HomeMy WebLinkAboutFinancial Reports - 1985TOWN OF MANSFIELD MASSACHUSETTS
Financial Statements
and Supplementary Data
June 30p 1985
(With Accountants' Report Thereon)
EAT
MARWICK
TOWN OF MANSFIELD, MASSACHUSETTS
1985 Financial Statements
Table of Contents
Page
Accountants' Report 1
Accountants' Report on Revenue Sharing Compliance 2
Combined Financial Statements:
Combined Balance Sheet - All Fund Types 3
Combined Statement of Revenues, Expenditures and
Changes in Fund Balances - All Governmental
Fund Types and Expendable Trust Funds 4
Statement of Revenues, Expenditures and
Encumbrances - Budget and Actual - General Fund 5
Statement of Revenues, Expenses and Changes in Retained
Earnings - Proprietary Funds 6
Statement of Changes in Financial Position - Proprietary Funds 7
Notes to Combined Financial Statements
8-17
Supplementary Data:
Combining Financial Statements:
Special Revenue Funds:
Combining Balance Sheet
Combining Statement of Revenues, Expenditures and Changes
18
in Fund Balances
19
Trust and Agency Funds:
Combining Balance Sheet
20
Combining Statement of Revenues, Expenditures and Changes in
Fund Balances - Trust Funds
21
Combining Statement of Changes in Assets and Liabilities -
Agency Funds
22
Schedule of Real Estate, Personal Property
and Motor Vehicle Excise Taxes
23
Schedule of Bonds Payable
24
Ly ,
The Board of Selectmen
Town of Mansfield, Massachusetts:
Peat, Marwick, Mitchell & Co.
Certified Public Accountants
One Boston Place
Boston, Massachusetts 02108
617-723-7700
We have examined the combined financial statements of the Town of Mansfield,
Massachusetts as of and for the year ended June 30, 1985 as listed in the table
of contents. Our examination was made in accordance with generally accepted
auditing standards and, accordingly, included such tests of the accounting
records and such other auditing procedures as we considered necessary in the
circumstances. We did not examine the financial statements of the Mansfield
Electric Department. These statements were examined by other auditors, whose
report thereon has been furnished to us and our opinion expressed herein,
insofar as it relates to the amounts included in the Mansfield Electric Depart-
ment's financial statements, is based solely upon the report of the other
auditors.
The other auditor's were not able to perform audit procedures to determine the
propriety of the original cost of utility plant in service, since the
accounting records supporting the original cost of utility plant in service
were destroyed in a fire, and they were unable to satisfy themselves regarding
the original cost of utility plant in service by means of other auditing
procedures.
The Town has not maintained records of the cost of its general fixed assets,
and the combined financial statements do not include financial statements for
the general fixed asset group of accounts as required to conform with generally
accepted accounting principles.
In our opinion, based on our examination and the report of the other auditors,
except that the omission of financial statements for the general fixed asset
group of accounts results in an incomplete presentation and that the scope of
work performed by the other auditors regarding the original cost of utility
plant in service was not sufficient to enable them to express an opinion on the
financial statements of the Mansfield Electric Department the aforementioned
combined financial statements present fairly the combined financial position
of the Town of Mansfield, Massachusetts at June 30, 1985 and the results of its
operations and the changes in financial position of its proprietary funds for
the year then ended in conformity with generally accepted accounting
principles applied on a basis consistent with that of the preceding year.
Our examination was made for the purpose of forming an opinion on the combined
financial statements taken as a whole. The combining financial statements and
schedules listed under supplementary data in the table of contents are
presented for purposes of additional analysis and are not a required part of
the general purpose financial statements of the Town of Mansfield,
Massachusetts. The information has been subjected to the auditing procedures
applied in the examination of the combined financial statements and, in our
opinion, is stated fairly in all material respects in relation to the combined
financials tatements taken as a whole.
t64 -t X, �k
September 15, 1985
1
� 0
The Board of Selectmen
Town of Mansfield, Massachusetts:
We have examined the combined financial statements of the Town of Mansfield,
Massachusetts as of and for the year ended June 30, 1985 as listed in the table
of contents and have issued our report dated September 15, 1985. Our
examination was made in accordance with generally accepted auditing standards
and, accordingly, included such tests of the accounting records and such other
auditing procedures as we considered necessary in the circumstances.
