Webster-Financial Statements 2025.pdf

WEBSTER CENTRAL SCHOOL DISTRICT BASIC FINANCIAL STATEMENTS For Year Ended June 30, 2025

TAB L E

OF CONTENTS

Pages Independent Auditors' Report

1-3

Management's Discussion and Analysis (Unaudited)

4 - 13

14

Statement of Activities

15

16

Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds

17

Reconciliation of Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances og Governmental Funds to Statement of Activities

18

Statement of Fiduciary Net Position and Statement of Changes in Fiduciary Net Position

19

Notes to the Basic Financial Statements:

20 - 52

53

Schedule of the District's Proportionate Share of the Net Pension Liability

54

Schedule of District Contributions

55

Schedule of Revenues, Expenditures and Changes in Fund Balance Budget (Non-GAAP Basis) and Actual - General Fund

56 - 57

58

Capital Projects Fund Schedule of Project Expenditures

59

60

Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds

61

Net Investment in Capital Assets/Right to Use Assets

62

Schedule of Expenditures of Federal Awards

63

Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards

64 - 65

INDEPENDENT AUDITORS' REPORT To the Board of Education Webster Central School District, New York Report on the Audit of the Financial Statements Opinions We have audited the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Webster Central School District, New York (the District), as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents. In our opinion, the accompanying financial statements present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the District, as of June 30, 2025, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinions We conducted our audit 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 Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the District 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 is sufficient and appropriate to provide a basis for our audit opinions. Responsibilities of Management for the Financial Statements The District’s 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.

1

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 District’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. Auditor’s Responsibilities for the Audit of the Financial Statements 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 GAAS and Government 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 District’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 judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’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 the management’s discussion and analysis, schedule of changes in District’s total OPEB liability and related ratio, schedule of the District’s proportionate share of the net pension liability, schedule of District contributions, and budgetary comparison information on pages 4-13 and 53-57 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. 2

Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the District’s basic financial statements. The accompanying supplemental information as listed in the table of contents and schedule of expenditures of federal awards, as required by Title 2 U.S. Code of Federal Regulations, Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards are presented for purposes of additional analysis and are not a required part of the basic financial statements. The accompanying supplementary information as listed in the table of contents and schedule of expenditures of federal awards is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information as listed in the table of contents and schedule of expenditures of federal awards is fairly stated, in all material respects, in relation to the basic financial statements as a whole. Other Information As described in Note II to the financial statements, the District adopted GASB Statement No. 101, Compensated Absences. As a result, the beginning net position has been restated. Our opinion is not modified with respect to this matter. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated September 22, 2025 on our consideration of the District’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 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 District’s internal control over financial reporting and compliance.

Rochester, New York September 22, 2025

3

Webster Central School District Management’s Discussion and Analysis For the Fiscal Year Ended June 30, 2025 The following is a discussion and analysis of the School District’s financial performance for the fiscal year ended June 30, 2025. This section is a summary of the School District’s financial activities based on currently known facts, decisions, and/or conditions. It is also based on both the government-wide and fund-based financial statements. The results of the current year are discussed in comparison with the prior year, with an emphasis placed on the current year. This section is only an introduction and should be read in conjunction with the School District’s financial statements, which immediately follow this section. Financial Highlights At the close of the fiscal year, the total liabilities plus deferred inflows (what the district owes) exceeded its total assets plus deferred outflows (what the district owns) by $166,229,940 (net position) a decrease of $16,016,100 from the prior year. As of the close of the fiscal year, the School District’s governmental funds reported combined fund balances of $63,403,531 an increase of $27,564,781 in comparison with the prior year. New York State Law limits the amount of unreserved fund balance that can be retained by the General Fund to 4% the ensuing year's budget, exclusive of the amount designated for the subsequent year's budget. At the end of the current fiscal year, the unassigned fund balance of the General Fund was $8,782,975. This amount was within the statutory limit. General revenues which includes Federal and State Aid, Real Property Taxes, Non Property Taxes, Investment Earnings, Compensation for Loss, and Miscellaneous accounted for $217,098,095 or 94% of all revenues. Program specific revenues in the form of Charges for Services and Operating Grants and Contributions, accounted for $13,056,419 or 6% of total revenues. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the School District's basic financial statements. The School District's basic financial statements are comprised of three components: (1) government-wide financial statements, (2) fund financial statements and (3) notes to the financial statements. This report also contains individual fund statements and schedules in addition to the basic financial statements. Government-Wide Financial Statements The government-wide financial statements are designed to provide readers with a broad overview of the School District's finances, in a manner similar to a private-sector business. The Statement of Net Position presents information on all of the School District's assets plus deferred outflow of resources and liabilities plus deferred inflow of resources, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the School District is improving or deteriorating.

4

The Statement of Activities presents information showing how the government's net position changed during the most recent fiscal year. 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. The governmental activities of the School District include instruction, pupil transportation, cost of food sales, general administrative support, community service, and interest on long-term debt. The government-wide financial statements can be found on the pages immediately following this section as the first two pages of the basic financial statements. Fund Financial Statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The School District, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance related legal requirements. All of the funds of the School District can be divided into two categories: governmental funds and fiduciary funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating the School District's nearterm financing 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 so, readers may better understand the long-term impact of the government's near term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The School District maintains six individual governmental funds; General Fund, Special Aid Fund, School Lunch Fund, Miscellaneous Special Revenue Fund, Debt Service Fund and Capital Projects Fund. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures and changes in fund balances for the General Fund, the Special Aid Fund, and the Capital Projects Fund which are reported as major funds. Data for the School Lunch Fund, the Miscellaneous Special Revenue Fund, and the Debt Service Fund are aggregated into a single column and reported as nonmajor funds. The School District adopts and voters approve an annual budget for its General Fund. A budgetary comparison statement has been provided for the General Fund within the basic financial statements to demonstrate compliance with the budget. The Fiduciary Funds are used to account for assets held by the School District in an agency capacity which accounts for assets held by the School District on behalf of others. Fiduciary funds are not reflected in the government-wide financial statement because the resources of these funds are not available to support the School District's programs. The financial statements for the governmental and fiduciary funds can be found in the basic financial statement section of this report.

5

Major Feature of the District-Wide and Fund Financial Statements

Scope

Government-Wide Statements Entire District (except fiduciary funds)

Required financial statements

Statement of Net Position Statement of Activities

Accounting basis and measurement focus Type of asset/liability information

Accrual accounting and economic resources focus

Type of inflow/outflow information

All revenues and expenses during year, regardless of when cash is received or paid

All assets and liabilities, both financial and capital, short-term and long-term

Fund Financial Statements Governmental Funds Fiduciary Funds The activities of the School Instances in which the School District that are not proprietary or District administers resources fiduciary, such as special on behalf of someone else, education, scholarship programs, such as student activities and building maintenance monies Balance Sheet Statement of Fiduciary Net Statement of Revenues, Position Expenditures, and Changes in Statement of Changes in Fund Balance Fiduciary Net Position Modified accrual accounting and Accrual accounting and current financial focus economic resources focus Generally, assets expected to be used up and liabilities that come due during the year or soon thereafter; no capital assets or long-term liabilities included Revenues for which cash is received during or soon after the end of the year; expenditures when goods or services have been received and the related liability is due and payable

All assets and liabilities, both short-term and long-term; funds do not currently contain capital assets, although they can All additions and deductions during the year, regardless of when cash is received or paid

Notes to the Financial Statements The notes provide additional information that is essential to a full understanding of the data provided in the governmentwide and fund financial statements. The notes to the financial statements can be found following the basic financial statement section of this report. Government-Wide Statements The government-wide statements report information about the District as a whole using accounting methods similar to those used by private-sector companies. The statement of net position includes all the School District's assets and liabilities. All of the current year's revenues and expenses are accounted for in the statement of activities regardless of when cash is received or paid. The two government-wide statements report the District's net position and how they have changed. Net position, the difference between the District's assets plus deferred outflow of resources and liabilities plus deferred inflow of resources, is one way to measure the District's financial health or position. Over time, increases or decreases in the District's net position are an indicator of whether its financial position is improving or deteriorating, respectively. Additional non-financial factors such as changes in the District’s property tax base and the condition of the school buildings and facilities must also be considered to assess the District’s overall health. All of the District’s services are reported in the government-wide financial statements as governmental activities. Most of the District's basic services are included here, such as regular and special education, transportation and administration. Property taxes, federal and state aid, and investment earnings finance most of these activities. 6

Financial Analysis of the School District As A Whole Net Position ASSETS: Current and Other Assets Capital Assets Total Assets DEFERRED OUTFLOWS OF RESOURCES: Deferred Outflows of Resources LIABILITIES: Long-Term Debt Obligations Other Liabilities Total Liabilities DEFERRED INFLOWS OF RESOURCES: Deferred Inflows of Resources NET POSITION: Net Investment in Capital Assets Restricted For, Reserve for ERS Reserve for TRS Other Purposes Unrestricted Total Net Position

Total Variance $

$

Governmental Activities 2025 2024 92,057,269 $ 81,188,280 215,721,185 216,820,267 307,778,454 $ 298,008,547

$

10,868,989 (1,099,082) 9,769,907

$

39,683,125

$

52,826,207

$

(13,143,082)

$

$ $

287,379,236 45,578,643 332,957,879

$

$

374,485,354 16,337,877 390,823,231

$

87,106,118 (29,240,766) 57,865,352

$

122,868,288

$

137,462,454

$

(14,594,166)

$

101,387,621

$

100,119,098

$

1,268,523

$

12,081,396 6,285,597 33,094,990 (319,079,544) (166,229,940)

$

10,049,457 4,768,161 34,683,756 (269,206,051) (119,585,579)

$

2,031,939 1,517,436 (1,588,766) (49,873,493) (46,644,361)

$

Key Variances  Current and Other Assets increased $10,868,989 as a result of the TRS pension system reported a net pension asset.  Deferred Outflows of Resources decreased $13,143,082 as a result of decreases to the pension system changes to assumptions and the net differences between projected and actual earnings on investments and decreases to the OPEB differences between expected and actual experiences.  Long-Term Debt Obligations increased $87,106,118 as a result of the issuance of $28,420,000 in bonds and the OPEB obligation increasing $36,531,735.  Other Liabilities decreased $29,240,766 as a result of converting the BAN to a serial bond.  Deferred Inflows of Resources decreased $14,594,166 as a result of differences between the expected and actual experiences and changes of assumptions decreasing for the OPEB plan.  Unrestricted Net Position decreased $49,873,493 as a result of the impact of the increase to the OPEB obligation. The District’s financial position is the product of many factors. By far, the largest component of the School District's net position reflects its investment in capital assets, less any related debt used to acquire those assets that is still outstanding. The School District uses these capital assets to provide services to the students and consequently, these assets are not available for future spending. Although the School District's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. Restricted net position consists of: Reserve for ERS, Reserve for TRS, and Other Purposes. The remaining balance of unrestricted net position is deficit of $319,079,544.

7

Changes in Net Position The District’s total revenue increased 2% to $230,154,514. State and federal aid 33% and property taxes 54% accounted for most of the District’s revenue. The remaining 13% of the revenue comes from operating grants and contributions, charges for services, non property taxes, investment earnings, compensation for loss, and miscellaneous revenues. The total cost of all the programs and services increased 19% to $246,170,614. The District’s expenses are predominately related to education and caring for the students (Instruction) 80%. General support which included expenses associated with the operation, maintenance and administration of the District accounted for 10% of the total costs. See table below: Total Variance

Governmental Activities 2025 2024 REVENUES: Program Charges for Service Operating Grants & Contributions Total Program General Property Taxes Non Property Taxes State and Federal Aid Investment Earnings Compensation for Loss Miscellaneous Total General TOTAL REVENUES EXPENSES: General Support Instruction Pupil Transportation Community Services School Lunch Interest TOTAL EXPENSES INCREASE IN NET POSITION

$ $ $

$ $ $

$

124,723,372 10,483,004 76,037,815 4,291,713 56,640 1,505,551 217,098,095 230,154,514

$

$

$ \$ $

2,166,041 10,504,328 12,670,369

$

120,694,376 10,468,990 74,357,415 4,421,161 67,388 2,285,656 212,294,986 224,965,355

$

$

$

23,504,623 196,517,327 13,698,043 2,603,657 5,573,189 4,273,775 246,170,614

$

18,685,412 164,085,607 13,135,166 2,338,514 4,610,201 3,945,021 206,799,921

$

(16,016,100)

$

18,165,434

NET POSITION, BEGINNING OF YEAR NET POSITION, END OF YEAR

2,600,390 10,456,029 13,056,419

(150,213,840) $

(166,229,940)

$

$ $

$

434,349 (48,299) 386,050 4,028,996 14,014 1,680,400 (129,448) (10,748) (780,105) 4,803,109 5,189,159 4,819,211 32,431,720 562,877 265,143 962,988 328,754 39,370,693

(137,751,013) $

Compensated Absences Adjustment

(119,585,579) (30,628,261)

2024 RESTATED NET POSITION

$

(150,213,840)

Key Variances  Instruction expenses increased $32,431,720 as a result of the net impact of the OPEB obligation increasing $36,531,735.

8

Revenue for 2024-25 Investment Earnings & Compensation for Loss 1.89%

Miscellaneous 0.66%

Charges for Services 1.13% Operating Grants & Contributions 4.54%

State and Federal Aid 33.04%

Property Taxes 54.19% Non-Property Taxes 4.55%

Revenue for 2023-24 Investment Earnings & Compensation for Loss 2.00%

Miscellaneous 1.02%

Charges for Services 0.96% Operating Grants & Contributions 4.67%

State and Federal Aid 33.05%

Property Taxes 53.65% Non-Property Taxes 4.65%

9

Expenditures for 2024-25 Community Services 1.06%

School Lunch 2.26%

Interest on Long Term Debt 1.74% General Support 9.55%

Pupil Transportation 5.56%

Instruction 79.83%

Expenditures for 2023-24 Community Services 1.13%

School Lunch 2.23%

Interest on Long Term Debt 1.90% General Support 9.04%

Pupil Transportation 6.35%

Instruction 79.35%

10

Financial Analysis of the School District’s Funds The financial performance of the District as a whole is reflected in its governmental funds. As the District completed the year, its governmental funds reported combined fund balances of $63,403,531 which is more than last year’s ending fund balance of $35,838,750. The General Fund is the chief operating fund of the District. At the end of the current year, the total fund balance of the General Fund was $61,052,398. Fund balance for the General Fund increased by $6,961,884 compared with the prior year. See table below:

2025 $ 46,597,530 5,671,893 8,782,975 $ 61,052,398

2024 $ 40,947,258 5,855,562 7,287,694 $ 54,090,514

Total Variance $ 5,650,272 (183,669) 1,495,281 $ 6,961,884

General Fund Budgetary Highlights The difference between the original budget and the final amended budget was $355,562. This change is attributable to $355,562 for carryover encumbrances from the 2023-24 school year. The key factors for budget variances in the General Fund are listed below along with explanations for each.

