HomeMy WebLinkAbout2018-12-31 2018 Year End Audited Financial Statements Consolidated Financial Statements of
COUNTY OF NEWELL
Year ended December 31, 2018
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, ,v a i LLP
CHARTERED PROFESSIONAL ACCOUNTANTS
INDEPENDENT AUDITORS' REPORT
To: The Mayor and Members of Council of
the County of Newell
Opinion
We have audited the consolidated financial statements of the County of Newell which comprise the consolidated
statement of financial position as at December 31, 2018, and the consolidated statements of financial activities,
change in net financial assets and cash flow for the year then ended, and notes to the financial statements,
including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the
financial position of the County of Newell as at December 31, 2018, and its results of operations and its cash flows
for the year then ended in accordance with Canadian public sector accounting standards.
Basis for Opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. 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 independent of the County in accordance with the ethical requirements
that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other
ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our opinion.
Other Matter
The consolidated financial statements of the County of Newell for the year ended December 31, 2017 were audited
by another auditor who expressed an unmodified opinion on those statements on April 5, 2018.
Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in
accordance with Canadian public sector accounting standards, and for such internal control as management
determines is necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
- In preparing the consolidated financial statements, management is responsible for assessing the County's ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless management either intends to liquidate the County or to cease operations, or
has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the County's financial reporting process.
Auditor's Responsibilities for the Audit of the Financia/Statements
Our objectives are to obtain reasonable assurance about whether the consolidated 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
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements. As part of an audit in accordance with Canadian generally accepted auditing standards, we
exercise professional judgment and maintain professional skepticism throughout the audit. We also:
Claresholm•Fort Macleod•lethbridge•Milk River•Pincher Creek•Taber•Vauxhall 1
INDEPENDENT AUDITORS' REPORT, continued
. Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. 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.
. 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 County's internal control.
. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
. Conclude on the appropriateness of management's use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the County's ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's
report to the related disclosures in the financial statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor's report. However, future events or conditions may cause the company to cease to continue
as a going concern.
. Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events
in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
Report on Other Legal and Regulatory Requirements
. Debt Limit Regulation:
In accordance with Alberta Regulation 255/2000, we confirm that the County is in compliance with
the Debt Limit Regulation. A detailed account of the County's debt limit can be found in note 18.
. Supplementary Accounting Principles and Standards Regulation:
In accordance with Alberta Regulation 313/2000, we confirm that the County is in compliance with
the Supplementary Accounting Principles and Standards Regulation and note the information
required can be found in note 17.
Lethbridge, Alberta �� ���
April 11, 2019 Chartered Professional Accountants
Claresholm.Fort Macleod.Lethbridge.Milk River.Pincher Creek.Taber.Vauxhall 2
MANAGEMENT REPORT
The consolidated financial statements are the responsibility of the management of the County of Newell.
These consolidated financial statements have been prepared from information provided by management.
Financial statements are not precise since they include certain amounts based on estimates and judgments.
Management has determined such amounts on a reasonable basis in order to ensure that the consolidated
financial statements are presented fairly, in all material respects.
The County maintains systems of internal accounting and administrative controls that are designed to provide
reasonable assurance that the financial information is relevant, reliable and accurate and that the County's assets
are properly accounted for and adequately safeguarded.
The elected Council of the County is responsible for ensuring that management fulfils its responsibilities for
financial statements. Council carries out its responsibility principally through the Finance and Administration and
General Services committees.
The Council meets annually with management and the external auditors to discuss internal controls over the
financial reporting process, auditing matters and financial reporting issues, and to satisfy itself that each party is
properly discharging its responsibilities. Council also considers the engagement or re-appointment of the external
auditors. Council reviews the monthly financial reports.
The consolidated financial statements have been audited by Avail LLP Chartered Professional Accountants, the
external auditors, in accordance with Canadian generally accepted auditing standards on behalf of the Council,
residents and ratepayers of the County. Avail LLP has full'and free access to the Council.
