HomeMy WebLinkAbout2025 TOWN OF SOUTHOLD, NEW YORK
FINANCIAL STATEMENTS
AND SUPPLEMENTARY INFORMATION
(WITH INDEPENDENT AUDITORS' REPORT)
For the Year Ended December 31, 2025
FINANCIAL
SECTION
TABLE OF CONTENTS
FINANCIAL SECTION
Page
IndependentAuditors' Report...................................................................................................................... 1-4
REQUIRED SUPPLEMENTARY INFORMATION
Management's Discussion and Analysis..................................................................................................... 5-17
BASIC FINANCIAL STATEMENTS
Government-Wide Financial Statements:
Statementof Net Position.......................................................................................................................... 18
Statementof Activities................................................................................................................................ 19
Fund Financial Statements:
Governmental Fund Financial Statements:
Balance Sheet and Reconciliation of the Governmental Funds Balance Sheet to
the Statement of Net Position............................................................................................ 20-21
Statement of Revenues, Expenditures, and Changes in Fund Balances and
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures
and Changes in Fund Balances to the Statement of Activities.......................................................... 22-23
Proprietary Fund Financial Statements
Statementof Net Position....................................................................................................................... 24
Statement of Revenues, Expenses, and Changes in Fund Net Position............................................. 25
Statementof Cash Flows........................................................................................................................ 26
Fiduciary Fund Financial Statements
Statement of Fiduciary Net Position....................................................................................................... 27
Statement of Changes in Fiduciary Net Position................................................................................... 28
Notes to Financial Statements...................................................................................................................... 29-66
REQUIRED SUPPLEMENTARY INFORMATION OTHER THAN
MANAGEMENT'S DISCUSSION AND ANALYSIS
Schedule of Revenues, Expenditures, and Changes in Fund Balance-Budget and Actual:
GeneralFund.............................................................................................................................................. 67
HighwayFund............................................................................................................................................. 68
Community Preservation Fund.......................................................................................... 69
Schedule of Changes in the Town's Total Other Postemployment Benefits Liability and
RelatedRatios............................................................................................................... 70
Schedule of Pension Contributions....................................................................................... 71
Schedule of Proportionate Share of the Net Pension Liability(Asset)............................................ 72
TABLE OF CONTENTS (COOtDUed)
OTHER SUPPLEMENTARY INFORMATION
Page
Combining Fund Statements:
Nonmajor Governmental Funds:
CumbiningBa|anmaGheet---------------------------------------. 73
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6CONNOR
DAVIES
ACCOUNTANTS AND ADVISORS
Independent Auditors' Report
The Honorable Supervisor and Town Board
of the Town of Southold, New York
Report on the Audit of the Financial Statements
Disclaimer of Opinion and Unmodified Opinions
We have audited the fiD8DCi8| St8t8OOeOtS of the 0OvR[O0eDt8| 8C1ivi|iHS. business-type 8CtiViti9S,
each major fund and the aggregate remaining fund information of the Town Of Southold, New York
/''TOwn''>. as of and for the year ended [}9S8mb8r31. 2025. and the related notes to the financial
statements. We were not engaged to audit the aggregate discretely presented component units of
the Town. Together these financial St8LBrn8ntS CO||SCtive|y comprise the |FOvvn'S basic fiD8DCi8|
statements as listed in the table of contents.
We did not audit the fiO8OCi8| statements of the Southold LOC8| D8V8|Op0eOt COrpO[8tiOD, which is
both 8 major fUnd. 8nd8CCOUntSfOr10096Ofth88SSHtS. n8tpOSiLiOn, 8ndn8v8nU8SOfth8bUSinHSS-
b/pg activities as of December 31. 2025. Those statements were audited by other auditors whose
report has been furnished to ue, and our opinion, insofar as it relates to the amounts included for
Southold Local Development Corporation, is based solely on the report of the other auditors.
Disclaimer of Opinion on the Aggregate Discretely Presented Component Units
We do not express an opinion on the financial statements of the aggregate diauneia|y presented
component units of the Town. Because of the significance of the matter described in the Basis for
Disclaimer ofOpinion on the Aggregate 0ioongte|y Presented Component Units section of our nepurt,
vve have not been able to obtain sufficient appropriate audit evidence to provide a basis for anaudit
opinion on the financial statements of the aggregate discretely presented component units.
Unmodified Opinions on Governmental Activities, Business-type Activities, Each Major Fund,
and Aggregate Remaining Fund Information
In Our 0piniOn, the financial statements of the governmental octiviUes, business-type activities, each
major fund, and the aggregate [eRl@iDiOQ fund iOfO[[D@dOD present fairly, in all mn@t8[i@| [eSpgCtS, the
respective financial position of the governmental activities, business-type activities, each majorfund'
and the aggregate remaining fund information of the Town as Of December 31. 2025. and the
respective changes in fiD8DCiG| p0SiUOO and, vVhe[8 @pp|iC@b|8' C@Sh flows thereof for the year then
ended in accordance with accounting principles generally accepted in the United States of America.
PKFO'CONNORDAV|ES.LLP
878 Veterans Memorial Highway,4m Floor, Hauppauge, NY117G8|Tel:x&1434goOO| Fax:§31.434go18|www.pNodrom
par O'Connor Davies,up/oo member firm of the pxr International Limited network of legally independent firms and does not accept any responsibility
or liability for the actions or inactions on the part of any other individual member firm or firms.
-1-
Basis for Disclaimer of Opinion on the Aggregate Discretely Presented Component Units
The financial statements of the Fishers Island Ferry District, Fishers Island Waste Management
District, Cutchogue-New Suffolk Park District, Southold Park District, Orient-East Marion Park
District, Mattituck Park District, and Orient Mosquito District have not been audited, and we were
unable to obtain sufficient appropriate audit evidence regarding the financial information of these
component units. The financial activities of these component units are included in the Town's basic
financial statements as part of the aggregate discretely presented component units and represent
100% of the assets, net position, and revenues, of the Town's aggregate discretely presented
component units. Accordingly, we were unable to determine whether any adjustments might have
been necessary with respect to the financial statements of the aggregate discretely presented
component units.
Basis for Unmodified Opinions
We conducted our audit of the governmental activities, business-type activities, each major fund and
the aggregate remaining fund information in accordance with auditing standards generally accepted
in the United States of America ("GAAS") and the standards applicable to financial audits contained
in Government Auditing Standards, issued by the Comptroller General of the United States. Our
responsibilities under those standards are further described in the Auditors' Responsibilities for the
Audit of the Financial Statements section of our report. We are required to be independent of the
Town, and to meet our other ethical responsibilities, in accordance with the relevant ethical
requirements relating to our audit. We believe that the audit evidence we have obtained and the
audit evidence obtained by other auditors is sufficient and appropriate to provide a basis for our
unmodified audit opinions.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with accounting principles generally accepted in the United States of America, and for
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.
In preparing the financial statements, management is required to evaluate whether there are
conditions or events, considered in the aggregate, that raise substantial doubt about the Town's
ability to continue as a going concern for twelve months beyond the financial statement date,
including any currently known information that may raise substantial doubt shortly thereafter.
Auditors'Responsibilities for the Audit of the Financial Statements
Auditors' Responsibilities for the Audit of the Aggregate Discretely Presented Component Units
Our responsibility is to conduct an audit of the Town's financial statements in accordance with
generally accepted auditing standards and to issue an auditor's report. However, because of the
matter described in the Basis for Disclaimer of Opinion on the Aggregate Discretely Presented
Component Units section of our report, we were not able to obtain sufficient appropriate audit
evidence to provide a basis for an audit opinion on the financial statements of the aggregate
discretely presented component units.
We are required to be independent of the Town and to meet our other ethical responsibilities, in
accordance with the relevant ethical requirements relating to our audit.
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Auditors'Responsibilities for the Audit of the Financial Statements (continued)
Auditors' Responsibilities for the Audit of the Governmental Activities, the Business-type Activities,
Each Major Fund, and the Aggregate Remaining Fund Information.
Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's
report that includes our opinions. Reasonable assurance is a high level of assurance but is not
absolute assurance and therefore is not a guarantee that an audit conducted in accordance with
generally accepted auditing standards will always detect a material misstatement when it exists. The
risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control. Misstatements are considered material if there is a substantial likelihood
that, individually or in the aggregate, they would influence the judgment made by a reasonable user
based on the financial statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material misstatement of the financial statements, whether
due to fraud or error, and design and perform audit procedures responsive to those risks.
Such procedures include examining, on a test basis, evidence regarding the amounts and
disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audit 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 Town's internal control. Accordingly, no such opinion
is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluate the overall
presentation of the financial statements.
• Conclude whether, in our judgement, there are conditions or events, considered in the
aggregate, that raise substantial doubt about the Town's ability to continue as a going
concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit, significant audit findings, and certain internal
control-related matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that Management's
Discussion and Analysis and the schedules included under Required Supplementary Information in
the accompanying table of contents be presented to supplement the basic financial statements.
Such information is the responsibility of management and, 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 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.
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Supplementary Information
Our audit was conducted for the purpose of forming opinions on the governmental activities, the
business-type activities, each major fund, and the aggregate remaining fund information; and we
were not engaged to audit the aggregate discretely presented component units, of the Town, which
collectively comprise the Town's basic financial statements. The combining fund financial
statements are presented for the purposes of additional analysis and are not a required part of the
basic financial statements. Because of the significance of the matter described in the Basis for
Disclaimer of Opinion section of our report, it is inappropriate to and we do not express an opinion
on the combining fund financial statements.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated September
30, 2026 on our consideration of the Town's internal control over financial reporting and on our tests of
its compliance with certain provisions of laws, regulations, contracts and grant agreements and other
matters. The purpose of that report is solely to describe the scope of our testing of internal control
over financial reporting and compliance and the results of that testing, and not to provide an opinion on
the effectiveness of the Town's internal control over financial reporting or on compliance. That report
is an integral part of an audit performed in accordance with Government Auditing Standards in
considering the Town's internal control over financial reporting and compliance. That report is issued
as part of the separately issued Single Audit report.
P ! Z_
PKF O'Connor Davies, LLP
Hauppauge, New York
September 30, 2026
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REQUIRED SUPPLEMENTARY INFORMATION
Management's Discussion and Analysis
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2025
As management of the Town of Southold, New York (the "Town"), we offer readers of the financial statements
this narrative overview and analysis of the financial activities for the year ended December 31, 2025.
FINANCIAL HIGHLIGHTS
• The assets and deferred outflows of the primary government exceeded its liabilities and deferred
inflows at the close of 2025 by $174,759,368 (net position), $174,610,961 for the governmental
activities, and $148,407 for the business-type activities.
• The primary government's net position increased by $21,999,352. The net position of the
governmental activities increased $22,007,431, while the business-type activities decreased
$8,079.
• The Town is committed to provide current and postemployment benefits to its employees in the
form of pensions and healthcare. As a result, the Town has recognized substantial liabilities in the
government-wide financial statements for these benefits. As of December 31, 2025, the Town had
liabilities of$6,597,753 and $10,729,429 for its proportionate share of the net pension liability of the
New York State and Local Employees' Retirement System ("ERS") and the New York State and
Local Police and Fire Retirement System ("PFRS"), respectively, recorded in accordance with the
provisions of GASB Statement No. 68, "Accounting and Financial Reporting for Pensions". The
Town had a liability of $120,871,514 for other postemployment benefits recorded in accordance
with the provisions of Governmental Accounting Standards Board ("GASB") Statement No. 75,
"Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions" ("OPEB").
More detailed information about the Town's pension reporting and OPEB is presented in Note C.6
and C.7, respectively, in the notes to financial statements.
• As of the close of 2025, the Town's governmental funds reported combined ending fund balances
of$99,552,986. Of this amount, $1,559,749 is not in spendable form or is required to remain intact.
The remaining $97,993,237 or approximately 98.4% of total fund balance is in spendable form with
various levels of spending constraint: restricted, committed, assigned, or unassigned (see Note
B.2).
• At the end of 2025, the Town's total fund balance for the General Fund was $29,245,781, an
increase of$1,131,399 or 4.0% from the prior year. The assigned and unassigned fund balance for
the General Fund was $27,329,457 or 61.6% of total General Fund expenditures and other uses.
• The Town's total long-term bonded debt was $19,850,965, excluding premiums of $995,895, a
decrease of 12.4%from the prior year.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the Town's basic financial statements.
The Town's basic financial statements comprise these components: (1) government-wide financial statements,
(2) fund financial statements, and (3) notes to basic financial statements. This report also contains
supplementary information in addition to the basic financial statements themselves.
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TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2025
OVERVIEW OF THE FINANCIAL STATEMENTS (continued)
Government-wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad overview of the
Town's finances, in a manner similar to a private-sector business. The intent of the government-wide financial
statements is to give the reader a long-term view of the Town's financial condition.
The Statement of Net Position presents financial information on all of the Town's assets, deferred outflows of
resources, liabilities, and deferred inflows of resources with the difference between the four reported as net
position. This statement combines and consolidates the Town's current financial resources with capital assets
and long-term obligations. Over time, increases or decreases in the Town's net position is one indicator of
whether its financial health is improving or deteriorating. You will need to consider other nonfinancial factors,
however, such as changes in the Town's property tax base and the condition of the Town's buildings, roads,
drainage and other assets to assess the overall health of the Town.
The Statement of Activities presents information showing how the Town's net position changed during the
most recent year. Revenues and expenses are reported by activity to give the reader an understanding of how
each of the Town's activities are being supported. All changes in net position are reported as soon as the
underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus,
revenues and expenses are reported in this statement for some items that will only result in cash flows in
future periods. This method is known as the accrual basis of accounting and is different from the modified
accrual basis of accounting used in the Town's fund financial statements.
The Town's government-wide financial statements include both the governmental and business-type activities
of the Town itself(known as the primary government) and of its legally separate component units for which the
Town is financially accountable. Financial information for all component units is reported separately (discretely
presented)from the financial information presented for the primary government. Each of the government-wide
financial statements distinguishes functions of the Town that are principally supported by taxes and
intergovernmental revenues (governmental activities)from other functions that are intended to recover all or a
significant portion of their costs through user fees and charges (business-type activities). The business-type
activities of the Town includes the activities of the Southold Local Development Corporation ("SLDC").
Governmental Activities - The Town's basic services are reported here, including: general government
support; public safety; public health; transportation; economic assistance and opportunity; culture and
recreation and home and community services. Property taxes, mortgage taxes, franchise fees, fines, and state
and federal grants finance these activities. The Town also charges fees to help cover the cost of certain
services it provides.
Business-type Activities—The activities of the SLDC are reported here.
Component Units — Discretely presented component units are legally separate organizations for which the
Town is either financially accountable, or the nature and significance of their relationship with the Town is such
that exclusion would cause the Town's financial statements to be misleading or incomplete. All of these
entities are reported in a separate column in the government-wide statements. The Town also includes one
blended component unit, the SLDC, that is in substance, a part of the Town's operations. The SLDC is
reported as a proprietary fund.
Information on separately issued financial statements is shown in Note E to the financial statements.
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TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31. 2025
OVERVIEW 0F THE FINANCIAL STATEMENTS (continued)
Fund Financial Statements
The fund financial statements focus on current available resources and are organized and operated on the
basis of fundo, each of which is defined as an accounting entity with a self-balancing set of accounts
established for the purpose of carrying on specific or attaining certain objectives in accordance with special
negu|atinns, restrictions or limitations. The Town. like other governments, uses fund accounting to ensure and
demonstrate compliance with finance-related legal requirements. All of the funds of the Town can be divided
into three categories: governmental funds, proprietary funds, and fiduciary funds.
Governmental Funds
The Town'o activities are reported in governmental funds. Governmental funds are used to account for
essentially the same functions reported as governmental activities in the government-wide financial
statements. Hovvover, unlike the government-wide financial otatementn, governmental fund financial
statements focus on near-term inflows and outflows of spendable renounceo, as well as on balances of
spendable resources available at the end of the year. Such information may be useful in evaluating a
government's near-term financial requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial statements, it
is useful to compare the information presented for governmental funds with similar information presented for
governmental activities in the government-wide financial statements. By doing on, readers may better
understand the long-term effect of the Tovvn's near-term financial decisions. Both the governmental fund
balance sheet and governmental fund statement of revenues, exponditureo, and changes in fund balances
provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.
The Town maintains bwo|vo (12) individual governmental funds. Information is presented separately in the
governmental fund balance sheet and in the governmental fund statement nfrevenues, expendituron, and
changes in fund balances for the four (4) major funds. The General Fund, Highway Fund, Capital Projects
Fund, and the Community Preservation Fund are reported as major funds. Data from the eight (8) other
governmental funds are combined into a single, aggregated presentation.
The Town adopts an annual appropriated budget for its general and special revenue funds, but not the Capital
Projects Fund, and special grant fund. A budgetary comparison schedule for the General Fund, Highway Fund,
and Community Preservation Fund can be found in the section labeled "Required Supplementary Information
Other Than Management's Discussion and Ana|ysis^
Proprieta�y Funds
The Town maintains one type of proprietary fund, an enterprise fund. Enterprise funds are used to report the
same functions presented as business-type activities in the government-wide financial statements. The Town
uses an enterprise fund to account for the 8LUC. Proprietary funds provide the same type of information an
the government-wide financial stetements, only in more detail. The proprietary fund financial statements can
be found in the"Basic Financial Sbahomants"section of this report.
Fiduciary Funds
Fiduciary funds are used to account for resources held for the benefit of parties outside the government and as
the resources are not available to support the Tuwn'o pnogramo, these funds are not reflected in the
government-wide financial statements. The Town has one fiduciary fund, a custodial fund' which primarily
accounts for real property taxes billed and collected on behalf ofother munioipa|idan, and bail collected and
held on behalf ofbailees.
Notes bmthe Financial Statements
The notes provide additional information that in essential toafull understanding uf the data provided in the
government-wide and fund financial statements. The notes to the financial statements can be found following
the basic financial statements.
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TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2025
OVERVIEW OF THE FINANCIAL STATEMENTS (continued)
Other information
In addition to the basic financial statements and accompanying notes, this report also presents required
supplementary information concerning the Town's budget to actual comparisons for the major governmental
funds, and progress in funding its obligation to provide pension and other postemployment benefits to its
employees. Required supplementary information immediately follows the notes to the financial statements.
The combining nonmajor governmental funds financial statements are presented immediately following the
required supplementary information.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
As noted earlier, net position may serve over time as a useful indicator of a government's financial position. In the
case of the Town, assets and deferred outflows of resources exceeded liabilities and deferred inflows by
$174,759,368 at the close of the most recent year.
Condensed Statement of Net Position
Primary Government
Decem her 31,
Governmental Activities Business-type Activities Total
2025 2024 2025 2024 2025 2024
Assets
Current and other assets $ 114,824,044 $ 104,130,528 $ 153,207 $ 156,486 $ 114,977,251 $ 104,287,014
Noncurrent and other assets 1,548,659 1,952,457 1,548,659 1,952,457
Capital assets 238,510,882 228,819,340 238,510,882 228,819,340
Total Assets 354,883,585 334,902,325 153,207 156,486 355,036,792 335,058,811
Deferred Outflows of Resources 52,659,588 34,395,275 -0- -0- 52,659,588 34,395,275
Liabilities
Current and other liabilities 15,932,012 15,177,471 4,800 15,936,812 15,177,471
Long-term liabilities 172,313,908 156,001,305 172,313,908 156,001,305
Total Liabilities 188,245,920 171,178,776 4,800 -0- 188,250,720 171,178,776
Deferred Inflows of Resources 44,686,292 45,515,294 -0- -0- 44,686,292 45,515,294
Net Position
Net investment in capital assets 205,624,628 197,100,612 205,624,628 197,100,612
Restricted 54,220,949 41,001,787 54,220,949 41,001,787
Unrestricted(deficit) (85,234,616) (85,498,869) 148,407 156,486 (85,086,209) (85,342,383)
Total Net Position $ 174,610,961 $ 152,603,530 $ 148,407 $ 156,486 $ 174,759,368 $ 152,760,016
Total assets and deferred outflows of resources of the primary government as of December 31, 2025 were
$407,696,380, an increase of $38,242,294 from the prior year. Total liabilities and deferred inflows of
resources as of December 31, 2025 were $232,937,012, which represents an increase of $16,242,942 from
December 31, 2024. This resulted in a net position of $174,759,368, an increase in net position of
$21,999,352. Of the Town's net position, $205,624,628 was invested in capital assets and $54,220,949 was
restricted for community preservation and community housing, leaving an unrestricted deficit of$85,086,209.
By far, the largest portion of the Town's net position is $205,624,628 which reflects its investment in capital
assets (i.e. land, construction in progress, buildings, machinery and equipment, intangibles, and infrastructure)
less any related debt used to acquire those assets that is still outstanding. The Town uses these capital assets
to provide services to citizens; consequently, these assets are not available for future spending. Although the
Town's 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 will not be
used to liquidate these liabilities.
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TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2025
GOVERNMENT-WIDE FINANCIAL ANALYSIS (continued)
The deficit in the unrestricted net position does not necessarily indicate fiscal stress. At the end of the current
year, the Town is able to report a positive change in the categories of investment in capital assets, and
restricted net position. The deficit balance in unrestricted arose primarily due to long-term liabilities, which
includes other postemployment benefits, net pension liability, leases payable, subscription-based information
technology arrangements, compensated absences, claims and judgments, and landfill closure and postclosure
costs that will be funded through future budgetary appropriations when they become payable in future periods.