Expenditure Items:

Budget Variance Original Vs. Amended

Explanation for Budget Variance

General Support

$1,147,741

Increase in BOCES support and utility cost increases

Instructional

($4,219,474)

Debt Service-Principal

$1,997,852

Spending freeze implemented Reclassification of the budget for financial reporting related to leases under GASB

Revenue Items:

Budget Variance Amended Vs. Actual

Explanation for Budget Variance

Non-Property Taxes

$2,483,004

BOCES surplus higher than anticipated

Use of Money and Property

$3,694,871

Interest Earnings higher than budgeted

State Sources

$5,170,277

Building Aid and BOCES aid larger than anticipated

11

Capital Asset and Debt Administration Capital Assets By the end of the 2025 fiscal year, the District had invested $212,511,829 in a broad range of capital assets, including land, work in progress, buildings and improvements, and machinery and equipment. The change in capital assets, net of accumulated depreciation, is reflected below: 2025 Capital Assets Land Work in Progress Buildings and Improvements Machinery and Equipment Total Capital Assets Lease Assets Equipment Subscription IT Assets Total Lease Assets

$

$ $ $

2024

2,147,912 21,114,168 181,062,795 8,186,954 212,511,829

$

3,087,505 121,851 3,209,356

$

2,147,912 76,110,999 126,914,565 7,601,534 212,775,010

$

4,022,683 22,574 4,045,257

$

More detailed information can be found in the notes to the financial statements. Long-Term Debt At year end, the District had $374,485,354 in general obligation bonds and other long-term debt outstanding as follows:

Type Serial Bonds Unamortized Bond Premium Lease Liability OPEB Net Pension Liability Retainage Payable Compensated Absences Total Long-Term Obligations

$

$

2025 100,120,000 8,314,986 1,367,393 220,884,339 10,267,717 60,648 33,470,271 374,485,354

More detailed information can be found in the notes to the financial statements.

12

$

$

2024 78,055,000 6,631,506 2,353,257 184,352,604 14,070,685 32,544,445 318,007,497

Factors Bearing on the District’s Future Based on current information, here is a look at the key factors influencing the Webster Central School District's budget and operations for the 2025-26 fiscal year and beyond: 1. State Aid: The Webster Central School District is still navigating the complexities of state funding. While the final report from the Rockefeller Institute on the Foundation Aid formula was released in December 2024, the full, long-term impact on future state aid allocations remains a significant point of concern. The District is focused on managing its budget in light of potential changes and uncertainties in state support. 2. Federal Funding and Fiscal Challenges: The District's 2025-26 budget had to be developed without the approximately $14 million in federal stimulus funding that expired in September 2024. The District now faces the major challenge of sustaining the programs and staffing previously supported by these temporary funds. Additionally, the District is monitoring potential changes to other federal grants, including the USDA school lunch program. The District is also preparing for a federal budget that may include cuts to public education funding and is looking into ways to address these issues. 3. Economic and Workforce Challenges: The District continues to face ongoing workforce challenges, with ongoing vacancies for positions such as educational support, custodians, and special education aides. To attract and retain talent, the District has made contractual changes that have led to increased costs for the 2025-26 and future fiscal years. The broader economic climate also remains a factor in state support, and the District is closely monitoring this. 4. Capital Improvement Project: The $85 million capital project, which was approved in October 2023, is now in its implementation phase. Construction on Phase 1 began in the summer of 2025 and is currently underway at various school sites, including Webster Schroeder High School. The District is continuing to mitigate the tax impact by using $10 million from its capital reserve and restructuring debt, maintaining the zero-tax-impact scenario for residents. 5. Local Economy: The local economy is demonstrating greater stability, with new corporations taking over spaces previously occupied by a large, dominant employer. This diversification is seen as a positive development that will contribute to the District's long-term financial stability in the coming years. Contacting the School District’s Financial Management This financial report is designed to provide the District’s citizens, taxpayers, customers, investors, and creditors with a general overview of the District’s finances and to demonstrate the District’s accountability for the money it receives. Questions concerning any of the information provided in this report or requests for additional information should be addressed to the following: Webster Central School District 119 South Avenue Webster, NY 14580

13

WEBSTER CENTRAL SCHOOL DISTRICT, NEW YORK Statement of Net Position June 30, 2025 Governmental Activities ASSETS Cash and cash equivalents Investments Accounts receivable Inventories Net pension asset Capital Assets: Land Work in progress Other capital assets (net of depreciation) TOTAL ASSETS

$

DEFERRED OUTFLOWS OF RESOURCES Deferred outflows of resources LIABILITIES Accounts payable Accrued liabilities Unearned revenues Due to other governments Due to teachers' retirement system Due to employees' retirement system Other liabilities Long-Term Obligations: Due in one year Due in more than one year TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURCES Deferred inflows of resources NET POSITION Net investment in capital assets Restricted For: Reserve for employee retirement system Reserve for teacher retirement system Other purposes Unrestricted TOTAL NET POSITION (See accompanying notes to financial statements)

56,882,281 8,153,272 14,327,157 130,623 12,563,936

$

2,147,912 21,114,168 192,459,105 307,778,454

$

39,683,125

$

2,168,086 806,372 27,699 88,209 9,155,209 1,085,395 3,006,907

$

12,895,178 361,590,176 390,823,231

$

122,868,288

$

101,387,621

12,081,396 6,285,597 33,094,990 (319,079,544) $ (166,229,940) 14

WEBSTER CENTRAL SCHOOL DISTRICT, NEW YORK Statement of Activities For The Year Ended June 30, 2025

Net (Expense) Revenue and Changes in Program Revenues

Net Position

Operating Functions/Programs

Expenses

Charges for

Grants and

Governmental

Services

Contributions

Activities

Primary Government General support

$

23,504,623

$

-

$

-

$

(23,504,623)

Instruction

196,517,327

641,364

8,693,163

(187,182,800)

Pupil transportation

13,698,043

-

-

(13,698,043)

Community services

2,603,657

-

-

(2,603,657)

School lunch

5,573,189

1,959,026

1,762,866

(1,851,297)

Interest

4,273,775

-

-

(4,273,775)

Total Primary Government

$

246,170,614

$

2,600,390

$

10,456,029

$

(233,114,195)

$

124,723,372

10,483,004

State and federal aid

76,037,815

Investment earnings

4,291,713

Compensation for loss

56,640

Miscellaneous

1,505,551

Total General Revenues Changes in Net Position

$

217,098,095

$

(16,016,100)

$

(119,585,579)

Net Position, Beginning of Year, as previously recorded Compensated absences restatement

(30,628,261)

Net Position, Beginning of Year, as adjusted

$

(150,213,840)

Net Position, End of Year

$

(166,229,940)

(See accompanying notes to financial statements)

15

WEBSTER CENTRAL SCHOOL DISTRICT, NEW YORK Balance Sheet Governmental Funds June 30, 2025

ASSETS Cash and cash equivalents Investments Receivables Inventories Due from other funds TOTAL ASSETS LIABILITIES AND FUND BALANCES Liabilities Accounts payable Accrued liabilities Due to other funds Due to other governments Due to TRS Due to ERS Other liabilities Unearned revenue TOTAL LIABILITIES Fund Balances Nonspendable Restricted Assigned Unassigned TOTAL FUND BALANCE TOTAL LIABILITIES AND FUND BALANCES

General Fund $ 55,818,624 8,153,137 10,457,799 12,367,321 $ 86,796,881

Special Aid Fund $ 233,876 3,532,761 2,593,380 $ 6,360,017

Capital Projects Fund $ 279,088 137,920 5,501,647 $ 5,918,655

Nonmajor Governmental Funds $ 550,693 135 198,677 130,623 6,922,391 $ 7,802,519

Total Governmental Funds $ 56,882,281 8,153,272 14,327,157 130,623 27,384,739 $ 106,878,072

$

1,311,337 462,714 11,233,420 83,859 9,155,209 490,918 3,007,026 $ 25,744,483

$

18,181 42,889 5,513,792 4,350 7,030 5,586,242

$

741,327 9,465,876 $ 10,207,203

$

97,241 52,694 1,171,651 587,447 27,580 1,936,613

$

$

46,597,530 5,671,893 8,782,975 $ 61,052,398

$

$

$

130,623 4,682,464 1,052,819 5,865,906

$

$

313,366 (4,601,914) (4,288,548)

$

$

773,775 773,775

$ 86,796,881

$

6,360,017

$

5,918,655

$

7,802,519

$

$

Amounts reported for governmental activities in the Statement of Net Position are different because: Capital assets/right to use assets used in governmental activities are not financial resources and therefore are not reported in the funds.

$

$

2,168,086 558,297 27,384,739 88,209 9,155,209 1,085,395 3,007,026 27,580 43,474,541 130,623 51,593,360 7,498,487 4,181,061 63,403,531

215,721,185

Interest is accrued on outstanding bonds in the Statement of Net Position but not in the funds.

(248,075)

The following long-term obligations are not due and payable in the current period and therefore are not reported in the governmental funds: Serial bonds payable Lease liability Retainage payable OPEB liability Compensated absences Unamortized bond premium Net pension asset Deferred outflow - pension Deferred outflow - OPEB Net pension liability Deferred inflow - pension Deferred inflow - OPEB Net Position of Governmental Activities

(100,120,000) (1,367,393) (60,648) (220,884,339) (33,470,271) (8,314,986) 12,563,936 34,973,820 4,709,305 (10,267,717) (16,437,248) (106,431,040) $ (166,229,940)

(See accompanying notes to financial statements)

16

WEBSTER CENTRAL SCHOOL DISTRICT, NEW YORK Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For The Year Ended June 30, 2025 Formerly Nonmajor Special

Capital

Nonmajor

Total

General

Aid

Projects

Governmental

Governmental

Fund

Fund

Fund

Funds

Funds

REVENUES Real property taxes and tax items

-

$ 124,723,372

Non-property taxes

$ 124,723,372 10,483,004

-

-

-

10,483,004

Charges for services

641,364

-

-

-

641,364

4,109,871

-

-

147,413

4,257,284

Use of money and property Sale of property and compensation for loss

$

-

$

-

$

56,640

-

-

-

56,640

Miscellaneous

1,391,962

1,872,442

-

147,987

3,412,391

State sources

75,601,667

3,321,599

-

65,944

78,989,210

Federal sources

436,148

3,499,122

-

1,696,922

5,632,192

-

-

-

1,959,026

1,959,026 $ 230,154,483

Sales TOTAL REVENUES

$ 217,444,028

$

$

$

8,693,163

$

-

$

4,017,292

-

$

-

$

360,924

EXPENDITURES General support Instruction

19,160,455

$

19,521,379

111,482,003

6,152,297

-

-

117,634,300

Pupil transportation Community services

8,882,245 1,199,308

205,653 1,437,609

1,135,476 -

-

10,223,374 2,636,917

Employee benefits

55,184,957

1,156,190

-

663,025

57,004,172

9,152,852

-

-

1,855,000

11,007,852

4,807,258

-

-

-

4,807,258

Cost of sales

-

-

-

2,157,581

2,157,581

Other expenses

-

-

-

2,012,701

2,012,701

Capital outlay

-

-

9,887,111

-

9,887,111

TOTAL EXPENDITURES

$ 209,869,078

$

8,951,749

$

11,022,587

$

7,049,231

$ 236,892,645

$

7,574,950

$

(258,586)

$ (11,022,587)

$

(3,031,939)

$

-

$

299,785

$

$

186,826

$

EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES

(6,738,162)

OTHER FINANCING SOURCES (USES) Transfers - in

$

313,281

799,892

(613,066)

-

(186,826)

-

(799,892)

Proceeds from obligations

-

-

29,981,988

-

29,981,988

BAN's redeemed from appropriations

-

-

2,105,000

-

2,105,000

Premium on obligations issued

-

-

-

2,215,955

2,215,955

TOTAL OTHER FINANCING SOURCES (USES)

$

(613,066)

$

299,785

$

32,213,443

$

2,402,781

$

34,302,943

NET CHANGE IN FUND BALANCE

$

6,961,884

$

41,199

$

21,190,856

$

(629,158)

$

27,564,781

FUND BALANCE, BEGINNING OF YEAR, as previously reported

$

54,090,514

$

-

$ (25,479,404)

$

7,227,640

$

35,838,750

732,576

-

Changes within financial reporting entity nonmajor to major

-

(732,576)

-

FUND BALANCE, BEGINNING OF YEAR, as adjusted FUND BALANCE, END OF YEAR (See accompanying notes to financial statements)

$

54,090,514

$

732,576

$ (25,479,404)

$

6,495,064

$

35,838,750

$

61,052,398

$

773,775

$

$

5,865,906

$

63,403,531

17

(4,288,548)

WEBSTER CENTRAL SCHOOL DISTRICT, NEW YORK Reconciliation of Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to Statement of Activities For The Year Ended June 30, 2025 NET CHANGE IN FUND BALANCES TOTAL GOVERNMENTAL FUNDS

$

27,564,781

Amounts reported for governmental activities in the Statement of Activities are different because: Governmental funds report capital outlays as expenditures. However, in the Statement of Activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. The following are the amounts by which capital outlays and additions of assets in excess depreciation in the current period: Capital Outlay $ 9,887,111 Additions to Assets, Net 2,761,393 Depreciation and Amortization (13,747,586) (1,099,082) Bond proceeds provide current financial resources to governmental funds, but issuing debt increases long-term obligations in the Statement of Net Position. Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long-term obligations in the Statement of Net Position. The following details these items as they effect the governmental activities: Debt Repayments $ 11,007,852 Proceeds from Obligations - Bond Issuance (28,420,000) Proceeds from BAN Redemption (2,105,000) Unamortized Bond Premium (1,683,480) Proceeds from Obligations - Lease Insurrance (1,561,988) (22,762,616) In the Statement of Activities, interest is accrued on outstanding bonds, whereas in governmental funds, an interest expenditure is reported when due.