In connection with our examination, we also (a) performed tests of compliance
with the Revenue Sharing Act and regulations as required by Sections II.C.3 and
III.C.3 of the "Audit Guide and Standards for Revenue Sharing and Antirecession
Fiscal Assistance Fund Recipients" (Guide) issued by the Office of Revenue
Sharing, U.S. Department of the Treasury, and (b) compared the data on Bureau
of Census Form RS -9 with the records of the Town of Mansfield, Massachusetts,
required by Sections II.C.4 of the Guide.
Based on these procedures, we noted for the tested operations and records no
instance of noncompliance with the aforementioned acts and regulations and no
material differences between the data on Bureau of Census Form RS -9 and the
records of the Town of Mansfield, Massachusetts, for the year ended June 30,
1985. Further, based on the above procedures, nothing came to our attention
for the operations and records not tested, to indicate that the Town of
Mansfield, Massachusetts, was in noncompliance with the aforementioned act and
regulations.
September 15, 1985
2
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TOWN OF MANSFIELD, MASSACHUSETTS
Statement of Revenues, Expenditures and Encumbrances
Budget and Actual - General Fund
Budget Basis (note 6)
Year ended June 30, 1985
5
1985
Variance
favorable
Budget
Actual
(unfavorable)
Revenues:
Taxes $
8,557,557
8,557,557
-
Abatements - current year
(250,364)
(154,785)
95,579
Abatements - prior year
-
(45,930)
(45,930)
In lieu of tax receipts
2,110
2,110
-
Electric Department in lieu of taxes
220,200
220,200
-
Intergovernmental revenue
3,082,385
3,019,838
(62,547)
Licenses and fines
165,499
225,562
60,063
Motor vehicle excise
406,502
592,741
186,239
Interest
134,079
126,287
(7,792)
Other
203,301
259,995
56,694
Water and sewer
1,172,016
1,143,397
(28,619)
Total revenues
13,693,285
13,946,972
253,687
Expenditures and encumbrances:
Education
7,484,041
7,617,127
(133,086)
General government
1,290,562
1,241,190
49,372
Public works
485,993
453,511
32,482
Debt service
953,178
885,575
67,603
Public safety
1,719,646
1,714,619
5,027
Sanitation
28,489
25,168
3,321
Other environmental
212,315
209,822
2,493
Recreation & culture
236,829
231,828
5,001
Human services
136,136
130,899
5,237
State and county assessments
434,747
432,038
2,709
Water and sewer
1,422,719
1,240,587
182,132
Revenue sharing
498,203
485,117
13,086
Total expenditures and
encumbrances
14,902,858
14,667,481
235,377
Excess of revenues over (under)
expenditures and
encumbrances
(1,209,573)
(720,509)
489,064
Other financing sources (uses):
Transfers from revenue sharing
432,832
403,071
(29,761)
Transfers from other funds
189,416
145,796
(43,620)
Transfers to other funds
-
(4,200)
(4,200)
Continuing appropriations and
encumbrances carried forward
692,806
692,806
-
Total other financing
sources (uses)
1,315,054
1,237,473
(77,581)
Excess (deficiency) of revenues over
expenditures and other financing
sources (uses) $
105,481
516,964
4112483
See accompanying notes to combined financial statements.
