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• 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 $2,944,965 at December 31, 2025. The Town anticipates this deficit will be remedied through future issuance of long-term debt. 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. Collateral is required for demand deposit accounts, time deposit accounts and certificates of deposit at 100% of all deposits not covered by Federal deposit insurance. The Town has entered into custodial agreements with the various banks which hold their deposits. These agreements authorize the obligation that may be pledged as collateral. Obligations that may be pledged as collateral are outlined in Chapter 623 of the laws of the State of New York. Total cash and cash equivalents at December 31, 2025, are shown below: Governmental Funds Petty Cash (uncollateralized) $ 500 Deposits 2,094,274 Total $ 2,094,774 Deposits—All deposits are carried at fair value, and are classified by custodial credit risk at December 31, 2025 as follows: Carrying Amount Insured (FDIC) $ 250,000 Uninsured: Collateral held by bank's agent in the Town's name 1,844,274 Total $ 2,094,274 Custodial Credit Risk—Deposits—Custodial credit risk is the risk that in the event of a bank failure, the Town’s deposits may not be returned to it. As noted above, by State statute all deposits in excess of FDIC insurance coverage must be collateralized. At December 31, 2025, the Town’s deposits were either FDIC insured or collateralized with securities held by the pledging bank’s agent in the Town’s name. Interest Rate Risk—Deposits—In accordance with its investment policy, the Town manages exposures by limiting investments to low risk type investments governed by New York State statute. - 91 -