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Ch'e i istrative Officer Treasurer
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Ava i I LLP Chartered Professional Accountants 3
COUNTY OF NEWELL
Consolidated Statement of Financial Position
December 31, 2018, with comparative information for 2017
2018 2017
Financial assets:
Cash and cash equivalents (note 2) $ 3,349,499 $ 2,648,535
Taxes and grants in place of taxes receivable (note 3) 1,700,222 1,312,676
Trade and other receivables (note 4) 12,149,564 14,820,227
Land held for resale 19,748 31,491
Investments(note 5) 81,671,584 72;549,878
Notes receivable (note 6) -- 789,542
Other financial assets 6,495 9,819
98,897,112 92,162,168
Financial liabilities:
Accounts payable and accrued liabilities 4,212,382 2,407,267
Employee benefit obligations(note 8) 1,580,098 1,604,991
Unearned revenue (note 9) 297,964 22,000
Long-term debt-operating (note 10) -- 789,542
Long-term debt-capital (note 11) 14,882,255 20,020,644
Provision for landfill closure and post-closure costs(note 12) 361,378 662,535
Provision for gravel pit closure and post-closure costs(note 12) 416,059 331,814
Deposit liabilities(note 2) 269,291 212,408
22,019,427 26,051,201
Net financial assets 76,877,685 66,110,967
Non-financial assets:
Prepaid expenses 131,631 118,829
Tangible capital assets(note 7) 199,229,568 202,274,435
Inventory for consumption 2,139,527 1,170,123
201,500,726 203,563,387
Contingent liabilities(note 20)
Accumulated surplus (note 13) $278,378,411 $269,674,354
The accompanying notes are an integral part of these consolidated financial statements.
4
COUNTY OF NEWELL
Consolidated Statement of Financial Activities
Year ended December 31, 2018, with comparative information for 2017
Budget 2018 2017
Revenues:
Net municipal property taxes(note 14) $ 33,130,046 $33,087,488 $ 32,278,376
Special levies 4,972,179 114,362 117,189
User fees and sale of goods 2,081,005 3,310,758 2,618,838
Government transfers (note 15) 626,574 685,888 638,510
Penalties and cost of taxes 131,000 280,078 210,582
Investment income 1,220,925 2,000,408 1,234,488
Licenses and permits 152,000 213,321 255,278
Other revenue 107,900 421,622 634,705
Gain (loss)on disposal of tangibie
capital assets - 102,936 143,662
42,421,629 40,216,861 38,131,628
Expenses (note 16):
Legislative 581,800 467,697 515,343
Administration 4,934,564 4,510,648 4,381,172
Corporate safety services 331,965 318,794 339,779
Fireand by-lawenforcement 1,641,524 1,172,017 1,156,185
Disaster and emergency services 290,023 244,948 244,070
Roads,streets, walks and lighting 12,537,923 11,411,031 10,873,803
Airport 139,733 111,071 115,279
Water and waste water 3,263,845 2,925,322 2,890,116
Waste management 332,798 470,972 698,556
Family and community support 65,466 64,466 79,466
Municipal planning 674,623 479,191 571,253
Community and agricultural services 2,006,477 1,783,155 1,609,879
Subdivision land and development 183,395 186,695 190,737
Recreation and parks 845,767 828,494 1,873,728
Culture and library 160,653 160,653 155,326
Other 98,425 158,034 1,269,883
28,088,981 25,293,188 26,964,575
Annual surplus
before the undernoted 14,332,648 14,923,673 11,167,053
Other:
Contributed to other governments (19,767,188) (6,319,496) --
Transfer of assets to Newell Regional Services
Corporation -- -- (30,338,627)
Government transfers (note 15) -- 99,880 173,520
Annual surplus (deficit) (5,434,540) 8,704,057 (18,998,054)
Accumulated surplus, beginning of year 269,674,354 269,674,354 288,672,408
Accumulated surplus, end of year $264,239,814 $278,378,411 $269,674,354
The accompanying notes are an integral part of these consolidated financial statements.
5
COUNTY OF NEWELL
Consolidated Statement of Change in Net Financial Assets
December 31, 2018, with comparative information for 2017
Budget 2018 2017
Annual surplus(deficit) $(5,434,540) $ 8,704,057 $(18,998,054)
Acquisition of tangible capital assets (10,379,211) (4,382,530) (15,587,875)
Contributed (transferred)tangible capital assets - - 33,324,214
Proceeds on disposal of tangible capital assets - 614,248 556,406
Amortization of tangible capital assets 7,155,882 6,916,087 6,528,819
(Gain) loss on disposal of tangible capital assets - (102,936) (143,662)
(8,657,869) 11,748,926 5,679,847
Use(acquisition)of inventories for consumption (1,200,000) (969,406) 220,631
Use(acquisition)of prepaid expenses - (12,802) (3,844)
Change in net financial assets (1,200,000) 10,766,718 5,896,635
Net financial assets, beginning of year 66,110,967 66,110,967 60,214,332
Net financial assets, end of year $56,253,098 $76,877,685 $ 66,110,967
The accompanying notes are an integral part of these consolidated financial statements.