Statement of Activities
Primary Government
For the years ended December 31, Governmental Activities Business-type Activities Total
2025 2024 2025 2024 2025 2024
Program Revenues
Charges for services $ 6,329,324 $ 6,496,217 $ 12,380 $ 11,962 $ 6,341,704 $ 6,508,179
Operating grants and contributions 904,803 946,927 904,803 946,927
Capital grants and contributions 5,683,777 3,823,510 5,683,777 3,823,510
12,917,904 11,266,654 12,380 11,962 12,930,284 11,278,616
General Revenues
Real property taxes 44,536,735 41,479,855 44,536,735 41,479,855
Other real property tax items 466,144 452,476 466,144 452,476
Non-property tax items 16,672,801 16,386,835 16,672,801 16,386,835
Interest earnings 3,501,531 3,442,069 4,536 5,067 3,506,067 3,447,136
State aid-unrestricted 2,009,015 1,441,752 2,009,015 1,441,752
Other 223,583 394,303 223,583 394,303
67,409,809 63,597,290 4,536 5,067 67,414,345 63,602,357
Total Revenues 80,327,713 74,863,944 16,916 17,029 80,344,629 74,880,973
Program Expenses
General government support 15,668,368 15,065,183 - 15,668,368 15,065,183
Public safety 23,875,470 23,635,386 23,875,470 23,635,386
Public health 43,300 43,300 43,300 43,300
Transportation 9,856,939 8,691,355 9,856,939 8,691,355
Economic assistance and opportunity 2,207,448 2,439,498 24,995 20,175 2,232,443 2,459,673
Culture and recreation 816,251 661,182 816,251 661,182
Home and community services 8,976,602 7,996,693 8,976,602 7,996,693
Interest on debt 1,248,856 1,188,576 1,248,856 1,188,576
Total Expenses 62,693,234 59,721,173 24,995 20,175 62,718,229 59,741,348
Change in net position before transfers 17,634,479 15,142,771 (8,079) (3,146) 17,626,400 15,139,625
Transfers 4,372,952 4,372,952
Change in net position $ 22,007,431 $ 15,142,771 $ (8,079) $ (3,146) $ 21,999,352 $ 15,139,625
Net position, from all combined activities, increased by$21,999,352 in the current year. The governmental
activities increased by$22,007,431 and the business-type activities decreased by$8,079.
Key elements of the changes in governmental activities were:
• Overall program revenues increased by $1,651,250 from the prior year. This was primarily driven by an
increase in capital grants and contributions of $1,860,267 relating to federal grants for airport
improvements.
• General revenues increased by $3,812,519 from the prior year. This was primarily due to the increase in
property taxes of $3,056,880 due to an increase in the tax levy, and an increase in mortgage tax of
$465,309.
• Overall expenses increased by$2,972,061 due to increases in general government support of$603,185,
transportation expense of$1,165,584 and home and community services of$979,909.
There were no significant changes in the business-type activities.
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TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2025
GOVERNMENT-WIDE FINANCIAL ANALYSIS (continued)
Total Revenue(Cost)of Services
Net Cost of Services for Primary Government
For the years ended December 31,
Total Cost of Services Program Revenues Net(Cost)of Services
2025 2024 2025 2024 2025 2024
Governmental activities:
General government support $ 15,668,368 $ 15,065,183 $ 1,487,220 $ 1,871,017 $ (14,181,148) $ (13,194,166)
Public safety 23,875,470 23,635,386 1,900,639 1,569,095 (21,974,831) (22,066,291)
Public health 43,300 43,300 7,500 (43,300) (35,800)
Transportation 9,856,939 8,691,355 4,448,454 3,059,997 (5,408,485) (5,631,358)
Economic assistance
and opportunity 2,207,448 2,439,498 734,172 466,366 (1,473,276) (1,973,132)
Culture and recreation 816,251 661,182 138,054 332,338 (678,197) (328,844)
Home and community
services 8,976,602 7,996,693 4,209,365 3,960,341 (4,767,237) (4,036,352)
Interest on debt 1,248,856 1,188,576 (1,248,856) (1,188,576)
Total governmental activities $ 62,693,234 $ 59,721,173 $ 12,917,904 $ 11,266,654 $ (49,775,330) $ (48,454,519)
Business-type activities:
Economic assistance
and opportunity $ 24,995 $ 20,175 $ 12,380 $ 11,962 $ (12,615) $ (8,213)
Total business-type activities $ 24,995 $ 20,175 $ 12,380 $ 11,962 $ (12,615) $ (8,213)
Total primary government $ 62,718,229 $ 59,741,348 $ 12,930,284 $ 11,278,616 $ (49,787,945) $ (48,462,732)
The total cost of all activities this year was$62,718,229 ($62,693,234 in the governmental activities and $24,995 in
the business-type activities). The net cost of these services after being subsidized by program revenues of
$12,930,284 was$49,787,945.
Expenses and Program Revenues-Governmental Activities for the Year Ended December 31, 2025
$30,000,000
$25,000,000
®Expenses
$20,000,000 ®Program Revenues
$15,000,000
$10,000,000-
� � ti
i
$5,000,000
$0
General government Public safety Public health Transportation Economic assistance and Culture and recreation Home and community Interest on debt
support opportunity service s
-10-
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2025
GOVERNMENT-WIDE FINANCIAL ANALYSIS (continued)
Revenues by Source-Governmental Activities for the Year Ended December 31, 2025
Operating grants and Capital grants and
contributions contributions
1% 7%
Other general
revenues
5%
Non-property tax �
items
21% 3 Real property
taxes
1 55%
Charges for
services State aid-
8% unrestricted
3%
FINANCIAL ANALYSIS OF THE TOWN'S FUNDS
Governmental Funds
The focus of the Town's governmental funds is to provide information on near-term inflows, outflows, and
balances of spendable resources. Such information is useful in assessing the Town's financing requirements.
In particular, spendable fund balance may serve as a useful measure of a government's net resources
available for spending at the end of the year.
• Nonspendable fund balance - $1,559,749 (inherently nonspendable) includes the portion of net
resources that cannot be spent because they are not in spendable form or they must be maintained
intact.
• Restricted fund balance - $56,889,417 (externally enforceable limitations on use) includes amounts
subject to limitations imposed by creditors, grantors, contributors, or laws and regulations of other
governments.
• Committed fund balance - $2,066,250 includes amounts subject to constraints placed on the use of
its own resources by the Town's highest level of decision-making authority.
• Assigned fund balance - $16,338,776 (limitation resulting from intended use) consists of amounts
where the intended use is established by the Town Board, but do not meet the criteria to be classified
as restricted or committed.
• Unassigned fund balance - $22,698,794 (residual net resources) is the total fund balance in the
general fund in excess of nonspendable, restricted, committed and assigned fund balance and
negative fund balances in funds other than the general fund.
The following schedule presents a summary of the Governmental Funds - (general, special revenue, and
capital projects) revenues and expenditures for the years ended December 31, 2025 and 2024, and the
amount of change in relation to the prior year.
-11-
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2025
FINANCIAL ANALYSIS OF THE TOWN'S FUNDS (continued)
Governmental Funds (continued)
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
For the years ended December 31,
Increase
2025 2024 (Decrease)
Revenues:
Real propertytaxes $ 44,536,735 $ 41,479,855 $ 3,056,880
Other real property tax items 466,144 452,476 13,668
Non-property tax items 16,672,801 16,386,835 285,966
Departmental income 4,622,863 4,676,081 (53,218)
Intergovernmental charges 158,352 158,395 (43)
Use of moneyand property 3,405,952 3,351,700 54,252
Licenses and permits 1,025,877 955,499 70,378
Fines and forfeitures 358,807 354,583 4,224
Sale of property and compensation for loss 428,053 703,575 (275,522)
Miscellaneous local sources 989,590 246,277 743,313
Interfund revenues 8,193 10,088 (1,895)
State aid 4,066,092 3,483,605 582,487
Federal aid 3,478,380 2,483,491 994,889
Total Governmental Fund Revenues $ 80,217,839 $ 74,742,460 $ 5,475,379
Expenditures:
General government support $ 9,864,081 $ 9,327,474 $ 536,607
Public safety 13,942,471 13,859,381 83,090
Public health 43,300 43,300 -0-
Transportation 7,209,910 6,065,288 1,144,622
Economic assistance and opportunity 1,374,237 1,455,119 (80,882)
Culture and recreation 383,929 402,468 (18,539)
Home and community services 5,651,957 10,798,116 (5,146,159)
Employee benefits 17,715,121 16,857,270 857,851
Capital Outlay 7,735,848 10,064,756 (2,328,908)
Debtservice principal and interest 5,304,624 4,180,657 1,123,967
Total Governmental Fund Expenditures $ 69,225,478 $ 73,053,829 $ (3,828,351)
Other financing sources and uses:
Debt proceeds $ 1,450,000 $ 7,799,160 $ (6,349,160)
Lease proceeds 8,931 58,788 (49,857)
Subscription proceeds 332,937 48,079 284,858
Transfers in 4,888,326 3,250,006 1,638,320
Transfers out (4,888,326) (3,250,006) (1,638,320)
Total Governmental Fund Other Sources and(Uses) $ 1,791,868 $ 7,906,027 $ (6,114,159)
• Although the Town appropriated $5,095,000 of prior year fund balance to finance the 2025 operations,
excluding open purchase orders brought forward, the total fund balance increased $12,784,229.
Governmental revenues increased by $5,475,379, which is primarily due to increases in real property
taxes of$3,056,880, miscellaneous local sources of$743,313, State aid of$582,487, and federal aid of
$994,889.
• Overall, governmental expenditures decreased by $3,828,351, which is primarily due to a decrease in
home and community services of $5,146,159 due to large land acquisitions in the prior year, and a
decrease in capital outlay of $2,328,908. These decreases were offset by increases in general
government support, transportation, employee benefits, and debt service of $536,607, $1,144,622,
$857,851 and$1,123,967 respectively.
• Debt proceeds decreased $6,349,160 due to issuance of long-term bond anticipation notes in the prior
year, partially offset by issuance of long-term bond anticipation notes in the current year.
-12-
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31. 2025
FINANCIAL ANALYSIS OF THE TOWN'S FUNDS (continued)
Governmental Funds(onnhnued)
General Fund
The General Fund is the chief operating fund of the Town. At the and of the current year, the total fund
balance of the General Fund was$29.245.781. an increase of$1.131.300. or4.0%from the prior year. {}fthis
amount. $1.224.107 is not in spendable form (i.e. inventory, prepaid items, and long-term receivables). The
committed fund balance of$692,127 represents park and recreation subdivision fees assessed through Town
Code which can only be expended on park, p|aygnound, or other recreational purposes. The remaining
$27.329.457nf the fund balance iain spendable form asfollows: $5OO.000is assigned for insurance claims;
$4,000,000 has been assigned by the Town Board for the subsequent year's budget and $130,663 has been
assigned for encumbrances resulting from open purchase onders, and the remaining $22'088'784 represents
unassigned fund balance.
As a measure of the general funds' liquidity, it may be useful to compare spendable fund balance and total
fund balance to total fund expenditures and other financing uses. Spendable fund balance (excluding
restricted and committed amounts) represents 61.6Y6 of total general fund expenditures and other financing
uses. Total fund balance represents 65.9% of total general fund expenditures and other financing uses.
The key elements of the fund balance increase uf$1.131.300 are aefollows:
* General government support was $1.670.218 under budget primarily due io personal services coming in
under budget by approximately $430.000 due to unfilled positions during the year, retirements under
budget by approximately $865.000. and other contractual expenditures under budget ofapproximately
$350,000.
° Public safety was $297.785 |aao than budgeted which nuou|bud mainly from savings of approximately
$190,000 in personnel costs due tnunfilled positions and conservative overtime uaage, and contractual
expenditures under budget of approximately$05.8OO.
* Economic assistance and opportunity was $280.612 |eea than budgeted which nuau|tod mainly from
savings of approximately$200,000 in personnel costs due to unfilled positions and conservative overtime
usage, and contractual expenditures under budget of approximately$90,000.
* Employee benefits were $1.195.184 under budget due to the Town conservatively budgeting for
retirement contributions and medical inounanoo, as well as budgetary savings in personal non/inos
resulting in lower employee benefit contributions.
* Use of money and property exceeded budget expectations by $038.175 due to an increase in cash
balances, and conservative budgeting.
* State and federal aid came in over budget by combined $822.802 due tofluctuations in the funding
source for programs for the aging, and mortgage tax over budget of 520,134 due to challenges in the real
estate market.
° Transfers in exceeded budgeted amounts by $1.157.404 due to transfers from the capital projects fund
relating to projects whiohwereoump|etudunderbudgeL
* The general fund final budget included a planned deficit of$5.220.731.
Highway Fund
At the end of the current year,the total fund balance of the highway fund was$3,897,677, an increase of$237,735
or 6.5% from the prior year. Of this amount, $177,466 is not in spendable form (i.e. prepaid and inventory items).
The remaining $3.720.211 of fund balance is in spendable form as fnUovvn: $400.000 has been assigned by the
Town Board for the subsequent year's budget, and the remaining $3,320,211 is assigned for highway purposes.
-13-
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2025
FINANCIAL ANALYSIS OF THE TOWN'S FUNDS (continued)
Governmental Funds(continued)
Highway Fund (continued)
The key elements of the fund balance increase of$237,735 are as follows:
• The final budget included a planned deficit of$663,929.
• Transportation costs were $366,449 under budget as personal services came in under budget by
approximately$275,000 due to due to conservative overtime budgeting and budgeting for retirements that
did not occur, and contractual expenditures under budget of approximately$84,000.
• Employee benefits savings of $351,776 resulted from conservative budgeting for retirement and health
insurance costs, and the budgetary savings in wages noted above.
• Use of money and property, and sale of property exceeded budgeted expectations by$139,948.
Capital Projects Fund
At December 31, 2025, the capital projects fund had total fund balance of $4,973,596, of which $2,674,160
was restricted, and $2,299,436 was assigned to capital projects. The decrease in fund balance of$2,171,040
was primarily due to capital outlay expenditures of $7,735,848, and transfers out for completed projects of
$1,182,541, exceeding revenues, transfers in, debt proceeds, lease proceeds and subscription proceeds of
$1,270,885, $3,684,596, $1,450,000, $8,931 and $332,937, respectively.
Community Preservation Fund
The Community Preservation Fund's total fund balance, which is restricted for land preservation acquisitions,
increased by $10,309,525 to $47,315,830. The increase in fund balance is primarily attributable to non-
property tax revenues (proceeds from the 2% tax on property sales) of $11,410,805, and interest income of
$1,270,333 offset by home and community services expenditures of$245,135 and debt service expenditures
totaling $2,032,692.
Nonmajor Governmental Funds
At the end of the current year, the total fund balance of the nonmajor governmental funds was $14,120,102,
increasing $3,276,610 from the prior year. Of this amount, $152,394 is not in spendable form (i.e. prepaids
and inventory). The restricted fund balance of $6,905,119 is restricted for community housing initiatives, and
the committed fund balance of$1,374,123 is related to housing fund fees assessed through Town Code which
can only be expended on affordable housing projects in the Town. The remaining $5,688,466 of the fund
balance is in spendable form as follows; $400,000 is assigned for the subsequent year's budget, $36,663 is
assigned for encumbrances resulting from open purchase orders, and the remaining $5,251,803 of fund
balance is assigned for nonmajor governmental fund purposes.
The key elements of the fund balance increase of$3,276,610 are as follows:
• The fund balance of the Community Housing Fund increased $2,909,637, which is mainly attributable
to the 0.5% transfer tax collected on sales of real property within the Town, and which is restricted for
use on affordable housing initiatives.
• The solid waste management district's fund balance increased $288,486, which was due to
expenditures coming in lower than budgeted by approximately $285,000, primarily due to budgetary
savings of approximately $175,000, and $110,000 in home and community and employee benefits,
respectively.
-14-
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2025
FINANCIAL ANALYSIS OF THE TOWN'S FUNDS (continued)
General Fund Budgetary Highlights
The Town appropriated expenditures and other financing uses in the original general fund budget were
projected to be in excess of estimated revenues and other financing sources in the amounts of $4,029,603,
inclusive of $229,603 of prior year encumbrances, including appropriated fund balance from the prior year in
the amount of $3,800,000. Actual revenues and other financing sources were greater than anticipated by
$2,399,862. Actual expenditures and other uses, including encumbrances, in all budgetary line items were less
than the budgetary appropriation by$3,830,605.
Over the course of the year, the Town Board revises the budget as needed so that expenditures do not exceed
appropriations. In all Town funds, various transfers between appropriations were approved for this purpose.
The following are the main components of the increase in appropriations in the general fund:
• Appropriated fund balance increased by$1,170,000 for transfers to the capital projects fund.
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
As of December 31, 2025, the primary government had $238,510,882 in net capital assets and the Town's
component units had $16,974,998 in net capital assets as listed below:
Capital Assets at December 31,
Primary Government 2025 2024
Land $ 31,499,395 $ 30,831,653
Land development rights 153,052,277 153,052,277
Construction in progress 3,258,264 1,005,240
Buildings 22,345,965 22,325,474
Improvements other than buildings 21,608,369 17,071,236
Machinery and equipment 22,213,285 20,499,495
Software 1,609,018 1,585,279
Infrastructure 100,517,260 97,417,821
Right-to-use lease asset 998,804 414,565
Right-to-use subscription asset 465,089 77,708
Total Capital Assets 357,567,726 344,280,748
Less:accumulated depreciation/amortization 119,056,844 115,461,408
Primary Government-Total Net Capital Assets $ 238,510,882 $ 228,819,340
Component Units
Land $ 4,220,925 $ 4,220,925
Construction in progress 1,272,875 2,126,438
Buildings 14,699,952 14,639,194
Improvements otherthan buildings 3,311,086 2,941,729
Machinery and equipment 6,876,059 6,409,035
Infrastructure 6,247,430 6,605,408
Total Capital Assets 36,628,327 36,942,729
Less:accumulated depreciation 19,653,329 18,741,599
Component Units-Total Net Capital Assets $ 16,974,998 $ 18,201,130
-15-
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2025
CAPITAL ASSET AND DEBT ADMINISTRATION (continued)
Capital Assets(continued)
In 2025, the primary government's significant capital asset acquisitions were as follows:
• Land of$667,742.
• Construction in progress of$2,253,024.
• Improvements other than buildings of$4,537,133.
• Machinery and equipment of$2,226,969.
• Infrastructure of$3,099,439.
• Right-to-use lease asset of$590,747.
• Right-to-use subscription asset of$465,089.
The capital program is a long-range financing guide and not a definitive plan. Each appropriation must be
authorized by Town Board resolution before being undertaken. Each may be financed by issuance of general
obligation bonds, which, at times, are preceded by issuance of bond anticipation notes for various periods of
time depending on the period of probable usefulness of the purpose of expenditure. The Town's three-year
capital plan is summarized below:
2026 2027 2028
Machinery and equipment
General Fund $ 410,900
Highway Fund 740,000 $ 908,000 $ 927,000
Nonmajor Funds 32,000
Buildings and improvements
General Fund 27,600
Infrastructure
General Fund 250,000 250,000 250,000
Highway Fund 1,085,000 1,050,000 1,050,000
Intangible-software
General Fund 88,000 5,000 5,000
$ 2,633,500 $ 2,213,000 $ 2,232,000
Additional information on the Town's capital assets can be found in Note CA to the financial statements.
Debt
At December 31, 2025, the Town had approximately $33 million in long-term general obligation bonds and
bond anticipation notes (short-term and long-term)outstanding.
Outstanding Debt Primary Government
Governmental Activities
2025 2024
General obligation bonds payable* $ 19,850,965 $ 22,654,870
Bond anticipation notes 13,067,577 12,824,160
$ 32,918,542 $ 35,479,030
*Does not include the bond premium as presented in the Statement of Net Position.
The Town's bond credit rating from Moody's Investors Services was Aaa as of December 31, 2025.
-16-
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2025
CAPITAL ASSET AND DEBT ADMINISTRATION (continued)
Debt(continued)
Debt Limit - The Town has the power to contract indebtedness for any Town purpose so long as the principal
amount thereof, subject to certain limited exceptions, shall not exceed seven percent of the average full
valuation of taxable real estate of the Town, 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 calculated 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 Board of Equalization and Assessment. 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. The percentage of debt contracting power exhausted at
December 31, 2025 was 2.55%.
Additional information on the Town's debt activity can be found in Note C.5 to the financial statements.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
Property Tax
The Town has adopted a budget for the 2026 fiscal year which factors in inflation and other adjustments to
revenues and expenditures as well as prior year positive and negative fund balances. The 2026 budget
includes an overall increase in real property tax revenues from the prior year of approximately 3.0% for the
governmental funds.
In June 2011, New York State enacted Chapter 97, Laws of 2011 Real Property Tax Levy Cap and Mandate
Relief Provisions, which includes a 2% property tax cap for municipalities that affects the Town and its
municipal component units. Beginning in 2012, no local government is authorized to increase its property tax
levy by more than 2% or the rate of inflation (whichever is less). Local governments can exceed the tax levy
limit by a 60% vote of the governing body, or local law. There are permitted exceptions and adjustments. The
Town continuously evaluates the effect of the cap on future year's budgets.
State Aid and Local Assistance
The Town receives financial assistance from New York State and from Suffolk County. During 2025, financial
assistance included state aid consisting of mortgage tax of $1,920,134 and consolidated highway and other
NYS Department of Transportation aid of$1,153,748. County revenue sharing was $1,759,073. Additionally, if
the State should not adopt its budget in a timely manner, municipalities and school districts in the State,
including the Town, 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 Town. The Town's 2026 budget included similar amounts for
this financial assistance.
CONTACTING THE TOWN'S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, and creditors with a general
overview of the Town's finances and to show the Town's accountability for the money it receives. If you have
questions about this report or need additional financial information, contact the Town, Office of the Town
Comptroller, Southold, New York.
