Compliance” for an overview of the Village’s past historical compliance.

THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT LANK

APPENDIX - D

VILLAGE OF ENDICOTT

AUDITED FINANCIAL STATEMENTS

For the Year Ended May 31, 2016

Such Annual Financial Update Report Document and opinion were prepared as of date thereof and have not been reviewed

and/or updated in connection with the preparation and dissemination of this Official Statement.

Independent Auditor's Report

VILLAGE OF ENDICOTT TABLE OF CONTENTS

Management's Discussion and Analysis

Statement of Net Position

Statement of Activities

Balance Sheet - GO\.ernmental Funds

Statement of Re\.enues, Expenditures and Changes in Fund Equity - GO\.ernmental Funds

Reconcilation of GO\.ernmental Funds Balance Sheet to the Statement of Net Position

Reconcilation of GO\.ernmental Funds, Re\.enues, Expenditures, and Changes in Fund Equity to the Statement of Activities

Statement of Net Position - Proprietary Funds

Statement of Re\.enues, Expenditures and Changes in Fund Net Position - Proprietary Funds

Statement of Cash Flows - Proprietary Funds

Statement of Fiduciary Net Position

Notes to the Financial Statements

Required Supplementary Information Schedule of Re\.enues, Expenditures and Changes in Fund Balance -Budget (non-GAAP Basis) and Actual - General Fund

Schedule of Proportionate Share of the Net Pension Liability

Schedule of Contributions Supplementary Information

Schedule of Project Expenditures - Capital Projects Fund

In\.estment in Capital Assets, Net of Related Debt Independent Auditor's Report on Internal Control o\.er Financial Reporting and on Compliance

and Other Matters Based on an Audit of Financial Statements Performed in Accordance with GO\.ernment Auditing Standards

Schedule of Findings and Responses

Page No.

1 - 3

4 - 13

14 - 15

16 - 17

18 - 19

20 - 21

22

23

24 - 25

26

27

28

30 - 51

53 - 54

55

56

57

58

59 - 60

61 - 63

Cwynar & Company CettifiedPublic Accountants A PromooallimitedliabilityCompmy

Mayor and Board of Trustees Village of Endicott Endicott, New York

INDEPENDENT AUDITOR'S REPORT

Report on the Financial Statements

12 South Broad Street Suite 3 Norwich, New York 13815

(607) 334-3838 voice (607) 334-3837 fax www.cwynar.com

We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund , and the aggregate remaining fund information of the Village of Endicott as of and for the year ended May 31, 2016, and the related notes to the financial statements, which collectively comprise the Village's basic financial statements as listed in the table of contents

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Summary of Opinions

Opinion Unit

Governmental Activities Business-Type Activities Governmental General Fund Governmental Capital Projects Fund Governmental Library Fund Enterprise Light Fund Enterprise Water Fund

11 Page

Type of Opinion

Adverse Adverse Qualified Qualified Qualified Adverse Adverse

INDEPENDENT AUDITOR'S REPORT (CONTINUED)

Enterprise Sewer Fund Aggregate Remaining Governmental Funds

Basis for Adverse Opinions

Adverse Qualified

As discussed in Note 1 to the financial statements, management has not recorded the liability for other postemployment benefits and, accordingly, has not recorded the related financial statement disclosures in accordance with GASB Statement 45, Accounting and Financial Reporting for Post-employment Benefits Other than Pension. Accounting principles generally accepted in the United States of America require that the actuarially calculated liability be recorded, which would increase the liabilies and expenses, and decrease the net position of the governmental activities, business-type activities, and enterprise funds. The amount by which this departure would affect the liabilities, net position, and expenses of these opinion units has not been determined.

Management has not adopted sufficient procedures for determing accounts payable at year-end. Accounting principles generally accepted in the United States of America require that revenues and expenses be recorded on the accrual basis for government-wide and enterprise fund accounting. This would result in an increase in liabilities, a decrease in net position, and an increase in expenses. The amount by which this departure would affest the liabilities, net position, and expenses has not been determined.

Adverse Opionion

In our opinion, because of the significance of the matters discussed in the 'Basis for Adverse Opinions" paragraph, the financial statements referred to above do not present fairly the financial position of the governmental activities, business-type activities, and enterprise funds of the Village of Endicott, as of May 31, 2016, or the changes in financial position thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Qualified Opinions

Management has not adopted sufficient procedures for determing accounts payable at year-end. Accounting principles generally accepted in the United States of America require that revenues and expenditures be recorded on the accrual basis for government-wide accounting and modified accrual basis for fund accounting. This would result in an increase in liabilities, a decrease in fund balance and net position, and an increase in expenditures and expenses. The amount by which this departure would affect the liabilities, fund balance and net position, expenditures and expenses has not been determined.

Qualified Opinion-

In our opinion, except for the effects of the matter described in the "Basis for Qualified Opinions" paragraph, the financial statements referred to above present fairly, in all material respects, the financial position governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Village of Endicott, as of May 31, 2016, and the changes in financial position thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the management's discussion and analysis and budgetary comparison information on pages 4 - 13 and 50 - 53 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not

21Page

INDEPENDENT AUDITOR'S REPORT (CONTINUED)

express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Management has omitted the schedule of post-employment benefits plan actuarial valuation that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information.

Other Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Village's basic financial statements. The supplementary schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements.

The supplementary schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, except for the effects on the supplementary information of the qualified opinion on the basic financial statements as explained in the "Basis for Qualified Opinions" paragraph, the supplementary schedules are fairly stated in all material respects, in relation to the basic financial statements as a whole.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated January 10, 2017, on our consideration of the Village of Endicott's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is 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 internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Village of Endicott's internal control over financial reporting and compliance.

Norwich, New York January 10, 2017

31Page

VILLAGE OF ENDICOTT MANAGEMENT'S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED MAY 31, 2016

This section of the Village of Endicott's annual financial report presents our discussion and analysis of the Village's financial performance during the fiscal year that ended on May 31,2016. Please read it in conjunction with the transmittal letter at the front of this report on the Village's financial statements, which follow this section.

FINANCIAL HIGHLIGHTS

• The assets of the Village of Endicott exceeded its liabilities at the close of the calendar year by $39 million (Net Position). Of this amount, $4 million may be used to meet the government's ongoing obligations to citizens and creditors.

• The total Net Position decreased by $1.5 million. The decrease can be attributed to deficits in the governmental funds and depreciation expense in government-wide statements.

• As of May 31,2016, the Village of Endicott's governmental funds reported a combined ending fund balance of $4.39 million, a decrease of $284 thousand.

• At the end of the current year, unassigned fund balance for the General Fund was $2.3 million or 16.4% of the total General Fund expenditures.

• The Village had a net increase in outstanding debt and long-term debt liabilities outstanding by $5.1 million during the year. The increase was result of implementing GASB 68 and recording the related net pension liability.

OVERVIEW OF THE FINANCIAL STATEMENTS This annual report consists of three parts: management's discussion and analysis (this section), the basic financial statements, and required supplementary information. The basic financial statements include two kinds of statements that present different views of the Village:

• The first two statements are Government-wide financial statements that provide both short term and long term information about the Village's overall financial status.

• The remaining statements are fund financial statements that focus on individual parts of the Village, reporting the Village's operations in more detail than the Government-wide statements. The fund financial statements concentrate on the Village's most significant funds, with all other non-major funds listed in total in one column.

• The governmental funds statements tell how basic services such as public safety and transportation, were financed in the short term as well as what remains for future spending.

• Proprietary fund statements offer short- and long-term financial information about the activities the government operates like businesses, such as the water, sewer, and light system.

• Fiduciary funds statements provide information about the financial relationships in which the Village acts solely as a trustee or agent for the benefit of others, to whom the resources in question belong.

41Page


FOR THE YEAR ENDED MAY 31,2016

The financial statements also include notes that explain some of the information in the statements and provide more detailed data. The statements are followed by a section of required supplementary information that further explains and supports the financial statements with a comparison to the Village's budget for the year.

Figure A-1 summarizes the major features of the Village's financial statements, including the portion of the Village's activities they cover and the types of information they contain. The remainder of this overview section of MD&A highlights the structure and contents of each of the statements.

Figure A-1 Major Features of the Government-Wide and Fund Financial Statements

Government-Wide Fund Financial Statements

Governmental Funds Proprietary Funds Fiduciary Funds

Scope Entire Village The activities of the The business-type Instances in Government Village that are not activities of the which the Village (except fiduciary proprietary or fiduciary, Village, such as is the trustee or funds) such as police, fire, water, sewer, and agent for

and parks light. someone else's resources.

Required Financial • Statement of Net • Balance sheet • Statement of • Statement of Statements Position • Statement of proprietary Net fiduciary Net

• Statement of revenues, Position Position Activites expenditures, and • Statement of • Statement of

changes in fund revenues, changes in balances expenses, and fiduciary Net

changes in Net Position Position

• Statement of cash flows

Accounting Basis Accrual accounting Modified accrual Accrual accounting Accrual and Measurement and economic accounting and current and economic accounting and Focus resources focus financial resources resources focus economic

focus resources focus

Type of All assets, deferred Only assets and All assets and All assets, Asset/Deferred outflows and deferred outflows deferred outflows deferred outflows Outflow or liabilities, deferred expected to be used up and liabilities and and liabilities, Liability/Deferred inflows both and liabilities and deferred inflows, deferred inflows Inflow Information financial and deferred inflows that both financial and both short-term

capital, short-term come due during the capital, and short- and long-term; and long-term year or soon thereafter; term and long-term funds do not

no capital assets currently contain included capital assets,

although they can

Type of Inflow or All revenues and Revenues for which All revenues and All revenues and Outflow Information expenses during cash is received during expenses during the expenses during

year, regard less of or soon after the end of year, regard less of the year, when cash is the year; expenditures when cash is regardless of received or paid when goods or received or paid when cash is

services have been received or paid received and payment is due during the year or soon thereafter

51 Page



Government-Wide Statements The Government-wide statements report financial information about the Village as a whole using accounting methods similar to those used by private-sector companies. The statement of Net Position includes all of the Village's assets and liabilities. All of the current year's revenues and expenses are accounted for in the statement of activities regardless of when cash is received or paid.

The two Government-wide statements report the Village's Net Position and how they have changed. Net Position - the difference between the Village's assets and liabilities - is one way to measure the Village's financial health or position.

• Over time, increases or decreases in the Village's Net Position are an indicator of whether its financial position is improving or deteriorating, respectively.

• To assess the Village's overall health, you need to consider additional nonfinancial factors such as changes in the Village's property tax base and the condition of the Village's roads.

In the Government-wide financial statements, the Village's activities are shown as Governmental and Business-Type activities:

Governmental activities - Most of the Village's basic services are included here, such as police, fire, public works, and parks department, and general administration. Property taxes and charges for services finance most of these activities.

Business-type activities - The Village charges fees to customers to help it cover the costs of certain services it provides. The Village's water, sewer, and light systems are included here.

Fund Financial Statements A fund is a grouping of related accounts that is used to maintain control and accountability over resources that have been segregated for specific activities or objectives. Some funds are required to be established by State law, while others are established to help control and manage money for a particular purpose. The Village of Endicott has three kinds of funds:

Governmental Funds The majority of the Village's basic services are reported in governmental funds. These reports focus on how money flows into and out of those funds and the balances left at year-end that are available for spending. Consequently, the governmental funds statements provide a detailed short-term view that helps you determine whether there are more or fewer financial resources that can be spent in the near future to finance the Village's programs. Because this information does not encompass the additional long-term focus of the government-wide statements, we provide additional information on a subsequent page that explains the relationship or differences between them.

Proprietary Funds Services for which the Village charges customers a fee are generally reported in proprietary funds. Proprietary funds, like the government-wide statements, provide both long- and short-term financial information. The Village's enterprise funds are the same as its business-type activities, but provide more detail and additional information, such as cash flows.

Fiduciary Funds The Village is the trustee, or fiduciary, for assets that belong to others. Fiduciary funds are not reflected in the government-wide financial statement because the Village cannot use these assets to finance its operations. The Village is responsible for ensuring that the assets reported in these funds are used for their intended purposes.

61Page



FINANCIAL ANALYSIS OF THE VILLAGE AS A WHOLE

The Village's total Net Position was approximately $39 million. By far the largest portion of the Village's Net Position (87% percent) reflects its investment in capital assets (e.g. land, buildings, roads, water mains, sewers, equipment, and vehicles), less any related outstanding debt used to acquire those assets. The Village uses these capital assets to provide services to citizens, consequently these assets are not available for future spending. Although the Village's investment in its 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. Below is a Condensed Statement of Net Position. Additional details are available in the main financial statement section.

Figure A-2 Condensed Statement of Net Position (in Thousands)

At May 31, 2015 Percentage

2016 (restated) Change

Current and Other Assets $ 9,752 $ 9,808 -0.6% Capital Assets 42,787 45,207 -5.4%

Total Assets 52,539 55,015 -4.5%

Deferred Outflows 7,035 n/a

Long-Term Liabilities 15,498 10,272 50.9% Other Liabilities 3,965 4,169 -4.9%

Total Liabilities 19,463 14,441 34.8%

Deferred Inflows 1,041 n/a

Net Position In~sted in Capital Assets,

Net of Related Debt 33,902 35,251 -3.8% Restricted 1,147 1,435 -20.1% Unrestricted 4,021 3,888 3.4%

Total Net Position $ 39,070 $ 40,574 -3.7%

The remaining unrestricted Net Position are a combination of designated and undesignated amounts.