6
COUNTY OF NEWELL
Consolidated Statement of Cash Flows
Year ended December 31, 2018, with comparative information for 2017
2018 2017
Cash provided by(used in):
Operations:
Annual surplus(deficit) $ 8,704,057 $(18,998,054)
Items not involving cash:
Amortization 6,916,087 6,528,819
Transferred (contributed)assets - 33,324,214
Loss (gain)on disposal of tangible capital assets (102,936) (143,662)
Change in non-cash financial assets and liabilities:
Taxes and grants in place of taxes receivable (387,545) (18,294)
Trade and other receivables 2,670,663 5,367,626
Land held for resale 11,743 -
Other financial assets 3,324 76
Prepaid expenses (12,802) (3,844)
Inventory for consumption (969,406) 220,631
Accounts payable and accrued liabilities 1,805,115 205,813
Employee benefit obligations (24,893) 76,153
Unearned revenue 275,964 (174,685)
Landfill closure and post-closure costs (301,157) 349,002
Gravel pit closure and post-closure costs 84,245 (3,527)
18,672,459 26,730,268
Capital activities:
Proceeds on disposal of tangible capital assets 614,248 556,406
Purchase of tangible capital assets (4,382,531) (15,587,875)
(3,768,283) (15,031,469)
Investing activities:
Decrease(increase) in temporary investments - 18,196,412
Increase in investments (9,121,706) (26,097,781)
Payments received on notes receivable 789,542 984,096
(8,332,164) (6,917,273)
Financing activities:
Repayment of long-term debt:
-operating (789,542) (748,381)
-capital (5,138,389) (5,034,630)
Proceeds from debt acquired - 640,850
Increase (decrease) in deposit liabilities 56,883 13,534
(5,871,048) (5,128,627)
Increase (decrease) in cash and cash equivalents 700,964 (347,101)
Cash and cash equivalents, beginning of year 2,648,535 2,995,636
Cash and cash equivalents, end of year(note 2) $ 3,349,499 $ 2,648,535
Cash and cash equivalents is comprised of:
Cash $ 3,349,499 $ 2,648,535
$ 3,349,499 $ 2,648,535
The accompanying notes are an integral part of these consolidated financial statements.
7
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2018
1. Significant accounting policies:
The consolidated financial statements of the County of Newell (the "County") are the
representations of management prepared in accordance with Canadian Public Sector accounting
standards. Significant aspects of the accounting policies adopted by the County are as follows:
(a) Cash and cash equivalents:
Cash and cash equivalents include cash on hand and short-term deposits which are highly
liquid with original maturities of less than three months from the date of acquisition.
(b) Reporting entity:
The consolidated financial statements reflect the assets, liabilities, revenues and expenses,
changes in net financial assets and cash flows of the County, which comprises of all the
organizations that are owned or controlled by the County and are, therefore accountable to
the Council for the administration of their financial affairs and resources.
All significant inter-department transactions and balances are eliminated on consolidation.
Taxes levied also include requisitions for educational, health care, social and other external
organizations that are not part of the County.
The statements exclude trust assets that are administered for the benefit of external parties.
(c) Basis of accounting:
The financial statements are prepared using the accrual basis of accounting. The accrual
basis of accounting records revenue as it is earned and measurable. Expenses are
recognized as they are incurred and measurable based upon receipt of goods or services
and/or the legal obligation to pay.
Funds from external parties and earnings thereon restricted by agreement or legislation are
accounted for as deferred revenue until used for the purpose specified.
(d) Investments:
Investments are recorded at cost. Where there has been a loss in value of an investment
other than a temporary decline, the investment is written down to reflect the loss.
(e) Requisition over-levy and under-levy:
Over-levies and under-levies arise from the difference between the actual property tax levy
made to cover each requisition and the actual amount requisitioned.
If the actual levy exceeds the requisition, the over-levy is accrued as a liability and property
tax revenue is reduced. Where the actual levy is less than the requisition amount, the
under-levy is accrued as a receivable and as property tax revenue.
Requisition tax rates in the subsequent year are adjusted for any over-levies for the prior
year.
8
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2018
1. Significant accounting policies (continued):
(f) Inventories:
Land held for resale is recorded at the lower of cost and net realizable value. Cost includes
costs for land acquisition and improvements required to prepare the land for servicing such
as clearing, stripping, and leveling charges. Related development costs incurred to provide
infrastructure such as water and waste water services, roads, sidewalks and street lighting
are recorded as capital assets under their respective function.