5
TOWN OF MANSFIELD, MASSACHUSETTS
Statements of Revenues, Expenses and Changes
in Retained Earnings
Proprietary Funds
Year ended June 30, 1985 (except Electric Department as of December 31, 1984)
Operating revenues:
Charges for services
Other
Total operating revenues
Operating expenses:
Power production, transmission and
distribution
Customer accounts
General services
Depreciation
Payments in lieu of tax
Total operating expenses
Operating income (loss)
Other income:
Interest
Forfeited discounts
Other
Other deductions:
Donations
Interest expense
Net income
Transfer to other funds
Fund equity/retained earnings:
Beginning of year
End of year
Sewer and
Internal Electric
Service Fund Department Total
$ 349,562 11,890,207 12,239,769
12,349 - 12,349
361,911 11,890,207 12,252,118
261,825 10,942,525 11,204,350
- 151,638 151,638
- 390,808 390,808
- 140,632 140,632
- 284.992 284.992
261,825 11,910,595 12,172,420
100,086 (20,388) 79,698
14,384 14,384
126,061 126,061
7,323 7,323
147,768 147,768
-
4,536
4,536
-
15,020
15,020
-
19,556
19,556
100,086
107,824
207,910
(21,054)
(42,108)
(63,162)
304,948
3,318,861
3,623,809
$ 383,980
3,384,577
3,768,557
See accompanying notes to combined financial statements.
2
TOWN OF MANSFIELD, MASSACHUSETTS
Statements of Changes in Financial Position
Proprietary Funds
Year ended June 30, 1985 (except Electric Department as of December 31, 1984)
See accompanying notes to combined financial statements.
7
Sewer and
Internal
Electric
Service Fund
Department
Total
Sources of working capital:
Operations:
Net income
$ 100,086
107,824
207,910
Depreciation
-
140,632
140,632
Working capital
provided by operations
100,086
248,456
348,542
Contributed capital
2,206,255
-
2,206,255
Transfers to other funds
(21,054)
(42,108)
(63,162)
Total sources (uses)
of working capital
2,285,287
206,348
2,491,635
Uses of working capital:
Retirement of bonds
135,000
-
135,000
Additions to property,
plant and equipment
3,303,221
278,566
3,581,787
Total uses of working capital
3,438,221
278,566
3,716,787
Net decrease in working capital
$ (1,152,934)
(72,218)
(1,225,152)
Elements of net increase (decrease) in
working capital:
Cash
(1,168,780)
19,793
(1,148,987)
Receivables, net of allowance
24,824
25,317
50,141
Due from other funds
(18,848)
-
(18,848)
Other assets
-
(360,780)
(360,780)
Prepayments
-
12,314
12,314
Materials and supplies
-
(30,965)
(30,965)
(1,162,804)
(334,321)
(1,497,125)
Warrants and accounts payable
(9,870)
(358,272)
(368,142)
Accrued expenses
-
152,295
152,295
Guaranteed deposits
-
1,750
1,750
Deferred revenue
-
(57,876)
(57,876)
(9,870)
(262,103)
(271,973)
Net decrease in working capital
$ (1,152,934)
(72,218)
(1,225,152)
See accompanying notes to combined financial statements.
7
TOWN OF MANSFIELD, MASSACHUSETTS
Notes to Combined Financial Statements
June 30, 1985
(1) Definition of Reporting Entity
The combined financial statements present information on organizations and
activities of the Town of Mansfield, Massachusetts for which the Board of
Selectmen have oversight responsibility.
These entities and activities include the enterprise activities of the
Mansfield Electric Department and the Mansfield Sewer Department. The
financial statements of the Mansfield Electric Department are presented for
the year ended December 31, 1984, which is its fiscal period for reporting
to its regulatory agencies.
The operations of the Mansfield Police and Fire Departments, the Mansfield
Library System, the Mansfield Public School System, and the Mansfield Water
Department are included in the governmental fund types since their
operations are controlled by the Town.
(2) Summary of Significant Accounting Policies
The accounting are reporting policies of the Town of Mansfield are set forth
below:
(a) Basis of Presentation - Fund Accounting
The activities of the Town are accounted for through the use of several funds
and a long-term debt group of accounts, each of which is a separate
accounting entity. The operations of each fund are accounted for through a
separate set of self -balancing accounts which are summarized by type in the
financial statements. The following fund types and account group are used
by the Town:
Governmental Funds
General Fund - This fund is the general operating fund of the Town. It is used
to account for all financial resources except those required to be accounted
for in another fund.