(18,962)

The retainage liability does not measure the use of current financial resources and, therefore, is not reported as an expenditure in the governmental funds

(60,648)

The net OPEB liability does not require the use of current financial resources and, therefore, is not reported as an expenditure in the governmental funds.

(21,194,589)

(Increase) decrease in proportionate share of net pension asset/liability reported in the Statement of Activities do not provide for or require the use of current financial resources and therefore are not reported as revenues or expenditures in the governmental funds Teachers' Retirement System Employees' Retirement System

1,590,798 870,044

Portion of deferred (inflow) / outflow recognized in long term debt

20,000

In the Statement of Activities, vacation pay, teachers' retirement incentive and judgments and claims are measured by the amount accrued during the year. In the governmental funds, expenditures for these items are measured by the amount actually paid. The following provides the differences of these items as presented in the governmental activities: Compensated Absences CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES

(See accompanying notes to financial statements)

18

(925,826) $

(16,016,100)

WEBSTER CENTRAL SCHOOL DISTRICT, NEW YORK Statement of Fiduciary Net Position June 30, 2025

Custodial Funds ASSETS Cash and cash equivalents TOTAL ASSETS

$ $

603,517 603,517

NET POSITION Restricted for individuals, organizations and other governments TOTAL NET POSITION

$ $

603,517 603,517

Statement of Changes in Fiduciary Net Position For The Year Ended June 30, 2025

Custodial Funds ADDITIONS Student activity TOTAL ADDITIONS

$ $

1,006,628 1,006,628

DEDUCTIONS Student activity TOTAL DEDUCTIONS

$ $

873,578 873,578

CHANGE IN NET POSITION

$

133,050

NET POSITION, BEGINNING OF YEAR

470,467

NET POSITION, END OF YEAR

(See accompanying notes to financial statements)

$

19

603,517

WEBSTER CENTRAL SCHOOL DISTRICT, NEW YORK Notes To The Basic Financial Statements June 30, 2025

I.

Summary of Significant Accounting Policies

The financial statements of the Webster Central School District, New York (the District) have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to government 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 District's accounting policies are described below. A.

Reporting Entity

The District is governed by the laws of New York State. The District is an independent entity governed by an elected Board of Education consisting of seven members. The President of the Board serves as the chief fiscal officer and the Superintendent is the chief executive officer. The Board is responsible for, and controls all activities related to public school education within the District. Board members have authority to make decisions, power to appoint management, and primary accountability for all fiscal matters. The reporting entity of the District is based upon criteria set forth by GASB Statement 14, The Financial Reporting Entity, as amended by GASB Statement 39, Component Units and GASB Statement No. 61, The Financial reporting Entity. The financial reporting entity consists of the primary government, organizations for which the primary government is financially accountable and other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity’s financial statements to be misleading or incomplete. The District is not a component unit of another reporting entity. The decision to include a potential component unit in the District’s reporting entity is based on several criteria including legal standing, fiscal dependency, and financial accountability. Based on the application of these criteria, the following is a brief review of certain entities included in the District’s reporting entity. 1.

Extraclassroom Activity Funds

The extraclassroom activity funds of the District represent funds of the students of the District. The Board of Education exercises general oversight of these funds. The extraclassroom activity funds are independent of the District with respect to its financial transactions, and the designation of student management. Separate audited financial statements (cash basis) of the extraclassroom activity funds can be found at the District’s business office. The District accounts for assets held for various student organizations in the Custodial Fund.

20

( I. ) (Continued) B.

Joint Venture

The District is a component of the First Supervisory District of Monroe County Board of Cooperative Educational Services (BOCES). The BOCES is a voluntary, cooperative association of school districts in a geographic area that shares planning, services, and programs which provide educational and support activities. There is no authority or process by which a school district can terminate its status as a BOCES component. BOCES are organized under §1950 of the New York State Education Law. A BOCES Board is considered a corporate body. Members of a BOCES Board are nominated and elected by their component member boards in accordance with provisions of §1950 of the New York State Education Law. All BOCES property is held by the BOCES Board as a corporation (§1950(6)). In addition, BOCES Boards also are considered municipal corporations to permit them to contract with other municipalities on a cooperative basis under §119-n(a) of the New York State General Municipal Law. A BOCES’ budget is comprised of separate budgets for administrative, program, and capital costs. Each component school district’s share of administrative and capital cost is determined by resident public school district enrollment as defined in Education Law, Section 1950(4)(b)(7). In addition, component districts pay tuition or a service fee for programs in which its students participate. During the year, the District was billed $17,541,884 for BOCES administrative and program costs. The District’s share of BOCES aid amounted to $8,232,097. Financial statements for the BOCES are available from the BOCES administrative office. C.

Basis of Presentation 1.

Districtwide Statements

The Statement of Net Position and the Statement of Activities present financial information about the District’s governmental activities. These statements include the financial activities of the overall government in its entirety, except those that are fiduciary. Eliminations have been made to minimize the double counting of internal transactions. Governmental activities generally are financed through taxes, state aid, intergovernmental revenues, and other exchange and nonexchange transactions. Operating grants include operating-specific and discretionary (either operating or capital) grants, while the capital grants column reflects capital specific grants. The Statement of Activities presents a comparison between program expenses and revenues for each function of the District’s governmental activities. Direct expenses are those that are specifically associated with and are clearly identifiable to a particular function. Indirect expenses, principally employee benefits, are allocated to functional areas in proportion to the payroll expended for those areas. Program revenues include charges paid by the recipients of goods or services offered by the programs, and grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.

21

( I. ) (Continued) 2.

Fund Statements

The fund statements provide information about the District’s funds, including fiduciary funds. Separate statements for each fund category (governmental and fiduciary) are presented. The emphasis of fund financial statements is on major governmental funds, each displayed in a separate column. All remaining governmental funds are aggregated and reported as nonmajor funds. The District reports the following governmental funds: a.

b. Nonmajor Governmental Funds - The other funds which are not considered major are aggregated and reported as nonmajor governmental funds as follows: Debt Service Fund - This fund accounts for the accumulation of resources and the payment of principal and interest on long-term obligations for governmental activities. School Lunch Fund - Used to account for transactions of the District’s lunch, breakfast and milk programs. Miscellaneous Special Revenue Fund – used to account for and report those revenues that are restricted or committed to expenditures for specified purposes. c. Fiduciary Fund - Fiduciary activities are those in which the District acts as trustee or agent for resources that belong to others. These activities are not included in the District-wide financial statements, because their resources do not belong to the District, and are not available to be used. Custodial Funds - These funds are strictly custodial in nature and do not involve the measurement of results of operations. Assets are held by the District as agent for various student groups or extraclassroom activity funds.

22

( I. ) (Continued) D.

Measurement Focus and Basis of Accounting

Accounting and financial reporting treatment is determined by the applicable measurement focus and basis of accounting. Measurement focus indicates the type of resources being measured such as current financial resources or economic resources. The basis of accounting indicates the timing of transactions or events for recognition in the financial statements. The District-wide and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash transaction takes place. Nonexchange transactions, in which the District gives or receives value without directly receiving or giving equal value in exchange, include property taxes, grants and donations. On an accrual basis revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied. The fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The District considers all revenues reported in the governmental funds to be available if the revenues are collected within one year after the end of the fiscal year. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, claims and judgments, and compensated absences, which are recognized as expenditures to the extent they have matured. General capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term debt and acquisitions under capital leases are reported as other financing sources. E.

Property Taxes

Real property taxes are levied annually by the Board of Education no later than September 1, and became a lien on August 19, 2024. Taxes were collected during the period September 1 through October 31, 2024. Uncollected real property taxes are subsequently enforced by the County of Monroe, in which the District is located. An amount representing uncollected real property taxes transmitted to the Counties for enforcement is paid by the Counties to the District no later than the forthcoming April 1. F.

Restricted Resources

When an expense is incurred for purposes for which both restricted and unrestricted net position are available, the District’s policy concerning which to apply first varies with the intended use, and with associated legal requirements, many of which are described elsewhere in these notes.

23

( I. ) (Continued) G.

Interfund Transactions

The operations of the District include transactions between funds. These transactions may be temporary in nature, such as with interfund borrowing. The District typically loans resources between funds for the purpose of providing cash flow. These interfund receivables and payables are expected to be repaid within one year. Permanent transfers of funds include the transfer of expenditures and revenues to provide financing or other services. In the District-wide statements, the amounts reported on the Statement of Net Position for interfund receivables and payables represent amounts due between different fund types (governmental activities and fiduciary funds). Eliminations have been made for all interfund receivables and payables between the funds. The governmental funds report all interfund transactions as originally recorded. Interfund receivables and payables may be netted on the accompanying governmental funds balance sheet when it is the District’s practice to settle these amounts at a net balance based upon the right of legal offset. Refer to Note IX for a detailed disclosure by individual fund for interfund receivables, payables, expenditures, and revenues activity. H.

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets, deferred outflows of resources, liabilities, and deferred inflows of resources and disclosure of contingent assets and liabilities at the date of the financial statements and the reported revenues and expenses/expenditures during the reporting period. Actual results could differ from those estimates. Estimates and assumptions are made in a variety of areas, including computation of encumbrances, compensated absences, potential contingent liabilities and useful lives of long-lived assets. I.

Cash and Cash Equivalents

The District’s cash and cash equivalents consist of cash on hand, demand deposits, and short-term investments with original maturities of three months or less from the date of acquisition. New York State Law governs the District’s investment policies. Resources must be deposited in FDIC-insured commercial banks or trust companies located within the State. Permissible investments include obligations of the United States Treasury, United States Agencies, repurchase agreements and obligations of New York State or its localities. Collateral is required for demand and time deposits and certificates of deposit not covered by FDIC insurance. Obligations that may be pledged as collateral are obligations of the United States and its agencies and obligations of the State and its municipalities and Districts.

24

( I. ) (Continued) J.

Receivables Receivables are shown net of an allowance for uncollectible accounts, when applicable.

In addition, the District will report a receivable relating to a lease arrangement. The receivable is recorded at the present value of the future payments and recognized over the life of the lease. K.

Inventory and Prepaid Items

Inventories of food and/or supplies for school lunch are recorded at cost on a first-in, first-out basis or, in the case of surplus food, at stated value which approximates market. Purchases of inventoriable items in other funds are recorded as expenditures at the time of purchase and are considered immaterial in amount. Prepaid items represent payments made by the District for which benefits extend beyond year end. These payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both the District-wide and fund financial statements. These items are reported as assets on the Statement of Net Position or balance sheet using the consumption method. A current asset for the prepaid amounts is recorded at the time of purchase and an expense/expenditure is reported in the year the goods or services are consumed. A nonspendable fund balance for these non-liquid assets (inventories and prepaid items) has been recognized to signify that a portion of fund balance is not available for other subsequent expenditures. L.

Capital Assets

In the District-wide financial statements, capital assets are accounted for at historical cost or estimated historical cost if actual is unavailable, except for donated capital assets which are recorded at their acquisition value at the date of donation. Depreciation of all exhaustible capital assets is recorded as an allocated expense in the Statement of Activities, with accumulated depreciation reflected in the Statement of Net Position. Depreciation is provided over the assets’ estimated useful lives using the straight-line method of depreciation. The range of estimated useful lives and capitalization threshold by type of assets is as follows:

Class Buildings Machinery and Equipment

Capitalization Threshold $ 50,000 $ 5,000

Depreciation Method SL SL

Estimated Useful Life 15-50 Years 5-25 Years

The investment in infrastructure type assets have not been segregated for reporting purposes since all costs associated with capital projects are consolidated and reported as additions to buildings and improvements.

25

( I. ) (Continued) M.

Right To Use Assets

The District-wide financial statements, right-to-use-assets are reported within the major class of the underlying asset and valued at the future minimum lease payment. Amortization is between 3 and 10 years based on the contract terms and/or estimated replacement of the assets. N.

Unearned Revenue

The District reports unearned revenues on its Statement of Net Position and its Balance Sheet. On the Statement of Net Position, unearned revenue arises when resources are received by the District before it has legal claim to them, as when grant monies are received prior to incurrence of qualifying expenditures. In subsequent periods, when the District has legal claim to resources, the liability for unearned revenue is removed and revenue is recognized. O.

Deferred Outflows and Inflows of Resources

In addition to assets, the Statement of Net Position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period and so will not be recognized as an outflow of resources (expenses/expenditure) until that time. In addition to liabilities, the Statement of Net Position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. P.

Vested Employee Benefits 1.

Compensated Absences

The District, based on policy and/or various negotiated labor or employment contracts, recognizes a liability for compensated absences for leave time that: (i) (ii) (iii)

has been earned for services previously rendered by employees. has accumulated and is allowed to be carried over into subsequent years. is more likely than not to be used as time off or settled (for example paid in cash to the employee or as a payment to an employee 403b or medical spending account) during or upon separation from employment.

Based on the criteria listed, only vacation leave, sick leave and sick leave banks meet the qualifications to be recognized as a liability for compensated absences. The total long-term estimated liability for compensated absences is reported as incurred in the District-wide financial statements. The short-term liability for compensated absences is recorded in the governmental funds only if the liability has matured because of employee resignations or retirements. The liability for compensated absences includes salary-related benefits, where applicable.

26

( I. ) (Continued) Consistent with GASB Statement 101, Compensated Absences, the liability has been calculated using the more likely than not to be used as leave or settled at separation method with the compensated absences liability being calculated based on the pay rates in effect at year end. Q.

Other Benefits

District employees participate in the New York State Employees’ Retirement System and the New York State Teachers’ Retirement System. In addition to providing pension benefits, the District provides post-employment health coverage to retired employees in accordance with the provision of various employment contracts in effect at the time of retirement. Substantially all of the District’s employees may become eligible for these benefits if they reach normal retirement age while working for the District. Health care benefits are provided through plans whose premiums are based on the benefits paid during the year. The cost of providing post-retirement benefits may be shared between the District and the retired employee. The District recognizes the cost of providing health insurance by recording its share of insurance premiums as an expenditure. R.