(g) Landfill and gravel pit closure and post-closure costs:
Pursuant to the Alberta Environment Protection and Enhancement Act, the County is
required to fund the closure of its landfill site and provide for post-closure care. Landfill
closure and post-closure activities include the final ciay cover, landscaping, as well as
surface and ground water monitoring, leachate control and visual inspection. The
requirement is being provided for over the estimated remaining life of the landfill site based
on usage.
The County is required to fund the closure of its gravel pits. Reclamation of these sites
includes providing final cover and landscaping. The requirement is being provided for on an
estimate of expected cost on size of sites.
(h) Government transfers:
Government transfers are recognized in the financial statements as revenues in the period
that the events giving rise to the transfer occurred, providing the transfers are authorized, all
eligibility criteria have been met by the County, and reasonable estimates of the amounts
can be made.
(i) Non-financial assets:
Non-financial assets are not available to discharge existing liabilities and are held for use in
the provision of services. They have useful lives extending beyond the current year and are
not intended for sale in the normal course of operations.
(i) Tangible capital assets:
Tangible capital assets are recorded at cost which includes all amounts that are directly
attributable to acquisition, construction, development or betterment of the asset. The
cost, less residual value, of the tangible capital assets is amortized on a straight-line
basis over the estimated useful life as follows:
Years
Land Improvements 15-45
Buildings 25-70
Engineered structures 15-75
Machinery and equipment 5-40
Vehicles 5-14
Assets under construction are not amortized until the asset is available for productive
use.
9
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2018
1. Significant accounting policies (continued):
(i) Non-financial assets(continued):
(ii) Contributions of tangible capital assets:
Tangible capital assets received as contributions are recorded at fair value at the date of
receipt and recorded as revenue.
(iii) Inventories
Inventories of materials and supplies held for consumption are recorded at the lower of
cost and replacement cost with cost determined by the average cost method.
(iv) Cultural and historical tangible capital assets:
Works of art for display are not recorded as tangible capital assets but are disclosed.
Q) Tax Revenue:
Tax revenue results from non-exchange transactions that are paid to governments in
accordance with the laws and regulations established to provide revenue to the government
� for public services. The revenue is recognized when the tax has been authorized and the
taxable event has occurred.
Requisitions operate as a flow through and are excluded from municipal revenue.
(k) Pension expenses:
The County participates in a multi-employer defined benefit pension plan, wherein
contributions for current and past service pension benefits are recorded as expenses in the
year in which they become due.
(I) Use of estimates:
The preparation of the financial statements in conformity with Canadian public sector
accounting standards requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Significant areas requiring the use of management
estimates relate to the determination of allowance for doubtful accounts, provision for
closure and post-closure care, employee benefit obligations and the useful life of tangible
capital assets.
Contributions of tangible capital assets are recorded at estimated fair value at the date of
receipt.
Actual results could differ from those estimates.
10
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2018
1. Significant accounting policies (continued):
(m)Contaminated sites:
Contaminated sites are a resuit of contamination being introduced into air, soil, water or
sediment of a chemical, organic or radioactive or live organism that exceeds an
environmental standard. The liability is recorded net of any expected recoveries. A liability
for remediation of a contaminated site is recognized when a site is not in productive use and
is managemenYs estimate of the cost of post-remediation including operation, maintenance
and monitoring. No contaminated sites have been identified.
2. Cash and cash equivalents:
2018 2017
Cash $ 3,349,499 $ 2,648,535
$ 3,349,499 $ 2,648,535
Included in cash are amounts aggregating $269,291 (2017 - $212,408) not available for current
use.
2018 2017
Tax sale surplus $ 20,879 $ 20,532
Public reserve 248,412 191,876
$ 269,291 $ 212,408
11
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2018
3. Taxes and grants in place of taxes receivable:
2018 2017
Current $ 819,359 $ 703,962
Arrears 1,009,363 708,715
1,828,722 1,412,676
Allowance for uncollectible taxes (128,500) (100,000)
$ 1,700,222 $ 1,312,676
4. Trade and other receivables:
2018 2017
Grants $ 2,632,716 $ 7,809,602
Local improvement taxes 5,294,765 5,656,126
Other 4,222,083 1,354,499
$ 12,149,564 $ 14,820,227
Local improvement taxes carry annual interest rates ranging from 2.64%-4.44%and are due
between 2020—2041.
5. Investments:
2018 2017
Fixed income securities $78,601,321 $ 69,479,617
Credit Union Common shares 7 5
Newell Regional Services Corporation:
Common shares 20 20
Preferred shares 3,070,236 3,070,236
3,070,263 3,070,261
$81,671,584 $ 72,549,878
Fixed income securities have effective interest rates of 2.40% to 3.46%with maturity dates from
June 2019 through December 2028. The fixed income securities have an aggregate market
value of$77,086,341 (2017-$69,105,496).