-17-
BASIC FINANCIAL
STATEMENTS
TOWN OF SOUTHOLD
GOVERNMENT-WIDE FINANCIAL STATEMENT
STATEMENT OF NET POSITION
December 31, 2025
Primary Government Nonmajor
Governmental Business-Type Component
Activities Activities Total Units
ASSETS
Current Assets:
Cash and investments $ 110,124,199 $ 153,207 $ 110,277,406 $ 4,296,410
Accounts receivable 562,863 562,863 71,683
State and federal aid receivables 295,143 295,143 116,471
Due from other governments 2,152,106 2,152,106
Loans receivable 250,000 250,000
Leases receivable 69,789 69,789
Due from primary government -0- 822,928
Inventory of material and supplies 110,117 110,117
Prepaids 1,259,827 1,259,827 220,561
Total Current Assets 114,824,044 153,207 114,977,251 5,528,053
Noncurrent Assets:
Leases receivable 1,548,659 1,548,659
Non-depreciable capital assets 187,809,936 187,809,936 5,493,800
Depreciable/amortizable capital assets,net of depreciation/amortization 50,700,946 50,700,946 11,481,198
Total Noncurrent Assets 240,059,541 -0- 240,059,541 16,974,998
Total Assets 354,883,585 153,207 355,036,792 22,503,051
DEFERRED OUTFLOWS OF RESOURCES
Deferred charges on refundings 606,696 606,696
Pensions 12,728,675 12,728,675 554,124
Other postemployment benefits 39,324,217 39,324,217 35,992
Total Deferred Outflows of Resources 52,659,588 -0- 52,659,588 590,116
LIABILITIES
Current Liabilities:
Accounts payable and accrued liabilities 4,030,730 4,800 4,035,530 311,940
Accrued interest payable 312,023 312,023 56,397
Bond anticipation notes payable -0- 4,772,768
Due to component units 822,928 822,928
Due to other governments -0- 279
Unearned revenue 1,182,234 1,182,234 -
Noncurrent liabilities due within one year:
General obligation bonds payable 2,597,064 2,597,064 42,935
Bond anticipation notes payable 1,162,577 1,162,577
Leases payable 56,272 56,272
Subscriptions payable 67,081 67,081
Compensated absences 1,763,372 1,763,372 103,070
Claims and judgments payable 14,487 14,487
Estimated liability for landfill closure and post closure care costs 25,661 25,661
Other postemployment benefits payable 3,897,583 3,897,583
Total Current Liabilities 15,932,012 4,800 15,936,812 5,287,389
Noncurrent Liabilities:
General obligation bonds payable,inclusive of premiums 18,249,796 18,249,796 996,100
Bond anticipation notes payable 11,905,000 11,905,000
Leases payable 167,953 167,953
Subscriptions payable 251,650 251,650
Compensated absences 6,695,588 6,695,588 309,210
Claims and judgments payable 485,513 485,513
Estimated liability for landfill closure and post closure care costs 257,295 257,295
Net pension liability 17,327,182 17,327,182 756,782
Total OPEB liability 116,973,931 116,973,931 517,221
Total Noncurrent Liabilities 172,313,908 -0- 172,313,908 2,579,313
Total Liabilities 188,245,920 4,800 188,250,720 7,866,702
DEFERRED INFLOWS OF RESOURCES
Lease related 1,460,871 1,460,871
Unearned revenue from real property taxes 8,927,405 8,927,405 822,928
Pensions 1,263,857 1,263,857 81,507
Other postemployment benefits 33,034,159 33,034,159 117,269
Total Deferred Inflows of Resources 44,686,292 -0- 44,686,292 1,021,704
NET POSITION
Net Investment in capital assets 205,624,628 205,624,628 12,578,130
Restricted:
Community preservation 47,315,830 47,315,830
Affordable housing 6,905,119 6,905,119
Grant restrictions -0- 7,500
Unrestricted(deficit) (85,234,616) 148,407 (85,086,209) 1,619,131
Total Net Position _.$ 174,610.961 _.$ 148,407 _.$ 174.759.368 _.$ 14,204,761
The notes to the financial statements are an integral part of this statement.
-18-
TOWN OF SOUTHOLD
GOVERNMENT-WIDE FINANCIAL STATEMENT
STATEMENT OF ACTIVITIES
Year Ended December 31, 2025
Net Revenue and
Program Revenues Changes in Net Position
Operating Capital Primary Government
Charges for Grants and Grants and Governmental Business-type Component
Function/Program Expenses Services Contributions Contributions Activities Activities Total Units
PRIMARY GOVERNMENT
Government Activities:
General government support $ 15,668,368 $ 564,575 $ 163,517 $ 759,128 $ (14,181,148) $ (14,181,148)
Public safety 23,875,470 1,300,310 132,154 468,175 (21,974,831) (21,974,831)
Public health 43,300 0 (43,300) (43,300)
Transportation 9,856,939 61,469 32,608 4,354,377 (5,408,485) (5,408,485)
Economic assistance and opportunity 2,207,448 411,546 322,626 (1,473,276) (1,473,276)
Culture and recreation 816,251 138,054 (678,197) (678,197)
Home and community services 8,976,602 3,853,370 253,898 102,097 (4,767,237) (4,767,237)
Interest on debt 1,248,856 (1,248,856) (1,248,856)
Total governmental activities 62,693,234 6,329,324 904,803 5,683,777 (49,775,330) (49,775,330)
Business-type Activities
Economic assistance and opportunity 24,995 12,380 $ (12,615) (12,615)
Total business-type activities 24,995 12,380 -0- -0- -0- (12,615) (12,615)
Total primary government $ 62,718,229 $ 6,341,704 $ 904,803 $ 5,683,777 (49,775,330) (12,615) (49,787,945)
COMPONENT UNITS
General government support $ 307,465 $ (307,465)
Public health 93,067 (93,067)
Transportation 4,111,048 $ 4,032,652 $ 2,507,923 2,429,527
Culture and recreation 1,579,610 180,092 (1,399,518)
Home and community services 1,201,021 2,291 (1,198,730)
Interest on debt 214,533 (214,533)
Total Component Units $ 7,506,744 $ 4,215,035 $ -0- $ 2,507,923 (783,786)
GENERAL REVENUES
Real property taxes 44,536,735 44,536,735 3,979,937
Other real property tax items 466,144 466,144
Non-property tax items 16,672,801 16,672,801 60,532
Interest earnings 3,501,531 4,536 3,506,067 49,535
State aid-unrestricted 2,009,015 2,009,015
Other 223,583 223,583 14,384
Transfers 4,372,952 4,372,952 (4,372,952)
Total General Revenues and Transfers 71,782,761 4,536 71,787,297 (268,564)
Change in Net Position 22,007,431 (8,079) 21,999,352 (1,052,350)
NET POSITION
Beginning 152,603,530 156,486 152,760,016 15,257,111
Ending $ 174,610,961 $ 148,407 $ 174,759,368 $ 14,204,761
The notes to the financial statements are an integral part of this statement.
-19-
TOWN OF SOUTHOLD
BALANCE SHEET
GOVERNMENTALFUNDS
December 31, 2025
MAJOR GOVERNMENTAL FUNDS
Non-Major
Capital Community Governmental
General Highway Projects Preservation Funds Totals
ASSETS
Cash and investments $ 41,169,528 $ 5,289,937 $ 3,847,150 $ 46,215,544 $ 13,602,040 $ 110,124,199
Accounts receivable 79,921 1,689 73,454 49,620 358,179 562,863
Due from other funds 620,839 1,290,964 3,370,227 1,199,560 6,481,590
State and federal aid receivable 33,022 2,641 214,324 45,156 295,143
Due from other governments 553,178 1,066,290 532,638 2,152,106
Loans receivable 250,000 250,000
Leases receivable 1,618,448 1,618,448
Inventory of material and supplies 2,046 78,844 29,227 110,117
Prepaids 1,032,346 98,622 5,692 123,167 1,259,827
Total Assets $ 45,109,328 $ 6,762,697 $ 7,505,155 $ 47,337,146 $ 16,139,967 $ 122,854,293
LIABILITIES
Accounts payable and accrued
liabilities $ 1,570,342 $ 113,029 $ 1,638,740 $ 13,123 $ 624,519 $ 3,959,753
Retained percentages 70,977 70,977
Due to other funds 3,998,528 1,465,785 821,642 8,193 187,442 6,481,590
Due to component units 822,928 822,928
Unearned revenue 690,586 23,196 200 468,252 1,182,234
Total Liabilities 7,082,384 1,602,010 2,531,559 21,316 1,280,213 12,517,482
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue 395,549 395,549
Lease related 1,460,871 1,460,871
Unearned revenue from
real property taxes 6,924,743 1,263,010 739,652 8,927,405
Total Deferred Inflows of Resources 8,781,163 1,263,010 -0- -0- 739,652 10,783,825
FUND BALANCES
Nonspendable 1,224,197 177,466 5,692 152,394 1,559,749
Restricted 2,674,160 47,310,138 6,905,119 56,889,417
Committed 692,127 1,374,123 2,066,250
Assigned 4,630,663 3,720,211 2,299,436 5,688,466 16,338,776
Unassigned 22,698,794 22,698,794
Total Fund Balances 29,245,781 3,897,677 4,973,596 47,315,830 14,120,102 99,552,986
Total Liabilities,Deferred Inflows of
Resources and Fund Balances $ 45,109,328 $ 6,762,697 $ 7,505,155 $ 47,337,146 $ 16,139,967 $ 122,854,293
The notes to the financial statements are an integral part of this statement.
-20-
TOWN OFSO0TNOL0
RECONCILIATION 0F THE GOVERNMENTAL FUNDS BALANCE SHEET TOTHE
STATEMENT 0F NET POSITION
December 31. 2025
Total Fund Balances-Governmental Funds $ 09.552.086
Amounts reported for governmental activities in the Statement of Net Position are different because:
Capital assets used in governmental activities are not financial resources and,
thoreforo, are not reported in the funds.
Capita| anoeta-non-dopnouiab|o $ 187.800.036
Capital assets-depreciable/amortizable 160.757.790
Acoumu|ateddepnociahon/amortizahon 238.510.882
Deferred outflows ofresources any included in the Statement ofNet Position
Pensions 12.728.675
Other pootemp|oymontbenefits 30324217 52.052.802
Long-term liabilities applicable to the Tuvvn'ogovernmental activities are not due
and payable in the current period, and accordingly, are not reported inthe
funds. However,these liabilities are included in the Statement of Net Position:
Bond anticipation notes payable (13.067.577)
General obligation bonds payable (10.850.905)
Leases payable (224.225)
Subscriptions payable (318'731)
Compensated absences (8.458'000)
Claims and judgments payable (500.000)
Estimated liability for landfill closure and pootc|noune care costs (282.056)
Net pension liability (17.327.182)
Total (]PEBliability (180.082.110)
Governmental funds report the effect of premiums, discounts, and ref ndingn
and similar items when debt in first issued, whereas these amounts are
deferred and amortized in the Statement ofActivities:
Deferred charges onrof ndingn 806.686
Premium on general obligation bonds (380.190)
Revenues in the Statement of Activities that do not provide current financial
resources are not reported ao revenues in the funds. 395.540
Doharn*d inflows ofresources are included in the Statement of Net Position
Pensions (1.263.857)
Other poatemp|oymontbenefits (34.208.818)
Interest payable applicable to the Town'ugovernmental activities are not due
and payable in the current period, and accordingly, are not reported inthe
funds. However,these liabilities are included in the Statement of Net Position. (312,023)
Net Position of Governmental Activities
The notes to the financial statements are an integral part of this statement.
-21-
TOWN OF SOUTHOLD
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTALFUNDS
For the Year Ended December 31, 2025
MAJOR GOVERNMENTAL FUNDS
Non-Major
Capital Community Governmental
General Highway Projects Preservation Funds Totals
REVENUES
Real property taxes $ 34,054,088 $ 6,847,083 $ 3,635,564 $ 44,536,735
Other real property tax items 375,779 59,227 31,138 466,144
Non-property tax items 1,759,073 $ 11,410,805 3,502,923 16,672,801
Departmental income 471,445 4,151,418 4,622,863
Intergovernmental charges 158,352 158,352
Use of money and property 1,576,175 254,948 $ 3,178 1,270,333 301,318 3,405,952
Licenses and permits 594,987 42,660 388,230 1,025,877
Fines and forfeitures 358,807 358,807
Sale of property and compensation
for loss 108,982 9,346 32 309,693 428,053
Miscellaneous local sources 60,098 794,924 125,693 6,392 2,483 989,590
Interfund revenues 8,193 8,193
State aid 2,095,402 1,153,748 673,839 143,103 4,066,092
Federal aid 2,713,640 13,500 468,175 283,065 3,478,380
Total Revenues 44,335,021 9,175,436 1,270,885 12,687,562 12,748,935 80,217,839
EXPENDITURES
Current:
General government support 9,591,036 273,045 9,864,081
Public safety 12,077,300 1,865,171 13,942,471
Public health 43,300 43,300
Transportation 2,919,263 4,290,647 7,209,910
Economic assistance and
opportunity 1,374,237 1,374,237
Culture and recreation 383,929 383,929
Home and community services 598,125 245,135 4,808,697 5,651,957
Employee benefits 13,381,248 2,190,547 100,210 2,043,116 17,715,121
Capital Outlay 7,735,848 7,735,848
Debt Service:
Principal 1,860,410 216,488 1,767,250 274,355 4,118,503
Interest 735,396 87,562 265,442 97,721 1,186,121
Total Expenditures 42,964,244 6,785,244 7,735,848 2,378,037 9,362,105 69,225,478
Excess(Deficiency)of Revenues
Over(Under)Expenditures 1,370,777 2,390,192 (6,464,963) 10,309,525 3,386,830 10,992,361
OTHER FINANCING SOURCES(USES):
Debt proceeds 1,450,000 1,450,000
Lease proceeds 8,931 8,931
Subscription proceeds 332,937 332,937
Transfers in 1,187,491 12,459 3,684,596 3,780 4,888,326
Transfers out (1,426,869) (2,164,916) (1,182,541) (114,000) (4,888,326)
Total Other Financing
Sources(Uses) (239,378) (2,152,457) 4,293,923 -0- (110,220) 1,791,868
Net Change in Fund Balance 1,131,399 237,735 (2,171,040) 10,309,525 3,276,610 12,784,229
Fund Balances at Beginning of Year 28,114,382 3,659,942 7,144,636 37,006,305 10,843,492 86,768,757
Fund Balances at End of Year $ 29,245,781 $ 3,897,677 $ 4,973,596 $ 47,315,830 $ 14,120,102 $ 99,552,986
The notes to the financial statements are an integral part of this statement.
-22-
TOWN OF SOWTHOL0
RECONCILIATION {}F THE GOVERNMENTAL FUNDS STATEMENT {}F REVENUES,
EXPENDITURES AND CHANGES |N FUND BALANCES T{} THE STATEMENT OFACTIVITIES
For the Year Ended December 31. 2025
Net Change io Fund Balance Total Governmental Funds $ 12.784.229
Amounts reported for governmental activities in the Statement of Activities are different because:
Governmental funds report capital outlays ao expenditures. However, inthe
Statement of Activities,the cost of those assets is allocated over their estimated
useful lives and reported aa depreciation/amortization expense.The amount
by which capital outlay exceeds depreciation/amortization in the current period is:
Capital asset additions $ 13.884.373
Depmoiation/emortizeUnnuxponoe (4.136.847)
Gain/(|onx)undispositions 8.081.542
Revenues in the Statement nf Activities that do not provide current financial
resources are not reported oo revenues in the funds. 553
Net change in deferred outflows n/resources not reported in the governmental
fund statements:
Deferred charges onmr ndinga (127.882)
Pension related amounts (1.555.053)
Other poammp|oymuntbenefits 19847248 18.204.313
Net change in deferred inflows n(resources not reported in the governmental
fund statements:
Pension related amounts 5.189.230
Other pnxVamp|oymontbenefits (1.602.798)
Premiums un bond issuances recognized in governmental fund statements
when issued and capitalized and amortized in the Statement nfActivities.
Premiums amortized 187.454
Bond and other debt proceeds provide current financial resources tn governmental funds, but
issuing debt increases long-term liabilities in the Statement of Net Position.Repayment of
bond and other debt principal is an expenditure in the governmental funds,but the repayment
reduces long-term liabilities in the Statement of Net Position.Also,governmental funds
report the effect of premiums,discounts and similar items when debt is first issued,whereas
these amounts are deferred and amortized in the Statement nfActivities.
Issuance of long-term bond anticipation notes (1.450.000)
Leaoeaioaund (8.831)
Subscriptions issued (332.837)
Repayment n[bond principal 2.803.805
Repayment of BAN principal 1.206.583
Repayment of lease principal 69.212
Repayment of subscription principal 38803 2.320.035
Some expenses reported in the Statement of Activities do not require the use of current
financial resources and therefore,are not reported ao expenditures inthe governmental
funds:
Compensated absences 175.049
Claims and judgments payable (225.000)
Estimated liability for landfill closure and pnam|naum care costs 35.380
Changes in net pension asset/(xobm\y)proportionate share (2.925.009)
Changes inOPEBliabilities (10.720.074)
Accrued interest payable 05147 (19,594,497)
Change in Net Position of Governmental Activities
The notes to the financial statements are an integral part of this statement.
-23-
TOWN OF SOUTHOLD
STATEMENT OF NET POSITION
PROPRIETARY FUND
December 31, 2025
Southold Local
Development
Corporation
ASSETS
Current Assets:
Cash and cash equivalents $ 41,354
Investments 111,853
Total assets 153,207
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities 4,800
Total liabilities 4,800
NET POSITION
Unrestricted 148,407
Total net position $ 148,407
The notes to the financial statements are an integral part of this statement.
-24-
TOWN OF SOUTHOLD
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION
PROPRIETARY FUND
Year Ended December 31, 2025
Southold Local
Development
Corporation
OPERATING REVENUES
Charges for sales and services:
Administrative fees $ 12,380
Total operating revenues 12,380
OPERATING EXPENSES
Cost of sales and services:
Consultant fees 19,200
Professional fees 5,000
Website 750
Other 45
Total operating expenses 24,995
Operating (loss) income (12,615)
NON-OPERATING REVENUE (EXPENSE)
Interest income 4,536
Total non-operating revenue 4,536
Change in net position (8,079)
Total net position - beginning of year 156,486
Total net position -ending $ 148,407
The notes to the financial statements are an integral part of this statement.
-25-
TOWN OF SOUTHOLD
STATEMENT OF CASH FLOWS
PROPRIETARY FUND
Year Ended December 31,2025
Southold Local
Development
Corporation
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers and users $ 12,380
Cash payments for contractual expenses (20,195)
Net cash from operating activities (7,815)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest income 179
Net cash from investing activities 179
Net increase (decrease) in cash and cash equivalents (7,636)
Cash and cash equivalents at January 1, 2025 48,990
Cash and cash equivalents at December 31, 2025 $ 41,354
Reconciliation of operating income (loss)to net cash from operating activities:
Operating income (loss) $ (12,615)
Increase (decrease) in accounts payable and accrued liabilities 4,800
Net cash from operating activities $ (7,815)
The notes to the financial statements are an integral part of this statement.
-26-
TOWN OF SOUTHOLD
STATEMENT OF FIDUCIARY NET POSITION
December 31, 2025
Custodial Fund
ASSETS
Cash and cash equivalents $ 22,226,985
Total Assets $ 22,226,985
LIABILITIES
Due to other governments $ 22,161,795
Other liabilities 65,190
Total Liabilities $ 22,226,985
The notes to the financial statements are an integral part of this statement.
-27-
TOWN OF SOUTHOLD
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
Year Ended December 31, 2025
Custodial Fund
ADDITIONS
Real property taxes collected for other governments $ 120,265,731
Bail collected 80,600
Total Additions 120,346,331
DEDUCTIONS
Payments of real property taxes to other governments 120,265,731
Bail returned or remitted 80,600
Total Deductions 120,346,331
Change in Fiduciary Net Position -0-
Net Position - Beginning of year -0-
Net Position - End of year $ -0-
The notes to the financial statements are an integral part of this statement.
-28-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2025
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Town of Southold (the "Town"), which was established in 1640, is governed by Town Law and other
general laws of the State of New York and various local laws. The Town Board is the legislative body
responsible for overall operations.The Town Board consists of the Supervisor who is elected for a term of four
years and five board members who are elected for terms of four years. The Town Board appoints the Town
Attorney and Town Comptroller. The Town Clerk, Receiver of Taxes, Superintendent of Highways, Justices
and Town Trustees are all elected and serve for four years, respectively. The Town provides a full range of
municipal services, including public safety, transportation, home and community services, public works and
road maintenance, recreation and parks, and general and administrative services.
The financial statements of the Town have been prepared in conformity with accounting principles generally
accepted in the United States of America ("GAAP") as applied to governmental units. The Governmental
Accounting Standards Board ("GASB") is the accepted standard setting body for establishing governmental
accounting and financial reporting principles.
The more significant of the government's accounting policies are described below.
1. REPORTING ENTITY
The financial reporting entity consists of: (a) the primary government, which is the Town;
(b) organizations for which the primary government is financially accountable; and (c) 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 decision to include a potential component unit in the Town's reporting entity is based on several
criteria including legal standing, dependency and financial accountability. The current guidance also
clarifies the status as a major or nonmajor component unit. Based on the application of these criteria, the
following is a summary of certain entities considered in determining the Town's reporting entity.
Blended Component Unit:
Though a legally separate entity, this component unit is, in substance, part of the Town's operations. The
blended component unit serves or benefits the primary government almost exclusively. Financial
information from this unit is combined with that of the primary government. The Town's only blended
component unit is the Southold Local Development Corporation.
a) Southold Local Development Corporation ("SLDC") is a not-for-profit corporation incorporated on
June 27, 2014 under New York Law. SLDC's purpose is to promote and conduct economic
development activities in the Town, and to finance facilities for not-for-profit corporations so that they
may acquire, improve, maintain, equip, and furnish such projects. The SLDC can enter into contracts,
sue and be sued, and acquire and own real and personal property, each on its own behalf and in its
own name. The SLDC can incur debt and issue bonds and notes in its own name and, unless the
Town elects to guarantee principal and interest on, or only the interest on, indebtedness issued by the
SLDC, all indebtedness of the SLDC is a liability only of the SLDC and not the Town.
The inclusion of the SLDC as a blended component unit of the Town is required because the SLDC is
organized as a nonprofit corporation with the Town as the sole corporate member as identified in the
SLDC's articles of incorporation. In addition, the Town appoints the voting majority of the Board of the
SLDC. The activities of the SLDC are reported as a proprietary fund of the Town.