Special Revenue Funds - These funds are used to account for the proceeds of
specific revenue sources (other than expendable trusts or major capital
projects) that are legally restricted to expenditures for specified
purposes.
Enterprise Funds - These funds are used to account for Town operations (1) that
are financed and operated in a manner similar to private business
enterprises - where the intent is that the costs (expenses, including
depreciation) of providing services to the public be financed or recovered
primarily through user charges; or (2) where a periodic determination of
revenues earned, expenses incurred, and/or net income is appropriate for
capital maintenance, public policy, management control, accountability or
other purposes.
(Continued)
9
TOWN OF MANSFIELD, MASSACHUSETTS
Notes to Combined Financial Statements
Internal Service Funds - These funds are used to account for the financing of
services provided by one department or agency to other departments or
agencies of the Town, or to other governmental units, on a cost -reimburse-
ment basis.
Fiduciary Funds
Trust and Agency Funds - These funds are used to account for assets held by the
Town in a trustee capacity or as an agent for individuals, private
organizations, other governmental units, and/or other funds.
Account Group
General Long -Term Obligation - This group of accounts is used to account for
all long-term obligations of the Town.
(b) Basis of Accounting
The modified accrual basis of accounting is followed by governmental funds and
expendable trust funds. Accordingly, revenues are recorded when
susceptible to accrual, i.e., both measurable and available. Available
means colectible within the current period or soon enough thereafter to be
used to pay liabilities of the current period. The Town recognizes funds
received 60 days after the close of its fiscal year as revenue of that
reporting period. All other amounts not received during that period are
deferred and recognized in future accounting periods. Expenditures, other
than interest on long-term debt, are recorded when the liability is
incurred.
In applying the susceptible to accrual concept to intergovernmental revenues,
the legal and contractual requirements of the numerous individual programs
are used as guidance. There are however, essentially two types of these
revenues. In one, monies must be expended on the specific purpose or
project before any amounts will be reimbursed to the Town; therefore,
revenues are recognized based upon the expenditures recorded. In the other,
monies are virtually unrestricted as to purpose of expenditure and are
usually revocable only for failure to comply with prescribed compliance
requirements. These resources are reflected as revenues at the time of
receipt or earlier if the susceptible to accrual criteria is met.
The accrual basis of accounting is followed by proprietary and fiduciary fund
types.
(c) Encumbrances
The Town uses encumbrance accounting in its governmental funds as a method of
recording commitments under purchase orders and contracts. Open
encumbrances are reported as reservations of fund balances.
(d) Property, Plant and Equipment
The Town does not maintain a general fixed asset group of accounts. Assets
purchased are recorded as expenditures of the acquiring fund except for the
Mansfield Electric Department and the Sewer Fund.
(Continued)
C.
TOWN OF MANSFIELD, MASSACNUSETTS
Notes to Combined Financial Statements
Detailed property, plant and equipment records have not been maintained for the
Water Fund. Therefore, depreciation expense is not recognized as a cost of
providing service and the net depreciated cost of property, plant and equip-
ment used in providing water service is not recorded in the Water Fund
balance sheet.
The provision for depreciation of the Electric Department utility plant is
computed on a straightline method at 3% of the cost of utility plant in
service at the beginning of the year, exclusive of land. Under
Massachusetts law, the Municipal Electric Department may change its
depreciation rate only with the approval of the DPU.
The Electric Department maintains a depreciation fund into which cash in an
amount equivalent to annual depreciation expense is transferred each year.
Cash in the fund may only be used to pay for additions to utility plant or to
repay debt issued to finance utility plant additions.
Maintenance and repairs of property are charged to maintenance expense.
Replacements and betterments are charged to utility plant.
(e) Transfers
On an annual basis the Town authorizes amounts to be shifted from funds legally
required to receive the resources to funds where the amounts will be
expensed.