12
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2018
6. Notes receivable:
2018 2017
Newell Foundation $ - $ 789,542
$ - $ 789,542
7. Tangible capital assets:
Cost 2017 Additions Disposals 2018
Land $ 5,351,168 $ 19,743 $ (2,650) $ 5,368,261
Land improvements 2,037,162 -- -- 2,037,162
Buildings 20,969,663 96,375 -- 21,066,038
Engineered structures 224,166,399 2,488,379 (46,100) 226,608,678
Machinery and equipment 11,587,473 665,076 (1,012,063) 11,240,486
Vehicles 6,087,278 804,853 (466,892) 6,425,239
Work in progress, net
of transfers 2,023,836 308,106 -- 2,331,942
Total $272,222,979 $ 4,382,532 $ (1,527,705) $275,077,806
Accumulated Amortization
amortization 2017 Disposals expense 2018
Land improvements $ 965,962 $ -- $ 130,104 $ 1,096,066
Buildings 1,715,976 -- 352,523 2,068,499
Engineered structures 59,168,305 (39,027) 5,023,066 64,152,344
Machinery and equipment 5,614,140 (573,215) 941,267 5,982,192
Vehicles 2,484,161 (404,151) 469,127 2,549,137
Total $ 69,948,544 $(1,016,393) $ 6,916,087 $ 75,848,238
Net book value 2018 2017
Land $ 5,368,261 $ 5,351,168
Land improvements 941,096 1,071,200
Buildings 18,997,539 19,253,687
Engineered structures 164,456,334 164,998,094
Machinery and equipment 5,258,294 5,973,333
Vehicles 3,876,102 3,603,117
Work in progress 2,331,942 2,023,836
Total $199,229,568 $202,274,435
Contributed tangible capital assets are recognized at fair value at the date of contribution.
13
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2018
8. Employee benefit obligations:
Vacation
The vacation liability is comprised of the vacation that employees are deferring to future years.
Employees have either earned the benefits (and are vested) or are entitled to these benefits
within the next budgetary year.
Sick
The sick liability is comprised of the sick pay that employees are deferring to future years.
Employees have either earned the benefits (and are vested) or are entitled to them within the
next budgetary year.
9. Unearned Revenue:
2018 2017
Government contributions $ 163,445 $ 22,000
Prepaid taxes 134,519 -
Total $ 297,964 $ 22,000
Government contributions in unearned revenue consist of the following:
Recognized as
Description 2017 Received revenue 2018
ACP $ -- $ 200,536 $ (59,162) $ 141,374
Other 22,000 21,640 (21,569) 22,071
Total $ 22,000 $ 222,176 $ (80,731) $ 163,445
10. Long-term debt—operating:
2018 2017
Debenture supported with notes receivable $ - $ 789,542
Interest on long-term debt amounted to$32,569 (2017—$74,295).
The County's total interest paid in 2018 was$43,425 (2017-$84,585).
14
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2018
11. Long-term debt—capital:
2018 2017
Tax supported debentures $ 14,882,255 $ 20,020,644
Principal and interest repayments are due as follows:
Principal Interest Total
2019 $ 5,233,923 $ 300,227 $ 5,534,150
2020 3,651,630 209,611 3,861,241
2021 2,482,572 141,266 2,623,838
2022 1,845,476 81,869 1,927,345
2023 623,877 47,872 671,749
Thereafter 1,044,777 285,497 1,330,274
$ 14,882,255 $ 1,066,342 $ 15,948,597
Debenture debt is repayable to Alberta Capital Finance Authority and bears interest at rates
ranging from 1.124% to 3.406% per annum and matures in periods 2019 through 2042. The
average annual interest rate is 2.179% for 2018 (2017— 2.095%). Debenture debt is issued on
the credit and security of the County of Newell at large.
Interest on long-term debt amounted to$391,373(2017-$476,748).
The County's total interest paid in 2018 was$395,760 (2017-$468,725).
12. Provision for landfill and gravel pit closure and post-closure costs:
Alberta environmental law requires closure and post-closure care of landfill sites, which includes
final covering and landscaping, pumping of ground water and leachates from the site, and on-
going environmental monitoring, site inspections and maintenance.
The accrued liability for the remaining post-closure costs of the County's landfill and closure and
post-closure costs for the County's gravel pits are based on an estimate of future discounted
costs. All landfill sites are closed. One site is expected to be reclaimed in 2019, while post-
closure costs associated on another are not expected until 2028.