71Page



The results of this year's operations as a whole are summarized below. The most significant governmental expense for the Village was in providing for public safety, which incurred expenses of $9 million. The major components of public safety are police and fire.

Figure A-3 takes the information from the Statement of Activities and rearranges it slightly, to show Governmental and Business-Type Activities and to allow comparison with the prior year total.

Figure A-3 Condensed Changes in Net Position from Operating Results (in Thousands)

Year ended May31, Percentage

2016 2015 Change Revenues Program Revenues

Charges for Services $ 11,085 $ 11,459 -3.26% Operating Grants 547 1,733 -68.40%

General Revenues Real PropertyTaxes and Tax Items 8,962 8,821 1.60% NonpropertyTaxes 3,112 3,141 -0.93% Use of Money and Property 31 34 -8.70% Gifts and Donations 13 7 77.03% Sale of Property and Com pensation for Loss 31 34 -8.84% State sources 911 377 141.67% Miscellanous 410 180 128.09%

Total Revenue 25,102 25,786 Expenses

General Governm ent Support 1,149 1,450 -20.79% Public Safety 9,059 8,721 3.88% Economic assistance and opportunity 4,502 3,983 13.01 % Culture and Recreation 240 391 -38.52% Hom e and Com m unity Service 569 371 53.19% Library 1,002 1,131 -11.39% Interest on Long-Term Debt 83 105 -20.48% Water 3,372 3,417 -1.31 % Sewer 3,444 3,576 -3.69% Electric 3,187 3,377 -5.63%

Total Expenses 26,607 26,522

Increase (Decrease) in Net Position $ (1,505) $ (736)

81Page



Figure A-4 Current and Prior Year Revenues

91 Page

Sources of Revenue for Fiscal Year 2016

Real Property Taxes and

Tax Items 35.7%

Operating Grants

2.2%

Nonproperty Taxes

Use of Gifts and Donations

0.0%

mpensation for Loss 0.1%

Miscellanous

1.6%

Charges for Services 44.2%

Sources of Revenue for Fiscal Year 2015

Real Property Taxes

and Tax Items

34.2%

Operating Grants

6.7%

Nonproperty Taxes 12.2%

Use of Money and P rt

Gifts and Donations rope y 0.0%

Sale of Property and Compensation for Loss

0.1%

1.5%

Charges for Services

44.4%

Miscellanous

0.7%



Figure A-5 Current and Prior Year Expenses

Expenses for Fiscal Year 2016

Sew er

13.0%

Water

Electric

12.7% _____ ~

Interest on Long-Term

Debt 0 .3%

Home and Community

Service

2.1%

0.9%

General Government

Support 4.3%

16.9%

Public Safety

34.1%

Expenses for Fiscal Year 2015

Electric

12.7%

Sewer

13.5%

Water

12.9%

Interest on Long-Term

Debt

0.4%

10l Page

Library

4.3%

Home and

Community

Service

1.5%

General Government

Support

5.5%

--___ Public Safety

32.9%

Transportation

15.0%

VILLAGE OF ENDICOTT MANAGEMENT'S DISCUSSION AND ANAL YSIS


Figure A-6 Net Cost of Governmental Activities (in thousands of dollars)

Year ended May 31, Percent

Gross cost of se rvices 2016 2015 Change

General Governm ent Support $ 1,149 $ 1,450 -20.8% Public Safety 9,059 8,721 3.9% Transportation 4,502 3,983 13.0% Culture and Recreation 240 391 -38.6% Hom e and Com m unity Service 569 371 53.4% Library 1,002 1,131 -11.4% Interest on Long-Term Debt 83 105 -21.0% Water 3,372 3,417 -1.3% Sewer 3,444 3,576 -3.7% Electric 3,187 3,377 -5.6%

Total Gross cost of services $ 26,607 $ 26,522 0.3%

Year ended May 31, Percent

Net cost of services 2016 2015 Change General Governm ent Support $ 1,102 $ 1,412 -22.0% Public Safety 8,839 8,483 4.2% Transportation 3,187 1,274 150.2% Culture and Recreation 193 346 -44.2% Home and Community Service 569 371 53.4% Library 940 1,062 -11.5% Interest on Long-Term Debt 83 105 -21.0% Water 111 395 -71.9% Sewer (137) 94 -245.7% Electric 86 (211 ) -140.8%

Total Net cost of services $ 14,973 $ 13,331 12.3%

Net costs of services are net of direct revenue items paid to the Village by third parties for thoses services.

111Page



Financial Analysis of the Village's Funds As noted earlier, the Village of Endicott uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.

Governmental Funds. The focus of the Village's governmental funds is to provide information on near-term inflows, outflows, and balances of usable resources. Such information is useful in assessing the Village's financing requirements. Specifically, unassigned fund balance can be a useful measure of a government's net resources available for spending at the end of the fiscal year. The general fund is the chief operating fund of the Village. At the end of the current year, unassigned fund balance of the General Fund was $2.3 million. As a measure of the general fund's liquidity, it may be useful to compare unassigned fund balance to total fund expenditures. Unassigned fund balance represents 17.6 percent of total General Fund expenditures. At May 31,2016, the combined governmental funds of the Village of Endicott reported a combined fund balance of $4.39 million. Funds experiencing decreases in fund balance during the year were the general fund, parking authority and capital projects fund. The decreases were $151 thousand, $1,821 million and $210 thousand, respectively.

General Fund Budgetary Highlights During the year, the Village revised the budget on several occasions. Generally, budget amendments fall into one of three categories: 1) amendments made to adjust the estimates that are used to prepare the original budget ordinance once exact information is available; 2) amendments made to recognize new funding amounts from external sources, such as Federal and State grants; and 3) increases in appropriations that become necessary to maintain services.

CAPITAL ASSET AND DEBT ADMINISTRATION

CAPITAL ASSETS At May 31,2016, the Village had $42.8 million invested in a broad range of capital assets, including land, buildings and furniture and equipment. Additions net of retirements and disposals amounted to $1.3 million. Depreciation expense of $3.7 million was recorded in the financial statements. Generally fixed asset records are updated annually, but not routinely maintained.

Figure A-7 Capital Assets (Net of Depreciation) (In Thousands)

Governmental Business-Type Total Land and non-depreciable $ 1,960 $ 97 $ 2,057 Buildings 993 2,690 3,683 Infrastructure 20,808 11,358 32,166 Machinery and equipment 1,766 3,115 4,881

Total $ 25,527 $ 17,260 $ 42,787

121Page

DEBT ADMINISTRATION



As of May 31,2016, the Village had total outstanding bond principal of $8.1 million. During the year, the Village made principal payments of $969 thousand. Interest payments were $248 thousand. The Village made $94 thousand in capital lease payments during the year. Compensated absences decreased by $14 thousand. Net pension liability increased by $4.9 million as a result of implementing GASB statement 68.

Figure A-8 Outstanding Debt and Long-term Liabilities (In Thousands)

Business Total 2015 Percentage Governmental Type 2016 (restated) Change

1998 Public Improvement Serial Bond $ 257 $ 203 $ 460 $ 675 -31.9% 2001 Wastewater Serial Bond 5,150 5,150 5,415 -4.9% 2004 Public Improvement Serial Bond 255 255 500 -49.0% 2007 Serial Bond 92 92 135 -31.9% 2009 Public Improvement Serial Bond 75 495 570 635 -10.2% 2014 Public Improvement Serial Bond 1,252 293 1,545 1,680 -8.0%

1,930 6,141 8,071 9,040 -10.7%

Interest-free government loan 803 803 811 -1.0% Lease obligation payable 10 10 105 -90.5% Compensated absences 286 143 429 443 -3.2% Net pension liability 5,530 1,624 7,154 944 657.8%

Total $ 7,756 $ 8,711 $16,467 $11,343 45.2%

ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES

Amounts available for appropriation in the general fund balance are $2,303,358. Expenditures and property taxes are expected to increase in the upcoming year. The Village will use the increases in revenue to finance programs we currently offer and the expected impact of inflation on these costs. The largest increments are retirement system contributions, health insurance costs and increased wages and cost of living adjustment based on agreements reached with department unions. The Village has added no major new programs or initiatives to the 2017 budget.

As for the Village's business-type activities, we expect that the 2017 results will improve based upon rate increases made during the current year along with monitoring expenses and tracking purchasing budgets closely.

The Village will contrinue to work hard to maintain a reduced level of spending in 2016-17 after making major cuts in the years prior.

CONTACTING THE VILLAGE'S FINANCIAL MANAGEMENT

This financial report is designed to provide our citizens, taxpayers, customers, and investors and creditors with a general overview of the Village's finances and to demonstrate the Village's accountability for the money it receives. If you have questions about this report or need additional financial information, contact the Village of Endicott Treasurer, 1009 East Main Street, Endicott, NY 13760.

131 P age

VILLAGE OF ENDICOTT STATEMENT OF NET POSITION

MAY 31,2016

Governmental Business-type

Activities Activities

ASSETS Current assets:

Cash & cash equivalents $ 3,074,484 $ 2,193,672 Receivables (net, where applicable, of allowance

for uncollectables) Accounts 95,008 726,672 State and federal aid 40,884 Other gO\.ernments 490,320 112,545

Internal balances (811,219) 811,219 Due from fiduciary funds 1,017,985 Inventory 26,619 234,659 Other assets 2,623

Total current assets 2,918,719 5,096,752

Restricted assets: Cash & cash equivalents 1,662,029 74,143

Total restricted assets 1,662,029 74,143

Noncurrent assets: Capital assets:

Construction-in-progress 131,923 Land 1,828,188 96,830 Buildings 9,562,201 12,328,250 Machinery and equipment 5,883,505 10,322,896 Infrastructure 43,444,814 25,323,750 Less: accumulated depreciation (35,323,541) (30,811,552)

25,527,090 17,260,174

Total Assets 30,107,838 $ 22,431,069

DEFERRED OUTFLOWS OF RESOURCES

Pension Plans 5,553,086 1,481,535

Total Assets and Deferred Outflows of Resources $ 35,660,924 $ 23,912,604

See Independent Auditor's Report and Notes to Financial Statements

14\ P age

Total

$ 5,268,156

821,680 40,884

602,865

1,017,985 261,278

2,623 8,015,471

1,736,172

1,736,172

131,923 1,925,018

21,890,451 16,206,401 68,768,564

(66,135,093) 42,787,264

$ 52,538,907

7,034,621

$ 59,573,528

VILLAGE OF ENDICOTT STATEMENT OF NET POSITION (CONTINUED)

MAY 31,2016

Governmental Business-type

Activities Activities Total

LIABILITIES Current liabilities:

Accounts payable $ 429,788 $ 220,396 $ 650,184

Accrued payroll 373,094 148,038 521,132

Bond Interest payable 18,264 23,559 41,823

Due to other go\ternments 5,931 13,323 19,254

Due to state retirement systems 1,358,056 404,594 1,762,650

Current portion of long-term liabilities 534,148 436,504 970,652

Total current liabilities 2,719,281 1,246,414 3,965,695

Long-term liabilities, net of current portion

Bonds payable 1,403,872 5,712,928 7,116,800

Notes payable 795,347 795,347

Capital lease obligations 2,676 2,676

Compensated absences 285,909 142,511 428,420

Net pension liability 5,530,039 1,624,270 7,154,309

Total long-term liabilities 7,222,496 8,275,056 15,497,552

Total Liabilities 9,941,777 9,521,470 19,463,247

DEFERRED OUTFLOWS OF RESOURCES Pension plans 848,482 192,530 1,041,012

Total Liabilities and Deferred Inflows of Resources 10,790,259 9,714,000 20,504,259

NET POSITION In\testment in capital assets,

net of related debt 23,586,394 10,315,395 33,901,789

Restricted for:

Debt 1,072,812 1,072,812

Capital 74,143 74,143

Unrestricted 211,459 3,809,066 4,020,525

Total Net Position $ 24,870,665 $ 14,198,604 $ 39,069,269


151 P age

161Page

VILLAGE OF ENDICOTT STATEMENT OF ACTIVITIES


FUNCTIONS/PROGRAMS GO\.ernmental activities:

General gO\.ernment support Public safety Trans portation Culture and recreation Home and community Library Interest on long-term debt

Total gO\.ernmental activities

Business-type activities: Electric Water Sewer Total business-type activities

Total functions/programs

Program Revenues Charges for Operating

Expenses Services Grants

$ 1,148,860 $ 47,134 $ 9,059,246 95,307 124,583 4,501,619 1,101,367 213,037

240,320 47,595 568,974

1,002,211 29,357 32,633 83,108

16,604,338 1,320,760 370,253

3,186,693 3,100,636 3,371,888 3,260,702 3,443,553 3,403,024 177,215

10,002,134 9,764,362 177,215

$ 26,606,472 $ 11,085,122 $ 547,468

GENERAL REVENUES Real property taxes & tax items Nonproperty taxes Use of money and property Gifts and donations Sale of property and compensation for loss Miscellaneous State sources