(3) Long -Term Debt
Serial bond issues outstanding at June 30, 1985 bear interest at rates ranging
from 3.20% to 8.75% with a weighted average rate of 5.74%. Outstanding debt
matures during subsequent fiscal years as follows:
1986 $ 540,200
1987 540,200
1988 540,200
1989 312,200
1990 and thereafter 2,858,900
$ 4,791,700
(continued)
10
TOWN OF MANSFIELD, MASSACHUSETTS
Notes to Combined Financial Statements
At June 30, 1985, the Town had grants receivable from the School Building
Assistance Bureau (SBAB) of $140,336 to defray principal and interest costs
related to $809,000 of school bonds outstanding. Grants are subject to
annual appropriation by the State legislature. The amount of the grants is
based on estimated construction costs of school projects which may be
revised upon audit by the SBAB. Assuming satisfactory audit results and
annual appropriations by the State legislature, $123,729 will be received
in 1986, $123,729 annually through 1987 and the balance will be received in
subsequent years.
Bond anticipation notes (BANS) of $1,150,000 bear interest at rates ranging
between 4.61% and 6.90%. The BANs have been issued against the authority of
the Town to issue long-term debt for the following projects:
Wastewater treatment plant $ 500,000
Water projects II 650,000
$ 1,150,000
The Town also has outstanding a State aid anticipation note (SAN) of $54,000
bearing interest of 5.30%. The SAN has been issued against the authority of
the Town to issue temporary borrowing in accordance with State Chapter 805.
The Town is a member of the Southeast Regional School District. Aggregate net
costs of service, including debt service requirements, are assessed to the
Town ($29,114 in 1985) and other members of the School District in
accordance with certain formulae. The following summary sets forth the
amount of long-term debt of the School District at June 30, 1985, and the
Town's 1986 estimated share of such debt:
1965 Issue
1974 Issue
Long-term Mansfield
debt estimated
outstanding share
$ 180,000
900,000
$ 1LO80,000
9,360 5.20%
57,510 6.39%
66,870
(Continued)
11
TOWN OF MANSFIELD, MASSACHUSETTS
Notes to Combined Financial Statements
(4) Fund Balances Reserved for Specific Purposes
Fund balances reserved for specific purposes consist of the following:
General Fund:
Overlay surplus reserve $ 236,064
Continuing appropriations 48,636
Over and underassessment 2,710
$ 287,410
Special Revenue Funds:
Water Fund
$
1,075
Federal revenue sharing
223,200
School cafeteria revolving fund
48,295
Other
370,896
$
643,466
Sewer and Internal Service Fund:
Premium on sale of bonds
$
4,486
Interest on sale of bonds
6,806
$
11,292
Trust Funds:
Stabilization
$
196,230
Cemetary
13,941
Airport Land Fund
64,688
WWII Scholarship
72,420
Library
18,424
Other
13,201
$ 378,904
(5) Commitments and Contingencies
There are numerous cases pending in courts throughout the Commonwealth where
the Town of Mansfield is a defendant. In the opinion of the Town Counsel,
none of the pending litigation is likely to result, either individually or
in the aggregate, in final judgments against the Town that would materially
affect its financial condition.
(6) Budget Basis of Accounting
The Town's budget as presented in the Statement of Revenues, Expenditures and
Encumbrances - Budget and Actual - General Fund was developed as follows:
Town Meeting
authorizations
$
14,210,052
Supplemental
appropriations and budget transfers
692,806
$
14,902,858
(Continued)
12
TOWN OF MANSFIELD, MASSACHUSETTS
Notes to Combined Financial Statements
The Town's General Fund budget is prepared on a basis other than generally
accepted accounting principles (GAAP basis). The actual results of
operations in the Statement of Revenues, Expenditures and Encumbrances -
Budget and Actual -General Fund, are presented on a "budget basis" to
provide a meaningful comparison of actual results with the budget. The
major differences between the budget and GAAP basis are that:
(a) Budgeted revenues are recorded when cash is received except for real estate
and personal property taxes which are recorded as revenue when levied
(budget) as opposed to when cash is received.
(b) Encumbrances are recorded as the equivalent of expenditures (budget) as
opposed to a reservation of fund balance (GAAP).