The estimated closure and post-closure costs for the landfill are $361,378 and $416,059 for the
gravel pits, all of which have been accrued in the financial statements.
15
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2018
13. Accumulated surplus:
Equity in
tangible
Unrestricted capital Restricted Total Total
net assets assets (�) Surplus (2) 2018 2017
Beginning
balance $ 1,288,951 $182,253,791 $86,131,612 $269,674,354 $288,672,408
Annual surplus
(deficit) 8,704,057 -- -- 8,704,057 (18,998,054)
Transfers to
restricted surplus (19,043,515) -- 19,043,515 -- --
Transfers from
restricted surplus 14,274,759 -- (14,274,759) -- --
Amortization of
tangible capital
assets 6,916,087 (6,916,087) -- -- --
Net book value
of assets disposed 511,312 (511,312) -- -- --
Capital assets
internally
funded (4,382,531) 4,382,531 -- -- --
Debt paid-capital (5,138,390) 5,138,390 -- -- --
Total $ 3,130,730 $184,347,313 $90,900,368 $278,378,411 $269,674,354
��) Equity in tangible capital assets:
2018 2017
Tangible capital assets(note 7) $ 275,077,806 $272,222,979
Accumulated amortization (note 7) (75,848,238) (69,948,544)
Long-term debt—capital (note 11) (14,882,255) (20,020,644)
$ 184,347,313 $182,253,791
16
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2018
13. Accumulated surplus(continued):
�z) Restricted surpius is comprised of funds internally restricted as follows:
2018 2017
Paving $ 1,851,997 $ 127,805
Infrastructure 46,001,809 38,522,787
Future Projects 15,711,327 19,513,713
Vehicles, Machinery& Equipment 10,972,276 9,478,581
Regional Enhancement 2,258,874 4,428,874
Stabilization 3,150,000 5,400,277
Facilities 3,114,988 2,893,968
Fire Apparatus 3,756,959 3,156,346
Recreation 2,825,027 1,417,008
Tilley 50,662 50,662
Unexpended Budget Appropriation 1,206,449 1,141,591
$90,900,368 $86,131,612
14. Net municipal property taxes:
Budget 2018 2017
Taxation:
Real property taxes $ 17,729,360 $ 17,683,991 $ 17,285,035
Linear property taxes 28,442,640 28,442,234 27,732,086
Government grants in place of property
taxes 380,191 380,191 366,827
46,552,191 46,506,416 45,383,948
Requisitions:
Alberta School Foundation Fund 12,520,449 12,517,231 12,207,543
Newell Foundation 901,696 901,696 898,029
13,422,145 13,418,927 13,105,572
Net municipal property taxes $ 33,130,046 $33,087,488 $ 32,278,376
17
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2018
15. Government transfers:
Budget 2018 2017
Transfers for operating:
Provincial government $ 394,074 $ 448,368 $ 405,145
Local government 232,500 237,520 233,365
626,574 685,888 638,510
Transfers for capital:
Provincial government - 99,880 173,520
Local government - - -
- 99,880 173,520
$ 626,574 $ 785,768 $ 812,030
16. Expenses by object:
Budget 2018 2017
Salaries, wages and benefits $ 8,330,118 $ 7,893,075 $ 7,895,217
Contracted and general services 5,021,703 3,793,283 3,455,799
Materials, goods, supplies and utilities 5,487,940 4,602,510 4,796,641
Transfers to organizations 1,605,651 1,608,763 2,920,646
Bank charges and short-term interest 8,500 6,407 6,014
Interest on long-term debt 439,187 423,942 551,044
Other expenditures 40,000 49,120 810,395
Amortization 7,155,882 6,916,087 6,528,819
$28,088,981 $25,293,188 $ 26,964,575
18
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2018
17. Salary and benefits disclosure:
Disclosure of salaries and benefits for elected municipal officials and the chief administrative
officer as required by provincial regulation is as follows:
2018 2017
Benefits&
Salary(1) Allowances (2) Total Total
Council:
Division 1 -Amulung $ 30,865 $ 5,452 $ 36,317 $ 37,104
Division 2-Kallen 27,683 5,312 32,996 7,696
Division 2-Simpson - - - 24,801
Division 3- Philipsen 35,145 5,641 40,786 33,655
Division 4- Hammergren 24,966 2,658 27,624 28,652
Division 5- Fyfe 27,043 5,283 32,326 32,705
Division 6-Christman 27,480 5,303 32,783 33,897
Division 7- Unruh 32,331 5,517 37,848 33,093
Division 8- De Jong 28,812 1,450 30,262 27,132
Division 9- Douglass 43,902 2,155 46,057 52,522
Division 10-Juss 27,284 5,294 32,578 29,954
$ 305,512 $ 44,065 $ 349,577 $ 341,212
Chief Administrative Officer $ 225,125 $ 48,420 $ 273,545 $ 269,835
1) Salary includes regular base pay, bonuses, overtime, lump sum payments, gross honoraria
and any other direct cash remuneration.