-29-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31. 2025
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
1. REPORTING ENTITY(continued)
Discretely Presented Component Units:
The following entities are discretely presented component units of the Town nfSouthold:
o) Fishers Island Ferry District was established in 1847 by special act oflegislation within the State of
New Ynrk, known as the Ferry District Enabling Act. The Board of Commissioners is the legislative
body responsible for the overall operations. The Board of Commissioners consists of five mambera,
all of whom are elected by the residents of the District. The primary function of the District is to
provide ferry operations and services to District residents. Special districts cannot issue bonded debt
without the approval and the backing of the full faith and credit of the Town. The Town issues
indebtedness on behalf of the District which is responsible for the payment of annual debt service on
the obligations. Budgets and tax rates are not approved by the Town. Tax levies of the District are
collected by the Town Receiver of Taxes. This District is included in the Town's reporting entity since
the primary government issues debt on behalf ofthe 0othot as these districts cannot issue bonded
debt without the approval and the backing of the full faith and credit of the Town.
b) Fishers Island Waste Management District was established in 1952 and is governed by the |evvs of
New York State. The Board of Commissioners is the legislative body responsible for the overall
operations. The Board of Commissioners consists of five members, all of whom are elected by the
residents of the District. The primary function of the District is to provide vvasbo management and
disposal services to District residents. Special districts cannot issue bonded debt without the approval
and the backing of the full faith and credit of the Town. The Town ianuan indebtedness on behalf of
the District which is responsible for the payment of annual debt service on the obligations. Tax levies
of the District are collected by the Town Receiver of Taxes. This 0othot is included in the Tuwn'n
reporting entity since the primary government issues debt on behalf ofthe District as these districts
cannot issue bonded debt without the approval and the backing of the full faith and credit of the Town.
o) Cutohngue-New Suffolk Park District was established in 1853 and is governed by the |ovvs of New
York State.The Board of Commissioners is the legislative body responsible for the overall operations.
The Board of Commissioners consists of three members, all of whom are elected by the residents of
the District. The primary function of the District is to maintain and operate the specific private beaches
of residents who reside within the park district. Special districts cannot issue bonded debt without the
approval and the backing of the full faith and credit of the Town. The Town ioauan indebtedness on
behalf ofthe District which is responsible for the payment of annual debt oan/ioa on the obligations.
Tax levies of the District are collected by the Town Receiver of Taxes. This District is included in the
Town'o reporting entity since the primary government issues debt on behalf of the District as these
districts cannot issue bonded debt without the approval and the backing of the full faith and credit of
the Town.
d\ Southold Park District was established in 1007 and is governed by the laws uf New York State. The
Board of Commissioners is the legislative body responsible for the overall operations. The Board of
Commissioners consists of three membere, all of whom are elected by the residents of the District.
The primary function of the District is to maintain and operate the specific private beaches of residents
who reside within the park district. Special districts cannot issue bonded debt without the approval
and the banking of the full faith and credit of the Town. The Town issues indebtedness on behalf of
the District which is responsible for the payment of annual debt service on the obligations. Tax levies
of the District are ooUnob»d by the Town Receiver of Taxes. This District is included in the Town'o
reporting entity since the primary government issues debt on behalf ofthe District as these districts
cannot issue bonded debt without the approval and the backing of the full faith and credit of the Town.
-30-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2025
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
1. REPORTING ENTITY(continued)
Discretely Presented Component Units(continued):
e) Orient-East Marion Park District was established in 1969 and is governed by the laws of New York
State. The Board of Commissioners is the legislative body responsible for the overall operations. The
Board of Commissioners consists of three members, all of whom are elected by the residents of the
District. The primary function of the District is to maintain and operate the specific private beaches of
residents who reside within the park district. Special districts cannot issue bonded debt without the
approval and the backing of the full faith and credit of the Town. The Town issues indebtedness on
behalf of the District which is responsible for the payment of annual debt service on the obligations.
Tax levies of the District are collected by the Town Receiver of Taxes. This District is included in the
Town's reporting entity since the primary government issues debt on behalf of the District as these
districts cannot issue bonded debt without the approval and the backing of the full faith and credit of
the Town.
f) Mattituck Park District was established in 1941 and is governed by the laws of New York State. The
Board of Commissioners is the legislative body responsible for the overall operations. The Board of
Commissioners consists of three members, all of whom are elected by the residents of the District.
The primary function of the District is to maintain and operate the specific private beaches of residents
who reside within the park district. Special districts cannot issue bonded debt without the approval
and the backing of the full faith and credit of the Town. The Town issues indebtedness on behalf of
the District which is responsible for the payment of annual debt service on the obligations. Tax levies
of the District are collected by the Town Receiver of Taxes. This District is included in the Town's
reporting entity since the primary government issues debt on behalf of the District as these districts
cannot issue bonded debt without the approval and the backing of the full faith and credit of the Town.
g) Orient Mosquito District was established in 1916 and is governed by the laws of New York State. The
Board of Commissioners is the legislative body responsible for the overall operations. The Board of
Commissioners consists of five members, all of whom are elected by the residents of the District. The
primary function of the District is to provide pest control services to District residents. Special districts
cannot issue bonded debt without the approval and the backing of the full faith and credit of the Town.
The Town issues indebtedness on behalf of the District which is responsible for the payment of
annual debt service on the obligations. Tax levies of the District are collected by the Town Receiver of
Taxes. This District is included in the Town's reporting entity since the primary government issues
debt on behalf of the District as these districts cannot issue bonded debt without the approval and the
backing of the full faith and credit of the Town.
All of the Town's discretely presented component units are considered nonmajor.
2. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
The Town's basic financial statements include both government-wide (reporting the Town as a whole)
and fund financial statements (reporting the Town's major funds).
Government-wide Financial Statements
The government-wide financial statements (i.e. the Statement of Net Position and the Statement of
Activities) report information on all of the non-fiduciary activities of the Town as a whole with separate
columns for the primary governmental activities, as well as the discretely presented component units.
For the most part, the effect of interfund activity has been eliminated from the government-wide
financial statements, except for interfund services provided and used.
-31-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2025
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued)
2. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS(continued)
Government-wide Financial Statements (continued)
The government-wide Statement of Activities demonstrates the degree to which the direct expenses of
a given function are offset by program revenue. Direct expenses are those that are clearly identifiable
with a specific function. 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,
(2) grants and contributions that are restricted to meeting the operation and capital requirements of a
particular function, or (3) interest earned on grants or capital projects that is required to be used to
support a particular program or project. Taxes and other items not properly included among program
revenues are reported as general revenues. The Town does not allocate indirect expenses to specific
functions in the Statement of Activities.
Fund Financial Statements
The accounts of the Town are organized on the basis of funds, each of which is considered a separate
accounting entity. The operations of each fund are accounted for with a separate set of self-balancing
accounts that comprise its assets, liabilities, deferred inflows of resources, fund balances, revenues, and
expenditures, which are segregated for the purpose of carrying on specific activities or attaining certain
objectives in accordance with special regulations, restrictions or limitations. The various funds are
presented by type in the fund financial statements. Certain funds of the Town are utilized to account for
resources derived from and/or expenditures applicable to an area less than the entire Town. The focus of
the governmental funds financial statements is on the major funds. Accordingly, the Town maintains the
following fund types:
Governmental Funds - Governmental funds are those through which most governmental functions
are financed. The acquisition, use, and balances of expendable financial resources and the related
liabilities are accounted for through governmental funds.The measurement focus of the governmental
funds is upon the determination of financial position and changes in financial position. Governmental
funds are further classified as major and nonmajor funds.
The Town reports the following major governmental funds:
General Fund -the principal operating fund of the Town. This fund is used to account for all financial
resources not accounted for and reported in another fund.
Special Revenue Funds - used to account for and report the proceeds of specific revenue sources
that are restricted, committed, or assigned to expenditures for specified purposes other than debt
service or capital projects.
Highway Fund - used to account for revenues and expenditures for highway purposes
provided to the Town and to the area of the Town located outside of the Village of Greenport.
The major areas of expenditures are repairs and improvements to roadways, machinery, and
snow removal. The major source of revenue is real property taxes.
Community Preservation Fund - used to account for and report financial resources that are
restricted for the purchase of land and land development rights. The major source of revenue
is the transfer tax. See Note F.
Capital Projects Fund - used to account for and report financial resources that are restricted,
committed, or assigned to expenditures for capital outlays, including the acquisition or construction
of major capital facilities and other capital assets.
-32-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31. 2025
A. SUMMARY 0FSIGNIFICANT ACCOUNTING POLICIES(continued)
2. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS(oonUnuod)
Fund Financial Statements(nnndnued)
Additionally,the Town accounts for and reports the following nonmajor funds:
Special Revenue funds include the following:
General Fund Part Town - uoedhoaoouuntfornevenuenandexpenditureeforoartaino*rvioao
provided to the area of the Town located outside of the Village of Greenport. The major source
of revenue is real property taxes, non-property tax items and building permits.
Special Grant Fund - used to account for federal aid for the Community Development Block
Grant Program.
Special District Funds - used to account for taxes or other nevenueo, which are raised or
received to provide special services to areas that encompass less than the whole town. The
Special District Funds consist of number of separate diotriota, which are administered by the
Town Board as follows: East-West Fire Protection Oiotriot, Southold Wastewater District,
Fishers Island Sewer District, and the Solid Waste Management District.
Community Housing and Affordable Housing Funds - used to account for revenues and
expenditures relating tothe Town'o community housing and affordable housing programs.
Proprietary Fund—is used to account for ongoing activities which are similar to those often found in
the private sector. Proprietary fund financial statements include o Statement of Net Position, a
Statement ofRevenues, Expenses and Changes in Fund Net Position and a Statement ofCash
Flows for the proprietary fund.
The proprietary fund is accounted for using the "economic n000uroea^ measurement focus and the
accrual basis of accounting. A000rding|y, all aaooto, deferred uudlowo. liabilities (whether current or
non-current) and deferred inflows are included on the Statement of Net Position. The State of
F<evenueo. Expenses and Changes in Fund Not Position presents increases (revenues) and
decreases(expenoeo)in net position.
The Town has presented the following proprietary fund:
Southold Local Development Corporation — is used to account for the activities of the blended
component unit SLDC.
Fiduciary Fund (Not included in government-wide financial otobemento) — is used to account for
assets held by the Town on behalf ofothers.
The Town has presented the following fiduciary fund:
Custodial Fund - is used primarily to account for amounts due to other governments for general
and school taxes collected, as well as amounts due tn others for bail.
-33-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2025
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued)
3. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT
PRESENTATION
The accounting and financial reporting treatment is determined by the applicable measurement focus
and basis of accounting. Measurement focus refers to what is being measured, whereas the basis of
accounting refers to when revenues and expenditures are recognized in the accounts and reported in
the financial statements. Basis of accounting relates to the timing of the measurement made,
regardless of the measurement focus applied.
The government-wide statements are reported using the economic resources measurement focus and the
accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when
earned and expenses are recorded when the 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. 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 available when they are collectible within the current
period or soon enough thereafter to pay liabilities of the current period. For this purpose, the Town
generally considers revenues to be available if they are collected within 60 days after the year end. In
certain circumstances this application of the Town's normal availability period for a given revenue source
might distort revenue trends from one year to the next. In such unusual circumstances, revenues may be
considered available if received beyond 60 days. However, to the extent the revenue remains uncollected
after one year the Town would classify the fund balance as nonspendable.
Revenues susceptible to accrual include Suffolk County local assistance at year end on behalf of the
Town, franchise fees, mortgage taxes and certain charges for services and intergovernmental revenues.
Permits, fees, and other similar revenues are not susceptible to accrual because generally they are not
measurable until they are received in cash. In those instances where expenditures are the prime factor in
determining eligibility for state and federal grants, revenues are recognized when the expenditure is
incurred. In the governmental funds, the issuance of long-term debt is reported as other financing sources
upon receipt of the proceeds. 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, landfill closure and postclosure care costs, other postemployment
benefits payable and the proportionate share of the net pension liability are recorded when payment is
due. General capital asset acquisitions are reported as expenditures in governmental funds. Issuance of
long-term debt and acquisitions under leases are reported as other financing sources.
The proprietary fund distinguishes operating revenues and expenses from non-operating items. Operating
revenues generally result from providing and delivering services and/or goods in connection with the
proprietary fund's principal ongoing operations. Operating expenses include the cost of personnel
(salaries and benefits), materials and supplies, direct costs, equipment and depreciation of capital assets.
All revenues and expenses not meeting this definition are reported as non-operating revenues (such as
interest earnings)and expenses(such as interest expense).
The fiduciary fund utilizes the accrual basis of accounting.
Because governmental fund statements are presented using a measurement focus and a basis of
accounting different from that used in the government-wide statements governmental column, a
reconciliation is presented that briefly explains the adjustment necessary to reconcile ending net position
and the change in net position.
-34-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2025
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued)
4. ASSETS, LIABILITIES, DEFERRED OUTFLOWS/INFLOWS OF RESOURCES, AND NET
POSITION/FUND BALANCE
CASH AND INVESTMENTS
Cash consists of funds deposited in demand accounts, time deposit accounts and certificates of deposit
with maturities of less than three months. State statutes govern the Town's investment policies. The
Town's investments are governed by a formal investment policy. The Town's monies must be
deposited in FDIC-insured commercial banks or trust companies located within the State. The Town is
authorized to use demand accounts and certificates of deposit. Permissible investments include
obligations of the U.S. Treasury, U.S. Agencies and investments made by the Cooperative Liquid
Asset Security System ("CLASS").
Collateral is required for demand deposits and time deposit accounts at 100% of all deposits not covered
by federal deposit insurance. Obligations that may be pledged as collateral include obligations of the
United States and its agencies, obligations of the State and its municipalities, and school districts. The
Town's collateral agreements are based on the Town's available balance.
RECEIVABLES
Receivables include amounts due from federal, State and other governments or entities for services
provided by the Town. Receivables are recorded, and revenues recognized as earned or as specific
program expenditures are incurred.
DUE FROM/TO OTHER FUNDS
During the course of operations, the government has activity between funds for various purposes. Any
residual balance outstanding at year-end is reported as due from/due to other funds. While these
balances are reported in fund financial statements, certain eliminations are made in the preparation of the
government-wide financial statements.
INVENTORY AND PREPAID ITEMS
Inventory in the General and Special Revenue Funds is valued at cost, using weighted average cost
method. Inventory in these funds is accounted for under the consumption method.
Certain payments to vendors reflect costs applicable to future accounting periods and are reported as
prepaid items in both the government-wide and fund financial statements. Prepaids represent health
insurance and retirement benefits that will benefit a future period.
In governmental funds, amounts reported as inventories and prepaid items are equally offset by
nonspendable fund balance amounts, indicating that they do not constitute "available spendable
resources"even though they are a component of assets.
LEASES RECEIVABLE
The Town is a lessor for noncancellable leases of various cell towers. The Town recognizes a lease
receivable and a deferred inflow of resources in the financial statements. At the commencement of a
lease, the Town initially measures the lease receivable at the present value payments expected to be
received during the lease term. Subsequently, the lease receivable is reduced by the principal portion of
lease payments received. The deferred inflow of resources is initially measured at the initial amount of the
lease receivable. Subsequently, the deferred inflow of resources is recognized as revenue over the life of
the lease term. The Town monitors changes in circumstances that would require remeasurement of its
leases, and will remeasure the leases receivable and deferred inflows of resources if certain changes
occur that are expected to significantly affect the amount of the lease receivable.
-35-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2025
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued)
4. ASSETS, LIABILITIES, DEFERRED OUTFLOWS/INFLOWS OF RESOURCES, AND NET
POSITION/FUND BALANCE(continued)
CAPITAL ASSETS
Capital assets purchased or acquired with an original cost of$5,000 or more are reported at historical
cost or estimated historical cost. Contributed assets are reported at acquisition value as of the date of
donation. Additions, improvements and other capital outlays that significantly extend the useful life of
an asset are capitalized. Other costs incurred for repairs and maintenance are expensed as incurred.
Depreciation and amortization on all assets is provided on the straight-line basis over the following
estimated useful lives:
Buildings 10-40 years
Improvements other than buildings 20 years
Machinery and equipment 5-10 years
Software 5-10 years
Infrastructure 20-30 years
Right-to-use assets 4-20 years
Infrastructure assets, consisting of certain improvements other than buildings including roads, curbs,
sidewalks, bridges,drainage and street lighting are capitalized along with other capital assets.
Intangible assets lack physical substance, are nonfinancial in nature, and have an estimated useful life
extending beyond a single reporting period.
In the fund financial statements, capital assets are recorded as capital outlay expenditures in the
governmental fund upon acquisition.
DEFERRED OUTFLOWS/INFLOWS OF RESOURCES
In addition to assets, the Statement of Net Position will sometimes report a separate section for deferred
outflows of resources. Deferred outflows of resources represent a consumption of net assets that applies
to a future period(s) and so will not be recognized as an outflow of resources (expenditure/expense) until
that time. Deferred outflows of resources consist of deferred charges on refunding, pension related
amounts, and other postemployment benefits related amounts. The deferred charges on refunding stem
from advanced refunding of debt. The difference between the cost of securities placed in a trust for future
payment of refunded debt and the net carrying value of that debt is deferred and amortized as a
component of interest expense over the shorter of the term of the refunding issue or the original term of
the refunded debt. The amounts related to pensions consists of differences between the pension plans
expected and actual experience, changes of assumptions, changes in proportion and differences between
employer contribution and proportionate share of contributions, and contributions made subsequent to the
measurement date. The amounts related to other postemployment benefits consists of differences
between actual and expected experience, changes of assumptions, and contributions made subsequent
to the measurement date.
-36-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31. 2025
A. SUMMARY 0FSIGNIFICANT ACCOUNTING POLICIES(continued)
4. ASSETS, L|AB|0UES, DEFERRED OUTFLOWS/INFLOWS OF RESOURCES, AND
NE0POSNON/F0N0 BALANCE (oontinued)
DEFERRED OUTFLOWS/IN FLOWS OF RESOURCES(onntinued)
In addition to liabilities, the Statement of Net Position and balance sheet will sometimes report a separate
section for deferred inflows of resources. This oapanahy financial statement a|amant, deferred inflows of
nuoounceo, represents an acquisition of net assets that applies to a future period(s) and so will not be
recognized as an inflow of resources (revenue) until that time. The Town's deferred inflows of resources
consists of the following: unavailable ruvenuo, unearned revenue from real property taxes and pension
related amounts. |n the governmental funds, unavailable revenue represents amounts that do not meet
the availability criteria applicable to revenue recognition under the modified accrual basis of accounting.
These amounts are deferred and recognized as an inflow of resources in the period the amounts become
available. The unavailable revenue includes amounts for mortgage tax that relates to the current year but
does not meet the availability criteria. The unearned revenue relates bo the collection nf real estate taxes
for a future period and are accordingly reported as a deferred inflow in the government-wide Statement of
Net Position as well os the governmental Balance Sheet. In the Statement nf Net Position, the Town
reports deferred inflows of resources associated with its pension and the amounts are derived from the
differences between expected and actual axpehanoa, changes of assumptions, net difference between
projected and actual investment earnings on pension plan inveetments, and changes in proportion and
differences between the Town's contributions and proportionate share of contributions.
Deferred inflows of resources also include deferred inflows relating to the leases receivable. These
amounts are deferred and are amortized to lease revenue in o systematic and rational manner over the
term of the lease.
UNEARNED REVENUE
Unearned nevonuos, reported as liabilities in the fund and government-wide financial atetomants, are
those which asset recognition criteria have been mot, but which revenue recognition oriboho have not
been met for exchange type transactions. Such amounts include collections in advance for fee income
no|oUng to future periods.
PREMIUMS OF DEBT ISSUANCE
Premiums related to the issuance of long-term debt are amortized on a straight-line basis over the life of
the issue and are presented as part of the general obligation bonds payable in the non-current liabilities.
LONG-TERM OBLIGATIONS
In the government-wide financial statements, liabilities for long-term obligations consisting of general
obligation bonds, bond anticipation notes, |aoneo. SB|TAa, compensated aboenm*o, claims and
judgments, liability for landfill closure and pnatn|nsure onsts, net pension |iabi|ib/, and other
postomp|oyment benefits payable one recognized in the Statement nfNet Position. Bond premiums or
discounts are deferred and amortized on a straight-line basis over the life of the bonds. Bonds payable
are reported net of applicable bond premium or discount. Bond issuance costs are expensed as incurred.
In the fund financial statements, long-term obligations are not reported as liabilities. Governmental funds
recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The
face amount of the debt issued is reported as other financing oounoau and the payment of principal and
interest is reported as expenditures. 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 actual debt proceeds received, are reported as capital outlays.
-37-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31. 2025
A. SUMMARY 0FSIGNIFICANT ACCOUNTING POLICIES(continued)
4. ASSETS, LIABILITIES, DEFERRED OUTFLOWS/INFLOWS OF RESOURCES, AND NET
POSITION/FUND BALANCE(continued)
LEASES
The Town iaa lessee for nonoanmsUab|e leases ofequipment. The Town recognizes a lease liability and
an intangible right-to-use lease asset (^|aaae asset") in the government-wide financial statements. The
Town recognizes lease liabilities with an initial, individual value of$5,000 or more.
At the commencement nfo lease, the Town initially measures the lease liability at the present value of
payments expected to be made during the lease term. Subsequently, the lease liability is reduced by the
principal portion of lease payments made. The lease asset is initially measured as the initial amount of the
lease liability, adjusted for lease payments made at or before the lease commencement date, plus certain
initial direct costs. Subsequently, the lease asset is amortized on n straight-line basis over its useful life.
Key estimates and judgments related to leases include how the Town determines (1) the discount rate it
uses to discount the expected lease payments to present value, (2)lease term, and (3) lease payments.
The Town uses the interest naba charged by the lessor an the discount rate. When the interest rate
charged by the lessor is not provided. the Town generally uses its estimated incremental borrowing noba
os the discount rate for leases.
The lease term includes the nonnanmaUob|e period of the lease. Lease payments included in the
measurement of the lease liability are comprised of fixed payments and purchase option price that the
Town is reasonably certain to exercise. The Town monitors changes in circumstances that would require
a remeasurement of its lease and will remeasure the lease asset and liability if certain changes occur that
are expected to significantly affect the amount of the lease liability.
Right-to-use leased assets are reported with other capital assets and right-to-use lease liabilities are
reported with long-term liabilities on the Statement of Net Position.
SUBSCRIPTION-BASED INFORMATION TECHNOLOGY ARRANGEMENTS
The Town has entered into o subscription based information technology arrangement (^S8|TA'') with
various software providers. SBITAs are defined as arrangements in which a government entity contracts
with o vendor to aomaou and use software applications and related data posted by the vendor on the
vendors' servers. The Town recognizes a right-to-use subscription asset associated with its 80|TA
arrangements and discloses the total amount of subscription assets and the nu|abod accumulated
amortization, disclosed separately from other capital assets. The Town also discloses any payments not
included in the measurement of subscription assets.