(c) Water and Sewer Fund operations are presented as seperate funds (GAAP)
rather than as a component of the General Fund (budget).
A summary of the differences between the results of operations presented on a
budgeted basis and those presented in accordance with generally accepted
accounting principles is as follows:
As reported on a budgetary basis
To record real estate and personal
property taxes on a modified accrual
basis
To eliminate prior year appropriations
and encumbrances carried forward
To reclassify Revenue Sharing
To reclassify Water and Sewer fund
operations to special revenue and
enterprise fund
To eliminate current year encumbrances
and appropriation carryforwards
As reported on GAAP basis
(7) Pension Plan
Revenues Expenditures Transfers
$ 13,946,972 14,667,481 1,237,473
70,405 - -
- - (692,806)
(485,117) (403,071)
(1,143,397) (1,240,587) -
- (375,583) -
$ 12,873,980 12,566,194 141,596
The Town participates in a contributory retirement system administered by the
Bristol County Retirement System, that is partially funded aby employee
contributions. The retirement system operates a pension cost sharing
arrangement. Annual contributions to the retirement system are determined
on an overall pooled basis for participating employers on a pay-as-you-go
basis by the Commonwealth's Public Employee Retirement Administration.
Participating employers' share of the total annual contribution is
determined on the basis of active payroll. The Town's share of the
contribution was $355,732 in 1985.
(Continued)
13
TOWN OF MANSFIELD, MASSACHUSETTS
Notes to Combined Financial Statements
(8) Power Sales Agreements
The Light Department of the Town of Mansfield (the "Department") is a
participant in the Massachusetts Municipal Wholesale Electric Company
("MMWEC"), a public corporation of the Commonsealth of Massachusetts.
MMWEC is a coordinating and planning agency for the development of the bulk
power supply requirements of its members and Project Participants. MMWEC is
authorized to purchase ownership interests and to issue revenue bonds to
finance such generating units ("Projects"). MMWEC sells the capability of
each of its Proejects to its members and Project Participants under power
sales agreements. The power sales agreement for each Project requires each
Project Participant to pay its share of MWEC's costs related to the Project
(exclusive of costs payable from the proceeds of MMWEC bonds), including
debt service on bonds issued by MWEC to finance the Project, plus 10% of
debt service to be paid into a Reserve and Contingency Fund. In addition,
MMWEC has entered into long-term take or pay power purchase contracts for
which it has corresponding resale agreements with certain of its members and
Project Participants. The Project and power purchase contract amounts are
payable solely from each Participant's electric system revenue and are
required to be made whether or not the Project is completed, the unit is
operating and notwithstanding the suspension or interruption of output of
the Project.
A substantial portion of MMWEC's construction program is its 11.59% ownership
interest in the Seabrook Project being constructed by New Hampshire Yankee
(NH Yankee), currently a division of Public Service Company of New Hampshire
(PSNH). NH Yankee, upon receipt of regulatory approval, is to be
established as an independent entity to construct and operate the Seabrook
station on behalf of the joint owners. Seabrook Unit No. 1 is under
construction while the continued construction of Seabrook Unit No. 2 by the
present joint owners is unlikely. Although not official cancelled, MMWEC's
$65,500 investment in the unit was charged as a Loss on Cancelled Units at
year end 1984 while the unit is maintained in a state of minimum
preservation.
In the Spring of 1984, construction activities on the Seabrook station were
suspended by PSNH, the sponsoring utility, due to a serious liquidity crisis
that threatened to require PSNH to seek protection from its creditors under
the Bankruptcy Code. This followd the announcement of a substantial
increase in the estimated cost of the Seabrook station. Since the
suspensionof construction, the joint owners have endorsed a financing plan
for completion of Seabrook No. 1, authorized the resumption of construction
of that unit on a limited basis pending timely implementation of the
financing plan and made arrangements for strengthening joint owner
management of the project and transferring construction and operation
responsibilities for the unit from PSNH to an independent entity.