Total General Re\.enues

Change in Net Position

Total Net Position - Beginning of year (restated) Transfers

Total Net Position - End of year


VILLAGE OF ENDICOTT STATEMENT OF ACTIVITIES (CONTINUED)


Net (Expense) Revenue and Changes in Net Position

Governmental Business-type Activities

$ (1,101,726) $ (8,839,356) (3,187,215)

(192,725) (568,974) (940,221) (83,108)

(14,913,325)

8,962,292 3,111,970

29,951 12,500 17,394

409,782 910,991

13,454,880

(1,458,445)

26,255,110 74,000

$ 24,870,665 $

171 P age

Activities Total

$ (1,101,726) (8,839,356) (3,187,215)

(192,725) (568,974) (940,221)

(83,108) (14,913,325)

(86,057) (86,057) (111,186) (111,186) 136,686 136,686 (60,557) (60,557)

---~-....:-

8,962,292 3,111,970

705 30,656 12,500

13,250 30,644 675 410,457

910,991 14,630 13,469,510

(45,927) (1,504,372)

14,318,531 40,573,641 (74,000)

14,198,604 $ 39,069,269

181Page

VILLAGE OF ENDICOTT BALANCE SHEET - GOVERNMENTAL FUNDS

MAY 31,2016

General ASSETS Cash & cash equivalents

Unrestricted cash $ 2,139,068 Restricted cash 78,006

Receivables

Accounts receivable 94,978 Due from other funds 276,175 Due from other governments 490,320

State and federal aid 23,118 Inventory 26,619 Prepaid expenses 2,623

Total Assets 3,130,907

LIABILITIES Payables

Accounts payable 372,784

Accrued liabilities 344,209

Due to other funds

Due to other governments 5,931

Total Liabilities 722,924

FUND BALANCES Nonspendable 26,619

Restricted for:

Debt 78,006

Assigned for:

Public library

Parking authority

Unassigned 2,303,358

Total Fund Balances 2,407,983

Total Liabilities and Fund Balances $ 3,130,907

Debt Service

$ 994,502

304

994,806

994,806

994,806

$ 994,806


Capital Projects

$ 589,521

589,521

54,298

907,520

961,818

(372,297)

(372,297)

$ 589,521

Public Library

$ 915,564 $

440,567

17,766

1,373,897

2,706

28,885

31,591

1,342,306

1,342,306

$ 1,373,897 $

191Page

VILLAGE OF ENDICOTT BALANCE SHEET - GOVERNMENTAL FUNDS (CONTINUED)

MAY 31,2016

Total Parking Governmental

Authority Funds

19,852 $ 3,074,484 1,662,029

30 95,008

717,046

490,320

40,884

26,619

2,623

19,882 6,109,013

429,788

373,094

246 907,766

5,931

246 1,716,579

26,619

1,072,812

1,342,306 19,636 19,636

1,931,061

19,636 4,392,434

19,882 $ 6,109,013

20 I P age

VILLAGE OF ENDICOTT STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND EQUITY

GOVERNMENTAL FUNDS FOR THE YEAR ENDED MAY 31, 2016

Debt Capital General Service Projects

REVENUES Real property taxes $ 7,887,814 $ $ Real property tax items 76,703

Nonproperty tax items 3,111,970

Departmental income 1,075,237

Intergo\€rnmental charges 259,896

Use of money and property 28,913 304 249

Gifts and donations 1,020 750

Licenses and permits 17,151

Fines and forfeitures 85,140

Sale of property & compensation for loss 15,927

Miscellaneous 358,929 50,000

State sources 857,330 328,144

Federal sources 14,416 38,786

Total Revenues 13,790,446 304 417,929

EXPENDITURES General go\€rnment support 1,400,981

Public Safety 8,126,954 72,513

Transportation 2,445,410 291,957

Culture & recreation 200,580 3,647

Home & community service 497,798 263,841

Employee benefits 688,338

Debt Service

Principal 553,918 8,000

Interest 90,121

Total Expenditures 14,004,100 8,000 631,958

Excess (Deficiency) of Revenues Over Expenditures (213,654) (7,696) (214,029)

OTHER FINANCING SOURCES AND USES Operating transfers in (out) 62,192 8,000 3,808

Total Other Sources (Uses) 62,192 8,000 3,808

Excess (Deficiency) of Re\€nues and Other Sources Over Expenditures and Other (Uses) (151,462) 304 (210,221 )

Fund Balances - Beginning of year (restated) 2,559,445 994,502 (162,076)

Fund Balances - End of year $ 2,407,983 $ 994,806 $ (372,297)


$

Public Library

997,775

29,357

477 10,730

1,467

14,421

27,700

1,300

1,083,227

1,004,255

1,004,255

78,972

78,972

1,263,334

$

VILLAGE OF ENDICOTT STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND EQUITY

GOVERNMENTAL FUNDS (CONTINUED)

Parking Authority

16,029

8

16,037

17,858

17,858

(1,821 )

(1,821)

21,457


Total Governmental

$

Funds

7,887,814

1,074,478 3,111,970

1,120,623

259,896

29,951

12,500

17,151

85,140

17,394

423,350

1,213,174

54,502

15,307,943

1,400,981

8,199,467 2,755,225

1,208,482

761,639

688,338

561,918 90,121

15,666,171

(358,228)

74,000

74,000

(284,228)

4,676,662

$ 1,342,306 $ 19,636 $ 4,392,434 =====

21 I P age

VILLAGE OF ENDICOTT RECONCILIATION OF GOVERNMENTAL FUNDS BALANCE SHEET

TO THE STATEMENT OF NET POSITION MAY 31,2016

Amounts reported for governmental activities in the Statement of Net Position are different because:

Total fund balances - gO\A3rnmental funds $ 4,392,434

Capital assets used in gO\A3rnmental activities are not financial resources and, therefore, are not reported in the funds. 25,527,090

Expenditures of gO\A3rnmental capital projects funds for proprietary fund projects are reclassified as interfund receivables from proprietary funds. 182,848

Proceeds of debt recorded in gO\A3rnmental capital projects funds for proprietary fund projects are reclassified as interfund payables to proprietary funds. (803,347)

Net pension liability for the New York State & Local Retirement System is shown as a liability on the statement of net position (5,530,039)

Differences between expected and actual expenses, assumption changes, net differences between projected and actual earnings, and contributions subsequent to the measurement date for New York State & Local Employees Retirement System are recognised as deferred outflows and inflows of resources on the statement of net position 4,704,604

Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the funds:

Due to State Retirement Systems (1,358,056)

Compensated Absences (285,909)

Serial Bonds (1,930,268)

Capital lease obligations (10,428)

Accrued Interest on Long Term Debt (18,264)

Net Position of GO\A3rnmental Activities $ 24,870,665


221 P age

VILLAGE OF ENDICOTT RECONCILIATION OF GOVERNMENTAL FUNDS REVENUES, EXPENDITURES AND CHANGES IN

FUND EQUITY TO THE STATEMENT OF ACTIVITIES MAY 31,2016

Amounts reported for governmental activities in the Statement of Activities are different because:

Net Changes in Fund Balance - Total Go\'€rnmental Funds

Capital outlays to purchase or build capital assets are reported in go\,€rnmental funds as expenditures. Howe\,€r, for go\,€rnmental activities, those costs are shown in the statement of Net Position and allocated o\,€r their useful Ii\,€s as depreciation expenses in the statement of activities. This is the amount by which capital outlays exceed depreciation in the period.

Depreciation Expense

Capital Outlays

(2,207,567)

694,181 ------

Bond and note proceeds provide current financial resources to go\,€rnmental funds, but issuing debt increases long-term liabilities in the statement of Net Position. Repayment of principal is an expenditure in go\,€rnmental funds, but the repayment reduces long-term liabilities in the statement of Net Position.

Repayment of capital leases

Interest expense on capital leases

Repayment of bond principal

Capital outlays recorded in the capital projects fund for proprietary fund projects are reclassified as interfund loans for the go\,€rnment-wide presentation.

8,115

(758)

561,918 ------

Under the modified accrual basis of accounting used in the go\,€rnmental funds, re\,€nue or expenditures are not recognized for transactions that are not paid with expendable available financial resources. In the statement of activities, which is presented on the accrual basis, re\,€nue, expenses, assets and liabilities are reported regardless of when financial resources are available.

Interest on long term debt is not recognized under the modified accrual basis of accounting until due, rather than as it accrues. This is the amount of additional interest accrual for the period:

The net change in net pension liability and deferred inflows and outflows for the New York State &

Local Retirement System is reported only in the statement of activities

Certain expenses in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds.

Change in Liabilities for Retirement System Contributions

Change in Compensated Absences

Change in Net Position - Go\'€rnmental Activities


231 P age

12,946

9,321 ------

$ (284,228)

(1,513,386)

569,275

32,830

7,771

(218,974)

22,267

$ (1,384,445)

ASSETS Current assets:

Cash & cash equivalents Restricted cash & cash equivalents Receivables, net

Due from other governments Due from other funds

Inventories

Total current assets

Noncurrent assets: Capital assets:

Capital assets not depreciated

Capital assets depreciated, net


PROPRIETARY FUNDS MAY 31,2016

Light Water

$ 1,722,482 $ 176,598 74,143

305,544 207,280

37,914 365,181 234,659

2,374,742 749,059

40,535 53,923

4,866,639 7,766,295

4,907,174 7,820,218

DEFERRED OUTFLOWS OF RESOURCES

Pension plan 449,751 502,664

Total assets and deferred outflows of resources $ 7,731,667 $ 9,071,941


24\ P age

Sewer Total

$ 294,592 $ 2,193,672

74,143 213,848 726,672 112,545 112,545

1,522,089 1,925,184

234,659

2,143,074 5,266,875

2,372 96,830 4,530,410 17,163,344

4,532,782 17,260,174

529,120 1,481,535

$ 7,204,976 $ 24,008,584


PROPRIETARY FUNDS (CONTINUED) MAY 31,2016

Light Water LIABILITIES Current liabilities:

Accounts payable $ 90,519 $ 87,384

Accrued liabilities 41,248 54,045

Due to other funds 95,980

Due to other governments 13,323

Due to state retirement system 116,738 135,590

Bond interest payable 1,093

Current portion of long-term debt 99,504

Total current liabilities 357,808 377,616

Long-term liabilities, net of current portion

Bonds payable 103,928

Notes payable

Compensated absences 36,665 54,387

Net pension liability 493,082 551,092

Total long-term liabilities 529,747 709,407

Total Liabilities 887,555 1,087,023

DEFERRED INFLOWS OF RESOURCES Pension plan 58,446 65,323

NET POSITION Investment in capital assets, net of related debt 4,907,174 7,616,786

Restricted for:

Capital 74,143

Unrestricted (deficit) 1,804,349 302,809

Total Net Position $ 6,785,666 $ 7,919,595


251 P age

Sewer Total

$ 42,493 $ 220,396

52,745 148,038

95,980

13,323

152,266 404,594

22,466 23,559

337,000 436,504

606,970 1,342,394

5,609,000 5,712,928

795,347 795,347

51,459 142,511

580,096 1,624,270

7,035,902 8,275,056

7,642,872 9,617,450

68,761 192,530

(2,208,565) 10,315,395

74,143

1,701,908 3,809,066

$ (506,657) $ 14,198,604

VILLAGE OF ENDICOTT STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION

PROPRIETARY FUNDS FOR THE YEAR ENDED MAY 31, 2016

Light Water Sewer Operating revenues Charges for services $ 3,100,636 $ 3,260,702 $ 3,403,024 $

Total operating revenues 3,100,636 3,260,702 3,403,024

Operating expenses Personal services 745,308 1,033,081 1,032,945 Contractual services 1,392,981 505,643 478,125 Repairs and maintenance 20,649 231,486 310,933 Other supplies and expenses 33,624 218,571 249,276 Insurance claims and expenses 40,961 32,040 35,235 Employee benefits 532,807 754,182 683,629 Depreciation 420,363 584,713 492,851

Total operating expenses 3,186,693 3,359,716 3,282,994

Operating Income (loss) (86,057) (99,014) 120,030

Non-operating revenues (expenses) Interest income 592 38 75 Sale of property 818 12,432 Miscellaneous 675 Federal sources 177,215 Interest expense (12,172) (160,559)

Total non-operating re\€nue 2,085 (12,134) 29,163

Income before transfers (83,972) (111,148) 149,193

Transfers from (to) other funds (74,000)

Change in Net Position (157,972) (111,148) 149,193

Total Net Position - Beginning (restated) 6,943,638 8,030,743 (655,850)

Total Net Position - Ending $ 6,785,666 $ 7,919,595 $ (506,657) $


261 P age

Total

9,764,362

9,764,362

2,811,334 2,376,749

563,068 501,471 108,236

1,970,618 1,497,927

9,829,403

(65,041)

705 13,250

675 177,215

(172,731)

19,114

(45,927)

(74,000)

(119,927)

14,318,531

14,198,604

VILLAGE OF ENDICOTT STATEMENT OF CASH FLOWS

PROPRIETARY FUNDS FOR THE YEAR ENDED MAY 31,2016

Cash Flows from Operating Activities: Cas h recei\'€d from customers Cash recei\'€d from suppliers and other go\,€rnments Cash payments to employees for wages Cash payments to employees for benefits Cash payments to suppliers for goods and services Other operating and nonoperating re\,€nues

Net cash provided by operating activities

Cash Flows from Non-Capital Financing Activities: Cash recei\'€d from other funds Cash payments to other funds

Net cash used for non-capital financing activities

Cash Flows from Capital and Related Financing Activities: Proceeds from bond issue Proceeds from sales of equipment Cash payment of interest on debt Payment of capital lease, bond and BAN principal

Net cash used for capital and related financing activities

Cash Flows from Investing Activities: Interest on in\'€stments Purchase of capital assets

Net cash used for in\,€sting activities Net decrease in cash and cash equivalents

Cash and cash equivalents-beginning of the year Cash and cash equivalents-end of the year


271 P age

2016

$ 8,307,013

$

1,298,621 (2,777,154) (2,054,536) (3,716,239)

269,891 1,327,596

322,970 (164,382) 158,588

13,250 (173,968) (509,199) (669,917)

705 (591,939) (591,234) 225,033

1,968,639 2,193,672

281 P age

VILLAGE OF ENDICOTT STATEMENT OF FIDUCIARY NET POSITION

MAY 31,2016

ASSETS

Cash

Total Assets

LIABILITIES

Due to other funds

Customer deposits payable

Other liabilities

Total Liabilities

$ 1,048,446

1,048,446

1,017,985

24,104

6,357

$ 1,048,446


This page is intentionally left blank

291 P age

VILLAGE OF ENDICOTT

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The financial statements of the Village of Endicott (the "Village") have been prepared in conformity with generally accepted accounting principles (GAAP) as apply to governmental units. Those principles are prescribed by the Governmental Standards Board (GASB), which is the accepted standard-setting body for establishing governmental accounting and financial reporting principles.