Short-Term Debt

The District may issue Bond Anticipation Notes (BANs), in anticipation of proceeds from the subsequent sale of bonds. These notes are recorded as current liabilities of the funds that will actually receive the proceeds from the issuance of bonds. State law requires that a BAN issued for capital purposes be converted to long-term financing within five years after the original issue date. S.

Accrued Liabilities and Long-Term Obligations

Payables, accrued liabilities, and long-term obligations are reported in the District-wide financial statements. In the governmental funds, payables and accrued liabilities are paid in a timely manner and in full from current financial resources. Claims and judgments, other postemployment benefits payable and compensated absences that will be paid from governmental funds are reported as a liability in the funds financial statements only to the extent that they are due for payment in the current year. Bonds and other long-term obligations that will be paid from governmental funds are recognized as a liability in the fund financial statements when due. Long-term obligations represent the District’s future obligations or future economic outflows. The liabilities are reported as due in one year or due within more than one year in the Statement of Net Position. T.

Equity Classifications 1.

District-wide Statements In the District-wide statements there are three classes of net position: a. Net Investment in Capital Assets - consists of net capital assets (cost less accumulated depreciation) reduced by outstanding balances of related debt obligations from the acquisition, constructions or improvements of those assets.

27

( I. ) (Continued) b. Restricted Net Position - reports net position when constraints placed on the assets or deferred outflows of resources are either externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments, or imposed by law through constitutional provisions or enabling legislation. On the Statement of Net Position the following balances represent the restricted for other purposes: Capital Projects Workers' Compensation Unemployment Costs Capital Reserve Insurance Reserve Tax Certiorari Scholarships Debt Service Reserve Liability Reserve Employee Benefit Accrued Liability Total Net Position - Restricted for Other Purposes

$

Total 181,989 5,043,202 1,231,696 5,304,133 5,025,572 5,039,360 153,138 4,529,326 5,541,945 1,044,629

$ 33,094,990

c. Unrestricted Net Position - reports the balance of net position that does not meet the definition of the above two classifications . The reported deficit of $319,079,544 at year end is the result of full implementation of GASB #75 regarding retiree health obligations and the New York State Pension system unfunded pension obligation. 2.

Fund Statements In the fund basis statements, there are five classifications of fund balance: a. Nonspendable Fund Balance – Includes amounts that cannot be spent because they are either not in spendable form or legally or contractually required to be maintained intact. Nonspendable fund balance includes inventory in School Lunch of $130,623. b. Restricted Fund Balances – Includes amounts with constraints placed on the use of resources either externally imposed by creditors, grantors, contributors, or laws or regulations of other governments; or imposed by law through constitutional provisions or enabling legislation. All encumbrances of funds other than the General Fund are classified as restricted fund balance. The District has established the following restricted fund balances: Reserve for Debt Service - According to General Municipal Law §6-1 , the Reserve for Debt Service must be established for the purpose of retiring the outstanding obligations upon the sale of District property or capital improvement that was financed by obligations that remain outstanding at the time of the sale. Also, earnings on project monies invested together with unused proceeds are reported here. 28

( I. ) (Continued) Capital Reserve - According to Education Law §3651, must be used to pay the cost of any object or purpose for which bonds may be issued. The creation of a capital reserve fund requires authorization by a majority of the voters establishing the purpose of the reserve; the ultimate amount, its probable term and the source of the funds. Expenditures may be made from the reserve only for a specific purpose further authorized by the voters. The form for required legal notice for the vote on establishing and funding the reserve and the form of the proposition to be placed on the ballot are set forth in §3651 of the Education Law. The Reserve is accounted for in the General Fund under restricted fund balance. Year end balances are as follows: Total Name Maximum Total Funding Year to Date of Reserve Funding Provided Balance 2017 Capital Reserve $ 15,000,000 $ 15,000,000 $ 5,304,133 Employee Benefit Accrued Liability Reserve - According to General Municipal Law §6-p, must be used for the payment of accrued employee benefits due to an employee upon termination of the employee’s service. This reserve may be established by a majority vote of the Board, and is funded by budgetary appropriations and such other reserves and funds that may be legally appropriated. Teachers’ Retirement Reserve – General Municipal Law §6-r was amended to include a Teachers’ Retirement Reserve (TRS) sub-fund. The reserve has an annual funding limit of 2% of the prior year TRS salaries and a maximum cumulative total balance of 10% of the previous year’s TRS salary. Insurance Reserve - According to General Municipal Law §6-n, must be used to pay liability, casualty and other types of losses, except losses incurred for which the following types of insurance may be purchased: life, accident, health, annuities, fidelity and surety, credit, title residual value and mortgage guarantee. In addition, this reserve may not be used for any purpose for which a special reserve may be established pursuant to law (for example, for unemployment compensation insurance). The reserve may be established by Board action, and funded by budgetary appropriation, or such other funds as may be legally appropriated. There is no limit on the amount that may be accumulated in the Insurance Reserve, however, the annual contribution to this reserve may not exceed the greater of $33,000 or 5% of the budget. Settled or compromised claims up to $25,000 may be paid from the reserve without judicial approval. Liability Reserve - According to General Municipal Law §1709(8)(c), must be used to pay for property loss and liability claims incurred. Separate funds for property loss and liability claims are required, and this reserve may not in total exceed 3% of the annual budget or $15,000, whichever is greater.

29

( I. ) (Continued) Retirement Contribution Reserve - According to General Municipal Law §6-r, must be used financing retirement contributions. The reserve must be accounted for separate and apart from all other funds and a detailed report of the operation and condition of the fund must be provided to the Board. Tax Certiorari Reserve - According to General Municipal Law §3651.1-a, must be used to establish a reserve fund for tax certiorari claims and to expend from the fund without voter approval. The monies held in the reserve shall not exceed the amount which might reasonably be deemed necessary to meet anticipated judgments and claims arising out of tax certiorari proceedings. Any resources deposited to the reserve which are not expended for tax certiorari proceeding in the year such monies are deposited must be returned to the General Fund on or before the first day of the fourth fiscal year after deposit of these monies. Unemployment Insurance Reserve - According to General Municipal Law §6m, must be used to pay the cost of reimbursement to the State Unemployment Insurance Fund for payments made to claimants where the employer has elected to use the benefit reimbursement method. The reserve may be established by Board action and is funded by budgetary appropriations and such other funds as may be legally appropriated. Within sixty days after the end of any fiscal year, excess amounts may either be transferred to another reserve or the excess applied to the appropriations of the next succeeding fiscal year’s budget. If the District elects to convert to tax (contribution) basis, excess resources in the fund over the sum sufficient to pay pending claims may be transferred to any other reserve fund. Workers’ Compensation Reserves- According to General Municipal Law ̕§6-j, must be used to pay for compensation benefits and other expenses authorized by Article 2 of the Workers’ Compensation Law, and for payment of expenses of administering this self-insurance program. The reserve may be established by Board action, and is funded by budgetary appropriations and such other funds as may be legally appropriated. Within sixty days after the end of any fiscal year, excess amounts may either be transferred to another reserve or the excess applied to the appropriations of the next succeeding fiscal year’s budget. Encumbrances - Encumbrance accounting, under which purchase orders, contracts and other commitments of expenditures are recorded for budgetary control purposes in order to reserve applicable appropriations, is employed as a control in preventing over-expenditure of established appropriations. Open encumbrances are reported as restricted fund balance in all funds other than the General Fund and School Lunch Fund, since they do not constitute expenditures or liabilities and will be honored through budget appropriations in the subsequent year.

30

( I. ) (Continued) Restricted fund balances include the following: Total General Fund Workers' Compensation Unemployment Costs Retirement Contribution - ERS Retirement Contribution - TRS Insurance Reserve Tax Certiorari Reserve Liability Reserve Capital Reserves Employee Benefit Accrued Liability Capital Projects Fund Restricted Capital Projects Miscellaneous Special Revenue Fund Scholarships Debt Service Fund Debt Service Total Restricted Fund Balance

$ 5,043,202 1,231,696 12,081,396 6,285,597 5,025,572 5,039,360 5,541,945 5,304,133 1,044,629 313,366 153,138

4,529,326 $ 51,593,360

The District has appropriated the following reserves as part of the 2025-26 budget:

Retirement Contribution ERS Retirement Contribution TRS Total

Total $ 1,500,000 1,500,000 $ 3,000,000

c. Committed - Includes amounts that can only be used for the specific purposes pursuant to constraints imposed by formal action of the school districts highest level of decision making authority, i.e., the Board of Education. The District has no committed fund balances as of June 30, 2025. d. Assigned Fund Balance – Includes amounts that are constrained by the District’s intent to be used for specific purposes, but are neither restricted nor committed. All encumbrances of the General Fund are classified as assigned fund balance. Encumbrances represent purchase commitments made by the District’s purchasing agent through their authorization of a purchase order prior to year-end. The District assignment is based on the functional level of expenditures. Management has determined significant encumbrances for the General Fund to be $241,516 and the Capital Projects Fund to be $17,094. The Capital Projects Fund has $11,015,946 in significant contracts for capital projects. 31

( I. ) (Continued) Assigned fund balances include the following:

General Fund - Encumbrances General Fund - Appropriated for Taxes Special Aid Fund - Community Programs School Lunch Fund - Year End Equity Total Assigned Fund Balance

Total 171,893 5,500,000 773,775 1,052,819 $ 7,498,487 $

e. Unassigned Fund Balance –Includes all other General Fund amounts that do not meet the definition of the above four classifications and are deemed to be available for general use by the school district and could report a surplus or deficit. In funds other than the General Fund, the unassigned classification is used to report a deficit fund balance resulting from overspending for specific purposes for which amounts had been restricted or assigned. NYS Real Property Tax Law 1318 limits the amount of unexpended surplus funds a school district can retain to no more than 4% of the District’s budget for the General Fund for the ensuing fiscal year. Nonspendable and restricted fund balance of the General Fund are excluded from the 4% limitation. Amounts appropriated for the subsequent year and encumbrances are also excluded from the 4% limitation. 3.

Order of Use of Fund Balance

The District’s policy is to apply expenditures against nonspendable fund balance, restricted fund balance, committed fund balance, assigned fund balance, and unassigned fund balance at the end of the fiscal year. For all funds, nonspendable fund balances are determined first and then restricted fund balances for specific purposes are determined. Any remaining fund balance amounts for funds other than the General Fund are classified as restricted fund balance. In the General Fund, the remaining amounts are reported as unassigned. Assignments of fund balance cannot cause a negative unassigned fund balance. U.

New Accounting Standards

The District has adopted all current Statements of the Governmental Accounting Standards Board (GASB) that are applicable. At June 30, 2025, the District implemented the following new standards issued by GASB: GASB has issued Statement No. 101, Compensated Absences. GASB has issued Statement No. 102, Certain Risk Disclosures.

32

( I. ) (Continued) V.

Future Changes in Accounting Standards

GASB has issued Statement No. 103, Financial Reporting Model Improvements, which will be effective for fiscal years beginning after June 15, 2025. GASB has issued Statement No. 104, Disclosure of Certain Capital Assets, which will be effective for fiscal years beginning after June 15, 2025. The District will evaluate the impact each of these pronouncements may have on its financial statements and will implement them as applicable and when material. II.

Restatement of Net Position

For the year ended June 30, 2025, the District implemented GASB Statement No. 101, Compensated Absences. The restatement is noted on the Statement of Activities. III.

Changes in Accounting Principles

For the year ended June 30, 2025, the District implemented GASB Statement No. 101, Compensated Absences. The implementation of the statement changes the reporting for compensated absences. See Note II for the financial statement impact of implementation of the Statement. IV.

Stewardship, Compliance and Accountability

By its nature as a local government unit, the District is subject to various federal, state and local laws and contractual regulations. An analysis of the District’s compliance with significant laws and regulations and demonstration of its stewardship over District resources follows. A.

Budgets

The District administration prepares a proposed budget for approval by the Board of Education for the General Fund. The voters of the District approved the proposed appropriation budget. Appropriations established by adoption of the budget constitute a limitation on expenditures (and encumbrances) which may be incurred. Appropriations lapse at the end of the fiscal year unless expended or encumbered. Encumbrances will lapse if not expended in the subsequent year. Appropriations authorized for the current year are increased by the planned use of specific reserves, and budget amendments approved by the Board of Education as a result of selected new revenue sources not included in the original budget (when permitted by law). These supplemental appropriations may occur subject to legal restriction, if the Board approves them because of a need which exists which was not determined at the time the budget was adopted. During 2024-25, the budget was increased $355,562 for carryover encumbrances.

33

( IV. ) (Continued) Budgets are adopted annually on a basis consistent with GAAP. Appropriations authorized for the year are increased by the amount of encumbrances carried forward from the prior year. Budgets are established and used for individual Capital Projects Fund expenditures as approved by a special referendum of the District’s voters. The maximum project amount authorized is based primarily upon the cost of the project, plus any requirements for external borrowings, not annual appropriations. These budgets do not lapse and are carried over to subsequent fiscal years until the completion of the projects. B.

Encumbrances

Encumbrance accounting is used for budget control and monitoring purposes and is reported as a part of the governmental funds. Under this method, purchase orders, contracts, and other commitments for the expenditure of monies are recorded to reserve applicable appropriations. Outstanding encumbrances as of yearend are presented as reservations of fund balance and do not represent expenditures or liabilities. These commitments will be honored in the subsequent period. Related expenditures are recognized at that time, as the liability is incurred, or the commitment is paid. C.

Deficit Net Position

The District-wide net position had a deficit at June 30, 2025 of $166,229,940. The deficit is the result of the implementation of GASB Statement 75, “Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions”, which required the recognition of an unfunded liability of $220,884,339 at June 30, 2025. Since New York State Laws provide no mechanism for funding the liability, the subsequent accruals are expected to increase the deficit. D.