(Continued)
14
TOWN OF MANSFIELD, MASSACHUSETTS
Notes to Combined Financial Statements
The most recent cost and schedule estimate, which was issued by PSNH on July
24, 1985, projects a cash cost -to -complete from August 1, 1985 of $558
million and commercial operation date of October 1986. The estimate assumes
full project funding is available in September 1985 and includes about $150
million to cover contingencies. PSNH estimates that Seabrook No. 1 was
about 86% complete as of June 30, 1985. For planning purposes, MMWEC is
using assumptions of $1.0 billion cash coat -to -complete from January 1,
1985 and an October, 1987 commercial operation date.
On April 4, 1985, the Massachusetts Department of Public Utilities (DPU) issued
an order in a generic proceeding to investigate the construction cost and
schedule of Seabrook Unit No. 1. The DPU in its order projected an August
1988 or later commercial operation date, higher construction cost -to -
complete estimates and that Seabrook Unit No. 1 may not be completed. The
order prohibited MMWEC from selling new bonds to finance its share of the
remaining construction cost of Seabrook Unit No. 1. MMWEC, along with three
Massachusetts utilities affected by the ruling, has appealed the order to
the Massachusetts Supreme Judicial Court (SJC).
Alternative plans are being developed by MMWEC based on scenarios in which the
SJC: 1) overturns the DPU order or remands the case to the DPU with an order
for timely approval of an MMWEC financing, or, 2) upholds the DPU order or
remands the case to the DPU without assurance of timely financing approval.
One of the other affected Massachusetts utilities, Fitchburg Gas & Electric
(.086% ownership share) has ceased making construction payments. Advance
payments have been made to cover the short -fall by five other joint owners.
The Connecticut Department of Public Utilities Control, on April 17, 1985
approved the continued participation of the Connecticut joint owners in the
Seabrook Project.
On April 18, 1985, the New Hampshire Public Utilities Commission (NHPUC) gave
PSNH permission to sell up to $525 million in securities to finance its
share of completing Seabrook once regulatory bodies in other states have
approved the needed financings of the other joint owners. A weekly project
funding limitation of $5 million, of which PSNH's share is $1.8 million, was
ordered in conjunction with the $525 million securities allowance. The
NHPUC's deciion to allow this financing is under appeal by anti -Seabrook
activists. On June 28, 1985, PSNH filed a petition with the NHPUC to rela
the funding limitation and slow the issuance of the securities. In terms of
the total project, this would mean an increase in the weekly construction
funding of approximately $4 million to a level of about $9 million of the
$525 million authorized by the NHPUC would be required to complete the PSNH
portion of the projectes financing.
On Autust 13, 1985, the New Hampshire State Supreme Court ordered that a
decision by the NHPUC must be made on the anti -Seabrook activits' appeal of
the order approving the $525 million financing prior to taking action on the
June 28, 1985 request to remove the funding limitation.
(Continued)
15
TOWN OF MANSFIELD, MASSACHUSETTS
Notes to Combined Financial Statements
On May 8, 1985, the Vermont Public Service Board ordered the Vermont utilities
to pursue all reasonable and feasible steps to achieve cancellation of the
Project and announce that their interests are for sale.
The Maine Public Utilities Commission (MPUC), based on their order of December
13, 1984, is considering plans filed by the three Maine joint owners for
disengaging from the Project. The Central Maine Power Company (CMP) is on
record as saying that no order to disengage, which violates the utilities'
obligations under the Seabrook Joint Ownership Agreement, "...could be
lawful and valid." Subsequently, on July 18, 1985, the MPUC found that
further participation of CMP in the Seabrook project is not inconsistent
with the public convenience and necessity and is not unreasonable in light
of an earlier stipulation approved by the MPUC with respect to the handling
of construction costs and rates related to Seabrook. The Maine PUC has
reopened proceedings to allow Maine Public Service and Bangor Hydro to
pursue a stipulation similar to the one previously approved with respect to
CMP.
In addition, Eastern Utilities Associates (EUA) has announced that it has
reached tentative agreement to purchase the shares of Seabrook owned by all
three utilities in Maine and one in Vermont. The utilities that have agreed
to sell are: Central Maine Power Co. (6%); Maine Public Service Co. (1.4%);
Bangor Hydro Electric Co. (2.2%); and Central Vermont Public Service Corp.