Certain significant accounting principles and policies utilized by the Village are described below:

A) Reporting Entity The Village of Endicott was founded in 1906 and operates under an elected Board of Trustees, which includes a mayor and four trustees. The financial reporting entity consists of the primary government, organizations for which the primary government is financially accountable and other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete.

Accounting principles generally accepted in the United States of America require that the reporting entity include (1) the primary government, (2) organizations for which the primary government is financially accountable and (3) other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete. The criteria provided by the Codification, Section 2100 has been considered and no component units have been identified.

B) Basis of Presentation

Government-wide and Fund Financial Statements The government-wide financial statements report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable.

The statement of activities demonstrates the degree to which the direct expenses of a given function or activity are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or activity. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or activity and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or activity. Taxes and other items not properly included among program revenues are reported instead as general revenues.

Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements.

30 I P age

VILLAGE OF ENDICOTT


Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are recognized when earned and expenses are recognized when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied for. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the Village considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences, claims and judgments and pollution remediation costs, are recorded only when payment is due (matured).

Property taxes, when levied for, intergovernmental revenues, when eligibility requirements are met, parking fines, charges for services and interest associated with the current fiscal period are all considered to be susceptible to accrual (measurable) and so have been recognized as revenues of the current fiscal period, if available. Available has been defined as received within 60 days. All others, primarily licenses, fees and permits, are measurable and available only when cash is received.

The Village reports the following major governmental funds:

a. General Fund: This is the Village's primary operating fund. It accounts for all financial transactions that are not required to be accounted for in another fund.

b. Debt Service Fund: This fund accounts for those funds restricted to expenditures for the repayment of debt.

c. Parking Authority Fund: This fund accounts for those revenues that are legally restricted to expenditures for the parking authority.

d. Capital Projects Funds: These funds are used to account for the financial resources used for acquisition, construction, or major repair of capital facilities, other than those financed by proprietary funds and equipment purchases financed in whole or in part from the proceeds of obligations. An individual capital projects fund should be established for each authorized project.

e. Public Library Fund: This fund accounts for transactions of a library established and supported, in whole or in part, by real property taxes. The use of this fund assures compliance with Education Law §259, which provides that all monies received from taxes or other public sources for library purposes shall be kept in a separate fund.

The Village reports the following major proprietary funds:

a. Light Fund: This fund is used to account for the Village's electric utilities operations.

b. Water Fund: This fund is used to account for the Village's water operations.

c. Sewer Fund: This fund is used to account for the Village's sewer operations

31 I P age

VILLAGE OF ENDICOTT


The Village reports the following fiduciary fund type:

a. Fiduciary Funds: These funds account for assets held by the Village in a trustee capacity or as an agent. The agency funds are custodial in nature and do not involve measurement of results of operations.

Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both the government-wide and enterprise fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent private-sector guidance for their business-type activities and enterprise funds, subject to this same limitation. The Village has elected not to follow subsequent private-sector guidance.

As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are charges between the enterprise funds and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned.

Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes.

Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the proprietary funds are charges to customers for services. Operating expenses for enterprise and internal service funds include the cost of operations and maintenance, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses.

C) Budgetary Data

No later than March 1, the budget officer submits a tentative budget to the board of trustees for the fiscal year commencing the following June 1. The tentative budget includes proposed expenditures and the proposed means of financing for all funds of the Village. After public hearings are conducted to obtain taxpayer comments, the board of trustees adopts the Village budget. The board of trustees must approve all budget revisions that alter appropriations of any department or fund. Unencumbered budgetary appropriations lapse at the close of each year. Budgetary controls are established for the capital projects fund through resolutions authorizing individual projects that remain in effect for the life of the project.

D) Interfund Transactions

The operations of the Village include transactions between funds. These transactions may be temporary in nature, such as with interfund borrowings. The Village typically loans resources between funds for the purpose of providing cash flow. These interfund receivables and payables are expected to be repaid with one year. Permanent transfers of funds include the transfer of expenditure and revenues to provide financing or other services. In the Village-wide statements, the amounts reported on the Statement of Net Position for interfund receivables and payables represent amounts due between different fund types (governmental activities or proprietary and fiduciary funds). Eliminations have been made for all interfund receivables and payables between the funds, with the exception of those due from or to the fiduciary funds. The governmental funds report all interfund transactions as originally recorded. Interfund receivables and payables may be netted on the accompanying governmental funds balance sheet when it is the Village's practice to settle these amounts at a net balance based upon the right of legal offset.

321 P age

VILLAGE OF ENDICOTT


E) Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates and assumptions are made in a variety of areas, including computation of encumbrances, compensated absences, other postemployment benefits, potential contingent liabilities and useful lives of long-lived assets.

F) Encumbrances

Encumbrance accounting is used for budget control and monitoring purposes and is reported as a part of the governmental funds. Under this method, purchase orders, contracts and other commitments for the expenditure of monies are recorded to reserve applicable appropriations. Outstanding encumbrances as of year-end are presented as reservations of fund balance and do not represent expenditures or liabilities. These commitments will be honored in the subsequent period. Related expenditures are recognized at that time, as the liability is incurred or the commitment is paid.

G) Assets. Liabilities. and Fund Equity

1. Cash and Investments

The Village considers all highly-liquid debt instruments with original maturities of three months or less to be cash equivalents.

State statutes require that collateral be pledged for demand deposits, time deposits, and certificates of deposit at 100% of all deposits not covered by federal depository insurance. Obligations that may be pledged as collateral are obligations of the United States Treasury and its agencies, obligations of the state and its municipalities, district debt, irrevocable letters of credit, and surety bonds issued by the state-authorized insurance companies.

The carrying amount of cash and cash equivalents aggregated $8,052,774 at May 31,2016, of which $500,000 is covered by Federal Deposit Insurance and the balance is covered by collateral held in the pledging bank's trust department or agent in the Village's name.

2. Restricted Assets

Certain assets are classified as restricted assets because their use is completely restricted according to the capital project, bond instrument, grant agreement, or other legal document. These funds are offset by a "reserve of fund balance" in the fund financial statements to indicate that they are not available for appropriation.

3. Receivables

Property taxes are levied annually, no later than May 15, and become a tax lien on June 1. Collection of real property taxes starts June 1 and continues until November.

Uncollected real property taxes are subsequently enforced by Broome County. The County pays an amount representing uncollected real property taxes transmitted to the County for enforcement to the Village no later than April of the same fiscal year.

Other receivables consists of amounts owed on open accounts from private individuals or organizations for goods and.or services furnished by a government.

331 P age

VILLAGE OF ENDICOTT


4. Allowances for Doubtful Accounts

The Village specifically identifies and writes off receivables using the direct write-off method. Accordingly, there has been no provision for uncollectible accounts recorded.

5. Inventory and Prepaid Items

The inventories of the Village are valued at cost (first-in, first-out), which approximates market. The Village's Governmental Funds, Water and Sewer Funds inventory consists of expendable supplies that are recorded as expenditures when purchased. The Funds that reports an inventory of unconsumed supplies as an asset include the Light Fund supplies and General Fund airport fuel.

6. Capital Assets

Capital assets are reported at actual cost for acquisitions subsequent to May 31, 2015. For assets acquired prior to this date, estimated historical costs, based on appraisals conducted by independent third-party professionals were used. Donated assets are reported at estimated fair market value at the time received. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred, net of interest earned on specific project related debt, during the construction phase of capital assets of enterprise funds is included as part of the capitalized value of the assets constructed. Capital assets of the Village are depreciated using the straight line method over the estimated useful life of the asset. Capital asset acquisitions are reported as expenditures and no depreciation expense is reported in the governmental fund financial statements.

Capitalization thresholds (the dollar value above which asset acquisitions are added to the capital asset accounts), depreciation methods, and estimated useful lives of capital assets reported in the Government-wide and proprietary fund statements are as follows:

Infrastructure Buildings Impro\.ements Vehicles Furniture and equipment Computer equipment

Capitalization Threshold

$ 20,000 15,000 15,000 10,000

1,000 1,000

Depreciation Method

Straight -Line Straight -Line Straight -Line Straight -Line Straight -Line Straight -Line

Estimated Useful Life

30 40

25 - 40 5 - 10 5 - 15 5 - 10

Capital assets that are not depreciated include land and construction in progress.

7. Long-Term Obligations

In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of Net Position. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the straight-line method that approximates the effective interest method. Bonds payable are reported net of the applicable bond premiums or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. In fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

34\ P age

VILLAGE OF ENDICOTT


8. Compensated Absences

The vacation policy of the Village provides employees with vacation days annually depending on their contract and years of service. Upon resignation or retirement, employees are paid for some or all unused vacation leave. Employees are granted sick leave based on the individual employees contract and they are allowed to accumulate sick leave depending on contract coverage. Sick leave is forfeited if an employee leaves the Village prior to retirement. Employees are granted up to three (3) days personal leave each year depending on their contracts, coverage, and hiring date. At May 31 of each year, the employee forfeits all unused personal leave. It is the policy of the Village to accrue the costs associated with earned, but not yet paid, sick leave and vacation leave of all employees of the Village. The total accrued liability for sick, personal, and vacation leave at May 31, 2016 is $428,420.

9. Deferred Outflows and Inflows of Resources

In addition to assets the statement of Net Position will sometimes report a separate section for deferred outfiows of resources. This separate financial statement element, deferred outfiows of resources, represents a consumption,of net position that applies to a future period and so will not be recognized as an outfiow of resourses (expens/expenditure) until then. The government has three items that qualify for reporting in this category. First is the deferred charge on refunding reported in the government-wide Statemerit;of Net Position. A deferred charge on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. The second item is related to pensions reported in the Village-wide Statement of Net Position. This represents the effect of the net change in the Village's proportion of the collective net pension asset or liability and difference during the measurement period between the Village·s contrltlutions and its proportion share of total contributions to the pension systems not included in pension expense. Lastly is the Village contributions to the pension systems (PFRS and ERS Systems) subsequent to the measurement date.

In addition to liabilities, the statement of net position will sometimes report a separate section for deferred inflows of resources. This separate financial statemenfelement, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an infiow of resources (revenue) until that time. The Viliage has three items that qualify for reporting in this category. First arises only under a modified accrual basis of accounting and is reported as unavailable revenue - property taxes. The second item is related to pensions reported in the Village-wide Statement of Net Position. This represents the effect of the net change in the Village·s proportion of the collective net pension liability (ERS and PFRS System) and difference during the measurement periods between the Village·s contributions and its proportion share of total contributions to the pension systems not included in pension expense.

PENSION OBLIGATIONS

New York State and Local Employees· Retirement System (ERS) and the Police and Fire Retirement System (PFRS) (the Systems).

PLAN DESCRIPTIONS AND BENEFITS PROVIDED

The Office of the New York State Comptroller administers the following plans: the New York State and Local Employees· Retirement System (ERS) and the New York State and Local Police and Fire Retirement System (PFRS), which are collectively referred to as the New York State and Local Retirement System (the System). The net position of the System is held in the New York State Common Retirement Fund (the Fund), which was established to hold all assets and record changes in fiduciary net position allocated to the System.

351 P age

VILLAGE OF ENDICOTT


The Comptroller of the State of New York serves as the trustee of the Fund and is the administrative head of the System. The Comptroller is an elected official determined in a direct statewide election and serves a four-year term. Thomas P. DiNapoli has served as Comptroller since February 7, 2007. In November 2014, he was elected for a new term commencing January 1, 2015. System benefits are established under the provisions of the New York State Retirement and Social Security Law (RSSL). Once a public employer elects to participate in the System, the election is irrevocable. The New York State Constitution provides that pension membership is a contractual relationship and plan benefits cannot be diminished or impaired. Benefits can be changed for future members only by enactment of a State statute. Generally, members of the System are employees of the State and its municipalities, other than New York City.