2) Benefits and allowances include the employer's share of all employee benefits and
contributions or payments made on behalf of employees including pension, health care,
dental coverage, vision coverage, group life insurance, accidental disability and
dismemberment insurance, long and short-term disability plans, professional memberships
and tuition.
Benefits and allowances figures also include the employer's share of the costs of additional
taxable benefits including special leave with pay, financial planning services, retirement
planning services, concessionary loans, travel allowances, car allowances, and club
memberships, if applicable.
19
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2018
18. Debt limits:
Section 276(2) of the Municipal Government Act requires that debt and debt limits as defined by
Alberta Regulation 255/00 for the County be disclosed as follows:
2018 2017
Total debt limit $60,325,292 $57,197,4420
Total debt (14,882,255) (20,810,186)
Unused debt limit $45,443,037 $ 36,387,256
2018 2017
Debt servicing limit $ 10,054,215 $ 9,532,907
Debt servicing (5,534,150) (6,367,116)
Unused debt servicing limit $ 4,520,065 $ 3,165,791
The debt limit is calculated at 1.5 times revenue of the County (as defined in Alberta Regulation
255/00) and the debt service limit is calculated at 0.25 times such revenue. Incurring debt
beyond these limitations requires approval by the Minister of Municipal Affairs. These thresholds
are guidelines used by Alberta Municipal Affairs to identify municipalities which could be at
financial risk if further debt is acquired.
19. Local authorities pension plan:
The County participates in a multi-employer defined benefit pension plan. This plan is
accounted for as a defined contribution plan.
Employees of the County participate in the Local Authorities Pension Plan (LAPP), which is one
of the plans covered by the Public Sector Pension Plans Act. The LAPP serves about 259,714
people and about 420 employers. The LAPP is financed by employer and employee
contributions and investment earnings of the LAPP fund.
Contributions for current service are recorded as expenditures in the year in which they become
due. The County is required to make current service contributions to the Plan of 10.39% of
pensionable earnings up to the year's maximum pensionable earnings under the Canada
Pension Plan and 14.84% on pensionable earnings above this amount. Employees of the
County are required to make current service contributions of 9.39% of pensionable salary up to
the year's maximum pensionable salary and 13.84%on pensionable salary above this amount.
Total current service contributions by the County to the LAPP in 2018 were $591,344 (2017 -
$619,332). Total current service contributions by the employees of the County to the LAPP in
2018 were$541,737 (2017-$571,265).
At December 31, 2017, the LAPP disclosed an actuarial surplus of$4.84 billion.
20
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2018
20. Contingent liabilities:
The County of Newell is a member of the Alberta Municipal Insurance Exchange (MUNIX).
Under the terms of inembership, the County of Newell could become liable for its proportionate
share of any claim losses in excess of the funds held by the exchange. Any liabi.lity incurred
would be accounted for as a current transaction in the year the losses are determined.
21. Recent accounting pronouncements:
The Public Sector Accounting Board recently announced the following accounting
pronouncements:
(a) Financial instruments:
This section establishes recognition, measurement, and disclosure requirements for
derivative and non-derivative instruments. The standard requires fair value measurements
of derivative instruments and equity instruments; all other financial instruments can be
measured at either cost or fair value depending upon elections made by the government.
Unrealized gains and losses will be presented on the new statement of remeasurement gains
and losses arising from the adoption of PS 1201. There will also be a requirement to
disclose the nature and extent of risks arising from financial instruments and clarification is
given for the de-recognition of financial liabilities. As the Municipality does not invest in
derivatives or equity instruments based on its investment policy, it is anticipated that the
adoption of this standard will have a minimal impact on the Municipality. This standard is
effective for fiscal years beginning on or after April 1, 2019.
(b)Foreign currency translation:
This section estabiishes guidance on the recognition, measurement, presentation and
disclosure of assets and liabilities denominated in foreign currencies. The Section requires
monetary assets and liabilities, denominated in a foreign currency and non-monetary items
valued at fair value denominated in a foreign currency to be adjusted to reflect the exchange
rates in effect at the financial statement date. The resulting unrealized gains and losses are
to be presented in the new statement of remeasurement gains and losses. This standard is
effective for fiscal years beginning on or after April 1, 2019.