The Capital Projects Fund had a deficit fund balance of $4,288,548 at June 30, 2025, which is a result of bond anticipation notes which are used as a temporary means of financing capital projects. These proceeds are not recognized as revenue but merely serve to provide cash to meet expenditures. This results in the creation of a fund deficit which will remain until the notes are replaced by permanent financing (i.e., bonds, grants-in-aid, or redemption from current appropriations). V.

Cash and Cash Equivalents

34

( V. ) (Continued) Interest rate risk: The District has an investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from rising interest rates. The District’s aggregate bank balances, included balances not covered by depository insurance at year end, collateralized as follows: Uncollateralized Collateralized within Trust Department or Agent Total

$ $

9,172,335 9,172,335

Restricted cash represents cash where use is limited by legal requirements. These assets represent amounts required by statute to be reserved for various purposes. Restricted cash as of year-end includes $51,593,360 within the governmental funds and $603,517 in the fiduciary funds. VI.

Investments The District’s investments are recorded at fair value and have been categorized based upon a fair market

value. The following table presents information about the District’s investments measured at fair value as of June 30, 2025:

Investments US Treasury Bills

Fair Value $ 8,153,137

Due Within One Year $ 8,153,137

Level Level 1

The fair value measurements of the investments noted above have been classified by the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the investments. The levels of the fair value hierarchy are as follows: Level 1 – Quoted price for identical assets in an active market. Level 2 – (A) Quoted princes for similar assets or liabilities in active markets; (B) Quoted prices for identical or similar assets or liabilities in markets that are not active; (C) Inputs other than quoted prices that are observable for the assets or liability, such as (1) invest rates and yield curves observable at commonly quoted intervals (2) implied volatilities (3) credit spreads; (D) Market-corroborated inputs. Level 3 – Unobservable inputs for an asset or liability are significant to the fair value measurement. Credit risk: In compliance with the State Law, District investments are limited to obligations of the United States of America, obligations guaranteed by agencies of the United States of America where the payment of principal and interest are guaranteed by the United States of America, obligations of the State, time deposit accounts and certificates of deposit issued by a bank or trust company located in, and authorized to do business in, the State, and obligations issued by other municipalities and authorities within the State.

35

( VI. ) (Continued) Concentration of Credit risk: To promote competition in rates and service cost, and to limit the risk of institutional failure, District deposits and investments are placed with multiple institutions. The District’s investment policy limits the amounts that may be deposited with any one financial institution at the General Fund budget. Interest Rate Risk: Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment the greater the sensitivity of its fair value to changes in market interest rates. The District limits its exposure to fair value losses arising from changes in interest rates by structuring the investment portfolio so that securities mature to meet cash requirements for ongoing operations, thereby avoiding the need to sell securities on the open market prior to maturity. The District invests operating funds primarily in short-term securities, money market funds, or similar investment pools although the Town does not have a formal policy relating to a specific investment related risk. VII.

Investment Pool

The District participates in a multi-municipal cooperative investment pool agreement pursuant to New York State General Municipal Law Article 5-G, §119-O, whereby it holds a portion of the investments in cooperation with other participants. The investments are highly liquid and are considered to be cash equivalents. Total investments of the cooperative as of year-end are $797,676, which consisted of $215,931 in repurchase agreements, $549,040 in U.S. Treasury Securities, and $25,446 in collateralized bank deposits, and $7,259 in FDIC insured deposits with various interest rates and due dates.

The following amounts are included as unrestricted and restricted cash: Fund General Fund

VIII.

Bank Amount $ 797,676

Carrying Amount $ 797,676

Type of Invesment NYCLASS

Receivables

Receivables at June 30, 2025 for individual major funds and nonmajor funds, including the applicable allowances for uncollectible accounts, are as follows:

Description Accounts Receivable Due From State and Federal Due From Other Governments Total Receivables

General Fund $ 58,022 2,771,594 7,628,183 $ 10,457,799

Governmental Activities Special Aid Capital Projects Nonmajor Fund Fund Funds $ 3,523,468 $ $ 77,076 9,293 137,920 121,601 $ 3,532,761 $ 137,920 $ 198,677

District management has deemed the amounts to be fully collectible. 36

$

$

Total 3,658,566 3,040,408 7,628,183 14,327,157

IX.

Interfund Receivables, Payables, Revenues and Expenditures Interfund Receivables, Payables, Revenues and Expenditures at June 30, 2025 were as follows:

General Fund Capital Projects Fund Nonmajor Funds Total

Receivables 12,367,321 5,501,647 9,515,771 $ 27,384,739

$

Interfund Payables Revenues $ 11,233,420 $ 9,465,876 313,281 6,685,443 486,611 $ 27,384,739 $ 799,892

Expenditures $ 613,066 186,826 $ 799,892

Interfund receivables and payables between governmental activities are eliminated on the Statement of Net Position. The District typically loans resources between funds for the purpose of mitigating the effects of transient cash flow issues. All interfund payables are not necessarily expected to be repaid within one year. Transfers are used to finance certain special aid programs, support capital project expenditures and debt service expenditures. X.

Capital Assets and Lease Assets A.

Capital Assets Capital asset balances and activity were as follows:

Balance 7/1/2024

$

Additions

$

64,944,590 $ 64,944,590

$

$ 272,333,097 21,008,270 $ 293,341,367

$ 62,919,583 2,205,335 $ 65,124,918

$ $

730,927 730,927

$ 335,252,680 22,482,678 $ 357,735,358

$ 145,418,532 13,406,736 $ 158,825,268

$

8,771,353 1,619,915 $ 10,391,268

$ $

730,927 730,927

$ 154,189,885 14,295,724 $ 168,485,609

$ 134,516,099

$ 54,733,650

$

-

$ 189,249,749

$ 212,775,010

$ 64,681,409

$ 64,944,590

$ 212,511,829

37

$

Deletions

9,947,759 9,947,759

$

2,147,912 76,110,999 78,258,911

Balance 6/30/2025

$

$

2,147,912 21,114,168 23,262,080

( X. ) (Continued) B.

Lease Assets

A summary of the lease and Subscription IT Assets activity during the year ended June 30, 2025 is as follows: Balance 7/1/2024

C.

Additions

$ 9,729,885 5,707,202 $ 4,022,683

$

$

45,868 23,294 22,574

$

$ 4,045,257

$

2,320,255 3,255,433 (935,178)

$ 1,820,537 1,820,537 $ -

$

$ $

10,395 10,395 -

$

$

200,162 100,885 99,277

$

235,635 113,784 121,851

$

(835,901)

$

-

$

3,209,356

$

$ $

189,249,749 3,209,356 192,459,105

Depreciation/Amortization expense for the period was charged to functions/programs as follows:

XI.

$

10,229,603 7,142,098 3,087,505

Other Capital Assets (net of depreciation and amortization): Depreciated Capital Assets (net) Amortized Lease Assets (net) Total Other Capital Assets (net)

D.

Balance 6/30/2025

Deletions

Depreciation $ 214,198 8,475,526 1,368,412 333,132

Amortization $ 3,356,318 -

$ 10,391,268

$ 3,356,318

$

$

Total 214,198 11,831,844 1,368,412 333,132 13,747,586

Short-Term Debt Transactions in short-term debt for the year are summarized below:

Maturity BAN-Construction 6/26/2025 Total Short-Term Debt

Interest Rate 4.25%

Balance 7/1/2024 $ 29,325,000 $ 29,325,000

38

Additions $ $

-

Deletions $ 29,325,000 $ 29,325,000

Balance 6/30/2025 $ $

-

( XI. ) (Continued) The short-term interest expense for June 30, 2025 was composed of: Interest Paid Less: Interest Accrued in the Prior Year Total Short-Term Interest Expense

XII.

$ 1,246,314 (13,848) $ 1,232,466

Long-Term Debt Obligations Long-term liability balances and activity for the year are summarized below: Balance 7/1/2024

*

$

Additions

78,055,000 6,631,506 2,353,257 87,039,763

$

$

$

14,070,685 184,352,604 32,544,445 230,967,734

$

318,007,497

$ $

28,420,000 2,215,924 1,561,988 32,197,912

$

$

$

36,531,735 60,648 925,826 37,518,209

$

$

69,716,121

$

Balance 6/30/2025

Deletions

6,355,000 532,444 2,547,852 9,435,296

$

3,802,968 3,802,968

$

$ 13,238,264

$

100,120,000 8,314,986 1,367,393 109,802,379

$

$

$

10,267,717 220,884,339 60,648 33,470,271 264,682,975

$

$

374,485,354

$ 12,895,178

$

The change in compensated absences above is a net change for the year.

Existing serial and statutory bond obligations: Description Serial Bonds Renovations Construction Bus Purchases Construction Bus Purchases Construction Bus Purchases Bus Purchases Construction Bus Purchases Construction Total Serial Bonds Leases Various Leases

Original Amount

Issue Date

Final Maturity

Interest Rate

$ 7,805,000 $ 16,475,000 $ 1,663,000 $ 23,420,000 $ 1,566,000 $ 17,305,000 $ 1,687,500 $ 1,600,000 $ 18,285,000 $ 1,200,000 $ 27,220,000

2017 2020 2021 2021 2022 2023 2023 2024 2024 2025 2025

2031 2035 2026 2040 2027 2037 2028 2029 2039 2029 2040

2%-5% 4%-5% 2.00% 2.00% 1.00%-2.25% 5.00% 4.00% 4.00% 5.00% 3.25%-3.50% 5.00%

$ 11,853,796

Various

39

Various

0.05%-4.99%

Due Within One Year

Amount Outstanding 6/30/2025 $

$

4,005,000 12,175,000 350,000 18,765,000 650,000 15,710,000 1,050,000 1,320,000 17,675,000 1,200,000 27,220,000 100,120,000

$

1,367,393

$

7,550,000 680,172 810,952 9,041,124 60,648 3,793,406 3,854,054

( XII. ) (Continued) The following is a summary of debt service requirements:

Year 2026 2027 2028 2029 2030 2031-35 2036-40 Total

Serial Bonds Principal Interest $ 7,550,000 $ 4,753,170 7,830,000 4,029,475 7,550,000 3,694,659 7,395,000 3,369,200 7,490,000 3,048,088 36,010,000 10,342,550 26,295,000 2,851,450 $ 100,120,000 $ 32,088,592

Leases Principal Interest $ 810,952 $ 29,835 554,720 143 1,441 35 280 2 $ 1,367,393 $ 30,014

Interest on long-term debt for June 30, 2025 was composed of: Interest Paid Less: Interest Accrued in the Prior Year Plus: Interest Accrued in the Current Year Less: Amortization of Deferred Inflows Less: Amortization of Bond Premium Total Long-Term Interest Expense

XIII.

$3,560,944 (215,266) 248,075 (20,000) (532,444) $3,041,309

Deferred Inflows/Outflows of Resources The following is a summary of the deferred inflows/outflows of resources:

Pension OPEB Total

XIV.

Deferred Outflows $ 34,973,820 4,709,305 $ 39,683,125

Deferred Inflows $ 16,437,248 106,431,040 $ 122,868,288

Pension Plans A.

General Information

The District participates in the New York State Teacher’s Retirement System (TRS) and the New York State and Local Employee’s Retirement System (ERS). These are cost-sharing multiple employer public employee retirement systems. The Systems offer a wide range of plans and benefits, which are related to years of service and final average salary, vesting of retirement benefits, death, and disability.

40

( XIV. ) (Continued) B.

Provisions and Administration

A 10-member Board of Trustees of the New York State Teachers’ Retirement Board administers TRS. TRS provides benefits to plan members and beneficiaries as authorized by the Education Law and the New York State Retirement and Social Security Law (NYSRSSL). Membership is mandatory and automatic for all full-time teachers, teaching assistants, guidance counselors and administrators employed in New York Public Schools and BOCES who elected to participate in TRS. 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. TRS issues a publicly available financial report that contains financial statements and required supplementary information. The report may be obtained by writing to NYSTRS, 10 Corporate Woods Drive, Albany, New York 122112395 or by referring to the TRS Comprehensive Annual Financial report, which can be found on the System’s website at www.nystrs.org. ERS provides retirement benefits as well as death and disability benefits. The net position of the System is held in the New York State Common Retirement Fund (the Fund), which was established to hold all net assets and record changes in plan 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. NYSRSSL govern obligations of employers and employees to contribute, and benefits to employees. 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 District 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. ERS issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by writing to NYSERS, Office of the State Comptroller, 110 State Street, Albany, New York 12244 or by referring to the ERS Comprehensive Annual Report, which can be found at www.osc.state.ny.us/retire/publications/index.php. C.

Funding Policies

The Systems are noncontributory except for employees who joined after July 27, 1976, who contribute 3% of their salary for the first ten years of membership, and employees who joined on or after January 1, 2010 who generally contribute 3.0 to 3.5% of their salary for their entire length of service. In addition, employee contribution rates under ERS Tier 6 vary based on a sliding salary scale. For TRS, contribution rates are established annually by the New York State Teachers’ Retirement Board pursuant to Article 11 of the Education Law. For ERS, the Comptroller annually certifies the actuarially determined rates expressly used in computing the employers’ contributions for the ERS’ fiscal year ended March 31. The District paid 100% of the required contributions as billed by the TRS and ERS for the current year. The District’s share of the required contributions, based on covered payroll paid for the District’s year ended June 30, 2025: Contributions 2025

$

ERS 3,154,382

41

$

TRS 9,155,209

( XIV. ) (Continued) D.

Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources related to Pensions

At June 30, 2025, the District reported the following asset/(liability) for its proportionate share of the net pension asset /(liability) for each of the Systems. The net pension asset/(liability) was measured as of March 31, 2025 for ERS and June 30, 2024 for TRS. The total pension asset/(liability) used to calculate the net pension asset/(liability) was determined by an actuarial valuation. The District’s proportion of the net pension asset/(liability) was based on a projection of the District’s long-term share of contributions to the Systems relative to the projected contributions of all participating members, actuarially determined. This information was provided by the TRS and ERS Systems in reports provided to the District. Measurement date

ERS March 31, 2025

Net pension asset/(liability)

$

District's portion of the Plan's total net pension asset/(liability)

TRS June 30, 2024

(10,267,717)

$

12,563,936

0.0599%

0.4211%

For the year ended June 30, 2025, the District recognized pension expenses of $2,458,405 for ERS and $6,728,894 for TRS. At June 30, 2025, the District’s reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows of Resources ERS TRS Differences between expected and actual experience Changes of assumptions Net difference between projected and actual earnings on pension plan investments Changes in proportion and differences between the District's contributions and proportionate share of contributions Subtotal

$

$

District's contributions subsequent to the measurement date

Grand Total

$

Deferred Inflows of Resources ERS TRS

2,548,516 430,608

$ 13,529,052 7,515,780

805,576

-

582,747 4,367,447

202,308 $ 21,247,140

1,085,395

8,273,838

5,452,842

$ 29,520,978

42

$

$

$

120,215 -

$

1,264,224

-

13,959,604

340,097 460,312

753,108 $ 15,976,936

-

-

460,312

$ 15,976,936

( XIV. ) (Continued) District contributions subsequent to the measurement date which will be recognized as a reduction of the net pension liability in the year ended June 30, 2025. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year ERS TRS 2025 $ $ (6,609,038) 2026 1,898,903 15,276,976 2027 2,732,795 (2,649,178) 2028 (803,007) (2,899,978) 2029 78,444 1,551,381 Thereafter 600,041 Total $ 3,907,135 $ 5,270,204 E.

Actuarial Assumptions

The total pension liability as of the measurement date was determined by using an actuarial valuation as noted in the table below, with update procedures used to roll forward the total pension liability to the measurement date. The actuarial valuations used the following actuarial assumptions: Measurement date

ERS March 31, 2025

TRS June 30, 2024

Actuarial valuation date

April 1, 2024

June 30, 2023

Interest rate

5.90%

6.95%

Salary scale

4.30%

4.40%

April 1, 2015March 31, 2020 System's Experience

July 1, 2015June 30, 2020 System's Experience

Inflation rate

2.90%

2.40%

COLA's

1.50%

1.30%

Decrement tables

For ERS, annuitant mortality rates are based on April 1, 2015 – March 31, 2020 System experience with adjustments for mortality improvements based on the Society of Actuaries’ Scale MP-2021. For TRS, annuitant mortality rates are based on plan member experience adjustments for mortality improvements based on Society of Actuaries Scale MP-2021. The long-term rate of return on pension plan investments was determined using a building block method in which best estimate ranges of expected future real rates of return (expected returns net of investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of the arithmetic real rates of return for each major asset class included in the target asset allocation as of March 31, 2025 or ERS and June 30, 2024 for TRS are summarized as follows:

43

( XIV. ) (Continued)

Measurement date

Long Term Expected Rate of Return ERS March 31, 2025

Asset Type Domestic equity International equity Global equity Private equity Real estate Opportunistic portfolios Real assets Global bonds Cash Private debt Real estate debt High-yield bonds Domestic fixed income Fixed income Credit

3.54% 6.57% N/A 7.25% 4.95% 5.25% 5.55% N/A 0.25% N/A N/A N/A N/A 2.00% 5.40%

TRS June 30, 2024 6.60% 7.40% 6.90% 10.00% 6.30% N/A N/A 2.50% 0.50% 5.90% 3.90% 4.80% 2.60% N/A N/A

The real rate of return is net of the long-term inflation assumption of 2.90% for ERS and 2.40% for TRS.

F.

Discount Rate

The discount rate used to calculate the total pension liability was 5.90% for ERS and 6.95% for TRS. 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. G.

Sensitivity of the Net Pension Liability to the Discount Rate Assumption

The following presents the District’s proportionate share of the net pension liability calculated using the discount rate of 5.90% for ERS and 6.95% for TRS, as well as what the District’s proportionate share of the net pension asset/(liability) would be if it were calculated using a discount rate that is 1percentage-point lower (4.90% for ERS and 5.95% for TRS) or 1-percentage-point higher (6.90% for ERS and 7.95% for TRS) than the current assumption :

44

( XIV. ) (Continued)

ERS Employer's proportionate share of the net pension asset (liability)

TRS Employer's proportionate share of the net pension asset (liability)

H.

1% Decrease (4.90%)

Current Assumption (5.90%)

1% Increase (6.90%)

$ (29,716,064)

$ (10,267,717)

$

1% Decrease (5.95%)

Current Assumption (6.95%)

1% Increase (7.95%)

$ (58,033,546)

$ 12,563,936

$

5,971,666

71,938,313

Pension Plan Fiduciary Net Position

The components of the current year net pension asset/(liability) of the employers as of the respective valuation dates, were as follows:

Measurement date Employers' total pension liability Plan net position Employers' net pension asset/(liability) Ratio of plan net position to the employers' total pension asset/(liability)

I.

(In Thousands) ERS TRS March 31, 2025 June 30, 2024 $ 247,600,239 $ 142,837,827 230,454,512 145,821,435 $ (17,145,727) $ 2,983,608 93.08%

102.10%

Payables to the Pension Plan

For ERS, employer contributions are paid annually based on the System’s fiscal year which ends on March 31st. Accrued retirement contributions as of June 30, 2025 represent the projected employer contribution for the period of April 1, 2025 through June 30, 2025 based on paid ERS wages multiplied by the employer’s contribution rate, by tier. Accrued retirement contributions as of June 30, 2025 amounted to $1,085,395. For TRS, employer and employee contributions for the fiscal year ended June 30, 2025 are paid to the System in September, October and November 2025 through a state aid intercept. Accrued retirement contributions as of June 30, 2025 represent employee and employer contributions for the fiscal year ended June 30, 2025 based on paid TRS wages multiplied by the employer’s contribution rate, by tier and employee contributions for the fiscal year as reported to the TRS System. Accrued retirement contributions as of June 30, 2025 amounted to $9,155,209.

45

XV.

Postemployment Benefits A.

General Information About the OPEB Plan

Inactive employees or beneficiaries currently receiving benefit payments

1,503

Active Employees

1,677

Total B.

3,180

Total OPEB Liability

The District’s total OPEB liability of $220,884,339 was measured as of June 30, 2025, and was determined by an actuarial valuation as of that date. Actuarial Assumptions and Other Inputs – The total OPEB liability in the June 30, 2025 actuarial valuation was determined using the following actuarial assumptions and other inputs, applied to all periods included in the measurement, unless otherwise specified:

Inflation

2.30%

Salary Increases

3.30%, average, including inflation

Discount Rate

4.39%

Healthcare Cost Trend Rates

Initial rate of 5.30% decreasing to an ultimate rate of 3.71%

Retirees' Share of Benefit-Related Costs

Varies depending on contract

The discount rate was based on the Bond Buyer General Obligation 20-year Municipal Bond index. Pub-2010 Public Retirement Plans Mortality Tables, Headcount-Weighted, distinct for Teachers, General, and Safety, without separate Contingent Survivor mortality, fully generational using scale MP2021.

46

( XV. ) (Continued) C.

Changes in the Total OPEB Liability Balance at June 30, 2024

$ 184,352,604

Changes for the Year Service cost Interest Changes of benefit terms Differences between expected and actual experience Changes in assumptions or other inputs Benefit payments Net Changes Balance at June 30, 2025

$

3,404,530 7,117,549 12,862 42,370,414 (7,449,386) (8,924,234) $ 36,531,735 $ 220,884,339

Changes of assumptions and other inputs reflect the following:   

The Single Discount Rate changed from 3.98% to 4.39% effective June 30, 2025. The Salary scale changed from 3.42% to 3.30% effective June 30, 2025. Updated healthcare cost trend rates effective June 30, 2025.

Sensitivity of the Total OPEB Liability to Changes in the Discount Rate – The following presents the total OPEB liability of the District, as well as what the District’s total OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower (3.39%) or 1-percentage-point higher (5.39%) than the current discount rate:

Total OPEB Liability

1% Decrease (3.39%) $ 248,248,713

Discount Rate (4.39%) $ 220,884,339

1% Increase (5.39%) $ 198,197,520

Sensitivity of the Total OPEB Liability to Changes in the Healthcare Cost Trend Rates – The following presents the total OPEB liability of the District, as well as what the District’s total OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-percentage-point lower or 1percentage-point higher than the current healthcare cost trend rate:

Total OPEB Liability

1% Decrease (4.30% Increasing to 2.71%) $ 195,569,925

47

Healthcare Cost Trend Rates (5.30% Increasing to 3.71%) $ 220,884,339

1% Increase (6.30% Increasing to 4.71%) $ 251,919,759

( XV. ) (Continued) D.

OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB

For the year ended June 30, 2025, the District recognized OPEB expense of ($10,057,740). At June 30, 2025, the District reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

Differences between expected and actual experience Changes of assumptions Contributions after measurement date Total

Deferred Outflows of Resources

Deferred Inflows of Resources

$

$

$

39,929,376 2,231,059 42,160,435

$

71,705,009 34,726,031 106,431,040

Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: Year 2026 2027 2028 2029 2030 Thereafter Total

XVI.

$

$

(17,567,181) (18,454,406) (18,834,652) (13,217,607) (1,114,050) 2,686,232 (66,501,664)

Risk Management A.

General Information

The District is exposed to various risks of loss related to injuries to employees, theft, damages, natural disasters, etc. These risks are covered by commercial insurance purchased from independent third parties. Settled claims from these risks have not exceeded commercial insurance coverage for the past two years. B.

Health Plans

The District is a Participant of and incurs costs related to the Rochester Area School Health Plan (Plan I) and Rochester Area School Health Plan II Municipal Cooperative Health Benefit Plan (Plan II). Plan I and Plan II are sponsored by the Board of Cooperative Educational Services, Second Supervisory District of Monroe and Orleans Counties (Monroe 2-Orleans BOCES) and its component districts. Plan I and Plan II objectives are to formulate, develop and administer a program of insurance to obtain lower costs for that coverage, and to develop a comprehensive loss control program. 48

( XVI. ) (Continued) 1.

Plan I

Plan I was established as a Municipal Cooperative under the authorization of Article 5-G of the General Municipal Law in 1986. Membership in Plan I may be offered to any component district of the Board of Cooperative Educational Services, First Supervisory District of Monroe County (Monroe 1 BOCES) or Monroe 2-Orleans BOCES with the unanimous approval of the Board of Directors. Membership of new Participants becomes effective on the first day of the calendar month following the adoption by the Board of Directors of the resolution to accept a new Participant. Current membership of Plan I includes nineteen (19) Participants with the Webster Central School District bearing an equal and proportionate share of Plan I’s assets and claim liabilities. Voluntary withdrawal from Plan I is subject to the following constraints: a. b.

Effective only once annually on the last day of the Plan year. Notice of intention to withdrawal must be given in writing to the Chairman of the Board of Directors and Treasurer not less than thirty (30) days prior to the end of the Plan year. Failure to provide at least thirty (30) days’ notice, will result in continued membership in the plan for another year unless all other Participants consent to such withdrawal.

Pursuant to the Municipal Cooperative Agreement, Plan I is a risk sharing pool and all monies paid to the Treasurer shall be pooled and administered as a common fund. No refunds shall be made to a Participant, and no assessments are charged to a Participant other than the annual premium equivalent. If surplus funds exist at the end of any fiscal year, the distribution of such funds shall be determined by the Board of Directors. Plan I purchases, on an annual basis, stop-loss insurance to limit exposure for claims paid. Plan I establishes a liability for both reported and unreported insured events, which includes estimates of both future payments of losses and related claim adjustment expenses. However, because actual claims costs depend on complex factors, the process used in computing claims liabilities does not necessarily result in an exact amount. Such claims are based on the ultimate cost of claims (including future claim adjustment expenses) that have been reported but not settled, and claims that have been incurred but not reported. Adjustments to claims liabilities are charged or credited to expenses in the periods in which they are made. During the year ended June 30, 2025, the District incurred premiums or contribution expenditures totaling $3,341,125. Plan I is audited on an annual basis and is available at the Monroe 2-Orleans BOCES administrative offices. The most recent audit available for the year ended December 31, 2024, revealed that Plan I is fully funded. 2.

Plan II

Plan II was established as a Municipal Cooperative under the authorization of Article 5-G of the General Municipal Law in 2004. Plan II received a Certificate of Authority to operate as a self-funded plan under Article 47 of the New York State Insurance Law, effective January 1, 2024.

49

( XVI. ) (Continued) Membership in Plan II may be offered to any component school district of the Monroe 1 BOCES and Monroe 2-Orleans BOCES within the geographical boundaries of Monroe County, New York provided that the applicant provides proof of its financial responsibility that is satisfactory to the Board of Directors in its sole discretion, and the applicant is the same type of municipal corporation as the initial Participants. Membership of new Participants becomes effective on the first day of the calendar month following a majority vote of the entire Board of Directors and the adoption by the Board of Directors of a resolution to accept the municipal corporation as a Participant. Current membership of Plan II includes nineteen (19) Participants with the Webster Central School District bearing an equal and proportionate share of Plan II’s assets and claim liabilities. Voluntary withdrawal from Plan II is subject to the following constraints: a. b.

c. d.

Effective only on January 1 of the next Plan Year following the Plan Year in which the Participant provides notice. Notice of intention of a Participant withdraw must be given in writing to the Chairperson and the Treasurer by April 1st of the Plan Year immediately preceding the January 1st withdrawal date. Failure to provide the required written notices in a timely manner will result in continued membership in Plan II for another year unless the Board of Directors consent to such withdrawal. Participant is responsible for pro-rata share of any Plan II deficit and shall satisfy any other obligation relating to the Participant’s membership in the Plan. Participant is not entitled to any share of Plan II surplus.

Pursuant to the Municipal Cooperative Agreement as signed by the Participants, Plan II is a risk sharing pool and all monies paid to the Treasurer shall be pooled and administered as a common fund. The annual premium equivalent for each coverage option under Plan II is established and approved by a majority of the entire Board of Directors. Each Participant is required to contribute to Plan II an amount equal to the Premium Equivalent applicable to the coverage options, under which the Participants Enrollees are covered. In addition to paying on demand their applicable Premium Equivalent payments, each Participant shall pay on demand such Participant’s share of any Assessment Contribution ordered by the Board of Directors. If surplus funds exist at the end of any fiscal year, the distribution of such funds shall be determined by the Board of Directors. Plan II purchases, on an annual basis, stop-loss insurance to limit exposure for claims paid. Plan II establishes a liability for both reported and unreported insured events, which includes estimates of both future payments of losses and related claim adjustment expenses. However, because actual claims costs depend on complex factors, the process used in computing claims liabilities does not necessarily result in an exact amount. Such claims are based on the ultimate cost of claims (including future claim adjustment expenses) that have been reported but not settled, and claims that have been incurred but not reported. Adjustments to claims liabilities are charged or credited to expenses in the periods in which they are made. During the year ended June 30, 2025, the District incurred premiums or contribution expenditures totaling $30,709,476. Plan II is audited on an annual basis and is available at the Monroe 2-Orleans BOCES administrative offices. The most recent audit available for the year ended December 31, 2024, revealed that the Plan is fully funded. 50

( XVI. ) (Continued) C.