ERS and PFRS are cost-sharing, multiple-employer defined benefit pension plans. The System is included in the State's financial report as a pension trust fund. The Public Employees' Group Life Insurance Plan (GLlP) provides death benefits in the form of life insurance. In these statements, GLiP amounts are apportioned to and included in ERS and PFRS.

Separately issued financial statements for the System can be accessed on the Comptroller's website at www.osc.state.ny.us/retire/about us/financial statements index.php.

Membership Tiers

Pension legislation enacted in 1973, 1976, 1983, 2009 and 2012 established distinct classes of membership. For convenience, the System uses a tier concept to distinguish these groups, generally:

ERS Tier 1 Tier 2 Tier 3

Tier 4

Tier 5

Tier 6

PFRS Tier 1 Tier2 Tier 3

Tier4 Tier 5

Tier 6

Vesting

Those persons who last became members before July 1, 1973 Those persons who last became members on or after July 1,1973, but before July 27,1976. Generally, those persons who are State correction officers who last became members on or after July 27, 1976, but before January 1, 2010, and all others who last became members on or after July 27, 1976, but before September 1, 1983. Generally, except for correction officers, those persons who last became members on or after September 1, 1983, but before January 1, 2010. Those persons who last became members on or after January 1, 2010, but before April 1, 2012. Those persons who first became members on or after April 1 ,2012.

Those persons who last became members before July 31, 1973 Those persons who last became members on or after July 31 , 1973, but before July 1, 2009. Those persons who last became members on or after July 1 , 2009, but before January 9, 2010. Not Applicable Those persons who last became members on or after January 9,2010, but before April I, 2012, or who were previously PFRS Tier 3 members who elected to become Tier 5. Those persons who first became members on or after April 1, 2012.

Members who joined the System prior to January 1,2010 need five years of service to be 100% vested. Members who joined on or after January 1, 2010 (ERS) or January 9, 2010 (PFRS) require ten years of service credit to be 100% vested.

Employer Contributions Participating employers are required under the RSSL to contribute to the System at an actuarially determined rate adopted annually by the Comptroller. The average contribution rate for ERS forthe

361 P age

VILLAGE OF ENDICOTT


fiscal year ended March 31, 2016 was approximately 18.2%of payroll. The average contribution rate for PFRS for the fiscal year ended March 31, 2016 was approximately 24.7% of payroll. Delinquent annual bills for employer contributions accme interest at the actuarial interest rate applicable during the year. For the fiscal year ended March 31, 2016, the applicable interest rate was 7.5%.

Member Contributions Generally, Tier 3, 4 and 5 members must contribute 3% of their salary to the System. As a result of Article 19 of the RSSL,.eligible Tier 3 and 4 employees, with a membership date on or after July 27, 1976, who have ten or more years of membership or credited service with the System, are not required to contribute. Members cannot be required to begin making contributions or to make increased contributions beyond what was required when membership began. For Tier 6 members, the contribution rate varies from 3% to 6%,depending on salary. Generally, Tier 5 and 6 members are required to contribute for all years of service.

Contributions for the current year and two preceding years were equal to 100 percent of the contributions required, and were as follows:

Contributions 2016 2015 2014

ERS $950,773

931,490 953,480

PFRS $1,100,000

1,042,024 854,402

PENSION LIABILITIES. PENSION EXPENSE. AND DEFER ED OUTFLOWS OF. RESOURCES AND DEFERED INFLOWS OF RESOURCES RELATED TO PENSIONS

At May 31,2016, the Village reported the following asset/(Iiability) for its proportionate share of the net pension asset 1(liability) for each of the Systems. The net pension asset/(liability) was measured as of March 31, 2016 for ERS and PFRS. The total pension asset/(Iiability) used to calculate the net pension asset/(liability) was determined by an actuarial valuation. The Village's proportion of the net pension asset/(Iiability) was based on a projection of the Village's long-term share of contributions to the Systems relative to the projected contributions of all participating members, actuarially determined. This information was provided by the ERS and PFRS Systems in reports provided to the Village.

Actuarial valuation date Net pension asset/(Iiability) District's portion of the plan's total

net pension asset/(Iiability)

ERS 3/31/2016

$ (2,900,482)

0.0181%

PFRS 3/31/2016

$ (4,253,827)

0.1437%

For the year ended May 31,2016, the Village's recognized pension expense of $950,773 for ERS and $1,100,000 for PFRS. At May 31,2016 the Village's reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

371 P age

VILLAGE OF ENDICOTT


Deferred Outflows Deferred Inflows of Resources of Resources

ERS PFRS ERS PFRS

Differences between expected and actual experience $ 14,657 $ 38,153 $ 343,804 $ 643,128

Changes of assumptions 773,471 1,833,811

Net difference between projected and actual earnings on pension plan investments 1,720,725 2,383,926

Changes in proportion and differences between the Village's contributions and proportionate share of contributions 131,668 131,197 54,080

District's contributions subsequent to the measurement date 5,078 1,935

$ 2,645,599 $ 4,389,022 $ 343,804 $ 697,208

Village contributions subsequent to the measurement date which will be recognized as a reduction of the net pension liability in the year ended May 31, 2016. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

Year ended May 31: 2017 $ 2018 2019 2020 2021

Thereafter ACTUARIAL ASSUMPTIONS

ERS PFRS

582,447 582,447 582,447 549,376

$ 870,074 870,074 870,074 836,127 243,530

The total pension liability as of the measurement date was determined by using an actuarial valuation as noted in the table below, with update procedures used to roll forward the total pension liability to the measurement date. The actuarial valuations used the following actuarial assumptions:

Significant actuarial assumptions used in the valuations were as follows:

ERS PFRS Measurement date 3/31/2016 3/31/2016 Actuarial valuation date 4/112015 4/1/2015

Interest rate 7.0% 7.0% Salary scale 3.8% 4.5% Decrement tables April 1, 2010- April 1,2010-

March 31, 2015 March 31, 2015 Inflation rate 2.5% 2.5%

Annuitant mortality rates are based on April 1,2010 - March 31, 2015 System's experience with adjustments for mortality improvements based on MP-2014.

381 P age

VILLAGE OF ENDICOTT


Actuarial assumptions used in the April 1, 2015 valuation are based on the results of an actuarial experience study for the period April 1, 2010- March 31, 2015.

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

Measurement date

Asset type: Domestic equities International equities Private equity Real estate Absolute return strategies Opportunistic portfolio Real assets Bonds and morgages Cash Inflation indexed bonds

DISCOUNT RATE

ERS PFRS

3/31/2016 3/31/2016

38% 38% 13% 13% 10% 10% 8% 8% 3% 3% 3% 3% 3% 3% 18% 18% 2% 2% 2% 2%

The discount rate used to calculate the total pension liability was 7% for ERS and PFRS. The projection of cash flows used to determine the discount rate assumes that contributions form plan members will be made at the current contribution rates and that contributions from employers will be made at statutorily required rates, actuarially. Based upon the assumptions, the Systems' fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore the long term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

SENISITIVITY OF THE PROPORTIONATE SHARE FOR THE NET PENSION LIABILITY TO THE DISCOUNT RATE ASSUMPTION

The following presents the Village's proportionate share of the net pension liability calculated using the discount rate of 7% for ERS and PFRS, as well as what the Village's proportionate share of the net pension asset/(Iiability) would be if it were calculated using a discount rate that is 1 percentage point lower (6% for ERS and PFRS) or 1-percentage point higher (8 % for ERS and PFRS) than the current rate:

391 P age

VILLAGE OF ENDICOTT


ERS Employer's proportionate share of the net pension asset (liability)

PFRS Employer's proportionate share of the net pension asset (liability)

$

$

1% Decrease 6.0%

(6,540,297)

1% Decrease 6.0%

(9,501,438)

PENSION PLAN FIDUCIARY NET POSITION

Current Assumption

7.0%

$ (2,900,482)

Current Assumption

7.0%

$ (4,253,827)

1% Increase 8.0%

$ 175,189

1% Increase 8.0%

$ 144,630

The componets of the current year net pension asset(liability) of the employers as of the respective valuation dates, were as follows:

Valuation date

Employers' total pension asset/(Iiability) Plan Net Position Employers' pension asset/(Iiability) Ratio of plan net position to the

Employers' total pension asset/(liability)

PAY ABLES TO THE PENSION PLAN

ERS (Dollars in Thousands)

PFRS Total 4/1/2015

$(172,303,544) (156,253,265)

$ (16,050,279)

90.7%

4/1/2015

$ (30,347,727) (27,386,940)

$ (2,960,787)

90.2%

$ (202,651,271) (183,640,205)

$ (19,011,066)

90.6%

For ERS and PFRS, employer contributions are paid annually based on the System's fiscal year which ends on March 31". Accrued retirement contributions as of May 31,2016 represent the projected employer contribution for the period of April 1, 2015 through March 31, 2016 based on paid wages multiplied by the employer's contribution rate, by tier. Accrued retirement contributions as of May 31,2016 amounted to $1,762,650.

RESTATEMENT OF NET POSITION

For the fiscal year ended May 31, 2016, the Village implemented GASB Statement No. 68 Accounting and Financial Reporting for Pensions-Amendment to GASS Statement No. 27. The implementation of Statement No. 68 resulted in the reporting of an asset, deferred outflow of resources, liability and deferred inflow of resources related to the Village's participation in the New York State and Local Employees' retirement systems. The Village's net position has been restated as follows:

Net Pension Asset (Liability) at beginning of year Net Adjustment to Beginning Net Position

40 I P age

ERS $ (341,631) $ (341,631)

PFRS (601,887) (601,887)

Total $ (943,518) $ (943,518)

VILLAGE OF ENDICOTT


10. Other Benefits

Village employees participate in the New York State Employees' Retirement System and the New York State Police and Fire Retirement System.

In addition to providing pension benefits, the Village provides post-employment health insurance coverage and survivor benefits to retired employees and their survivors in accordance with the provision of various employment contracts in effect at the time Of retirement. Substantially all of the Village's employees may, become eligible for these benefits if they reach normal retirement age while working for the Village. Health care benefits are provided through plans whose premiums are based on the benefits paid during the year. The Village recognizes the cost of providing health insurance by recording its share insurance premiums as an expenditure.

Management has not recorded the.liability for other postemployment benefits and, accordingly, has not recorded the related financial statement disclosures in accordance with GASB Statement 45, Accounting and Financial Reporting for Post Employment Benefits Other than Pension. Accounting principles generally accepted in the United States of America require that the actuarially calculated liability be recorded, which would increase the liabilities and expenses, and decrease the net position of the governmental activities, business-type activities, and enterprise funds. The amount by which this departure would affect the liabilities, net position, and expenses of these opinion units has not been determined.

11. Net Position/Fund Balances

In the government-wide and proprietary fund financial statements, Net Position are classified in the following categories:

Invested in Capital Assets, Net of Related Debt - This category groups all capital assets, including infrastructure, into one component of Net Position. Accumulated depreciation and the outstanding balances of debt that are attributable to the acquisition, construction or improvement of these assets reduce this category.

Restricted Net Position - This category presents external restrictions imposed by creditors, grantors, contributors or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabling legislation.

Unrestricted Net Position - This category represents the Net Position of the Village, which are not restricted for any project or other purpose. A deficit will require future funding.

In the fund financial statements, fund balances of governmental funds are classified in five separate categories. The five categories, and their general meanings, are as follows:

Non-spendable fund balance - Includes amounts that cannot be spent because they are either not in spendable form or legally or contractually required to be maintained intact.

Restricted - includes amounts with constraints placed on the use of resources either externally imposed by creditors, grantors, contributors or laws or regulations of other governments; or imposed by law through constitutional provisions or enabling legislation. All encumbrances of funds other than the General fund are classified as restricted fund balance.

Committed - Includes amounts that can only be used for the specific purposes pursuant to constraints imposed by formal action of the Village's highest level of decision making authority, i.e., the Board of Trustees. The Village has no committed fund balances as of May 31, 2016.

41 I P age

VILLAGE OF ENDICOTT


Assigned - Includes amounts that are constrained by the Village's intent to be used for specific purposes, but are neither restricted nor committed. All encumbrances of the General fund are classified as Assigned Fund Balance in the General Fund. There were outstanding encumbrances of $-0- at year-end.

Unassigned - Includes all other Governmental Fund Net Position that do not meet the definition of the above four classifications and are deemed to be available for general use by the Village.

Spending Prioritization:

Unless the determination to use restricted, committed or assigned fund balance is made by the Village prior to spending amounts on an expenditure incurred, the spending prioritization policy of the Village shall be followed.

In the case that an expenditure is incurred for purposes for which both restricted an unrestricted fund balance is available; the Village considers unrestricted amounts to have been spent. In the case that an expenditure is incurred for which committed, assigned, and unassigned fund balance is available; the Village considers unassigned amounts to have been spent. The specific fund balance spending prioritization of the Village is as follows:

1. Unassigned 2. Assigned 3. Committed 4. Restricted

NOTE 2 STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY

A) Deficit Fund Balances

The sewer enterprise fund and capital projects governmental fund had deficit fund balances at year-end of $(506,657) and $(372,297), respectively.