VNTERF0N0TRANSACUONS
|nharfund tranaaotions, exclusive ofinbarfund services provided and used, have been eliminated from the
government-wide financial statements. In the funds statements, interfund transactions include:
o\ Unterfund Revenues
In the general fund, interfund revenues,which are quasi-external transactions, represent amounts
charged for services or facilities provided by the general fund. The amount paid by the fund
receiving the benefit of the service or facilities is reflected as an expenditure of that fund.
b\ Transfers
Transfers primarily represent payments to the capital projects fund from the other funds for their
appropriate share of the capital project costs or related BAN debt service amounts.
-38-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31. 2025
A. SUMMARY 0FSIGNIFICANT ACCOUNTING POLICIES(continued)
4. ASSETS, LIABILITIES, DEFERRED OUTFLOWS/INFLOWS OF RESOURCES,AND NET
POSITION/FUND BALANCE(continued)
NET POSITION AND FUND EQUITY CLASSIFICATIONS
In the government-wide statements and in the proprietary fund stotomonts, equity is classified as net
position and displayed in three components:
a) Net investment in capital assets - Consists of capital assets including restricted capital aaaatn,
net of accumulated depreciation and reduced by the outstanding balances of any bonde,
notes, or other borrowings that are attributable tnthe ocquisiUon, construction, or improvement
of those assets. Accounts payable in the capital projects fund is considered capital related
debt and is used in the calculation of net investment in capital assets.
b) Restricted - Consists of net position with constraints placed on the use either by (1) external
groups such on oreditons, gnantnro, contributors, or laws or regulations nf other governments;
or(2) law through constitutional provisions or enabling legislation.
u) Unrestricted - All other net position that does not meet the definition of "restricted" or
^net investment in capital aaaetn^
In the fund financial statements, governmental funds report aggregate amounts for five classifications
of fund balances based on the constraints imposed on the use of these resources; they are
(1) nonependab|a. (2) restricted, (3)committed, (4) assigned, ur(5) unassigned.
1> Nonapendab|ofund balance includes amounts that cannot be spent because they are either
(a) not in spendable form (i.e. prepaid items orinventohaa). or (b) will not convert ho cash
within the current period (i.e. long-term receivables and financial assets held for rena|e). or
(c) |eQmUy or contractually required to be maintained intact (i.e. the principal of permanent
fund).
The spendable portion of the fund balance comprises the remaining four classifications: restricted,
committed, assigned, and unassigned.
2) Restricted fund balance reflects the constraints imposed on resources either (a) externally by
uneditono, grantoro, contributors, or laws or regulation of other governments; or (b) imposed by
law through constitutional provisions or enabling legislation.
3) Committed fund balance reflects amounts that can only be used for specific purposes by
government using its highest and most binding level of decision-making authority. ThaTown's
highest decision-making authority is the Town Boord, who by adoption of Town ordinance
prior to yenpend, can commit fund balance. Those committed amounts cannot be used for
any other purpose unless the Town Board removes or changes the specified use by taking the
same type of action imposing the commitment.
4) Assigned fund balance reflects the amounts constrained by the Tovvn'o "intent" to be used for
specific purposes but are neither restricted nor committed. The Town Board has the authority
to assign amounts to be used for specific purposes. Assigned fund bo|onoos include all
remaining amounts (except negative balances) that are reported in governmental funds, other
than the general fund, that are not classified as nonspendab|e and are neither restricted nor
committed.
5> Unassigned fund balance is the residual classification for the general fund. It is also used to
report negative fund balances in other governmental funds.
-39-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31. 2025
A. SUMMARY 0FSIGNIFICANT ACCOUNTING POLICIES(continued)
4. ASSETS, LIABILITIES, DEFERRED OUTFLOWS/INFLOWS OF RESOURCES, AND NET
POSITION/FUND BALANCE(continued)
NET POSITION AND FUND BALANCE FLOW ASSUMPTIONS
When outlays for a particular purpose can be funded from both restricted and unrestricted net position
resources it io the Tovvn'a policy to consider restricted - net position to have been depleted before
unnmntricted - netpooitioninapp|ied.
When both restricted and unrestricted resources are available for use, itis the Tnwn's default policy to
use restricted resources first, and then unrestricted resources- committed, assigned and unassigned -
in order as needed.
FUND BALANCE POLICIES
The Town has, by resn|ution, adopted o fund balance policy that states the Town must maintain n
minimum unassigned fund balance in the general fund equal to 1096 of general fund expenditures. In
the event that the balance drops below the established minimum level, the Town's Board will develop
a plan to replenish the fund balance to the established minimum level within the current or ensuing
fiscal year.
6. REVENUES AND EXPENDITURES
REAL PROPERTY TAX ASSESSMENT AND COLLECTION PROCEDURES
Real property taxes are levied annually no later than December 11tand are recognized as revenue
January 1m of the year for which they were levied. The Town has its own Assessor's Office whose
responsibilities are independent and distinct from those of the Receiver of Taxes ("Receiver"). The Town
assessment rolls are used for the levy of property taxes by the Town and the school districts, as well as by
the County of Suffolk, New York("County")and by special districts based upon a single tax bill.
The Town of Southold Receiver ofTaxes collects all real property taxes for the Town. Suffolk County,
Town Special Districts and School Districts. These taxes are levied on December 1, and are due intwo
installments, 50% on December 1 and 50% on May 10. payable without penalty toJanuary 10 and May
31. respectively. Penalties are imposed thereafter at the rate of one-twelfth of the naba of interest
determined by the State Commissioner ofTaxation and Finanoe, after which taxes are payable to the
County Treasurer. The Town retains the total amount of Town, Highway and Town Special Districts levies
from the amount collected, and forwards the balance nnUeobed to the County which assumes on||ootinn
responsibility. The Town and Town'n Special Districts therefore nao|izo annually the 10096 collection of
real property taxes.
OTHERPOSTE08PLOYK8ENT BENEFITS
In addition to providing pension benefits, the Town provides health insurance coverage and survivor
benefits for retired employees. Substantially all of the Town'o employees may become eligible for these
benefits if they reach normal retirement age while working for the Town.
Health oone benefits in 0000ndenoe with Now York State Health Insurance Rules and Regulations
(administered by the New York State Department of Civil Servima), are provided through the New York
State Empire Man (the "Empire Plan") whose premiums are based on the benefits paid throughout the
State during the year.
-40-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2025
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued)
5. REVENUES AND EXPENDITURES(continued)
OTHER POSTEMPLOYMENT BENEFITS(continued)
The Town recognizes the cost of providing benefits by recording its share of insurance premiums as an
expenditure in the year paid. The Town's union contracts and ordinances require that it provide its eligible
enrollees with Empire Plan benefit coverage, or if another provider is utilized, the equivalent coverage.
Under the provisions of the Empire Plan, premiums are adjusted on a prospective basis for any losses
experienced by the Empire Plan. The Town has the option to terminate its participation in the Empire Plan
at any time without liability for its respective share of any previously incurred loss. The liability for other
postemployment benefits payable is recorded as a non-current liability in the government-wide
statements. The current year increase in the liability is based on the most recent actuarial valuation.
COMPENSATED ABSENCES
The liability for compensated absences represents the sick time ("leave"/"leave days") and salary
related payments which have been earned for services previously rendered by employees in
accordance with the Town's various collective bargaining agreements, accumulates, is allowed to be
carried over to subsequent year(s) and is deemed more likely than not (by management) to be used
for time off or otherwise paid/settled in the future. The liability is calculated based on each employees'
rate of pay and the number of unused leave days accumulated as of year-end, management's
assumption that the likelihood of future use (either by use during employment or settlement/payment
upon separation from service) is probable, and the salary related payments are directly and
incrementally associated with payments for the leave. The Town utilizes historical data of past usage
patterns to estimate the expected usage and payment of compensated absences. The liability for
compensated absences is reflected in the governmentwide financial statements as current and long-
term liabilities. In the fund financial statements, only the compensated absences liability that has
matured through employee resignation or retirement and is expected to be payable from expendable
available financial resources is reported. The financial reporting of these amounts are presented in
accordance with the provisions of GASB Statement No. 101, "Compensated Absences".
PENSIONS
The Town, as a participant in the New York State and Local Employees' Retirement System and Local
Police and Fireman Retirement System, recognizes the proportionate share of the net pension liability,
deferred outflows of resources, and deferred inflows of resources in the government-wide financial
statements, using the accrual basis of accounting, regardless of the amount recognized as pension
expenditures in the fund financial statements. The amounts recognized have been determined on the
same basis as reported by the Systems, utilizing the year end of March 31st. The financial reporting of
these amounts are presented in accordance with the provisions of GASB Statement No. 68,
"Accounting and Financial Reporting for Pensions—an amendment of GASB Statement No. 27'.
ENCUMBRANCES
Encumbrance accounting, under which purchase orders, contracts and other commitments for the
expenditures of monies are recorded for budgetary control purposes, is employed in the governmental
funds. Encumbrances are reported as restrictions, commitments, or assignments of fund balances since
they do not constitute expenditures or liabilities. Expenditures for such commitments are recorded in the
period in which the liability is incurred.
6. USE OF ESTIMATES
The preparation of basic 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 amounts of assets, deferred outflows of resources, liabilities and deferred inflows of resources
and, disclosure of contingent amounts, at the date of the financial statements, and the reported amounts
of revenues and expenditures during the reporting period. Actual results could differ from those estimates.
-41-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2025
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
7. NEW ACCOUNTING PRONOUNCEMENT
The Town has adopted all of the current Statements of the Governmental Accounting Standards Board
("GASB")that are applicable. During the year ended December 31, 2025,the Town adopted the following:
GASB Statement No. 102, Certain Risk Disclosures, has been issued to provide guidance on disclosures
within government financial statements for risks related to a government's vulnerabilities due to certain
concentrations or constraints. The requirements of this Statement are effective for fiscal years beginning
after June 15, 2024, and all reporting periods thereafter. The Town adopted this Statement for the year
ended December 31, 2025. The adoption of this Statement did not have a material impact on the Town's
financial statements.
8. SUBSEQUENT EVENTS
Management has evaluated subsequent events for disclosure and/or recognition in the financial
statements through the date the financial statements were available to be issued, which date is
September 30, 2026.
B. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
1. BUDGETARY INFORMATION
Budgets are adopted annually on a basis consistent with generally accepted accounting principles.
Appropriations authorized for the current year are increased by the amount of encumbrances carried
forward from the prior year.
Budgets for the general and special revenue funds, exclusive of the special grant fund, are legally
adopted for each year. The budgets are adopted on a basis of accounting consistent with GAAP,
except that appropriations authorized for the current year are increased by the amount of
encumbrances carried forward from the prior years. In the event that unanticipated revenues are
received (i.e. specific grant revenues) and exceed budgeted amounts, additional budgetary
appropriations may be made. The capital projects and special grant funds are budgeted on a project
or grant basis.
The Town follows the procedures enumerated below in establishing the budgetary data reflected in the
financial statements:
a) No later than October 1st, the Supervisor submits a tentative budget to the Town Board for the
fiscal year commencing the following fiscal year. The tentative budget includes the proposed
means of financing for all funds.
b) After public hearings are conducted to obtain taxpayer comments, no later than November
20th, the Town Board adopts the budget.
c) The Town Board must approve all modifications of the budget. However, the Comptroller is
authorized to transfer certain budgeted amounts within departments.
d) In June 2011, New York State enacted Chapter 97, Laws of 2011 Real Property Tax Levy Cap
and Mandate Relief Provisions, which includes a 2% property tax cap for municipalities.
Beginning in 2012, no local government is authorized to increase its property tax levy by more
than 2% or the rate of inflation (whichever is less); however, local governments can exceed the
tax levy limit by a 60% vote of the governing body and annually adopting a local law. The Town
exceeded its tax levy limit for the year ended December 31, 2025 by adopting a local law in
accordance with the Tax Levy Limitation Law.
-42-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2025
B. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY(continued)
2. FUND BALANCE AND NET POSITION
FUND BALANCE
The following table provides the detail regarding fund balance categories and classifications for the
governmental funds which show components of nonspendable fund balances, as well as the purposes for
restricted, committed and assigned fund balance. The unassigned fund balance is also shown.
Capital Community Other
General Highway Projects Reservation Governmental
Fund Fund Fund Fund Funds Total
Fund Balances:
Nonspendable:
Long-term receivables
-lease related $ 189,805 $ 189,805
Inventory 2,046 $ 78,844 $ 29,227 110,117
Repaids 1,032,346 98,622 $ 5,692 123,167 1,259,827
Total Nonspendable 1,224,197 177,466 $ -0- 5,692 152,394 1,559,749
Restricted for:
Unspent debt proceeds 2,674,160 2,674,160
Grantors and donor restrictions -
Land/Land right purchases 47,310,138 47,310,138
Community housing 6,905,119 6,905,119
Total Restricted -0- -0- 2,674,160 47,310,138 6,905,119 56,889,417
Committed for:
Parks and recreation 692,127 692,127
Affordable housing 1,374,123 1,374,123
Total Committed 692,127 -0- -0- -0- 1,374,123 2,066,250
Assigned to:
Subsequent year's budget 4,000,000 400,000 400,000 4,800,000
Purchases on order
or contractual obligations 130,663 1,468,425 36,663 1,635,751
Special revenue funds 3,320,211 5,251,803 8,572,014
Capital projects 831,011 831,011
Judgments and claims 500,000 500,000
Total Assigned 4,630,663 3,720,211 2,299,436 -0- 5,688,466 16,338,776
Unassigned,reported in:
General Fund 22,698,794 22,698,794
Total Unassigned 22,698,794 -0- -0- -0- -0- 22,698,794
Total Fund Balances $ 29,245,781 $ 3,897,677 $ 4,973,596 $ 47,315,830 $ 14,120,102 $ 99,552,986
SPACE INTENTIONALLY LEFT BLANK
-43-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2025
B. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY(continued)
2. FUND BALANCE AND NET POSITION (continued)
NET POSITION—NET INVESTMENT IN CAPITAL ASSETS
Net investment in capital assets, governmental activities, consists of capital assets, net of accumulated
depreciation, reduced by the outstanding balance of any long-term debt used to build or acquire the
capital assets. The net investment in capital assets of $205,624,628 included as part of the
governmental activities net position is calculated as follows:
Capital assets, net of depreciation $ 238,510,882
Deferred charges on refunding 606,696
Serial bonds payable (19,850,965)
Unamortized premiums (995,895)
BANs payable (13,067,577)
Unspent debt proceeds 2,674,160
Leases payable (224,225)
Subscriptions payable (318,731)
Capital related accounts payable (1,638,740)
Retainage payable (70,977)
Balance at December 31, 2025 $ 205,624,628
C. DETAILED NOTES ON ALL FUNDS
1. CASH AND INVESTMENTS
Custodial Credit Risk- Deposits/Investments- Custodial credit risk for deposits exists when, in the event
of the failure of a depository financial institution, a government may be unable to recover deposits, or
recover collateral securities that are in possession of an outside agency. Custodial credit risk for
investments exists when, in the event of the failure of the counterparty, a government will not be able to
recover the value of its investments or collateral securities that are in possession of an outside party.
The Town's investments policy defines permissible investments, limits the amount of deposits at any time
at any one bank or trust company, requires that bank balances in excess of the Federal Deposit
Insurance Corporation insurance limits of $250,000 be protected with custodial agreements which
requires that balances are fully collateralized in accordance with New York State General Municipal Law
("GML")and limits the form of acceptable collateral ization.
Credit Risk - The Town's written investment guidelines and policies are designed to protect principal by
limiting risk. State and Town law limit investments to those authorized by State statutes.
Interest-Rate Risk- Interest-rate risk arises because potential purchasers of debt securities will not agree
to pay face value for those securities if interest rates substantially increase, thereby affording potential
purchasers more favorable rates on essentially equivalent securities. Accordingly, such investments
would have to be held to maturity to avoid a potential loss.
Concentration of Credit Risk — Concentration of credit risk can arise as a result of failure to adequately
diversify investments. Concentration risk disclosure is required for positions of 5 percent or more in
securities of a single issuer.
-44-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31. 2025
C. DETAILED NOTES ONALL FUNDS (continued)
1. CASH AND INVESTMENTS (oontinuad)
Financial institutions can satisfy collateral requirements by furnishing an eligible letter ofcredit, an eligible
surety bond, by pledging eligible securities as specified in Section 10 of GML or participating in a deposit
placement program pursuant to Section 0-r of the banking law. Irrevocable letters of credit issued as
collateral in certain situations may require a threshold of up to 140% of aggregate deposits. Eligible
securities that may be pledged as collateral includes but is not limited to obligations of the United States
or its agencies, obligations of New York State and obligations of municipalities of New York State.
The use of available daily balances to determine collateral requirements may result in the available
balance being under-collateralized ot various times during the year.
At December 31. 2025. the Town'scash book balance was $87.008.513. This amount is inclusive of
fiduciary fund deposits of$22,220.085 but exclusive of petty cash uf$1.858. CLASS of$45.340.O21' and
investments in the business-type activities of $153.207. The available bank balance was $87.952.643
exclusive of CLASS deposits. Of the bank balance, $10.056.318 was covered by Federal depository
inounonoa. and $77.298.325vvao covered by collateral held bv the Town'a agonto, third-party financial
inotituduno, in the Town'a name.
External Investment Pool
The Town participates in the New York Cooperative Liquid Assets Securities System ("NYCLASS"), a
cooperative investment pool organized under a municipal cooperation agreement pursuant to Articles
3-A and 5-G of General Municipal Law of the State of New York. NYCLAGS is administered by a
governing board o|ootod by its participants. The governing board has retained PTK4A Investment
Advisors as its investment adviser. PTyWA Investment Advisors is registered with the Securities and
Exchange Commission ("SEC") and is subject to applicable federal securities laws and GEC oversight
in its capacity ao investment adviser. The SEC registration and oversight apply tothe investment
adviser and do not constitute SEC negiatnaUon, approva|, or direct regulation ofNYCLA8S.
NYCLASS is authorized to invest in obligations issued or guaranteed by the United States and certain
of its agenoieo, obligations of the State of Now York and repurchase agneemonta, in accordance with
its investment policies. These investments are reported at fair value. NYCLASS issues separate
audited financial statements for its fiscal year ending June 3Uih.
At Docember31. 2025, thoTown's investment in NYCLASSvvos $45.340.821. which equaled the
value of its pool shares. NYCLAG8's investment policy limits the maximum remaining maturity of any
individual investment to 397 days and the maximum weighted-average maturity of the portfolio to 00
days.
NYCLASS is rated AAAm by S&P Global Ratings. AA\Am principal stability fund rating indicates S&P
Global Ratings' opinion that the pool has an extremely strong capacity to maintain principal stability
and limit exposure to principal |ooneo due to credit risk. The rating is not guarantee of performance
or principal and is subject to change. An investment in NYCLASS is not insured or guaranteed by the
FDIC or any other governmental agency.
Additional information. including NYCLASS's annual report and audited financial stahemonbs, is
available at .
-45-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31. 2025
C. DETAILED NOTES ONALL FUNDS (continued)
1. CASH AND INVESTMENTS (oontinuad)
Fair Value Measurements
A framework has been established for measuring fair value of its investments. That framework provides a
fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Level 2 -
Inputs to the valuation methodology include quoted prices for similar assetsor liabilities in active markets,
quoted prices for identical or similar assets or liabilities in inactive markets, inputsothorthanquotedphces
that are observable for the asset or liability, and inputs that are derived principally from or corroborated by
observable market data by correlation or other means. If the asset or liability has a specified (contractual)
henn' the |nva| 2 input must be obaan/ab|a for substantially the full term of the asset or liability. As of
O000mber31. 2025. the Town reported investments of $1S3.2O7 in the business-type aotiviUoo, which
consisted of certificates of deposit, and are considered level 2assets.
2. DNTERFWN0 RECEIVABLES, PAYABLES AND TRANSFERS
|nterfund receivable and payable balances for the primary government at December 31. 2025 are
expected to be paid currently. These balances represent various temporary |oano, ohargeo, and
reimbursements between funds for operating and capital expenditures and are stated as follows:
Amount
Receivable Amount Payable
Major ommmmonta| Funds:
General Fund n,wn+wun $ 620,839 $ 3,998,528
Highway Fund 1.290.e64 1.465.7e5
Capital Projects Fund 3.370.227 om.o*o
Community Preservation Fund 'o' 8193
nxo|Major Funds 5282030 6294 14a
monmajo,Governmental Funds:
aonom| punu-part-Tvwn 211.e84 64.027
Special Grant 'n' 101.9e4
East-West Fire Protection District 177.203 n
nohom Island Sewer o|amct 23,033 -0-
smmvvenmMon000mommmnct mrmn 21,421
Total wvnmajv,punua 1,199,560 187442
rma| $ 6,481,590 $ 6*81 000
|nbyrfund transfer balances for the primary government at Deoember31' 2025 represent capital project
transfers and risk retention transfers and are stated as follows:
Transfers In Transfers Out
Major Governmental Funds:
General Fund rvwn+wuo $ 1.187.4e1 $ 1.426.8*e
Highway Fund 12.459 2.164.e16
Capital Projects Fund 36845e6 1,182,541
Total Major Funds 48e4546 477432*
wvnmajv,Governmental Funds:
General Fund Part-Town 'n' 46.000
Solid Waste Management District nroo snnnn
Total wonmajo,Fvnun nron 114000
Total $ 4,888,326 $ 4888326
-46-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2025
C. DETAILED NOTES ON ALL FUNDS (continued)
3. LEASES RECEIVABLE
The Town has entered into three agreements to lease its buildings and land to others for cell towers.
The Town recognizes lease receivables and deferred inflows of resources - lease related in the
government-wide and fund financial statements. The Town expects to renew these leases for all
renewable periods. The lease terms are for up to 287 months. During 2025, the Town recognized
$115,698 of lease revenue in the general fund, and $73,870 of interest income in the general fund.
During the year one lease agreement was terminated. The Town removed the related lease receivable
and deferred inflow balance associated with the terminated lease. The termination of this lease
resulted in a reduction of the lease receivable and deferred inflow of resources balances as of
December 31, 2025 of $334,010 and $304,569 respectively. The Town reported a loss on early
termination of lease in the general fund of$29,441.