(1.6%). EUA, a Massachusetts investor -owned electric utility holding
company which currently holds 2.9% of the project, could increase its
ownership by 11.2% if the sales are consummated, making EUA the third
largest owner of the project. Final sales are conditioned upon receipt of
all necesary regulatory approvals.
The Seabrook project has experienced numerous delays due to regulatory, legal
and other problems resulting in significant increases in cost estimates and
delays in the projected commercial operation date of the units. In view of
the uncettainty associated with the ability of the joint owners to implement
financings, the actions of the regulators and other problems generally
associated with the construction of nuclear units, the completion of
Seabrook No. 1 remains uncertain.
As of June 30, 1985 the total estimated construction cost of MMWEC's Projects
under construction was $1,107,328,000 of which the amount associated with
the Department's power sales agreements was $61,087,000. As of the same
date, total construction expenditures amounted to $689,072,000 of which
$37,367,000 represented the amount attributable to the Department. It is
estimated that $1,304,990,000 principal amount of debt obligations will
need to be issued by MMWEC to finance the Projects in its construction
program, and of that amount $1,035,195,000 of debt is outstanding. The
amount of each attributable to the Power sales agreements of the Department
is $72,061,000 and $54,784,000, respectively. On bonds which have been
issued, the total debt service requirement through the year 2018 is
$3,503,537,000 of which $186,929,000 is attributable to the Department.
Debt service after future funding, which includes bond proceeds to fund
interest payments, is estimabed to be $4,453,712,000 of hich $248,139,000
is your department's share.
(Continued)
1A
TOWN OF MANSFIELD, MASSACHUSETTS
Notes to Combined Financial Statements
In addition, MMWEC has expended $203,632,000 and $239,967,000 of bonds are
outstanding for Projects in operations, with total debt service of
$526,937,000. The Department's portion of the expenditures, bonds issued
and debt service on these Projects is $11,922,000, $14,072,000 and
$31,280,000, respectively.
The Light Department of the Town of Mansfield has entered into power purchase
contracts or project power sales agreements with MMWEC. Under the above
agreements the Department is required to make capacity and/or debt service
payments to MMWEC. The aggregate amount of such required payments on bonds
outstanding and significant power purchase contracts through MMWEC at June
30, 1985 is shown below. These amounts exclude operating and maintenance
expenses. The With Funding column excludes interest payments, up to the
expected commercial operation dates of the units under construction, on
currently outstanding bonds intended to be funded by future bond issues and
includes the debt service on those future issues.
For years ending June 30,
1986
1987
1988
1989
1990
Later fiscal years
Total
Annual cost
without funding
Annual cost
with funding
$ 7,819,000
3,990,000
9,074,000
4,630,000
7,883,000
8,494,000
7,346,000
9,618,000
7,427,000
9,701,000
183,283,000
247,_608,000
$ 222,832,000 284,041,000
In addition, the Department is also required to payits share of the operation
and maintneance costs of the units. The Department's total payments under
the agreements were $2,434,000 for the year ended June 30, 1984 and
$2,500,000 for the year ended June 30, 1985.
17
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TOWN OF
MANSFIELD, MASSACHUSETTS
Combining Statement
of Changes in Assets
and
Liabilities
Agency Funds
Year
ended June 30,
1985
Balance
Balance
June 30,
June 30,
Assets
1984
Additions
Deductions
1985
Cash
$ 11,021
99,624
79,665
30,980
$ 11,021
99,624
79,665
301980
Liabilities
Guarantee deposits and amounts
due
other taxing authorities:
Due to state -
' sporting license
$ 11
8,511
9,023
(501)
Due to county - dog license
25
2,711
1,973
763
Due to county - sale of dogs
33
102
126
9
Municipal outside details
812
64,405
66,226
(1,009)
Gifts and bequests
10,140
23,895
2,317
31,718
$ 11,021
99,624
79,665
302980
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