NOTE 3 DETAIL NOTES ON ALL FUNDS

A) Assets

1. Deposits

The Village considers all highly liquid debt instruments with original maturities of three months or less to be cash equivalents.

At year end the carrying value of the Village's deposits with banks was $8,268,857. All of the bank balance was covered by Federal Depository insurance or collateralized in accordance with New York State law. Under that law, banks holding public deposits in excess of amounts insured by FDIC must pledge collateral equal to 100% of such limit. Obligations that may be pledged as collateral are obligations of the United States Treasury and its agencies, obligations of the state and its municipalities, including school district debt, irrevocable letters of credit, and surety bonds issued by the state authorized insurance companies. Collateral is held in the pledging bank's trust department or agent in the Village's name.

2. Sales Tax and Collection

Broome County imposes a 4% sales tax on sales within the County. The County imposed tax is administered and collected by the State Tax Commission in the same manner as that relating to the

421 P age

VILLAGE OF ENDICOTT


State imposed 4% (June 1, 2005) sales and compensating use tax. The County turns a portion of sales tax collected to local municipalities, including the Village.

Net collections, meaning monies collected after deducting expenses of administration and collections and amounts refunded or to be refunded, but inclusive of any applicable penalties and interest, are paid by the State to the County, respectively. In 2016, payments from the County to the Village aggregated $2,887,353.

3. Capital Assets

Capital asset activity for the Village for the year ended May 31,2016, was as follows:

Governmental activities:

Capital assets that are not depreciated:

Beginning Balance

Land $ 1,800,276 Construction in progress

Total nondepreciable historical cost 1,800,276

Capital assets that are depreciated: Buildings Infrastructure Machinery and equipment

Total depreciable historical cost

Less accumulated depreciation: Buildings Infrastructure Machinery and equipment

Total accumulated depreciation

Total depreciable and non depreciable

9,557,159 43,232,429

5,566,586 58,356,174

8,261,573 21,058,246

3,796,155 33,115,974

historical cost, net $ 27,040,476

Depreciation expense was charged to governmental functions as follows:

General go\,€rnment support $ Public safety Trans portation Culture & receration Library

$

431 P age

Retirements I Additions Reclassifications

Ending Balance

27,912 131,923 131,923

5,042 212,385 316,919 534,346

307,242 1,578,847

321,478 2,207,567

25,874 174,930

1,956,226 30,370 20,167

2,207,567

- $ 1,828,188 131,923

1,960,111

9,562,201 43,444,814

5,883,505 58,890,520

8,568,815 22,637,093 4,117,633

35,323,541

$ 25,527,090

VILLAGE OF ENDICOTT


Beginning Balance

Business-type Activities:

Capital assets that are not depreciated: Land Construction in progress

Total nondepreciable historical cost

Capital assets that are depreciated: Buildings Infrastructure Machinery and equipment

Total depreciable historical cost

Less accumulated depreciation: Buildings Infrastructure Machinery and equipment

Total accumulated depreciation

Total depreciable and non depreciable historical cost, net

Depreciation expense was charged to business-type functions as follows:

Light Water Sewer

B) Liabilities

1. Pension Plan Obligations

$ 96,830

96,830

12,326,665 25,075,835 10,062,746 47,465,246

9,375,978 13,122,224 6,897,712

29,395,914

$ 18,166,162

Additions

1,585 283,519 306,835 591,939

262,092 878,950 356,885

1,497,927

$ 420,363 584,713 492,851

$ 1,497,927

Retirements I Reclassifications

-

(35,604) (46,685) (82,289)

(35,604) (46,685) (82,289)

Ending Balance

$ 96,830

96,830

12,328,250 25,323,750 10,322,896 47,974,896

9,638,070 13,965,570

7,207,912 30,811,552

$ 17,260,174

The Village participates in the New York State and Local Employees' Retirement System (NYSERS) and the New York State and Local Police and Fire Retirement Systems (NYSPFRS). These Systems are cost-sharing, multiple-employer retirement systems. The New York State Retirement and Social Security Law (NYSRSSL) govern obligations of employers and employees to contribute and benefit to employees. The Systems offer a wide range of plans and benefits that are related to years of service and final average salary, vesting of retirement benefits, death and disability benefits, and optional methods of benefit payments. All benefits generally vest after ten (10) years of credited service.

441Page

VILLAGE OF ENDICOTT


The NYSRSSL provides that all participating employers of the systems are jointly and severally liable for any actuarial unfunded amounts. Such amounts are collected through annual billings to all participating employers. Generally, all employees, except certain part-time employees, participate in the Systems. The Systems are non-contributory except for employees who joined after July 27, 1976, who contribute 3% of their salary for the first ten (10) years of employment, after which contributions are no longer required . Employee contributions are deducted by the Village from employees' salaries and are sent directly to the Systems.

The actuarial cost method used by the Systems to determine the annual contribution from employees through March 31 , 1990, was the aggregate cost method. Under this method, employers funded the excess of the actuarial liabilities over the actuarial assets as a level percentage of salary over the current members' future working lifetimes. The Village contributed $950,773 for NYSERS and $1,100,000 for NTSPFRS during 2016.

Historical trend information showing the progress in accumulating sufficient assets to pay benefits when due is presented in the March 31 , 2016 annual financial reports of the system. Total Village payroll covered by the NYSPFRS and NYSERS for the year ending March 31,2016, was approximately $8.1 million . Additional detailed information concerning the system may be found in the annual reports. Contact New York State Office of the State Comptroller or see the website: www.osc.state.nv.us/pension

2. Deferred / Unearned Revenues

Governmental funds report deferred revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period . Governmental funds and governmental activities also report unearned revenue in connection with resources that have been received, but not yet earned.

3. Claims, Judgements and Contingent Liabilities

At May 31, 2016, the Village was a defendant to various law suits. I n the opinion of the Village's management and the Village attorney, the ultimate effect of these legal matters will not have a material adverse effect on the Village's financial position.

4. General Obligation Indebtedness

a. Revenue Anticipation Notes and Tax Anticipation Notes Also known as "RANs" for governmental funds. They are notes issued in anticipation of the receipt of revenues. They are recorded as a liability of the fund that will actually receive the proceeds from the issuance of the notes. The revenue and tax anticipation notes represents a liability that will be extinguished by the use of expendable available resources of the fund.

b. Bond Anticipation Notes Also called "BANs" they are notes issued in anticipation of proceeds from the subsequent sale of bonds. It is recorded as a current liability of the fund that will actually receive the proceeds from the issuance of the bonds. Such notes may be classified as part of the General Long-Term Debt Account Group when (1) the intention is to refinance the debt on a long-term basis and (2) the intention can be substantiated through a post balance-sheet issuance of long-term debt or by an acceptable financing agreement. State law requires that bond anticipation notes issued for capital purposes be converted to long- term financing within five years after the original issue date. The Village had no BANs outstanding at year end. Interest paid on short term debt in 2016 was $-0-.

451 P age

VILLAGE OF ENDICOTT


c. Serial Bonds A bond is a written promise to pay a specified sum of money at a specified date or dates in the future, the maturity dates, together with periodic interest at a specified rate. Serial Bonds are those whose principal is repaid in periodic installments over the life of the issue. Interest paid on long-term debt amounted to $248,591.

d. Lease Obligations Payable Capital lease obligations represent the amount outstanding on capital leases for equipment and vehicles. The gross amount of assets in the statement of net position recorded under capital leases is $270,492, which is recorded under machinery and equipment and the associated accumulated amortization on these assets, is $2,719.

e. At May 31,2016, the total outstanding serial bonds are as follows:

Date of Original Interest Description of Issue Maturity Amount Rate Balance Business-type activities: Serial bond issued 10-15-98 10/15/2018 $ 1,341,355 4.15% $ 203,432 Serial bond issued 5-15-01 5/15/2031 8,663,165 2.62% 5,150,000 Serial bond issued 4-15-09 4/15/2029 775,000 4.50% 495,000 Serial bond issued 1-23-14 1/15/2033 321,000 2.50% 293,000 2013 HELP Loan dated 1-3-13 7/19/2017 819,347 0.00% 803,347

11,919,867 6,944,779 GO\ernmental activities: Serial bond issued 10-15-98 10/1/2014 1,691,710 4.15% 256,568 Serial bond issued 12-15-04 12/15/2017 2,486,081 4.10% 255,000 Serial bond issued 6-29-07 6/29/2017 389,500 4.34% 91,700 Serial bond issued 4-15-09 4/15/2019 473,999 4.50% 75,000 Serial bond issued 1-23-14 1/15/2033 1,500,000 2.50% 1,252,000

6,541,290 1,930,268 $ 18,461,157 $ 8,875,047

461 P age

VILLAGE OF ENDICOTT


f. Changes in Long-term Debt The changes in the Village's indebtedness during the year are summarized as follows:

Beginning Amounts Balance Payments/ End of Year Due Within

Bond Issue: (Restated) Additions Maturities Interest Balance One Year Business-type activities: Serial bond issued 10-15-98 $ 298,514 $ - $ 95,082 $ 10,718 $ 203,432 $ 99,504 Serial bond issued 5-15-01 5,415,000 265,000 107,740 5,150,000 275,000 Serial bond issued 4-15-09 535,000 40,000 29,135 495,000 40,000 Serial bond issued 1-23-14 307,000 14,000 10,555 293,000 14,000 2013 HELP Loan dated 1-3-13 811,347 8,000 803,347 8,000

7,366,861 422,082 158,148 6,944,779 436,504

Lease obligations 87,116 87,116 1,961 Compensated absences 147,730 5,219 142,511 Net pension liability 337,057 1,287,213 1,624,270

$ 7,938,764 1,287,213 514,417 160,109 8,711,560 $ 436,504

Governmental activities: Serial bond issued 10-15-98 376,486 119,918 13,518 256,568 125,496 Serial bond issued 12-15-04 500,000 245,000 21,000 255,000 255,000 Serial bond iss ued 6-29-07 134,700 43,000 5,846 91,700 44,900 Serial bond issued 4-15-09 100,000 25,000 5,446 75,000 25,000 Serial bond issued 1-23-14 1,373,000 121,000 44,633 1,252,000 76,000

2,484,186 553,918 90,443 1,930,268 526,396

Lease obligations 17,785 7,357 758 10,428 7,752 Compensated absences 295,230 9,321 285,909 Net pension liability 606,461 4,923,578 5,530,039

$ 3,403,662 4,923,578 570,596 91,201 7,756,644 $ 534,148

Total long-term liabilities $11,342,426 $ 6,210,791 $1,085,013 $251,310 $16,468,204 $ 970,652

g. Maturity The following is a summary of maturing debt service requirements: Business-type activities

Bonds Installment Purchase Maturity in year Interest Principal Interest Principal

2017 $ 161,961 $ 436,504 $ - $ 2018 151,420 1,238,275 2019 142,375 345,000 2020 135,031 355,000 2021 127,045 366,000 2022 - 2026 490,518 1,971,000 2027 - 2031 194,750 2,193,000 2032 - 2033 2,550 40,000

$ 1,405,650 $ 6,944,779 $ - $

47\ P age

VILLAGE OF ENDICOTT


GO\ernmental acti\Aties


2017 $ 68,712 $ 526,396 $ 362 $ 7,752 2018 47,321 278,872 29 2,676 2019 39,204 105,000 2020 35,807 80,000 2021 33,808 84,000 2022 - 2026 132,278 449,000 2027 - 2031 54,358 317,000 2032 - 2033 5,738 90,000

$ 417,226 $ 1,930,268 $ 391 $ 10,428

Total


2017 $ 262,128 $ 976,000 $ 362 $ 7,752 2018 230,673 962,900 29 2,676 2019 198,741 1,517,147 2020 181,579 450,000 2021 170,838 435,000 2022 - 2026 686,846 2,365,000 2027 - 2031 326,522 2,520,000 2032 - 2033 27,675 625,000

$ 2,085,002 $ 9,851,047 $ 391 $ 10,428

C) Interfund Balances and Activity

At May 31, 2016, the Village had the following due to/from other funds:

Receivable Payable Transfer in Transfer out General Fund $ 276,175 $ $ 74,000 $ 11,808 Debt Service 304 8,000 Capital Projects 907,520 11,808 8,000 Library 440,567 Parking Authority 246 Trust & Agency Fund 1,017,985 Electric Fund 37,914 95,980 74,000 Water Fund 365,181 Sewer Fund 901,590

$ 2,021,731 $ 2,021,731 $ 93,808 $ 93,808

Interfund receivables and payables, other than between governmental activities and fiduciary funds, are eliminated on the Statement of Net Position. Interfund receivables and payables are considered temporary. The Village intends to repay the amounts within the next fiscal year. The transfer from the light fund to the general fund is a recurring annual transfer.

481 P age

VILLAGE OF ENDICOTT


D) Leases

General Fund

For its General Fund, the Village has entered into several lease agreements for operating purposes. These lease agreements qualify as operating leases for accounting purposes.