Workers’ Compensation

The District is a Participant in the Rochester Area School Workers’ Compensation Plan (Plan). The Plan is sponsored by the Board of Cooperative Educational Services, Second Supervisory District of Monroe and Orleans Counties (Monroe 2-Orleans BOCES) and its component districts. The Plan’s objectives are to furnish workers’ compensation benefits to participating districts at a significant cost savings and to provide for risk management to reduce future liability for workers compensation. Membership in the Plan may be offered to any component district of the Board of Cooperative Educational Services, First Supervisory District of Monroe County (Monroe 1 BOCES) and Monroe 2-Orleans BOCES with the approval of the Board of Directors. Current membership of the Plan includes Participants from nineteen (19) municipal corporations. Voluntary withdrawal from the Plan is subject to the following constraints: 1. 2.

Notice on intention to withdraw must be given in writing to the Chairman of the Board of Directors and Treasurer not less than one-hundred twenty (120) days prior to the end of the Plan year. Participant is not entitled to any share of Plan surplus.

If a surplus of Participants’ assessments exists after the close of a Plan year, the Board may retain from such surplus an amount sufficient to establish and maintain a claim contingency fund. Surplus funds in excess of the amount transferred to or included in such contingency fund shall be applied in reduction of the next annual assessment or to the billing of Plan Participants. All monies paid to the Treasurer by participants shall be commingled and administered as a common fund. No refunds shall be made to a participant and no assessments are charged to a participant other than the annual premium equivalent. However, if the Board of Directors determines that the liabilities of the Plan will exceed its cash assets, after taking into account any “excess insurance”, the Board of Directors shall determine the amount needed to meet such deficiency and shall assess such amount against all Participants their pro-rata share, such additional assessment is due within sixty (60) days after written notification from the Board of Directors. The Plan purchases, on an annual basis, stop-loss insurance to limit exposure for claims paid. The Plan establishes a liability for both reported and unreported insured events, which includes estimates of both future payments of losses and related claim adjustment expenses. However, because actual claims costs depend on complex factors, the process used in computing claims liabilities does not necessarily result in an exact amount. Such claims are based on the ultimate cost of claims (including future claim adjustment expenses) that have been reported but not settled and claims that have been incurred but not reported. Adjustments to claims liabilities are charged or credited to expenses in the period in which they are made. During the year ended June 30, 2025, the District incurred premiums or contribution expenditures totaling $1,093,023. The Plan is audited on an annual basis and is available at the Monroe 2-Orleans BOCES administrative offices. The most recent audit available for the year ended June 30, 2024, revealed that the Plan was fully funded. D.

Dental Fund

The District has a self-insured plan for dental coverage. The plan is administered by a third-party administrator who pays the claims directly to the dentists. The District then reimburses the third-party administrator for the exact amount of the claims paid. The total cost to the District for dental claims during 2024-25 was $88,418.

51

( XVI. ) (Continued) E.

Medical Benefit Plan

The District established a medical benefit plan under Section 105 of the IRS Code. The District contributes an amount for each individual which can be used for any non-reimbursed medical benefits. The balance at June 30, 2025 totaled $1,965,529. F.

Unemployment

District employees are entitled to coverage under the New York State Unemployment Insurance Law. The District has elected to discharge its liability to the New York State Unemployment Insurance Fund (the Fund) by the benefit reimbursement method, a dollar-for-dollar reimbursement to the fund for benefits paid from the fund to former employees. The District has established a self-insurance fund to pay these claims. Claim and judgment expenditures of this program totaled $8,703 for the 2024-25 fiscal year. The balance of the fund at June 30, 2025 was $1,231,696 and is recorded in the General Fund as an Unemployment Insurance Reserve. In addition, as of June 30, 2025, no loss contingencies existed or were considered probable or estimable for incurred but not reported claims payable. XVII. Commitments and Contingencies A.

Litigation

There are several Article 7 Real Property Tax cases pending, some of which may be material, however, the financial outcome, if any, cannot be determined at this time. B.

Grants

The District has received grants, which are subject to audit by agencies of the State and Federal Governments. Such audits may result in disallowances and a request for a return of funds. Based on prior years’ experience, the District’s administration believes disallowances, if any, will be immaterial. XVIII. Tax Abatement The County of Monroe IDA, and the District enter into various property tax abatement programs for the purpose of Economic Development. As a result, the District property tax revenue was reduced $1,807,556. The District received payment in lieu of tax (PILOT) payments totaling $1,102,240 to help offset property tax reduction. XIX.

Subsequent Event

On July 16th, 2025, the District borrowed a construction Bond Anticipation Note in the amount of $15,000,000 at an interest rate of 4%. The note will mature on July 16, 2026,

52

Required Supplementary Information WEBSTER CENTRAL SCHOOL DISTRICT, NEW YORK Schedule of Changes in District's Total OPEB Liability and Related Ratio For The Year Ended June 30, 2025 TOTAL OPEB LIABILITY 2025 Service cost

$

Interest

3,404,530

2024 $

2023

5,600,499

$

8,639,715

2022 $

9,486,365

2021 $

2020

8,992,164

$

7,530,744

2019 $

8,199,089

2018 $

2017

8,058,335

$

7,611,752

7,117,549

9,786,087

9,254,534

7,331,438

7,921,071

9,677,705

11,170,886

11,020,063

8,945,216

12,862

-

(17,352)

1,128,202

-

1,038,869

9,628,820

-

-

and actual experiences

42,370,414

(77,962,140)

(32,929,405)

24,787,039

(12,698,411)

(22,064,776)

(34,877,880)

53,615

32,306,239

Changes of assumptions or other inputs

(7,449,386)

(6,362,544)

(40,092,180)

(29,438,698)

6,643,328

48,783,104

(13,756,785)

7,677,031

(19,251,283)

Changes in benefit terms Differences between expected

Benefit payments

(8,924,234)

(9,940,216)

(8,403,208)

(7,779,553)

(8,357,663)

(7,809,970)

(7,508,650)

(7,078,204)

(6,357,075)

Net Change in Total OPEB Liability

$

36,531,735

$

(78,878,314)

$

(63,547,896)

$

5,514,793

$

2,500,489

$

37,155,676

$

(27,144,520)

$

19,730,840

$

23,254,849

$

184,352,604

$

263,230,918

$

326,778,814

$

321,264,021

$

318,763,532

$

281,607,856

$

308,752,376

$

289,021,536

$

265,766,687

$

220,884,339

$

184,352,604

$

263,230,918

$

326,778,814

$

321,264,021

$

318,763,532

$

281,607,856

$

308,752,376

$

289,021,536

Covered Employee Payroll

$

98,463,447

$

90,774,636

$

87,679,548

$

80,969,533

$

78,276,811

$

75,834,926

$

75,834,926

$

61,593,845

$

59,620,409

Total OPEB Liability as a Percentage of Covered Employee Payroll

224.33%

203.09%

300.22%

403.58%

10 years of historical information is not available, and will be added each year subsequent to the year of implementation until 10 years of historical data is present.

(See Independent Auditors' Report)

53

410.42%

420.34%

371.34%

501.27%

484.77%

Required Supplementary Information WEBSTER CENTRAL SCHOOL DISTRICT, NEW YORK Schedule of the District's Proportionate Share of the Net Pension Liability For The Year Ended June 30, 2025 NYSERS Pension Plan 2025 Proportion of the net pension liability (assets)

0.0599%

2024

2023

0.0634%

0.0606%

2022

2021

0.0587%

2020

0.0575%

0.0549%

2019

2018

2017

0.0557%

0.0573%

0.0566%

2016 0.0534%

Proportionate share of the net pension liability (assets)

$

10,267,717

$

9,338,744

$ 13,004,429

$

(4,797,833)

$

57,291

$

14,546,445

$

5,322,915

$

8,572,863

Covered-employee payroll

$

22,620,339

$ 21,440,649

$ 19,880,298

$

18,770,068

$ 18,613,021

$

18,206,026

$ 17,718,558

$ 17,320,379

$ 16,531,449

$

14,487,778

Proportionate share of the net pension liability (assets) as a percentage of its covered-employee payroll

45.392%

43.556%

65.414%

(25.561%)

0.308%

79.899%

22.268%

10.669%

32.199%

59.173%

Plan fiduciary net position as a percentage of the total pension liability

93.08%

93.88%

90.78%

103.65%

99.95%

86.39%

96.27%

98.24%

94.70%

90.70%

3,945,598

$

1,847,921

$

NYSTRS Pension Plan 2025 Proportion of the net pension liability (assets)

0.4211%

Proportionate share of the net pension liability (assets)

$ (12,563,936)

$

Covered-employee payroll

$

2024

2023

0.4138%

0.4093%

0.4129%

0.3932%

7,854,441

$ (71,543,066) $

4,731,941

$

2022

2021

2020

2019

2018

2017

2016

0.3980%

0.3953%

0.3913%

0.3963%

0.3937%

$ 10,864,498

$ (10,341,054)

$ (7,147,171)

$ (2,974,442)

$

4,244,173

$ (40,890,569)

72,836,124

$ 70,073,998

$

66,734,312

$ 66,439,011

$ 64,381,869

$ 62,216,678

84,285,024

$ 82,812,348

$ 79,334,743

Proportionate share of the net pension liability (assets) as a percentage of its covered-employee payroll

(14.906%)

5.714%

9.900%

(98.225%)

15.504%

(15.496%)

(10.757%)

(4.620%)

6.822%

(66.868%)

Plan fiduciary net position as a percentage of the total pension liability

102.10%

99.20%

98.60%

113.25%

97.80%

102.20%

101.53%

100.66%

99.01%

110.46%

(See Independent Auditors' Report)

54

$

61,151,426

Required Supplementary Information WEBSTER CENTRAL SCHOOL DISTRICT, NEW YORK Schedule of District Contributions For The Year Ended June 30, 2025 NYSERS Pension Plan Contractually required contributions

2025

2024

2023

2022

2021

2020

2019

2018

2017

2016

$ 3,154,382

$ 2,557,460

$ 2,112,042

$ 2,739,298

$ 2,454,597

$ 2,422,820

$ 2,417,657

$ 2,441,068

$ 2,530,141

$ 2,337,897

(2,454,597)

$ (2,422,820)

$ (2,417,657)

$

$

Contributions in relation to the contractually required contribution

(3,154,382) $

-

(2,112,042) $

-

(2,739,298) $

-

$

-

-

-

(2,441,068) $

-

(2,530,141) $

-

(2,337,897)

$

Covered-employee payroll

$ 22,620,339

$ 21,440,649

$ 19,880,298

$ 18,770,068

$ 18,613,021

$ 18,206,026

$ 17,718,558

$ 17,320,379

$ 16,531,449

$ 14,487,778

13.94%

11.93%

10.62%

14.59%

13.19%

13.31%

13.64%

14.09%

15.31%

16.14%

Contributions as a percentage of covered-employee payroll

-

(2,557,460)

Contribution deficiency (excess)

$

-

NYSTRS Pension Plan Contractually required contributions

2025

2024

2023

2022

2021

2020

2019

2018

2017

2016

$ 9,155,209

$ 8,627,961

$ 8,506,491

$ 7,611,170

$ 7,080,025

$ 6,239,111

$ 7,353,594

$ 6,611,120

$ 7,573,009

$ 8,391,557

Contributions in relation to the contractually required contribution

(9,155,209)

-

$

-

(7,611,170) $

-

(7,080,025) -

$

-

(7,353,594) $

-

(6,611,120) $

-

(7,573,009) $

-

(8,391,557)

$ 84,285,024

$ 82,812,348

$ 79,334,743

$ 72,836,124

$ 70,073,998

$ 66,734,312

$ 66,439,011

$ 64,381,869

$ 62,216,678

$ 61,151,426

10.86%

10.42%

10.72%

10.45%

10.10%

9.35%

11.07%

10.27%

12.17%

13.72%

55

$

(6,239,111)

Covered-employee payroll

(See Independent Auditors' Report)

$

(8,506,491)

$

Contributions as a percentage of covered-employee payroll

-

(8,627,961)

Contribution deficiency (excess)

$

-

Required Supplementary Information WEBSTER CENTRAL SCHOOL DISTRICT, NEW YORK Schedule of Revenues, Expenditures and Changes in Fund Balance Budget (Non-GAAP Basis) and Actual - General Fund For The Year Ended June 30, 2025

Original Budget REVENUES Local Sources Real property taxes Real property tax items Non-property taxes Charges for services Use of money and property Sale of property and compensation for loss Miscellaneous State Sources Basic formula Lottery aid BOCES Textbooks All Other Aid Computer software Library loan Handicapped students Other aid Federal Sources TOTAL REVENUES

Amended Budget

$ 115,336,197 9,387,175 10,483,004 641,364 4,109,871

1,800,000

1,800,000

56,640 1,391,962

56,640 (408,038)

69,763,390 668,000

69,763,390 668,000

50,082,504 15,101,789 8,218,388 369,543

(19,680,886) 15,101,789 8,218,388 (298,457)

$ 205,506,070

$

205,506,070

251,748 51,356 1,313,581 212,758 436,148 $ 217,444,028

251,748 51,356 1,313,581 212,758 436,148 $ 11,937,958

$

5,500,000

$

5,500,000

Prior year encumbrances $ 355,562 TOTAL REVENUES AND APPROPRIATED RESERVES/ FUND BALANCE $ 211,361,632

$

355,562

$

211,361,632

(See Independent Auditors' Report)