The following table is the amortization schedule for the lease receivables:
Primary Government
Years Ending
December 31, Principal Interest Totals
2026 $ 69,789 $ 58,072 $ 127,861
2027 74,846 55,506 130,352
2028 78,144 52,810 130,954
2029 81,567 49,997 131,564
2030 91,524 46,965 138,489
2031-2035 448,225 182,981 631,206
2036-2040 465,590 103,662 569,252
2041-2045 185,950 39,195 225,145
2046-2048 122,813 6,978 129,791
Total $ 1,618,448 $ 596,166 $ 2,214,614
SPACE INTENTIONALLY LEFT BLANK
-47-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2025
C. DETAILED NOTES ON ALL FUNDS (continued)
4. CAPITAL ASSETS
Balance Transfers and Balance
Primary Government 1/1/2025 Additions Deletions 12/31/2025
Capital assets not being depreciated:
Land $ 30,831,653 $ 667,742 $ 31,499,395
Land development rights 153,052,277 153,052,277
Construction in progress 1,005,240 2,253,024 3,258,264
Total Capital Assets Not Being Depreciated 184,889,170 2,920,766 $ -0- 187,809,936
Depreciable/amortizable capital assets:
Buildings 22,325,474 20,491 22,345,965
Improvements other than buildings 17,071,236 4,537,133 21,608,369
Machinery and equipment 20,499,495 2,226,969 513,179 22,213,285
Software 1,585,279 23,739 1,609,018
Infrastructure 97,417,821 3,099,439 100,517,260
Right-to-use lease asset 414,565 590,747 6,508 998,804
Right-to-use subscription asset 77,708 465,089 77,708 465,089
Total Depreciable/Amortizable Capital Assets 159,391,578 10,963,607 597,395 169,757,790
Less accumulated depreciation/amortization:
Buildings 10,256,934 649,682 10,906,616
Improvements other than buildings 12,708,995 501,641 13,210,636
Machinery and equipment 13,508,705 1,463,273 235,683 14,736,295
Software 1,366,539 63,646 221,612 1,208,573
Infrastructure 77,441,657 1,239,017 78,680,674
Flight-to-use lease asset 139,724 165,891 6,508 299,107
Right-to-use subscription asset 38,854 53,797 77,708 14,943
Total Accumulated Depreciation/Amortization $ 115,461,408 $ 4,136,947 $ 541,511 119,056,844
Total Net Depreciable/Amortizable Capital Assets 50,700,946
Total Net Capital Assets $ 238,510,882
Depreciation/amortization expense was charged to governmental functions as follows:
General government support $ 1,103,967
Public safety 503,877
Transportation 1,578,659
Econorric assistance and opportunity 15,577
Culture and recreation 86,250
Home and community services 848,617
$ 4,136,947
The Town evaluates significant events or changes in circumstances affecting capital assets to
determine whether impairment of a capital asset has occurred. The Town's policy is to record an
impairment loss in the period when the Town determines that the carrying amount of the asset will not
be recoverable. At December 31, 2025, the Town has not recorded any such impairment losses.
-48-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2025
C. DETAILED NOTES ON ALL FUNDS(continued)
4. CAPITAL ASSETS (continued)
Balance Transfers/ Balance
Nonmajor Component Units 1/1/2025 Additions Deletions 12/31/2025
Capital assets not being depreciated:
Land $ 4,220,925 $ 4,220,925
Construction in progress 2,126,438 $ 3,519,389 $ 4,372,952 1,272,875
Total Capital Assets Not Being Depreciated 6,347,363 3,519,389 4,372,952 5,493,800
Depreciable capital assets:
Buildings 14,639,194 60,758 14,699,952
Improvements other than buildings 2,941,729 11,379 (357,978) 3,311,086
Wchinery and equipment 6,409,035 467,024 6,876,059
Infrastructure 6,605,408 357,978 6,247,430
Total Depreciable Capital Assets 30,595,366 539,161 -0- 31,134,527
Less accumulated depreciation:
Buildings 8,904,902 462,304 9,367,206
Improvements other than buildings 1,683,059 98,320 1,781,379
Nlachinery and equipment 4,315,683 141,634 4,457,317
Infrastructure 3,837,955 209,472 4,047,427
Total Accumulated Depreciation $ 18,741,599 $ 911,730 $ -0- 19,653,329
Total Net Depreciable Capital Assets 11,481,198
Total Net Capital Assets $ 16,974,998
Depreciation expense was charged to governmental functions as follows:
Transportation $ 698,105
Culture and recreation 113,880
Home and community services 99,745
$ 911,730
During 2025,the Fishers Island Ferry District transferred$4,372,952 of capital assets to the Town for
completed projects at the Elizabeth Field Airport.
5. INDEBTEDNESS
SHORT-TERM DEBT
Bond Anticipation Notes ("BANs") - Bond anticipation notes are used as a temporary means of
financing capital expenditures in the Capital Projects Fund. State law requires that BANs issued for capital
purposes be converted to long-term obligations within five years after the original issue date. The notes or
renewal thereof may not extend more than two years beyond the original date of issue unless a portion is
redeemed within two years and within each 12-month period thereafter. Liabilities for BANs are generally
accounted for in the Capital Projects Fund. BANs are expected to be paid from the proceeds of future
bond issues after renewal of these notes. As of December 31, 2025 the Town reported bond anticipation
notes outstanding of $17,840,345, of which $4,772,768 relate to Fishers Island Ferry District and were
reported as short term debt. The remaining $13,067,577 was reported as long-term debt by the primary
government. These BANs were issued in September 2025, bear interest at 3.25% and matured in
September 2026.
A summary of changes in short-term BANs for the year ended December 31, 2025 is as follows:
Balance Balance
1/1/2025 Increases Reductions 12/31/2025
Component Units $ 5,530,000 $ 4,772,768 $ 5,530,000 $ 4,772,768
Total BANs Payable $ 5,530,000 $ 4,772,768 $ 5,530,000 $ 4,772,768
-49-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31. 2025
C. DETAILED NOTES ONALL FUNDS (continued)
5. INDEBTEDNESS (continued)
LONG-TERM DEBT
General Obligation Bonds -The Town borrows money in order to acquire land, equipment or construct
buildings and improvements. This enables the cost of these capital assets iobe borne by the present and
future taxpayers receiving the benefit of the capital assets.
Arbitrage provisions of the Internal Revenue Tax Act of 1986 require the Town to rebate excess arbitrage
earnings from bond proceeds to the federal government. There were no excess arbitrage earnings for the
year ended December 31. 2025.
These long-term direct obligation bonds are backed by the full faith and credit of the Town which are
payable from tax revenues of the General Fund and Special Revenue Funds. Interest rates on these
bonds vary from 2.00%to5.00Y6 and have maturity dates through 2042.
At December 31, 2025, bonds payable consisted of the following individual issues:
Primary o m
/mvnmt Outstanding
/avve Purpose Final Maturity Issue Date Rate Amount
uo1s Refunding Serial Bonds Refunding Bond March 1.uouo July uy.uo1s 2.00% 5.00% u 2.600.000
xo10 Refunding Serial Bonds Refunding Bond February 15.2030 October^uo10 2.00% 4.00m r.m*.000
ou1s Public/mnro\emont Serial Bonds pum/c/mpmwmont August 15.203* August ua.uu10 2.00% 2.25% 2.115.000
nmx Public Improvement Serial Bonds Public Improvement September 1s.uwu September zo.umn 3.00m *.00% 7,430,965
$ 19,850,965
Future principal and interest payments to maturity for the primary government are as follows:
Primary Government
Years Ending General Obligation Bonds
nm:amuwro1. Principal Interest n*u|s
xocs $ 2.597.064 $ 569.58e $ 3.166.652
zozr 2.599.612 492.63* 3.0e2.2*6
ouca 2.647.1*7 420.202 3,067,359
ouce 2.664.705 350.821 3.015.526
onnn x.axo.u*e 278.6e0 2,960,939
2031'2035 3.032.429 980,978 4.013.407
2036-2040 2.491.611 534.117 3,025,728
2041'2042 1,136,138 68,608 1 on4*m
Total $ 19,850,965 $ 3,695,638 $ znn*000n
Bond Anticipation Notes Payable—The bond anticipation note in the amount of$17,840,345 that was
issued on September 18, 2025 with an interest rate of 3.25% was renewed on September 16, 2026. The
Town reported $4.772.708 as a shurt'bann liability in the component unit financial statements, and
$13.067.577aaa long-term liability in the government-wide financial statements.
-50-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2025
C. DETAILED NOTES ON ALL FUNDS (continued)
5. INDEBTEDNESS (continued)
LONG-TERM DEBT(continued)
Leases Payable - Leases payable as of December 31, 2025 are composed of the following individual
agreements:
Primary Government
Interest Outstanding
Purpose Year of Issue Final Maturity Rate Amount
Copiers 2022 2026 3,20% $ 4,269
Solar panels 2021 2026 3.02% 2,237
Hi-band radio 2018 2028 3,03% 54,943
Copiers 2023 2027 2.69% 2,408
Copiers 2023 2027 2.77% 2,031
Copiers 2023 2027 2.69% 1,817
Parking lot 2023 2043 4.33% 116,460
Radios 2024 2026 3.16% 8,848
Copiers 2024 2028 2.46% 5,677
Mail machine 2024 2029 2.54% 10,403
Copiers 2024 2028 2.72% 7,802
Copiers 2025 2029 2.73% 7,330
$ 224,225
Interest expense of$4,546 was recorded in the fund financial statements, of which$4,059 was reported in
the general fund, and $487 was reported in the highway fund.
Future principal and interest payments for leases payable for the primary government are as follows:
Primary Government
Years Ending
December 31, Principal Interest Totals
2026 $ 56,272 $ 2,820 $ 59,092
2027 38,799 1,626 40,425
2028 30,165 708 30,873
2029 7,760 358 8,118
2030 6,365 329 6,694
2031-2035 32,171 1,299 33,470
2036-2040 32,755 715 33,470
2041-2043 19,938 144 20,082
Total $ 224,225 $ 7,999 $ 232,224
Subscription-Based Information Technology Arrangement Liability-Subscription-Based Information
Technology Arrangement ("SBITA") Liability as of December 31, 2025 is composed of the following
individual agreements:
Primary Goernment
Interest Outstanding
Vendor Year of Issue Final Maturity Rate Amount
Intellishift 2025 2027 2.57% $ 22,497
Tyler 2025 2030 2.73% 254,096
Flock 2025 2031 2.76% 42,138
$ 318,731
-51-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2025
C. DETAILED NOTES ON ALL FUNDS (continued)
5. INDEBTEDNESS (continued)
LONG-TERM DEBT(continued)
Interest expense of$2,323 was recorded in the fund financial statements, of which$2,108 was reported in
the general fund, and $163 was reported in the highway fund, and $52 was reported in the nonmajor
governmental funds.
Future principal and interest payments for SBITA liability for the primary government is as follows:
Primary Government
Years Ending
December 31, Principal Interest Totals
2026 $ 67,081 $ 8,503 $ 75,584
2027 78,294 6,731 85,025
2028 72,632 4,740 77,372
2029 74,617 2,755 77,372
2030 25,378 715 26,093
2031 729 21 750
Total $ 318,731 $ 23,465 $ 342,196
CHANGES IN LONG-TERM LIABILITIES
Long-term liability activity for the year ended December 31, 2025 is as follows:
Noncurrent
Balance Balance Liabilities Due Noncurrent
1/1/2025 Increases Reductions 12/31/2025 Within One Year Liabilities
Primary Government:
General obligation bonds $ 22,654,870 $ 2,803,905 $ 19,850,965 $ 2,597,064 $ 17,253,901
Add:premiums on obligations 1,193,349 197,454 995,895 995,895
Total general obligation bonds
payable 23,848,219 -0- 3,001,359 20,846,860 2,597,064 18,249,796
Bond anticipation notes 12,824,160 $ 1,450,000 1,206,583 13,067,577 1,162,577 11,905,000
Leases payable 284,506 8,931 69,212 224,225 56,272 167,953
Subscription based information
technology arrangements payable 24,597 332,937 38,803 318,731 67,081 251,650
Compensated absences* 8,634,609 175,649 8,458,960 1,763,372 6,695,588
General claims and judgments
liability 275,000 239,487 14,487 500,000 14,487 485,513
Estimated liability for landfill closure
and postclosure care costs 318,346 35,390 282,956 25,661 257,295
Net pension liability-ERS 5,832,994 4,467,331 3,702,572 6,597,753 6,597,753
Net pension liability-PFRS 8,568,579 4,879,266 2,718,416 10,729,429 10,729,429
Total OPEB liability 104,151,440 34,862,633 18,142,559 120,871,514 3,897,583 116,973,931
$ 164,762,450 $ 46,240,585 $ 29,105,030 $ 181,898,005 $ 9,584,097 $ 172,313,908
Noncurrent
Balance Balance Liabilities Due Noncurrent
1/1/2025 Increases Reductions 12/31/2025 Within One Year Liabilities
Component Units:
General obligation bonds $ 1,080,130 $ 41,095 $ 1,039,035 $ 42,935 $ 996,100
Compensated absences* 388,323 $ 23,957 412,280 103,070 309,210
Net pension liability 657,485 99,297 756,782 756,782
Other postemployment benefits
payable 574,811 57,590 517,221 517,221
$ 2,700,749 $ 123,254 $ 98,685 $ 2,725,318 $ 146,005 $ 2,579,313
*The change in compensated absences is reflected as a net change.
-52-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2025
C. DETAILED NOTES ON ALL FUNDS (continued)
5. INDEBTEDNESS (continued)
CHANGES IN LONG-TERM LIABILITIES(continued)
The liabilities for compensated absences, leases, subscription-based information technology
arrangements, net pension liability and other postemployment benefits payable will be liquidated
through future budgetary appropriations in the funds that gave rise to the liability. In most instances,
these amounts will be liquidated from the general fund, highway fund, and certain special revenue
funds. Payments for estimated claims and judgments will be liquidated primarily from the general fund.
The estimated liability for landfill closure and post closure costs will be liquidated by the solid waste
management fund.
6. RETIREMENT SYSTEM
Plan Description
The Town participates in the New York State and Local Employees' Retirement System ("ERS") and
Local Police and Fire Retirement System ("PFRS"), which are collectively referred to as the New York
State and Local Retirement System (the "System"). These are cost-sharing multiple-employer defined
benefit pension plans. The net position of the System is held in the New York Common Retirement Fund
(the "Fund"), which was established to hold all net assets and record changes in fiduciary net position
allocated to the System. 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. 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. The Town also participates in the Public Employees' Group Life Insurance
Plan ("GLIP"), which provides death benefits in the form of life insurance. The System is included in the
State's financial report as a pension trust fund. That report may be found at http://www.osc.state.ny.us/
retire/publications/index.php or obtained by writing to the New York State and Local Retirement
System, 110 State Street, Albany, New York 12244-0001.
Benefits Provided
The System provides retirement benefits as well as death and disability benefits.
Tiers 1 and 2
Eligibility: Tier 1 members, with the exception of those retiring under special retirement plans, must be at
least age 55 to be eligible to collect a retirement benefit, there is no minimum service requirement. Tier 2
members, with the exception of those retiring under special retirement plans, must have five years of
service and be at least age 55 to be eligible to collect a retirement benefit. The age at which full benefits
may be collected for Tier 1 and Tier 2, is 55 and 62, respectively.
Benefit calculation: Generally, the benefit is 1.67% of final average salary for each year of service if the
member retires with less than 20 years. If the member retires with 20 or more years of service, the benefit
is 2% of final average salary for each year of service. Tier 2 members with five or more years of service
can retire as early as age 55 with reduced benefits. Tier 2 members age 55 or older with 30 or more years
of service can retire with no reduction in benefits. As a result of Article 19 of the RSSL, Tiers 1 and 2
members who worked continuously from April 1, 1999 through October 1, 2000 received an additional
month of service credit for each year of credited service they have at retirement, up to a maximum of 24
additional months.
-53-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2025
C. DETAILED NOTES ON ALL FUNDS (continued)
6. RETIREMENT SYSTEM (continued)
Benefits Provided (continued)
Final average salary is the average of the wages earned in the three highest consecutive years of
employment. For Tier 1 members who joined on or after June 17, 1971, each year's compensation used
in the final average salary calculation is limited to no more than 20% greater than the previous year. For
Tier 2 members, each year of final average salary is limited to no more than 20%than the average of the
previous two years.
Tiers 3, 4 and 5
Eligibility:Tiers 3 and 4 members, with the exception of those retiring under special retirement plans, must
have five years of service and be at least age 55 to be eligible to collect a retirement benefit. Tier 5
members, with the exception of those retiring under special retirement plans, must have five years of
service and be at least 55 to be eligible to collect a retirement benefit. The full benefit age for Tiers 3, 4
and 5 is 62.
Benefit calculation: Generally, the benefit is 1.67% of final average salary for each year of service if the
member retires with less than 20 years. If a member retires with between 20 and 30 years of service, the
benefit is 2% of final average salary for each year of service. If a member retires with more than 30 years
of service, an additional benefit of 1.5% of final average salary is applied for each year of service over 30
years. Tiers 3, 4 and 5 members with five or more years of service can retire as early as age 55 with
reduced benefits. Tiers 3 and 4 members age 55 or older with 30 or more years of service can retire with
no reduction in benefits.
Final average salary is the average of the wages earned in the three highest consecutive years of
employment. For Tiers 3, 4 and 5 members, each year's compensation used in the final average salary
calculation is limited to no more than 10%greater than the average of the previous two years.
Tier 6
Eligibility: Tier 6 members, with the exception of those retiring under special retirement plans, must have
five years of service and be at least age 55 to be eligible to collect a retirement benefit. The full benefit
age for Tier 6 members is age 63 for ERS members and 62 for PFRS members.
Benefit calculation: Generally, the benefit is 1.67% of final average salary for each year of service if the
member retires with less than 20 years. If a member retires with 20 years of service, the benefit is 1.75%
of final average salary for each year of service. If a member retires with more than 20 years of service, an
additional benefit of 2% of final average salary is applied for each year of service over 20 years. Tier 6
members with five or more years of service can retire as early as age 55 with reduced benefits.
Final average salary is the average of the wages earned in the five highest consecutive years. For Tier 6
members, each year of final average salary is limited to no more than 10% of the average of the previous
four years. Subsequent to the measurement date, the plan was amended which changed the definition of
the final average earnings to be based on the average of the members'three highest consecutive years of
earnings. The plan amendment also excludes certain earned overtime pay between April 1, 2022 and
March 31, 2024 from the Tier 6 contribution rates. The amendment is effective for those members who
retire on or after April 1, 2024.
Special Plans
The 25-Year Plan allows a retirement after 25 years of service with a benefit of one-half of final average
salary, and the 20-Year Plan allows a retirement after 20 years of service with a benefit of one-half of final
average salary.These plans are available to certain PFRS members, sheriffs, and correction officers.
-54-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31. 2025
C. DETAILED NOTES ONALL FUNDS (continued)
G. RETIREMENT SYSTEM (oontinued)
Benefits Provided (continued)
Disability Retirement Benefits
Disability retirement benefits are available bn members unable to perform their job duties because of
permanent physical or mental capacity. There are three general types of disability benefits: ondinary,
performance of duty and accidental disability benefits. Eligibility, benefit amounts, and other rules such as
any offsets of other benefits depend on a member's tier,years of service, and plan.
Ordinary Death Benmfita
Death benefits are payable upon the daoth, before retinoment, of a member who meets eligibility
requirements as set forth by law. The first$50,000 of an ordinary death benefit is paid in the form of group
life term life insurance. The benefit is generally throe times the member'a annual salary. For most
members,there is also a reduced post-retirement ordinary death benefit available.
Pont-RmtirenrmntBmnm/it/nonaeono
A cost-of-living adjustment is provided annually to: (1) all pensioners who have attained age 62 and have
been naUnud for five years; (2) all pensioners who have attained age 55 and have been retired for ten
years; (3)all disability pensioners, regardless of age,who have been retired for five years; (4)recipients of
an accidental death benefit, regardless of age, who have been receiving such benefit for five years; and
(5) the spouse of a deceased retiree receiving a lifetime benefit under an option elected by the retiree at
retirement. An eligible spouse is entitled to one-half the cost-of-living adjustment amount that would have
been paid to the retiree when the retiree would have mat the eligibility criteria. This cost-of-living
adjustment is a percentage of the annual retirement benefit of the eligible member as computed on a base
benefit amount not to exceed $18,000 of the annual retirement benefit. The cost-of-living percentage shall
be 50% of the annual consumer price index as published by the U.S. Bureau of Labor but cannot be less
than 1Y6or exceed 3%.
Contributions
The Systems any noncontributory except for employees who joined the ERS System after July 27.
1076 who contribute 3% of their salary for the first ten years of membership; and employees who
joined on or after January 1. 2010 (EF{S) or January 0. 2010 (PFF{S) who generally contribute 3% of
their salary for the entire length of service. Fore Tier G mombers, the contribution rate varies from 396
to 6% depending on salary. Generally, Tier 5 and 6 members are required to contribute for all years of
service. Under the authority of NYSRSSL, the Comptroller annually certifies the actuarially determined
rates expressly used in computing the employers' contributions based on salaries paid during the
Systems' fiscal year ending March 31. The employer contribution rates for ERS and PFRS for the plan
year ended March 31. 2025 are osfollows:
sue ppna
Tier/Plan Rate Tier/Plan
Rate
���_ _�� 24.80%_
5A1541u65 16.50m coowe 37.90%
6 A1541m00 12.70m 53*1E 32.10m
6A1541m65 12.80m suu*e 36.20%
oura/ 16.80%
saewE 28.90%
The primary government's required contributions for the current year and two preceding years were:
snn ppna
oous $ 2.107.*10 $ 2.369.736
e024 $ 1.702.360 $ 1.944.765
uuxx $ 1.635.452 $ 1.882.159
-55-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31. 2025
C. DETAILED NOTES ONALL FUNDS (continued)
G. RETIREMENT SYSTEM (oontinued)
Pension (Assets)/Liabilities, Pension Expense, Deferred Outflows of Resources and Deferred Inflows
of Resources Related to Pension
At December 31, 2025. the primary government reported a liability of $6.507.753 for EF{S and a
liability of$10.72S.42Q for PFRS, for its proportionate share of the net pension (aoaet)/|iabi|ity for the
Systems. The net pension liability was measured as of March 31. 2025 and the total pension liability
used to calculate the net pension (asset)/|iabi|ity was determined by on actuarial valuation as of April
1. 2024. The primary government proportion of the net pension (asset)/|iabi|ity was based on a
projected contribution of all participating members, actuarially determined.