The future minimum lease payments are as follows:

2017 $19,776 2018 19,776 2019 19,776 2020 ___ 9-,-,8_8_8_

Total minimum payments $69,216 -----'-~--

NOTE 4 RISK MANAGEMENT

General The Village purchases a variety of insurance policies, including but not limited to all risks property and specific liability policies. The policy limits are established in order to maximize potential recovery via insurance in the event of loss. Policy limits may range based on exposure to loss, and policies are subject to a range of deductibles.

Insurance requirements are established with contractors and consultants that do business with the Village based on the scope of services and nature of the project(s). Contractors and consultants are generally required to maintain certain types of insurance coverage including but not limited to general liability, automobile liability, workers' compensation and professional liability. There has not been any material change to insurance coverage from the previous year.

Self-insurance The Village is self-insured for the medical and dental plan. The Village pays for such claims as they become due. These claims liabilities are accounted for in the general fund and the applicable enterprise funds. Claims generated by governmental funds expected to be paid subsequent to one year are recorded only in the governmentwide financial statements.

Health and Dental Insurance The Village's medical and dental plans under Excellus Blue Cross Blue Shield are fully self insured. Liabilities are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. Liabilities include an amount for claims that have been incurred but not reported.

NOTE 5 SUMMARY DISCLOSURE OF SIGNIFICANT CONTINGENCIES

The Village is exposed to various risks of loss related to, but not limited to, torts; theft of, damage to, and destruction of assets; injuries to employees; errors and omissions; natural disasters. Settled claims from these risks have not exceeded commercial insurance coverage for the past three years.

The Village and/or its agencies are named in several lawsuits, some of which are for sUbstantial amounts. These claims are either adequately covered by insurance or, in the opinion of Village officials, will not result in material judgments against the Village or will not be pursued and, therefore, are not expected to have a material effect on the basic financial statements.

The Village has received proceeds from several Federal and New York State grants. Periodic audits of these grants are required and certain costs may be questioned as not being appropriate expenditures under the grant agreements. Such audits could result in the refund of grant moneys to the grantor

491 P age

VILLAGE OF ENDICOTT


agencies. Management believes that any required refunds will be immaterial. No provision has been made in the accompanying financial statements for the refund of grant monies.

NOTE 6 SUBSEQUENT EVENTS

The Village has evaluated subsequent events through the issuance date of the financial statements. The Village was awarded Federal grants from the Department of Agriculture and the Department Homeland Security totaling $471,882 and $64,000, respectively. Projects are expected to begin in the 2016-17 fiscal year.

NOTE 7 NEW ACCOUNTING PRONOUNCEMENTS

The Village has adopted all current Statements of the Governmental Accounting Standards Board (GASB) that are applicable, with the exception of GASB 45 as described the in independent accountant's report.

Future Changes in Accounting Standards:

GASB has issued Statement No. 72, Fair Value Measurement and Application, effective for the year ending June 30, 2017.

GASB has issued Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other than Pensions, effective for the year ending June 30, 2018. This Statement replaces the requirements of Statements No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions, as amended, and No. 57, OPEB Measurements by Agent Employers and Agent Multiple-Employer Plans, for OPEB. Statement NO.7 4, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, establishes new accounting and financial reporting requirements for OPEB plans.

GASB has issued Statement No. 76, The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments, effective for the year ending May 31,2017.

GASB has issued Statement No. 82, Pension Issues-an amendment of GASB Statements No. 67, No. 68, and No. 73. The objective of this Statement is to address certain issues:that have been raised with respect to Statements No. 67, Financial Reporting for Pension Plans, No.68, Accouting and Financial Reporting for Pensions, and No. 73, Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68. Specifically, this Statement addresses issues regarding (1) the presentation of payroll-related measures in required supplementary information, (2) the selection of assumptions and the treatment of deviations from the guidance in an Actuarial Standard of Practice for financial reporting purposes, and (3) the classification of payments made by employers to satisfy employee (plan member) contribution requirements. This is effective for the year ending May 31, 2018.

The Village will evaluate the impact each of these pronouncements may have on its financial statements and will implement them as applicable and when material.

NOTE 8 CHANGES IN ACCOUNTING PRINCIPLE

For the fiscal year ended May 31, 2016, the Village implemented GASB Statement No. 68 Accounting and Financial Reporting for Pensions -Amendment to GASB Statement No. 27 and GASB Statement No. 71, Pension Transition for contributions Made Subsequent to the Measurement date. The implementation of the Statements requires the Village to report as an asset and/or liability its portion of the collective net pensions asset and liability in the New York State Employees' Retirement Systems.

50 I P age

VILLAGE OF ENDICOTT


The implementation of the Statements also requires the Village to report a deferred outflow and/or inflow for the effect of the net change in the Village's proportion of the collective net pension asset and/or liability and difference during the measurement period between the Village's contributions and its proportion share of total contributions to the pension systems not included in pension expense. Also included as a deferred outflow is the Village contributions to the pension systems subsequent to the measurement date. See note 9 for the financial statement impact of implementation of the Statements.

NOTE 9 RESTATEMENT OF NET POSITION

For the fiscal year ended May 31, 2016, the Village implemented GASB Statement No. 68 Accounting and Financial Reporting for Pensions -Amendment to GASB Statement No. 27. The implementation of Statement No. 68 resulted in the reporting of an asset, deferred outflow of resources, liability and deferred inflow of resources related to the Village's participation in the New York State and Local Employees' retirement systems. The restatement resulted in deceases in the opening net position of $102,321 in the Light Fund, $114,359 in the Water Fund, $120,377 in the Sewer fund, and $606,461 in Governmental Activities.

The Village obtained a complete physical inventory of fixed assets by an independent third party appraisal company. This resulted in a restatement of opening gross fixed asset balances and accumulated depreciation. The restatement of beginning net position resulted in a decrease of $12,334,429 in governmental activities opening net position,an increase of $76,298 in the Water Fund opening net position and a decrease of $654,319 the Sewer Fund opening net position.

An interfund loan from a prior year was recorded in the incorrect fund. A restatement of beginning net position to correct the loan balance resulted in an increase of $109,815 in the Light Fund and decrease of $109,815 in the Water Fund net position. There was no effect on revenues or expenses as a result of this restatement.

A reclassification of unspent debt proceeds received in a prior year was moved from the capital projects fund to the debt service fund. This resulted in a decrease and increase in fund balance of $994,502 in the capital projects fund and debt service fund, respectively.

51 I P age

This page is intentionally left blank

521 P age

VILLAGE OF ENDICOTT REQUIRED SUPPLEMENTARY INFORMATION

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCEBUDGET (NON-GAAP BASIS) AND ACTUAL - GENERAL FUND


Budget REVENUES Original Revised Actual

Local Sources Real property taxes $ 7,900,328 $ 7,900,328 $ 7,887,814 $ Real property tax items 85,000 85,000 76,703 Nonproperty tax items 3,155,000 3,155,000 3,111,970 Departmental income 1,312,000 1,312,000 1,075,237 Intergo\ernmental charges 338,800 338,800 259,896 Use of money and property 28,700 28,700 28,913 Gifts and donations 1,020 Licenses and perm its 17,151 Fines and forfeitures 160,000 160,000 85,140 Sale of property and compensation for loss 85,100 85,100 15,927 Miscellaneous 92,000 92,000 358,929

Total Local Sources 13,156,928 13,156,928 12,918,700

State Sources 576,230 553,421 857,330 Federal sources 63,546 14,416 Total Re\enues 13,733,158 13,773,895 13,790,446

OTHER FINANCING SOURCES Transfers from other funds 74,000 74,000 74,000 Appropriated fund balance 125,000 324,027

$ 13,932,158 $ 14,171,922 $ 13,864,446

See paragraph on supplementary information included in the auditor's report

531 P age

Budget Variance

(12,514) (8,297)

(43,030) (236,763) (78,904)

213 1,020

17,151 (74,860) (69,173) 266,929

(238,228)

303,909 (49,130) 16,551


SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCEBUDGET (NON-GAAP BASIS) AND ACTUAL - GENERAL FUND (CONTINUED)


Budget Year-end EXPENDITURES Original Rev; sed Actual E ncum brances

General gO'vernment support $ 1,395,791 $ 1,393,501 $ 1,400,981 $ -Public safety 8,359,357 8,636,008 8,126,954 Transportation 2,443,425 2,443,425 2,445,410 Culture and recreation 224,120 224,120 200,580 Home and community service 397,265 362,668 497,798 Employee benefits 467,800 467,800 688,338 Debt service 644,400 644,400 644,039

Total Expenditures 13,932,158 14,171,922 14,004,100

OTHER FINANCING USES Transfers to other funds 11,808

Total Expenditures and Other Uses $ 13,932,158 $ 14,171,922 $ 14,015,908 $ -

Net change in fund balances (151,462)

Fund balance - beginning 2,559,445 Fund balance - ending $ 2,407,983


541 P age

Budget Variance

$ (7,480) 509,054

(1,985) 23,540

(135,130) (220,538)

361

167,822

(11,808)

$ 156,014


SCHEDULE OF VILLAGE'S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY AT MAY 31,2016

ERS PENSION PLAN

Village's proportion of the net pension liability (asset)

Village's proportionate share of the net pension liability (asset)

Village's cO'uered-employee payroll

Village's proportionate share of the net pension liability (asset) as a percentage of its cO'uered-employee payroll

Plan fiduciary net position as a percentage of total pension liability

PFRS PENSION PLAN

Village's proportion of the net pension liability (asset)

Village's proportionate share of the net pension liability (asset)

Village's cO'uered-employee payroll

Village's proportionate share of the net pension liability (asset) as a percentage of its cO'uered-employee payroll

Plan fiduciary net position as a percentage of total pension liability

See paragraph on supplementary schedules included in auditor's report

551 P age

$

$

$

$

5/31/2016

0.0181%

2,900,482

4,437,781

65.36%

90.70%

5/31/2016

0.1437%

4,253,827

3,668,424

115.96%

90.20%


SCHEDULE OF VILLAGE'S PENSION CONTRIBUTIONS FOR THE YEAR ENDED MAY 31, 2016

ERS PENSION PLAN

Contractually required contribution Contributions in relation to the contractually required contribution Contribution deficency (excess)

Village's covered-employee payroll

Contribution as a percentage of covered-employee payroll

PFRS PENSION PLAN

Contractually required contribution Contributions in relation to the contractually required contribution Contribution deficency (excess)

Village's covered-employee payroll

Contribution as a percentage of covered-employee payroll

$ 950,773 950,773

$4,437,781

21.425%

$1,100,000 1,100,000

$ 3,668,424

29.986%

See paragraph on supplementary schedules included in auditor's report

561 P age

PROJECT TITLE

Construct Runway 3-21 Pave Equipment and Vehicles Visitor Center GWJ Park Carousel Court NYS JCAP Traffic Signal Upgrades Carousel 80th Anniversary Chugnut Trail Chesapeake Bay Aquifer Study Carriage House Restoration Bomb Squad Equipment Waste Water Treatment Plant Stripper Well

VILLAGE OF ENDICOTT SUPPLEMENTARY INFORMATION

SCHEDULE OF PROJECT EXPENDITURES -CAPITAL PROJECTS FUND


Expenditures

Original Revised Prior Current Appropriation Appropriation Years Year

$ 1,609,400 $ 1,609,400 $1,132,266 $ 11,459 218,506 218,506 218,506

54,517 54,517 12,808 347 2,223 223 800 700

13,934 13,934 19,720 461,172 564,946 568,495 61,993

1,440 1,440 1,343 2,600 2,600 2,600

131,966 131,966 131,966 160,000 160,000 121,165 125,000 125,000 43,727 215,000 215,000 98,647 72,513

1,180,207 1,180,207 577,300 139,874 2,100,000 2,193,798 2,011,662

$ 6,275,965 $ 6,471,537 $4,587,933 $ 639,958

See paragraph on supplementary information included in the auditors report

Methods of Financing

Proceeds of Federal & Local Obligations State Aid Sources Total

PROJECT TITLE

Construct Runway 3-21 Pave $ $ 1,093,911 $ $ 1,093,911 Equipment and Vehicles 12,002 12,002 Visitor Center 104,517 104,517 GWJ Park Carousel 2,273 2,273 Court NYS JCAP 14,069 5,952 20,021 Traffic Signal Upgrades 162,850 530,432 693,282 Carousel 80th Anniversary 2,140 2,140 Chugnut Trail Chesapeake Bay Aquifer Study 11,885 11,885 Carriage House Restoration 43,727 43,727 Bomb Squad Equipment 219,506 219,506 Waste Water Treatment Plant 185,705 31,697 241,055 458,457 Stripper Well 2,193,873 2,193,873

$ 185,705 $ 1,522,033 $3,147,856 $ 4,855,594

See paragraph on supplementary information included in the auditors report

571 P age

Unexpended Total Balance

$1,143,725 $ 465,675 218,506

13,155 41,362 1,500 (1,277)

19,720 (5,786) 630,488 (65,542)

1,343 97 2,600

131,966 121,165 38,835 43,727 81,273

171,160 43,840 717,174 463,033

2,011,662 182,136

$5,227,891 $ 1,243,646

Fund

Balance 5/31/2016

$ (49,814) (206,504)

91,362 773 301

62,794 797

(2,600) (131,966) (109,280)

48,346 (258,717) 182,211

$ (372,297)

VILLAGE OF ENDICOTT SUPPLEMENTARY INFORMATION

INVESTMENT IN CAPITAL ASSETS, NET OF RELATED DEBT AT MAY 31,2016

Capital assets, net

Deduct: Bonds payable Capital lease payable Notes payable

Investment in capital assets, net of related debt

8,071,700 10,428

803,347

$ 42,787,264

(8,885,475)

$ 33,901,789


58\ P age

Cwynar & Company CertifiedPublic Accoun1an1s AProf~onalLimitedLiabi1i1y Cornreny

12 South Broad Street Suite 3 Norwich, New York 13815

(607) 334-3838 voice (607) 334-3837 fax www.cwynar.com

INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS

PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

Mayor and Board of Trustees Village of Endicott Endicott, New York

We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Village of Endicott, as of and for the year ended May 31, 2016, and the related notes to the financial statements, which collectively comprise Village of Endicott's basic financial statements and have issued our report thereon dated January 10, 2017.