(c) Financial statement presentation:
The implementation of this standard requires a new statement of re-measurement gains and
losses separate from the statement of operations. This new statement will include the
unrealized gains and losses arising from the remeasurement of financial instruments and
items denominated in a foreign currency. This standard is effective for fiscal years
beginning on or after April 1, 2019.
Management is assessing the impact of the adoption of these standards which is not known or
reasonably estimable at this time.
21
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2018
22. Segmented Disclosures:
Segmented disclosures (Schedule 1) are intended to enable users to better understand the
government reporting entity and the major expense and revenue activities of the County.
The segments have been selected based upon functional activities provided by the County. For
each reported segment, revenues and expenses represent both amounts directly attributable to
the segment and amounts that are allocated on a reasonable basis. The functional areas that
have been separately disclosed, along with the services they provide are as follows:
(a) General government is comprised of Council, Legislative, Corporate Administration,
Finance, Information and Computer Services, Planning, Economic Development,
Corporate Safety, Agricultural Services, Fire and Disaster Services, Bylaw Enforcement,
Community Services, Recreation, Parks and Programs and Library.
(b) Public Works and Transportation is comprised of Roads and Engineering Services.
(c) Public Utilities is comprised of Water, Wastewater and Solid Waste.
23. Budget information:
The budget information presented in these consolidated financial statements is based upon the
2018 budget approved by Council on April 5, 2018.
24. Approval of financial statements:
These financial statements were approved by Council and Management.
22
COUNTY OF NEWELL Schedule 1
Schedule of Segmented Disclosures
Year ended December 31,2018,with comparative information for 2017
Public Works Public Works
General and Total General and Total
Government Transportation Public Utilities 2018 Govemment Transportation Public Utilities 2017
Revenue
Net taxes for municipal purposes $ 33,087,488 $ - $ - $ 33,087,488 $ 32,278,376 $ - $ - $ 32,278,376
Speciallevies - - 114,362 114,362 - - 117,189 117,189
User Fees and sale of goods 1,399,689 342,769 1,568,300 3,310,758 868,422 256,573 1,493,843 2,618,838
Government transfers-operating 579,286 - 106,602 685,888 533,510 - 105,000 638,510
Penalties and costs of taxes 280,078 - - 280,078 210,582 - - 210,582
Investment income 2,000,408 - - 2,000,408 1,234,488 - - 1,234,488
License and permits 213,321 - - 213,321 255,278 - - 255,278
Other 333,799 20,895 66,928 421,622 414,858 46,167 173,680 634,705
Gain(loss)on disposai of capital assets 58,294 44,642 - 102,936 12,217 131,445 - 143,662
37,952,363 408,306 1,856,192 40,216,861 35,807,731 434,185 1,889,712 38,131,628
Expenses
Salaries,wages and benefits 5,110,027 2,783,048 - 7,893,075 5,061,846 2,833,371 - 7,895,217
Contracted and general services 1,621,797 1,388,185 783,302 3,793,284 1,656,052 1,118,991 680,756 3,455,799
Materials,goods,supplies and utilities 1,425,116 2,104,693 1,072,702 4,602,511 1,392,641 2,087,032 1,316,968 4,796,641
TransfertoOrganization 1,584,293 - 24,470 1,608,763 2,898,032 - 22,614 2,920,646
Bank charges and short term interest 6,407 - - 6,407 6,014 - - 6,014
Interest on long-term debt 32,569 - 391,373 423,942 74,296 - 476,748 551,044
Other expenditures 49,019 97 3 49,119 810,394 - - 810,394
Amortization 1,154,578 4,637,066 1,124,443 6,916,087 1,073,278 4,363,956 1,091,586 6,528,820
10,983,806 10,913,089 3,396,293 25,293,188 12,972,553 10,403,350 3,588,672 26,964,575
Annual surplus(deficit)
beforetheundernoted 26,968,557 (10,504,783) (1,540,101) 14,923,673 22,835,178 (9,969,165) (1,698,960) 11,167,053
Other
Contributed to other governments - (6,319,496) - (6,319,496) - - _ _
Contributed assets - - - - - (30,338,627) (30,338,627)
Government transfers-capital - 99,880 - 99,880 - 173,520 - 173,520
Annual surplus(deficit) $ 26,968,557 $ (16,724,399) $ (1,540,101) $ 8,704,057 $ 22,835,178 $ (9,795,645) $ (32,037,587) $ (18,998,054)
23