Below is the primary government's proportionate share of the net pension (aaoet)/|iabi|ity of the
System and its related employer allocation percentage as of March 31, 2025.
smn/uvo, Change mEmployer
Net Pension m/ooauon mwoaoon Percentage Since
Measurement Date Percentage Prior Measurement Date
sna March n1.uous $ 6,597,753 0u384805% '0u0113*9m
ppRa March o1.uoes o 10.729.429 01/65620m '0u041021m
For the year ended Oouember31. 2025, the primary government recognized pension expense of
$4.157.361. of which $1.587.425 ne|akao to ERS and $2.569.036 relates to PFRS. At December 31.
2025. the primary government reported deferred outflows of resources and deferred inflows of
resources related to pensions from the following sources:
�m PFno Totals
Deferred Outflows o,Resources:
Difference between expected and actual experience $ 1.637.607 y 3.573.831 $ 5.e11.438
Changes massumptions 276.697 1.611./*6 /.887.843
Net difference between projected and actual investment
earnings on pension plan investments 517.641 41e.405 930.046
Changes m proportion and differences uetwoenemployer
contributions and proportionate share mcontributions 778.135 1/6.98/ 955.116
Contributions made subsequent m the measurement date 1792678 195155* 3,744,232_
Total Deferred Outflows mResources pension amounts $ 50027*8 $ 7,725,917 m 12.728.e75
Deferred Inflows v,Resources:
Differences umw"on expected and actual experience u 77,247 u rr.:w/
Changes massumptions _0-
wyonfo,onuvumwoonprNecmuanoaoma/mvostnant
earnings vn pension plan investments -0-
cuuo«o"mvmnvmooanuuiff°mnovauetwvoomvTown'a
contributions and proportionate share mcontributions oou*o $ soua* 1,186,610_
Total Deferred Inflows m Resources pension amounts m nooyx $ 553,264 m 1.263.857
-56-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31. 2025
C. DETAILED NOTES ONALL FUNDS (continued)
G. RETIREMENT SYSTEM (oontinued)
Pension (Assets)/Liabilities, Pension Expense' Deferred Outflows of Resources and Deferred Inflows
of Resources Related to Pension (continued)
Contributions subsequent to the measurement date will be recognized as a reduction of the not pension
liability in the year ended December 31, 2026. Other amounts reported as deferred outflows of resources
and deferred inflows of resources related to pensions will be recognized in pension expense as follows:
oRS PFRS
Years ended December o1.onuV $ 1.186.745 $ 2.711.e2*
eour 1.751.709 1.621.*63
2028 (529.039) 18.715
unuo 90,072 578.655
2030 - 290.442
$ 2,4ee48/ $ 5,221,099
Actuarial Assumptions
The total pension liability as of the measurement date was determined by using an actuarial valuation
as noted in the table be|ow, with update procedures used to roll forward the total pension liability hothe
measurement date. The actuarial valuations used the following actuarial assumptions:
uRS PFRS
Measurement date March m.nocs March n1.zons
Actuarial valuation date April 1.uouw April 1.un2f
Interest rate 5.90% 5.90m
Salary increases ^.nnm 6.00%
Decrement tables April 1.2n10 April 1.xn10
March a1.2o2o March n1.ao2o
ayommosupor/onco ayotemaexpo,ienvo
Inflation rate uaom 2.90%
Cost m living adjustment 1.50m 1.50m
Annuitant mortality rates are based on the Syatem'o experience with adjustments for mortality
improvements based on the Society ofActuaries' Scale K8P'2021. The actuarial assumptions were
based on the results of an actuarial experience study for the period April 1, 2015- March 31, 2020.
The long-term expected rate nfreturn on pension plan investments was determined in accordance
with Actuarial Standard of Practice (^/\SDP^) No. 27. ^3m/motion of Economic Aoaunpduna for
Measuring Pension {}b&Jetiuna"A8{}P No. 27 provides guidance on the selection of an appropriate
assumed investment rate of return. Consideration was given to expected future real rates of return
(expected returns net of pension plan investment expenses and inflation) for equities and fixed
income, os well os historical investment data and plan performance.
-57-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2025
C. DETAILED NOTES ON ALL FUNDS (continued)
6. RETIREMENT SYSTEM (continued)
Actuarial Assumptions (continued)
Best estimates of the arithmetic real rates of return for each major asset class included in the target
asset allocation as of March 31, 2025 are summarized below:
Long-term
Target Expected Real
Asset Type: Allocation Rate of Return
Equity:
Domestic equity 25% 3.54%
International equity 14% 6.57%
Private equity 15% 7.25%
Real estate 12% 4.95%
Opportunistic/ARS portfolio 3% 5.25%
Credit 4% 5.40%
Real assets 4% 5.55%
Fixed income 22% 2.00%
Cash 1% 0.25%
100%
The discount rate used to calculate the total pension liability was 5.9% for the Systems. The projection
of cash flows used to determine the discount rate assumes that contributions from 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.
Sensitivity of the Proportionate Share of the Net Pension Liability to the Discount Rate Assumption
The following presents the primary government's proportionate share of the net pension liability
calculated using the discount rate of 5.9%, as well as what the primary government's proportionate
share of the net pension liability/(asset) would be if it were calculated using a discount rate that is 1-
percentage point lower(4.9%)or 1-percentage point higher(6.9%)than the current rate:
1.00% Current 1.00%
Decrease Assumption Increase
4.90% 5.90% 6.90%
Tow n's proportionate share of the
collective net pension liability(asset)
ERS $ 19,093,977 $ 6,597,753 $ (3,837,079)
PFRS 22,623,454 10,729,429 912,621
-58-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2025
C. DETAILED NOTES ON ALL FUNDS (continued)
6. RETIREMENT SYSTEM (continued)
Pension Plan Fiduciary Net Position
The components of the current-year net employees' retirement system pension liability of the
employers as of the respective valuation date of April 1, 2024 were as follows:
ERS PFRS
(Dollars in thousands) (Dollars in thousands)
Employers'total pension liability $ 247,600,239 $ 48,718,477
Plan net position (230,454,512) (42,641,620)
Employers'net pension liability $ 17,145,727 $ 6,076,857
Ratio of plan net position to the
Employers'total pension liability 93.08% 87.53%
Detailed information about the System pension plan's fiduciary net position is available in the System's
separately issued financial statements.
7. OTHER POSTEMPLOYMENT BENEFITS (OBLIGATIONS FOR HEALTH INSURANCE)
Plan Description
The Town established and administers a single-employer defined benefit OPEB plan for its
employees. Article 11 of the State Compiled Statutes grants the authority to establish and amend the
benefit terms and financial requirements to the Town Board. No assets are accumulated in a trust that
meets the criteria in paragraph 4 of GASB Statement No. 75.
The Town, as a single-employer defined benefit OPEB plan, per its contracts with employees, will pay
full premium costs for medical insurance coverage (currently provided by the Empire Plan) at
retirement with the exception of PBA members hired after 2013 who pay 15% while active and into
retirement. Employees are eligible for retiree health insurance provided that the employee has been
eligible for coverage under the Town's health insurance plan for at least 10 consecutive years and is
employed by the Town on the last date immediately prior to retirement. The retiree and spouse are
eligible for full Medicare premium reimbursement. Healthcare benefits for non-union employees are
similar to those of union employees. Surviving spouses of deceased employees may continue
coverage by paying the premium equivalent for participants.
Employees Covered by Benefit Terms
The number of participants as of January 1, 2025,the effective date of the OPEB valuation is as follows:
Active employees 206
Retirees and dependents 155
Total 361
There have been no significant changes in the number or type of coverage since that date.
-59-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31. 2025
C. DETAILED NOTES ONALL FUNDS (continued)
7. OTHERPOSTE88PLOYK8ENT BENEFITS (OBLIGATIONS FOR HEALTH INSURANCE) (conUnued)
Total OPEB Liability
The Tovvn'o total {}PEB liability of $120'871.514 was measured as of January 1. 2025 and was
determined byan actuarial valuation aoof January 1. 2025.
Funding Polic
The Town currently pays for other postemployment health care benefits on a pay-as-you-go basis.
Actuarial Assumptions and Other Inputs
The projection of future benefits for an ongoing plan involves estimates of the value of reported
amounts and assumptions about the probability of occurrence of events far into the future. Amounts
determined regarding the funded status of a plan and the employer's annual required contributions are
subject to continual revision as actual results are compared with past expectations and new estimates
are made about the future.
Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as
understood by the employer and the plan members) and include the types of benefits provided at the
time of each valuation and the historical pattern of sharing benefit ouato between the employer and
plan members to that point. The actuarial methods and assumptions used include techniques that are
designed to reduce the effects of short-term liability in actuarial accrued |iabi|itiao, consistent with the
long-term perspective of the calculations.
The total OPEB liability in the January 1, 2025 valuation date was determined using the following actuarial
assumptions and other inputs:
Discount Rate 4.0896
Healthcare cost trend rates 7Y6 for 2025 decreasing 8.496 per year toan ultimate trend rate
uf58Y6in year 6 and thereafter.
The discount rate was based on the January 1, 2025 Bond Buyer GO-20 municipal bond index rate.
Mortality rates were based on the RP-2014 mortality table with projected mortality.
The decrement tables used for this valuation are based on the New York State Employees' Retirement
System and New York State Police and Fire Retirement System.
The actuarial assumptions used in the January 1, 2025 valuation were based on standard tables modified
for certain plan features such as eligibility for full and early retirement where applicable.
-60-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31. 2025
C. DETAILED NOTES ONALL FUNDS (continued)
7. OTHER POSTE88PLOYK8ENT BENEFITS (OBLIGATIONS FOR HEALTH INSURANCE) (ronUnued)
Changes in the Total OPEB Liabili
Balance at January 1.z024
Changes for the year:
sar\Anonont 2.379.813
mtomot 3.434.128
Differences between expected and actual experience 29,048,692
Changes in assumptions and other inputs (14.888.593)
Benefit payments
Balance at January 1.unuo
Sensitivity of the Total OPEB Liability to Changes in the Discount Rate
The following presents the hdo| 0PE8 liability of the Tnwn, as well as what the Tnwn's total DPE0 liability
would be if it were calculated using u discount rate that is 1-percentage-point lower /3.0896\ or
1-penconbega-point higher(5.88Y6)than the discount rate.
1 oom oionvvnt 1 nnm
oeomaoo Rate mommxo
108Y6 «M% oM%
$ 14995e451 $ 120,871,514
Sensitivity of the Total OPEB Liability to Changes in the Healthcare Cost Trend Rate
The following presents the hdo| {}PEB liability of the Tnwn, as well as what the Tnwn's total DPE0 liability
would be if it were oa|ou|abad using e healthcare cost trend naby that is 1-percentage-point lower or
1-peroanboga-point higher than the healthcare cost trend rate.
1 oom nnnu 1 nom
o*cmvsn mate Increase
$ 148e828e6
For the year ended December 31. 2025. the Town recognized [}PEB expense nf $7.522.437. At
December 31. 2025. the Town reported deferred outflows or inflows of resources related to OpEB
from the following aoun:oo.
Deferred Outflows Deferred monwm
of Resources of Resources
oinvmnoem Between Actual and Expected Experience $ 25.611.084 $ 1.750.652
Changes massumptions e.e15.550 31.283.507
Contributions made subsequent to the measurement date nxornVo
Total Deferred Outflows mResources oPen $ 39,324,217 $ 3303415e
-61-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31. 2025
C. DETAILED NOTES ONALL FUNDS (continued)
7. OTHERPOSTE88PLOYK8ENT BENEFITS (OBLIGATIONS FOR HEALTH INSURANCE) (conUnued)
The amounts nopndad as deferred outflows and inflows of resources related to DPEB will be
recognized inOPEB expense asfollows:
Year ending December 31. 2020 $ 1.620.051
2027 (1.429.828)
2028 (817.320)
2028 (854.514)
2030 (854.514)
Thereafter 4528000
$ 2.392.475
Contributions subsequent to the measurement date will be recognized as a reduction of the net OPEB
liability in the year ended December 31. 2026.
8. COMPENSATED ABSENCES
Town employees are granted vacation and sick leave and earn compensatory absences invarying
amounts. In the event of termination or upon retirement, an employee is entitled to payment for
accumulated vacation and sink leave and unused compensatory absences at various rates subject to
certain maximum limitations. Estimated vacation, sick leave and compensatory absences accumulated
by governmental fund type employees have been n000ndad in the Statement of Net Position. Payment of
vacation time and sick leave is dependent upon many factors; therefore, timing of future payments is not
readily determinable. Hovvever, management believes that sufficient resources will be made available for
the payments of vacation, sick leave and compensatory absences when such payments become due. As
of December 31. 2U25. the value of the compensated absences liability was $8.458.060 for the primary
government, and $412.280 for the component units.
D. COMMITMENTS AND CONTINGENCIES
Risk Management
In common with other municipalities, the Town receives numerous notices of claims. The Town established a
self-insurance risk management program for general liability insurance which is accounted for in the general
fund. Although the eventual outcome of these claims cannot be presently determined, the Town has
estimated unsettled claims and litigation to be $500,000 which is reported as claims and judgments payable
in the government-wide financial statements. The Town in of the opinion that the ultimate settlement of the
outstanding claims will not result in a material adverse effect on the Town's financial position.
For the year ended December 31, 2025, the Town has a deductible liability exposure of$50,000 per claim
for general liability, $25.000 per claim for automobile liability, police liability and employee benefits, and
$10.000 per claim for public o[Ooia|o and employment practices. Any liability exposure above the
deductible amounts is covered by primary insurance policies up to $1.000.000 per claim for general
|iobi|ih/, public officials, police and employment practices, and employee benefits.
Aggregate exposures are $1.000.000 per claim for public nffioia|u, police and employment practices,
$3.000'000 for employee benefits and general liability. After primary policy limits are axhauoted, the
axoaoe exposure above the per claim or aggregate limits is covered by an umbrella liability policy of
$10.000.008 per claim and $18.U0U.000in the aggregate.
There have been no significant reductions in insurance coverage as compared to the prior year and there
were no settlements in excess of insurance coverage over the last three years.
-62-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2025
D. COMMITMENTS AND CONTINGENCIES(continued)
Risk Management(continued)
The Town liability for general liability claims is determined and reported by a third-party administrator and is
reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably
estimated. Claims reserves for general liability claims are re-evaluated periodically to take into consideration
recently settled claims and any new developments and changes.
The Town's discretely presented component units are not included in the Town's self-insurance risk
management program for any claims.
Fund balance is assigned for future catastrophic losses. Changes in the long-term liability for claims and
judgments for the years ended December 31, 2025 and 2024 are as follows:
General Liability
2025 2024
Unpaid Claims as of December 31st, prior year $ 275,000 $ 460,000
Incurred claims:
Provision for insured events of the current
fiscal year 125,000 100,000
Increase(decrease)in net provision for insured
events of prior fiscal years 114,487 (216,006)
Total incurred claims and claim adjustments 514,487 343,994
Payments of claims during the fiscal year (14,487) (68,994)
Unpaid claims as of December 31st $ 500,000 $ 275,000
Contingent Liabilities
Amounts received or receivable from grant agencies are subject to audit and adjustment by grantor
agencies, principally the federal and state government. Any disallowed claims, including amounts already
collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures that may be
disallowed by the grantor cannot be determined at this time, although the Town expects such amounts, if
any, to be immaterial.
Landfill Closure and Post-Closure Care Costs
State and federal laws and regulations required the Town to place a final cover on its landfill sites and to
perform certain maintenance and monitoring functions at the sites for thirty years after closure. The Town
ceased accepting waste at its Cutchogue landfill as of October 8, 1993. Accordingly, as of December 31,
2025, the Town has recorded a liability of $282,956, in the government-wide financial statements which
represents the provision to be made in future budgets for unfunded closure and postclosure landfill costs. As
the liability is based on 100% of capacity there are no estimated costs of closure or postclosure remaining to
be recognized. Actual costs may vary due to inflation or deflation, changes in technology, or changes in
regulations or applicable laws.
Construction and Other Capital Acquisition Commitments
The Town is committed to capital improvements to its various facilities and infrastructure. At December 31,
2025, these commitments amounted to$1,468,425 in the capital projects fund.
-63-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2025
D. COMMITMENTS AND CONTINGENCIES(continued)
Animal Shelter Agreement
In May 2011, the Town entered into an agreement with the North Fork Animal Welfare League to operate
and manage the Town's Animal Shelter. The agreement is for a term of four years commencing on June 1,
2011. The agreement was renewed in March 2015 with added lease terms beginning March 2016 expiring
in February 2026. The future minimum payments associated with this agreement are as follows:
Year Ending December 31, 2026 $ 148,811
Total $ 148,811
E. CONDENSED FINANCIAL STATEMENTS FOR THE DISCRETELY PRESENTED COMPONENT UNITS
The following represents condensed financial statements (unaudited)for the discretely presented component
units as of and for the year ended December 31, 2025:
Condensed Statement of Net Position:
Due from Capital Assets Deferred Other Deferred
Current and Primary Net of Outflows Current Long-Term Inflows Net
Other Assets Government Depreciation of Resources Liabilities Liabilities of Resources Position
Fishers Island
Ferry District $ 3,524,541 $ 277,553 $ 12,845,262 $ 590,116 $ 5,207,074 $ 2,579,313 $ 476,329 $ 8,974,756
Fishers Island Waste
Management District 340,682 244,965 1,554,509 60,313 244,965 1,834,878
Cutchogue-New Suffolk
Park District 93,208 71,505 117,277 1,845 71,505 208,640
Southold Park District 163,170 69,229 642,810 630 69,229 805,350
Orient-East Marion
Park District 40,216 17,587 448,642 279 17,587 488,579
Mattituck Park District 341,916 122,360 1,366,498 14,734 122,360 1,693,680
Orient Mosquito District 201,392 19,729 2,514 19,729 198,878
$ 4,705,125 $ 822,928 $ 16,974,998 $ 590,116 $ 5,287,389 $ 2,579,313 $ 1,021,704 $ 14,204,761
Condensed Statement of Activities:
Program General Revenue Net Position
Property
Expenses Revenue Net Expense Tax Other Transfers Change 1/1/25 12/31/25
Fishers Island
Ferry District $ 4,633,046 $ 6,540,575 $ (1,907,529) $ 1,448,167 $ 6,285 $ (4,372,952) $ (1,010,971) $ 9,985,727 $ 8,974,756
Fishers Island Waste
Management District 1,201,021 2,291 1,198,730 1,145,785 61,702 8,757 1,826,121 1,834,878
Cutchogue-New Suffolk
Park District 236,874 236,874 235,582 8,806 7,514 201,126 208,640
Southold Park District 469,119 4,555 464,564 363,978 43,277 (57,309) 862,659 805,350
Orient-East Marion
Park District 62,093 62,093 90,825 68 28,800 459,779 488,579
Mattituck Park District 811,524 175,537 635,987 592,000 3,198 (40,789) 1,734,469 1,693,680
Orient Mosquito District 93,067 93,067 103,600 1,115 11,648 187,230 198,878
$ 7,506,744 $ 6,722,958 $ 783,786 $ 3,979,937 $ 124,451 $ (4,372,952) $ (1,052,350) $ 15,257,111 $ 14,204,761
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TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31. 2025
E. CONDENSED FINANCIAL STATEMENTS FOR THE DISCRETELY PRESENTED COMPONENT UNITS
(continued)
Complete financial statements and financial records of these component units can be obtained from their
respective administrative offices:
Fishers Island Ferry District Fishers Island Waste
P.(]. Box H Management District
Fishers Island, NY08300 Fishers Island, NYO830O
Cutohogua-NevvSuffolk Southold Park District
Park District P.O. Box050
P.[). Box 311 Southold, NY11071
Cutohoguo. NY11035
Orient-East Marion K4aUitunk Park District
Park District P.O. Box 1413
P.O. Box 12 K4aditunk. NY11952
Orient, NY11Q57
Orient Mosquito District
145 Platt Road
Orient, NY11057
F. TRANSFER TAX
A 2.0% transfer tax is applied to sales of vacant land amounts in excess of$75,000 or sales of improved land
in exmsao of $2U0.U0U located within the Town. Receipts are recorded in the Community Preservation Fund
and one used for the purchase and/or preservation of agricultural |and, open opama, parka, or historic
pnsoenmUon sites. Conveyance of real property for open opama, parks or historic pn*oenmbon purposes and
certain first-time home buyers are exempt from this tax.
Beginning on April 1. 2023. a 0.5Y6 transfer tax is applied to sales of vacant land amounts in excess of
$75.000 or sales of improved land in excess of$380.000 located within the Town. Receipts are recorded in
the Community Housing Fund and are used for affordable housing initiatives. Conveyance of real property for
open opaoe, parks or historic preservation purposes and certain first-time home buyers are exempt from this
tax.
G. CONDUIT DEBT OBLIGATIONS
The SLDC may issue revenue bonds to provide financial assistance to notfoppnzfit corporations for the
acquisition of construction and equipment facilities for not-for-profits deemed to be in the public interest or
refunding high-interest debt. The bonds are required to be secured by the property financed and are payable
solely from payments received on the underlying mortgage loans. Upon repayment of the bonds, ownership of
the acquired facilities transfers to the not-for-profit organization served by the bond issuance.
Neither the 8LDC. the Town, nor any political subdivision thereof, io obligated in any manner for repayment of
the bonds. Accordingly, the bonds are not reported aa liabilities in the accompanying financial statements.
Conduit debt outstanding for the year ended December 31. 2025 totaled$24.381.188.
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TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2025
H. SUBSEQUENT EVENTS
On September 16, 2026, the Town issued$17,517,081 Bond Anticipation Notes with an annual interest rate of
4.50%and a premium of$280,974 which mature on September 16, 2027.