56

$

Over (Under) Revised Budget

115,324,745 9,534,935 8,000,000 415,000

Appropriated fund balance

$ 123,609,680 1,250,000 8,000,000 415,000

Current Year's Revenues

$

11,452 (147,760) 2,483,004 641,364 3,694,871

Required Supplementary Information WEBSTER CENTRAL SCHOOL DISTRICT, NEW YORK Schedule of Revenues, Expenditures and Changes in Fund Balance Budget (Non-GAAP Basis) and Actual - General Fund For The Year Ended June 30, 2025 Current Original Budget

Amended Budget

Year's Expenditures

Encumbrances

Unencumbered Balances

$

$

EXPENDITURES General Support Board of education

$

Central administration Finance

27,435

$

346,239 1,151,930

28,659

$

380,615 1,188,356

20,834 380,615 1,185,804

-

7,825 2,552

Staff

1,267,499

1,294,453

1,292,189

-

2,264

Central services Special items

13,085,298 2,329,040

14,001,766 2,461,333

13,819,680 2,461,333

130,351 -

51,735 -

Instruction, administration and improvement Teaching - regular school Programs for children with

8,408,439 60,431,819

10,674,257 53,879,359

10,648,993 53,791,551

2,000 29,779

23,264 58,029

handicapping conditions

23,960,782

22,922,622

22,831,351

8,561

82,710

2,100,000 265,000 8,833,665

1,799,550 370,063 9,395,211

1,799,550 370,063 9,314,815

166

80,230

Pupil services Pupil Transportation Community Services Employee Benefits

12,263,380 8,667,116 1,161,500 55,055,725

13,002,549 8,989,723 1,214,781 55,185,159

12,725,680 8,882,245 1,199,308 55,184,957

1,036 -

275,833 107,478 15,473 202

7,155,000

9,152,852

9,152,852

-

-

$

4,807,258 210,748,566

$

4,807,258 209,869,078

$

171,893

$

707,595

Instructional -

$

4,511,765 211,021,632

$

340,000

$

613,066

$

613,066

$

-

$

-

TOTAL EXPENDITURES AND OTHER USES

$

211,361,632

$

211,361,632

$

210,482,144

$

171,893

$

707,595

NET CHANGE IN FUND BALANCE

$

-

$

-

$

6,961,884

FUND BALANCE, BEGINNING OF YEAR FUND BALANCE, END OF YEAR

54,090,514 $

54,090,514

54,090,514 $

(See Independent Auditors' Report)

57

54,090,514

54,090,514 $

61,052,398

Supplementary Information

WEBSTER CENTRAL SCHOOL DISTRICT, NEW YORK Schedule of Change From Adopted Budget To Final Budget And The Real Property Tax Limit For The Year Ended June 30, 2025

CHANGE FROM ADOPTED BUDGET TO FINAL BUDGET: Adopted budget

$ 211,006,070

Prior year's encumbrances

355,562

Original Budget

$ 211,361,632

FINAL BUDGET

$ 211,361,632

SECTION 1318 OF REAL PROPERTY TAX LAW LIMIT CALCULATION: 2025-26 voter approved expenditure budget

$ 220,266,425

$ 5,671,893

Unassigned fund balance

8,782,975

Total Unrestricted fund balance

$ 14,454,868

$ 5,500,000

Encumbrances included in assigned fund balance Total adjustments

171,893 $ 5,671,893

General fund fund balance subject to Section 1318 of Real Property Tax Law

8,782,975

ACTUAL PERCENTAGE

3.99%

(See Independent Auditors' Report)

58

Supplementary Information

WEBSTER CENTRAL SCHOOL DISTRICT, NEW YORK CAPITAL PROJECTS FUND Schedule of Project Expenditures For The Year Ended June 30, 2025

Expenditures

Project Title

2014 Capital Improvement Project

Original

Revised

Prior

Current

Appropriation

Appropriation

Years

Year

$

$

12,953,473

$

Methods of Financing Unexpended Total

Balance

$

Obligations

123,426

$

Local

State

Sources

Sources

Fund Transfers

Total

$

Balance

12,953,473

$ 12,830,047

-

$ 12,830,047

7,805,000

$ 5,148,473

(56,598)

12,896,875

$43,000,000 Construction Project

43,539,223

43,539,223

43,539,223

-

43,539,223

-

39,895,000

3,644,248

-

-

43,539,248

$69,500,000 Construction Project

69,500,000

69,500,000

69,500,000

-

69,500,000

-

67,395,000

2,105,000

-

-

69,500,000

-

Aquatic Project

100,000

100,000

94,489

-

94,489

5,511

-

100,000

-

-

100,000

5,511

DASNY grant

100,000

100,000

97,478

-

97,478

2,522

-

-

99,131

-

99,131

1,653

Thomas Café

-

-

128,811

-

128,811

(128,811)

-

-

-

-

-

(128,811)

$

-

$

66,828 25

2019-20 Buses

1,612,000

1,612,000

1,582,854

-

1,582,854

29,146

1,612,000

-

-

(29,146)

1,582,854

-

2020-21 Buses

1,663,000

1,663,000

1,649,409

-

1,649,409

13,591

1,663,000

-

-

(13,591)

1,649,409

-

2021-22 Buses

1,566,000

1,566,000

1,526,058

-

1,526,058

39,942

1,566,000

-

-

(39,942)

1,526,058

-

2022-23 Buses

1,687,500

1,687,500

1,662,376

-

1,662,376

25,124

1,687,500

-

-

(25,124)

1,662,376

-

2023-24 Buses

1,600,000

1,600,000

1,520,977

-

1,520,977

79,023

-

-

1,600,000

(79,023)

1,520,977

-

2024-25 Buses

1,200,000

1,200,000

-

1,135,476

1,135,476

64,524

1,200,000

-

-

-

1,200,000

64,524

2020-21 Capital Outlay Project

100,000

100,000

99,796

-

99,796

204

-

100,000

-

-

100,000

204

Emergency Elevator Project

57,853

63,638

63,638

-

63,638

-

-

63,638

-

-

63,638

-

2022-23 Capital Outlay Schroeder

100,000

100,000

98,667

-

98,667

1,333

-

100,000

-

-

100,000

1,333 (192,676)

2022-23 Project

-

-

192,676

-

192,676

(192,676)

-

-

-

-

-

100,000

100,000

16,378

-

16,378

83,622

-

100,000

-

-

100,000

83,622

85,000,000

85,000,000

6,019,987

8,260,440

14,280,427

70,719,573

-

10,000,000

-

-

10,000,000

(4,280,427)

Shoeder Fire

1,000,000

1,000,000

242,813

-

242,813

757,187

-

242,813

-

-

242,813

-

23-24 State Rd Capital Outlay

100,000

100,000

10,334

-

10,334

89,666

-

100,000

-

-

100,000

89,666 -

Klem North Project $85,000,000 Construction Project

24-25 Capital Outlay $100K Leases TOTAL

(See Independent Auditors' Report)

100,000

64,683

-

64,683

64,683

-

-

64,683

-

-

64,683

1,561,988

1,561,988

-

1,561,988

1,561,988

-

1,561,988

-

-

-

1,561,988

$ 223,641,037

$ 223,611,505

$ 140,876,011

$ 11,022,587

$ 151,898,598

71,712,907

$ 124,385,488

$ 21,768,855

$ 1,699,131

$ (243,424)

59

$

$

147,610,050

$

(4,288,548)

Supplementary Information WEBSTER CENTRAL SCHOOL DISTRICT, NEW YORK Combining Balance Sheet - Nonmajor Governmental Funds June 30, 2025 Special Revenue Funds

Total

School

Miscellaneous

Debt

Nonmajor

Lunch

Special Revenue

Service

Governmental

Fund

Fund

Fund

Funds

ASSETS Cash and cash equivalents

$

550,693

$

-

$

-

$

550,693

Investments

-

135

-

135

Receivables

198,677

-

-

198,677

Inventories

130,623

-

-

130,623

Due from other funds

2,228,316

153,503

4,540,572

6,922,391

TOTAL ASSETS

$ 3,108,309

$

153,638

$ 4,540,572

$

7,802,519

$

$

-

$

$

97,241

LIABILITIES AND FUND BALANCES Liabilities Accounts payable

97,241

-

Accrued liabilities

41,448

-

11,246

52,694

Due to other funds

1,171,151

500

-

1,171,651

Due to ERS

587,447

-

-

587,447

Unearned revenue

27,580

-

-

27,580

TOTAL LIABILITIES

$ 1,924,867

$

500

$

11,246

$

1,936,613

$

$

-

$

-

$

130,623

Fund Balances Nonspendable

130,623

Restricted

-

153,138

4,529,326

4,682,464

Assigned

1,052,819

-

-

1,052,819

TOTAL FUND BALANCE

$ 1,183,442

$

153,138

$ 4,529,326

$

5,865,906

$ 3,108,309

$

153,638

$ 4,540,572

$

7,802,519

TOTAL LIABILITIES AND FUND BALANCES

(See Independent Auditors' Report)

60

Supplementary Information WEBSTER CENTRAL SCHOOL DISTRICT, NEW YORK Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds For The Year Ended June 30, 2025 Special Revenue Funds Formerly Nonmajor

Total

Special

School

Miscellaneous

Debt

Nonmajor

Aid

Lunch

Special Revenue

Service

Governmental

Fund

Fund

Fund

Fund

Funds

REVENUES Use of money and property

$

-

Miscellaneous

-

State sources Federal sources Sales TOTAL REVENUES

$

11,780

$

-

$

135,633

$

147,413

142,827

5,160

-

-

65,944

-

-

65,944

-

1,696,922

-

-

1,696,922

-

147,987

-

1,959,026

$

-

$ 3,876,499

$

5,160

$

135,633

$

1,959,026 4,017,292

$

-

$

$

-

$

360,924

$

360,924

EXPENDITURES General support Employee benefits

-

663,025

-

-

663,025

-

-

-

1,855,000

1,855,000

-

2,157,581

-

-

2,157,581

-

1,975,401

37,300

-

2,012,701

$

-

$ 4,796,007

$

37,300

$ 2,215,924

$

7,049,231

$

-

$

(919,508)

$

(32,140)

$ (2,080,291)

$

(3,031,939)

$

-

$

-

$

-

$

$

186,826

EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers - in Premium on obligations issued

-

-

186,826

-

2,215,955

2,215,955

$ 2,402,781

$

2,402,781

TOTAL OTHER FINANCING SOURCES (USES)

$

-

$

-

$

-

NET CHANGE IN FUND BALANCE

$

-

$

(919,508)

$

(32,140)

$

322,490

$

(629,158)

FUND BALANCE, BEGINNING OF YEAR, as previously reported

$

732,576

$ 2,102,950

$

185,278

$ 4,206,836

$

7,227,640

(732,576)

-

-

-

$

-

$ 2,102,950

$

185,278

$ 4,206,836

$

6,495,064

$

-

$ 1,183,442

$

153,138

$ 4,529,326

$

5,865,906

Changes within financial reporting entity nonmajor to major

(732,576)

FUND BALANCE, BEGINNING OF YEAR, as adjusted FUND BALANCE, END OF YEAR

(See Independent Auditors' Report)

61

Supplementary Information WEBSTER CENTRAL SCHOOL DISTRICT, NEW YORK Net Investment in Capital Assets/Right to Use Assets For The Year Ended June 30, 2025

Capital assets/right to use assets, net

$ 215,721,185

$

131,377 131,377

$ 100,120,000

Lease liability

1,367,393

Unamortized bond premium

8,314,986

Assets purchased with short-term financing

4,601,914

Retainage payable

60,648 114,464,941

Net Investment in Capital Assets/Right to Use Assets

(See Independent Auditors' Report)

62

$ 101,387,621

Supplementary Information WEBSTER CENTRAL SCHOOL DISTRICT, NEW YORK SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For The Year Ended June 30, 2025 Assistance Listing Number

Grantor / Pass - Through Agency Federal Award Cluster / Program U.S. Department of Education: Passed Through NYS Education Department Special Education Cluster IDEA Special Education - Grants to States (IDEA, Part B) 84.027 Special Education - Preschool Grants (IDEA Preschool) 84.173 Total Special Education Cluster IDEA Education Stabilization Funds ARP - Homeless Children and Youth II-COVID-18 84.425W ARP - Homeless Children and Youth II SL-COVID-18 84.425W Total Education Stabilization Funds Title IIA - Supporting Effective Instruction State Grant 84.367 Title IIA - Supporting Effective Instruction State Grant 84.367 Title IIIA - Immigration Education 84.365 Title IIIA - LEP 84.365 Title IIIA - LEP 84.365 Title IV - Student Support and Enrichment Program 84.424 Title I - Grants to Local Educational Agencies 84.010 Title I - Grants to Local Educational Agencies 84.010 Total U.S. Department of Education U.S. Department of Agriculture: Passed Through NYS Education Department (Child Nutrition Services) Child Nutrition Cluster National School Lunch Program 10.555 National School Breakfast Program 10.553 National School Lunch Program-Non-Cash Assistance (Commodities) 10.555 National School Snack Program 10.555 Total Child Nutrition Cluster Total U.S. Department of Agriculture TOTAL EXPENDITURES OF FEDERAL AWARDS

(See Independent Auditors' Report)

63

Pass-Through Agency Number

0032-25-0388 0033-25-0388

Total Expenditures

$ $

5218-21-1410 5219-21-1410

$ $

0147-24-1410 0147-25-1410 0149-25-1410 0293-24-1410 0293-24-1410 0204-24-1410 0021-24-1410 0021-25-1410 $

261901060000 261901060000

$

261901060000 261901060000

2,145,371 53,526 2,198,897 3 25,756 25,759 1,295 175,468 17,541 12,989 25,796 68,352 74,588 898,437 3,499,122

1,184,961 248,306

$ $

250,719 12,936 1,696,922 1,696,922

$

5,196,044

Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards Independent Auditors’ Report To the Board of Education Webster Central School District, New York We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Webster Central School District, New York (the District) as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements, and have issued our report thereon dated September 22, 2025. Report on Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the District’s internal control over financial reporting (internal control) as a basis for designing procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, we do not express an opinion on the effectiveness of the District’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that have not been identified.

64

Report on Compliance and Other Matters As part of obtaining reasonable assurance about whether the District’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Rochester, New York September 22, 2025

65