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Future Impacts of Accounting Pronouncements—The Town has not completed the process of evaluating the impact that will result from adopting; GASB No. 102, Certain Risk Disclosures, effective for the year ending December 31, 2025; No. 103, Financial Reporting Model Improvements; and No. 104, Disclosure of Certain Capital Assets, effective for the year ending December 31, 2026. The Town is, therefore, unable to disclose the impact that adopting GASB Statements No. 102, 103, and 104 will have on its financial position and results of operations when such statements are adopted. Stewardship, Compliance and Accountability Legal Compliance—Budgets—The Town follows these procedures in establishing the budgetary data reflected in the basic financial statements: Prior to September 30th, the Town Supervisor files a “tentative” budget with the Town Clerk for the following fiscal year to commence on January 1st. This budget, which includes appropriations and estimated revenues, is then presented to the full Town Board by October 2nd. The full Town Board reviews the tentative budget and may adjust same before approving a “preliminary” budget and calling for a public hearing, which is generally held in October. Following the public hearing, revisions may again be made by the Town Board before filing an adopted budget with Erie County by November 20th. Formal annual budgetary accounts are employed as a management control device for the General and Special Revenue Funds. During the fiscal year, the Town Board can legally amend the operating budgets and is empowered to implement supplemental appropriations. Budget amendments are required for the departmental budgetary control. All budget amendments and budget transfers require Town Board approval. Deficit Fund Balance—The Town’s Capital Projects Fund reported a deficit fund balance of $1,119,316 at December 31, 2024. The Town anticipates this deficit will be remedied through future issuance of long-term debt. The primary reason for the deficit in this case is that the Town issued bond anticipation notes (“BANs”), which do not qualify for treatment as a long-term liability. Accordingly, the BANs are reported as a fund liability in the Capital Projects Fund balance sheet (rather than an inflow on the statement of revenues, expenditures, and changes in fund balances). When the cash from the BANs is spent, expenditures are reported and fund balance is reduced. Since the BANs are the main source of revenues for the fund, the result is an overall fund deficit. This deficit will be eliminated as resources are obtained (e.g., from revenues, long-term debt issuances, and transfers in) to make the scheduled debt service principal and interest payments on the BANs or retire the BANs. 2. CASH, CASH EQUIVALENTS AND INVESTMENTS The Town’s investment policies are governed by State statutes. Town monies must be deposited in FDIC-insured commercial banks or trust companies located within New York State. The Town is authorized to use demand accounts and certificates of deposit. Permissible investments include obligations of the U.S. Treasury and U.S. Agencies, repurchase agreements, and obligations of New York State or its localities. - 25 -