On September 16, 2026, the Town issued $1,900,000 Bond Anticipation Notes with an annual interest rate of
4.875%and a premium of$126 which mature on September 16, 2027.
1. RECENT PRONOUNCEMENTS
The Governmental Accounting Standards Board (GASB) has issued the following Statements that may have
an impact on the Town's financial reporting:
Statement No. 103, "Financial Reporting Model Improvements", has been issued to improve key
components of the financial reporting model to enhance its effectiveness in providing information
that is essential for decision making and assessing a government's accountability. The requirements
of this Statement are effective for the year ending December 31, 2026.
Statement No. 104, "Disclosure of Certain Capital Assets", has been issued to improve disclosures
about certain types of capital assets by requiring additional disclosures for capital assets held for
resale (historical cost and accumulated depreciation and carrying amount of debt for which capital
asset is pledged as collateral) as well as requiring certain types of assets to be disclosed separately
in the capital asset footnote (such as right to use assets recognized from lease liabilities,
subscription liabilities and public-private and public-public partnerships and availability payment
arrangements). The requirements of this Statement are effective for the year ending December 31,
2026.
GASB Statement No. 105, "Subsequent Events", has been issued to improve the financial reporting
requirements for subsequent events (recognized/nonrecognized), thereby enhancing consistency in
their application and better meeting the information needs of financial statement users. The
requirements of this Statement are effective for the year ending December 31, 2027.
The Town is currently evaluating the impact of the above pronouncements.
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REQUIRED SUPPLEMENTARY
INFORMATION OTHER THAN
MANAGEMENT'S DISCUSSION AND
ANALYSIS
Schedules of Revenues, Expenditures and
Changes in Fund Balance - Budget and
Actual Major Governmental Funds and
Schedule
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
The budgets are adopted on a basis of accounting consistent with
GAAP. In the event that actual revenues received exceed
budgeted amounts, additional budgetary appropriations are made.
The Capital Projects and Special Grant Funds are budgeted on a
project or grant basis.
TOWN OF SOUTHOLD
GENERALFUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCE- BUDGET AND ACTUAL
REQUIRED SUPPLEMENTARY INFORMATION
Year Ended December 31, 2025
Variance
Original Final with Final
Budget Budget Actual Encumbrances Budget
REVENUES
Real property taxes $ 34,054,088 $ 34,054,088 $ 34,054,088 $ -0-
Other real property tax items 360,000 360,000 375,779 15,779
Non-property tax items 1,759,073 1,759,073 1,759,073 -0-
Departmental income 454,750 454,750 471,445 16,695
Intergovernmental charges 258,987 258,987 158,352 (100,635)
Use of money and property 640,000 640,000 1,576,175 936,175
Licenses and permits 640,250 640,250 594,987 (45,263)
Fines and forfeitures 426,100 426,100 358,807 (67,293)
Sale of property and compensation for loss 67,500 118,000 108,982 (9,018)
Miscellaneous local sources 388,855 390,255 60,098 (330,157)
Interfund revenues 5,000 5,000 8,193 3,193
State aid 1,456,735 1,515,656 2,095,402 579,746
Federal aid 18,500 2,470,494 2,713,640 243,146
Total Revenues 40,529,838 43,092,653 44,335,021 1,242,368
EXPENDITURES
Current:
General government support 11,674,579 11,339,951 9,591,036 $ 69,699 1,679,216
Public safety 12,344,035 12,429,278 12,077,300 54,193 297,785
Public health 43,300 43,300 43,300 -0-
Transportation 528,070 2,930,064 2,919,263 454 10,347
Economic assistance and opportunity 1,669,066 1,665,636 1,374,237 1,787 289,612
Culture and recreation 576,948 581,684 383,929 3,720 194,035
Home and community services 600,139 650,539 598,125 810 51,604
Employee benefits 15,177,057 14,576,432 13,381,248 1,195,184
Debt service:
Principal 993,020 1,863,274 1,860,410 2,864
Interest 729,227 735,526 735,396 130
Total Expenditures 44,335,441 46,815,684 42,964,244 130,663 3,720,777
Excess(Deficiency)of Revenues
Over(Under)Expenditures (3,805,603) (3,723,031) 1,370,777 (130,663) 4,963,145
OTHER FINANCING SOURCES(USES)
Transfers in 29,997 1,187,491 1,157,494
Transfers out (224,000) (1,536,697) (1,426,869) 109,828
Total Other Financing Uses (224,000) (1,506,700) (239,378) -0- 1,267,322
Net Change in Fund Balance $ (4,029,603) $ (5,229,731) 1,131,399 $ (130,663) $ 6,230,467
Fund Balance at Beginning of Year 28,114,382
Fund Balance at End of Year $ 29,245,781
See Independent Auditors' Report.
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TOWN OF SOUTHOLD
HIGHWAY FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCE- BUDGET AND ACTUAL
REQUIRED SUPPLEMENTARY INFORMATION
Year Ended December 31, 2025
Variance
Original Final with Final
Budget Budget Actual Encumbrances Budget
REVENUES
Real property taxes $ 6,847,083 $ 6,847,083 $ 6,847,083 $ -0-
Other real property tax items 58,500 58,500 59,227 727
Use of money and property 115,000 115,000 254,948 139,948
Licenses and permits 50,000 50,000 42,660 (7,340)
Sale of property and compensation for loss 4,000 4,000 9,346 5,346
Miscellaneous local sources 785,135 794,924 9,789
State aid 1,065,242 1,160,968 1,153,748 (7,220)
Federal aid 13,500 13,500
Total Revenues 8,139,825 9,020,686 9,175,436 154,750
EXPENDITURES
Current:
Transportation 4,577,291 4,657,096 4,290,647 366,449
Employee benefits 2,542,323 2,542,323 2,190,547 351,776
Debt Service:
Principal 201,220 216,491 216,488 3
Interest 86,920 87,570 87,562 8
Total Expenditures 7,407,754 7,503,480 6,785,244 $ -0- 718,236
Excess(Deficiency)of Revenues
Over(Under)Expenditures 732,071 1,517,206 2,390,192 -0- 872,986
OTHER FINANCING SOURCES(USES)
Transfers In 12,459 12,459
Transfers out (1,396,000) (2,181,135) (2,164,916) 16,219
Total Other Financing Uses (1,396,000) (2,181,135) (2,152,457) -0- 28,678
Net Change in Fund Balance $ (663,929) $ (663,929) 237,735 $ -0- $ 901,664
Fund Balance at Beginning of Year 3,659,942
Fund Balance at End of Year $ 3,897,677
See Independent Auditors' Report.
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TOWN OFSOUTHOL8
COMMUNITY PRESERVATION FUND
SCHEDULE 0F REVENUES, EXPENDITURES, AND CHANGES
|N FUND BALANCE- BUDGET AND ACTUAL
REQUIRED SUPPLEMENTARY INFORMATION
Year Ended December 31. 2025
Variance
onoino| nnu| with Final
auum au � Actual s u eu �
__-���� ���� �������� __-��2�__
nEvEwuEa
Non-property tax items $ o.*ua.roo $ o.*un.roo 11.410.805 $ 1.985.069
Use m money and property 250,000 250,000 1.270.333 1.020.333
xa/vm property and compensation
for loss ax 32
Miscellaneous local sources 6,392_ 6,392_
Total Revenues 9,675,736� 9,6/5,/36 12,687,562� 3�11,826�
EupEmo/TunEs
Current:
General government support 119
Home and community services 23.672.834 23.65e.184 245.135 $ 3,500 23.410.5*9
Employee benefits 95,055 108.824 100.210 8.614
Debt service:
Principal 1.767.252 1.767.252 1.767.250 n
Interest ueaz*sn usa,*sn usa���� o
Total Expenditures 25,800,710� 25,8x00J70� 2,378,037 3,500- ��19,173-
Excess(oenmenn0mRevenues
Over(Under)Expenditures (16,124,974) (16,124,974) 10,3«09,525 (3,500) 26,43x0,999_
Net Change m Fund Balance 10.309.525
Fund Balance ot Beginning mYear 37,006,305_
Fund Balance a/End o«Year 47,315,830
See Independent Auditors' Report.
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TOWN OF SOUTHOLD
SCHEDULE OF CHANGES IN THE TOWN'S TOTAL OTHER POSTEMPLOYMENT
BENEFITS LIABILITY AND RELATED RATIOS
REQUIRED SUPPLEMENTARY INFORMATION
Year Ended December 31, 2025
2025 2024 2023 2022 2021 2020 2019 2018
Total OPEB Liability
Service Cost $ 2,379,813 $ 2,266,488 $ 4,066,061 $ 3,872,339 $ 3,507,372 $ 3,340,354 $ 1,913,830 $ 1,822,695
Interest 3434,128 3,017,041 2,468,862 2,428,716 2,857,905 3,226,259 2,708,144 2,721,521
Differences between Actual and Expected Experience 29:048,692 309,565 (5,119,594) 8,515,166
Changes in Assumptions (14,888,593) 7,903,812 (29,209,581) 1,660,354 11,588,857 21,353,355 (11,542,778) 4,162,884
Benefit Payments (3,253,966) (3,099,015) (2,772,766) (2,772,766) (2,507,492) (2,507,492) (2,179,535) (1,871,347)
Net Change in Total OPEB Liability 16,720,074 10,088,326 (25,137,859) 5,188,643 10,327,048 25,412,476 (585,173) 6,835,753
TotalOPEBLiability-Beginning 104,151,440 94,063,114 119,200,973 114,012,330 103,685,282 78,272,806 78,857,979 72,022,226
TotalOPEBLiability-Ending $ 120,871,514 $ 104,151,440 $ 94,063,114 $ 119,200,973 $ 114,012,330 $ 103,685,282 $ 78,272,806 $ 78,857,979
Covered employee payroll $ 22,922,903 $ 22,193,772 $ 21,299,944 $ 20,157,714 $ 22,111,282 $ 21,800,313 $ 18,729,794 $ 17,995,841
Total OPEB liability as a percentage of covered payroll 527.30% 469.28% 441.61% 591.34% 515.63% 475.61% 417.91% 438.20%
Discount Rate 4.08% 3.26% 3.65% 2.06% 2.12% 2.73% 4.10% 3.44%
Note:
*This schedule is intended to show information for 10 years.Since 2018 is the first year for this presentation,no other date prior to 2018 is available.However,additional years will be included as
they become available.
Notes to Schedule:
No assets are accumulated in a trust that meets the criteria in GASB Statement No.75,paragraph 4,to pay other postemployment benefits(OPEB).
The Town currently contributed enough money to the plan to satisfy current obligations on a pay-as-you-go basis.
Changes of Benefit Terms
None
Changes of Assumptions
Changes of assumptions and other inputs reflect the effects of changes in the discount rate each period as listed above.Additional changes of assumptions include:
Medical Trend Assumption
January 1,2025 Started at 7%in current year decreasing by.4%per year to an ultimate trend rate of 5%after 6 years.
January 1,2024 Started at 7%in current year decreasing by.4%per year to an ultimate trend rate of 5%after 6 years.
January 1,2023 Started at 7%in current year decreasing by.4%per year to an ultimate trend rate of 5%after 6 years.
January 1,2022 Started at 7%in current year decreasing by.4%per year to an ultimate trend rate of 5%after 6 years.
January 1,2021 Started at 7%in current year decreasing by.4%per year to an ultimate trend rate of 5%after 6 years.
January 1,2020 Started at 8%in current year decreasing by.5%per year to an ultimate trend rate of 5%after 7 years.
January 1,2019 Started at 8%in current year decreasing by.5%per year to an ultimate trend rate of 5%after 7 years.
January 1,2018 Started at 10%decreasing by 1%over the next four years and 5%after 5 years.
Mortality Rates
January 1,2025 RP-2014 mortality table with projected mortality
January 1,2024 RP-2014 mortality table with projected mortality
January 1,2023 RP-2014 mortality table with projected mortality
January 1,2022 RP-2014 mortality table with projected mortality
January 1,2021 RP-2014 mortality table with projected mortality
January 1,2020 RP-2017 mortality table with projected mortality
January 1,2019 RP-2017 mortality table with projected mortality
January 1,2018 RP-2014 mortality table with projected mortality
See Independent Auditors' Report.
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TOWN OF SOUTHOLD
SCHEDULE OF PENSION CONTRIBUTIONS
REQUIRED SUPPLEMENTARY INFORMATION
For the Year Ended December 31, 2025
Contributions
Recognized by the Plan Contribution
Contractually in Relation to the Contribution as a Percentage
Years Ended Required Contractually Required Deficiency Covered of Covered
December 31, Contributions Contributions (excess) Payroll Payroll
ERS
2025 $ 2,319,657 $ 2,319,657 $ -0- $ 14,914,952 15.55%
2024 2,006,521 2,006,521 -0- 14,529,513 13.81%
2023 1,656,498 1,656,498 -0- 13,927,431 11.89%
2022 1,639,109 1,639,109 -0- 13,356,709 12.27%
2021 1,975,904 1,975,904 -0- 13,064,163 15.12%
2020 1,857,925 1,857,925 -0- 13,150,975 14.13%
2019 1,825,922 1,825,922 -0- 13,396,868 13.63%
2018 1,709,862 1,709,862 -0- 12,081,905 14.15%
2017 1,740,156 1,740,156 -0- 11,706,859 14.86%
2016 1,783,174 1,783,174 -0- 11,594,297 15.38%
PFRS
2025 $ 2,543,988 $ 2,543,988 $ -0- $ 8,294,282 30.67%
2024 2,263,501 2,263,501 -0- 7,869,322 28.76%
2023 1,929,136 1,929,136 -0- 7,676,848 25.13%
2022 1,881,986 1,881,986 -0- 7,308,743 25.75%
2021 1,819,083 1,819,083 -0- 7,230,653 25.16%
2020 1,618,733 1,618,733 -0- 7,140,672 22.67%
2019 1,583,285 1,583,285 -0- 6,843,730 23.13%
2018 1,606,947 1,606,947 -0- 6,943,972 23.14%
2017 1,677,894 1,677,894 -0- 6,971,643 24.07%
2016 1,587,581 1,587,581 -0- 7,139,568 22.24%
Note-Amounts presented for each year were determined as of December 31 st and the contractually required
contributions are based on the amounts invoiced by the New York State Local Retirement System.
See Independent Auditors' Report.
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TOWN OF SOUTHOLD
SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY(ASSET)
REQUIRED SUPPLEMENTARY INFORMATION
For the Year Ended December 31,2025
2025 2024 2023 2022 2021 2020 2019 2018 2017 2016
ERS
Town's proportion of the net pension liability(asset) 0.0384805% 0.0396154% 0.0461537% 0.0399244% 0.0419513% 0.0407666% 0.0404714% 0.0415681% 0.0431599% 0.0416430%
Town's proportionate share of the net collective
pension liability(asset) $ 6,597,753 $ 5,832,994 $ 9,897,222 $ (3,263,665) $ 41,773 $ 10,795,228 $ 2,909,885 $ 1,380,222 $ 4,073,415 $ 6,686,629
Town's covered-employee payroll $ 14,697,509 $ 14,145,321 $ 13,384,520 $ 13,162,229 $ 13,150,975 $ 13,437,810 $ 12,170,400 $ 11,793,423 $ 11,677,075 $ 11,791,354
Town's proportionate share of the net pension
liability(asset)as a percentage of its covered-employee payroll 44.89% 41.24% 73.95% -24.80% 0.32% 80.33% 23.91% 11.70% 34.88% 56.71%
Plan net position as a percentage of the total
pension liability(asset)coming from plan 93.08% 93.88% 90.78% 103.65% 99.95% 86.39% 96.27% 98.24% 94.70% 90.70%
PFRS
Town's proportion of the net pension liability(asset) 0.1765620% 0.1806641% 0.1927900% 0.1713070% 0.1713348% 0.1754425% 0.1744053% 0.1879416% 0.1929522% 0.2049668%
Town's proportionate share of the net collective
pension liability(asset) $ 10,729,429 $ 8,568,579 $ 10,623,637 $ 973,100 $ 2,974,844 $ 9,377,290 $ 2,924,887 $ 1,899,633 $ 3,999,229 $ 6,068,632
Town's covered-employee payroll $ 7,985,777 $ 7,761,854 $ 7,310,022 $ 7,300,605 $ 7,140,672 $ 6,890,101 $ 6,931,857 $ 6,934,979 $ 6,887,011 $ 6,750,958
Town's proportionate share of the net pension
liability as a percentage of its covered-employee payroll 134.36% 110.39% 145.33% 13.33% 41.66% 136A 0% 42A 9% 27.39% 58.07% 89.89%
Plan net position as a percentage of the total
pension liability coming from plan 87,53% 89,72% 87,43% 98,66% 95,79% 84.86% 95.09% 96.93% 93.50% 90.20%
Notes:
Amounts presented above were determined as of the System's measurement date of March 31 sL
Changes in benefits terms were as follows;
a)The New York State Legislature modified the Tier 6 final average salary calculation under Chapter 56 of the Laws of 2024,Part Co.This change was first reflected in the April 1,2024 actuarial valuation.
Changes in assumptions were as follows:
a)The discount rate used to calculate total pension liability was 5.9%(which was the same as the prior year)for both ERS and PFRS.
b)The assumptions for salary increases were decreased from 4.4%to 4.3%for ERS and 6.2%to 6.0%for PFRS effective with the March 31,2025 measurement date.
Amounts presented are based on the fiscal year related to the measurement date of March 31 st.
See Independent Auditors'Report.
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OTHER SUPPLEMENTARY
INFORMATION
TOWN OF SOUTHOLD
COMBINING BALANCE SHEET
NON-MAJOR GOVERNMENTAL FUNDS
December 31, 2025
Special Revenue Funds
East-West Fire Southold Fishers Solid Waste Affordable Community Total
General Fund Special Protection Wastewater Island Sewer Management Housing Housing Non-Major
Part Town Grant District District District District Fund Fund Funds
ASSETS
Cash and investments $ 3,136,596 $ 74,017 $ 46,996 $ 8,012 $ 116,334 $ 2,471,022 $ 1,124,123 $ 6,624,940 $ 13,602,040
Accounts receivable 182,491 13 2,427 158,067 15,181 358,179
Due from other funds 211,984 177,203 23,033 787,340 1,199,560
Due from other governments 266,065 266,573 532,638
Loans receivable 250,000 250,000
State and federal aid receivables 45,156 45,156
Inventory of materials and supplies 29,227 29,227
Prepaids 76,992 46,175 123,167
Total Assets $ 3,608,063 $ 340,082 $ 224,212 $ 8,012 $ 141,794 $ 3,536,987 $ 1,374,123 $ 6,906,694 $ 16,139,967
LIABILITIES
Accounts payable and
accrued liabilities $ 92,129 $ 80,000 $ 14,531 $ 3,596 $ 432,688 $ 1,575 $ 624,519
Due to other funds 64,027 101,994 21,421 187,442
Unearned revenue 217,125 158,088 21,967 71,072 468,252
Total Liabilities 373,281 340,082 14,531 $ -0- 25,563 525,181 $ -0- 1,575 1,280,213
DEFERRED INFLOWS OF RESOURCES
Unearned revenue from
real property taxes 196,939 177,203 533 364,977 739,652
FUND BALANCES
Nonspendable 76,992 75,402 152,394
Restricted 6,905,119 6,905,119
Committed 1,374,123 1,374,123
Assigned 2,960,851 32,478 8,012 115,698 2,571,427 5,688,466
Total Fund Balances 3,037,843 -0- 32,478 8,012 115,698 2,646,829 1,374,123 6,905,119 14,120,102
Total Liabilities,Deferred Inflows of
Resources and Fund Balances $ 3,608,063 $ 340,082 $ 224,212 $ 8,012 $ 141,794 $ 3,536,987 $ 1,374,123 $ 6,906,694 $ 16,139,967
See Independent Auditors' Report.
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TOWN OF SOUTHOLD
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
NON-MAJOR GOVERNMENTAL FUNDS
For the year ended December 31, 2025
Special Revenue Funds
East-West Fire Southold Fishers Solid Waste Affordable Community Total
General Fund Special Protection Wastewater Island Sewer Management Housing Housing Non-Major
Part Town Grant District District District District Fund Fund Funds
REVENUES
Real property taxes $ 992,723 $ 892,697 $ 1,750,144 $ 3,635,564
Other real property tax items 9,537 7,339 14,262 31,138
Non-property tax items 660,852 $ 2,842,071 3,502,923
Departmental income 1,407,014 $ 66,260 2,678,144 4,151,418
Use of money and property 102,350 2,733 1,522 83,617 $ 1,183 109,913 301,318
Licenses and permits 176,395 211,835 388,230
Sales of property and compensation
for loss 410 309,283 309,693
Miscellaneous local sources 431 2,052 2,483
State aid 88,328 54,775 143,103
Federal aid $ 283,065 283,065
Total Revenues 3,438,040 283,065 902,769 $ -0- 67,782 5,104,112 1,183 2,951,984 12,748,935
EXPENDITURES
Current:
General government support 273,045 273,045
Public safety 962,039 903,132 1,865,171
Home and community services 1,017,441 283,065 15,021 3,459,561 33,609 4,808,697
Employee benefits 1,106,588 361 927,429 8,738 2,043,116
Debt service:
Principal 7,233 267,122 274,355
Interest 427 97,294 97,721
Total Expenditures 3,359,113 283,065 903,132 -0- 23,042 4,751,406 -0- 42,347 9,362,105
Excess(Deficiency)of Revenues
Over Expenditures 78,927 -0- (363) -0- 44,740 352,706 1,183 2,909,637 3,386,830
Other Financing Uses:
Operating Transfers In 3,780 3,780
Transfers out (46,000) (68,000) (114,000)
Total Other Financing Uses (46,000) -0- -0- -0- -0- (64,220) -0- -0- (110,220)
Net Change in Fund Balance 32,927 -0- (363) -0- 44,740 288,486 1,183 2,909,637 3,276,610
Fund Balances at Beginning of Year 3,004,916 -0- 32,841 8,012 70,958 2,358,343 1,372,940 3,995,482 10,843,492
Fund Balances at End of Year $ 3,037,843 $ -0- $ 32,478 $ 8,012 $ 115,698 $ 2,646,829 $ 1,374,123 $ 6,905,119 $ 14,120,102
See Independent Auditors' Report.
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