Internal Control Over Financial Reporting

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

Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as described in the accompanying schedule of findings and questioned costs, we identified certain deficiencies in internal control that we consider to be material weaknesses and significant deficiencies.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis . We consider the deficiencies described in the accompanying schedule of findings and questioned costs to be material weaknesses. Audit findings 2016-1, 2012-2, and 2012-3.

A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. We consider the deficiencies described in the accompany schedule of findings and questioned costs to be significant deficiencies. Audit findings 2016-2, 2013-1 and 2012-4.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether Village of Endicott's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results

591 P age

INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS (CONTINUED)

of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Village of Endicott's Response to Findings

Village of Endicott's response to the findings identified in our audit is described in the accompanying schedule of findings and questioned costs. Village of Endicott's response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it.

Purpose of this Report

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

Norwich, New York January 10, 2017

60 I P age

VILLAGE OF ENDICOTT SCHEDULE OF FINDINGS AND RESPONSES

Reference Number: 2016-1

Condition: Audit analysis identified deficiencies in established controls over recording accounts payable and accrued liabilities. Deficiencies include:

a) There are no procedures in place to properly record accounts payable and accured liabilities as part of the financial closing procedures;

b) Accounts payable that are recorded adone based on the budget rather than the date the goods were received or services rendered.

c) Retainage payable is not recorded for construction in progress. d) Accrued liabilities are not recorded for employees days worked, but unpaid at year end.

Effect: Deficiencies in established controls over the tracking and recording of payables resulted in a number of material and immaterial misstatements in the general ledger.

Recommendation: The Village should perform a year end review especially in the three month period following year-end to identify invoices that are paid subsequent to year end, but relate to goods received or services rendered in the prior year. A journal entry should be prepared to record accounts payable and accrued liabilities identified during the review process. Purchase orders can be used to ensure purchases are assigned to the appropriate budget year.

Management Response: We recognize these deficiencies and management will perform an analysis of subsequent cash disbursements to identifiy and record unrecorded payables.


Condition: Audit analysis identified deficiencies in established controls over capital projects. Deficiencies include:

a) Open capital projects on an individual project basis lack a set of self balancing accounting records;

b) Closed capital projects lack proper tracking to identify whether a local share needs to be transferred in prior to closing or whether project surplus needs to be transferred out to the debt service fund or other originating fund.

Effect: Old projects may remain on the books as having assets and fund balance when the project has been closed out The debt service fund, general fund and enterprise funds expenditures and/or revenues may be understated for projects requiring a local share or having a surplus.

Recommendation: We recommend that the Village utilize the project management functions of it's accounting software to set up and track capital projects. This function is also useful when applied to grant management even if the funds are not used in a capital project.

Management Response: We recognize these deficiencies and in the future management will perform an analysis of open capital projects and will look into utilizing available project management functions within the current accounting software.

61 I P age



Condition: Audit analysis identified deficiencies in established controls over the capitalization of certain leases. Deficiencies included: a) Leases are not analyzed prior to commencement to determine whether they are capital leases; b) Understatement of capital assets and long-term debt.

Effect: Deficiencies in established controls over determining capital leases resulted in material and immaterial misstatements in the general ledger.

Recommendation: We recommend that all future equipment leases be analyzed prior to the commencement of the lease term in order to determine the required accounting treatment. Doing so will avoid potentially significant unexpected year-end adjustments to the financial statements. Also, it is more efficient to determine the proper accounting at the start than to spend time spend time making adjustments at year end.

Management Response: We recognize these deficiencies and in the future management will perform an analysis of each lease at the commencement of the lease to determine proper reporting.


Condition: Audit analysis identified deficiencies in established controls over the tracking and recording of longterm liabilities. Deficiencies included: a) Instances where the accounting records did not properly reflect a liability recorded for the

accumulated liability for annual required contributions; b) Instances where the accounting records did not properly reflect a liability recorded for

compensated absences; c) Instances where the accounting records did not properly reflect a liability recorded for retirement

system contributions due; d) Note disclosures did not include required disclosures about postemployment benefit plans and

actuarial calculations; e) Understatement of employee benefit expenses due to not accruing the increase in these

liabilities.

Effect: Deficiencies in established controls over the tracking and recording of other postemployment benefit liabilities resulted in a number of material misstatements in the general ledger.

Recommendation: The Village should engage the services of an actuary to calculate the liability in accordance with GASB No. 45. Supporting documentation and schedules should be reconciled to the general ledger.

Management Response: We have engaged the services of an actuary to calculate the unfunded actuarial accrued liability and annual required contribution amounts to present on next year's financial statement.

621 P age



Condition: Audit analysis identified deficiencies in established controls over the tracking and recording of receivables. Currently there is no process in place to ensure that all revenue relating to the prior fiscal year and received within 90 days after yearend is recorded as a receivable. There is no reconciliation of accounts receivable sub-ledgers to the general ledger.

Effect: Deficiencies in established controls over the tracking and recording of receivables resulted in a number of material and immaterial misstatements in the general ledger.

Recommendation: The Village should develop procedures that allows for the proper recording of receivables. A yearend review of subsequent receipts should be performed to determine whether to include or exclude receipts as receivables. Accounts receivable sub-ledgers should be routinely reconciled to the general ledger for program service fee billings.

Management Response: We recognize these deficiencies and continue to use them as an opportunity to implement effective improvements to the tracking and recording of receivables.


Condition: Certain funds spend more than their available cash balance during the year and the Village reports these funds as having a negative cash balance instead of recording interfund loans for the amount paid on behalf of a fund by other funds.

Effect: Cash and interfund balances are not properly reflected in the financial statement and require adjustment. Interfund balances remain outstanding for longer than one year and no interest is charged on interfund loans.

Recommendation: The Village should develop procedures that allows for the proper recording of cash balances and intefund receivables and payables.

Management Response: We recognize these deficiencies and continue to use them as an opportunity to implement effective improvements to the cash balance and interfund loans.

631 P age

APPENDIX - D

FORM OF BOND COUNSEL OPINION

August 29, 2017

Village of Endicott,

County of Broome,

State of New York

Re: Village of Endicott, Broome County, New York


Ladies and Gentlemen:

We have been requested to render our opinion as to the validity of a $2,345,000 Bond Anticipation Notes, 2017 (the

“Obligation”), of the Village of Endicott, Broome County, New York (the “Obligor”), dated August 29, 2017, numbered 1, of the

denomination of $2,345,000, bearing interest at the rate of ____% per annum, payable at maturity, and maturing August 29, 2018.

We have examined:

(1) the Constitution and statutes of the State of New York;

(2) the Internal Revenue Code of 1986, including particularly Sections 103 and 141 through 150 thereof, and the

applicable regulations of the United States Treasury Department promulgated thereunder (collectively, the “Code”);

(3) an arbitrage certificate executed on behalf of the Obligor which includes, among other things, covenants, relating

to compliance with the Code, with the owners of the Obligation that the Obligor will, among other things, (i) take all actions on its

part necessary to cause interest on the Obligation not to be includable in the gross income of the owners thereof for Federal income

tax purposes, including, without limitation, restricting, to the extent necessary, the yield on investments made with the proceeds of

the Obligation and investment earnings thereon, making required payments to the Federal government, if any, and maintaining

books and records in a specified manner, where appropriate, and (ii) refrain from taking any action which would cause interest on

the Obligation to be includable in the gross income of the owners thereof for Federal income tax purposes, including, without

limitation, refraining from spending the proceeds of the Obligation and investment earnings thereon on certain specified purposes

(the “Arbitrage Certificate”); and

(4) a certificate executed on behalf of the Obligor which includes, among other things, a statement that compliance

with such covenants is not prohibited by, or violative of, any provision of local or special law, regulation or resolution applicable

to the Obligor.

We also have examined a certified copy of proceedings of the finance board of the Obligor and other proofs authorizing

and relating to the issuance of the Obligation, including the form of the Obligation. In rendering the opinions expressed herein we

have assumed (i) the accuracy and truthfulness of all public records, documents and proceedings, including factual information,

expectations and statements contained therein, examined by us which have been executed or certified by public officials acting

within the scope of their official capacities, and have not verified the accuracy or truthfulness thereof, and (ii) compliance by the

Obligor with the covenants contained in the arbitrage certificate. We also have assumed the genuineness of the signatures

appearing upon such public records, documents and proceedings and the certifications thereof.

In our opinion:

(a) The Obligation has been authorized and issued in accordance with the Constitution and statutes of the State of New York and

constitutes a valid and legally binding general obligation of the Obligor, all the taxable real property within which is subject to

the levy of ad valorem taxes to pay the Obligation and interest thereon, subject to applicable statutory limitations; provided,

however, that the enforceability (but not the validity) of the Obligation: (i) may be limited by any applicable bankruptcy,

insolvency or other law now existing or hereafter enacted by said State or the Federal government affecting the enforcement of

creditors' rights, and (ii) may be subject to the exercise of judicial discretion in appropriate cases.

(b) The Obligor has the power to comply with its covenants with respect to compliance with the Code as such covenants relate to

the Obligation; provided, however, that the enforceability (but not the validity) of such covenants may be limited by any

applicable bankruptcy, insolvency or other law now existing or hereafter enacted by said State or the Federal government

affecting the enforcement of creditors' rights.

(c) Interest on the Obligation is excluded from gross income for federal income tax purposes under Section 103 of the Internal

Revenue Code of 1986, and is exempt from personal income taxes imposed by the State of New York and any political

subdivision thereof (including The City of New York). Interest on the Obligation is not a specific preference item for purposes

of the federal individual or corporate alternative minimum taxes, although it is included in adjusted current earnings when

calculating corporate alternative minimum taxable income. We express no opinion regarding other tax consequences related to

the ownership or disposition of, or the amount, accrual or receipt of interest on, the Obligation.

Certain agreements, requirements and procedures contained or referred to in the Arbitrage Certificate and other relevant

documents may be changed and certain actions (including, without limitation, economic defeasance of the Obligation) may be

taken or omitted under the circumstances and subject to the terms and conditions set forth in such documents.

The opinions expressed herein are based on an analysis of existing laws, regulations, rulings and court decisions and

cover certain matters not directly addressed by such authorities. Such opinions may be affected by actions taken or omitted or

events occurring after the date hereof. Accordingly, this opinion is not intended to, and may not, be relied upon in connection with

any such actions, events or matters. Our engagement with respect to the Obligation has concluded with their issuance, and we

disclaim any obligation to update this opinion. We have assumed, without undertaking to verify, the accuracy of the factual

matters represented, warranted or certified in the documents. Furthermore, we have assumed compliance with all covenants and

agreements contained in the Arbitrage Certificate, including without limitation covenants and agreements compliance with which

is necessary to assure that future actions, omissions or events will not cause interest on the Obligation to be included in gross

income for federal income tax purposes. We call attention to the fact that the rights and obligations under the Obligation and the

Arbitrage Certificate and their enforceability may be subject to bankruptcy, insolvency, reorganization, arrangement, fraudulent

conveyance, moratorium or other laws relating to or affecting creditors’ rights, to the application of equitable principles, to the

exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against municipal corporations such as

the Obligor in the State of New York. We express no opinion with respect to any indemnification, contribution, penalty, choice of

law, choice of forum, choice of venue, or waiver provisions contained in the foregoing documents.

The scope of our engagement in relation to the issuance of the Obligation has extended solely to the examination of the

facts and law incident to rendering the opinions expressed herein. Such opinions are not intended and should not be construed to

express or imply any conclusion that the amount of real property subject to taxation within the boundaries of the Obligor, together

with other legally available sources of revenue, if any, will be sufficient to enable the Obligor to pay the principal of or interest on

the Obligation as the same respectively become due and payable. We have not examined, reviewed or passed upon the accuracy,

completeness or fairness of any factual information which may have been furnished to any purchaser of the Obligation by or on

behalf of the Obligor and, accordingly, we express no opinion as to whether the Obligor, in connection with the sale of the

Obligation, has made any untrue statement of a material fact or omitted to state a material fact necessary in order to make any

statements made, in the light of the circumstances under which they were made, not misleading.

Very truly yours,

VILLAGE OF ENDICOTT - Fiscal Advisors · 2017-08-10 · Village of Endicott to give any information...

Documents

Transcript of VILLAGE OF ENDICOTT - Fiscal Advisors · 2017-08-10 · Village of Endicott to give any information...