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Home My WebLink About2021-04-19 2020 Annual ReportFOR THE YEAR ENDING DECEMBER 31, 2020 COUNTY OF NEWELL, ALBERTA, CANADA 2020 ANNUAL FINANCIAL REPORT County of Newell, Alberta, Canada2020 ANNUAL FINANCIAL REPORT For the fiscal period ending December 31, 2020 Produced by the Finance Department in cooperation with all County departments For information on programs and services, or to obtain a copy of this document, contact: ADMINISTRATIONTelephone: 403-362-3266 E-Mail: administration@newellmail.ca The 2020 Annual Financial Report is available online at www.countyofnewell.ab.ca Cover Photo by L. Virostek Page 2 Photo by S. Martens Page 3County of Newell - 2020 Annual Financial Report TABLE OF CONTENTS SECTION 1 Introduction Vision, Mission, & Guiding Principles 7 County Profile 8 County Council 9 Organizational Chart 10 GFOA Canadian Award for Financial Reporting 11 Message from the Reeve 12 Report from the Controller 13 Agricultural Services Report 26 Municipal Services Report 32 Planning & Development Report 36 SECTION 2 Consolidated Financial Statements Management’s Responsibility for the Consolidated Financial Statements 43 Independent Auditors’ Report 44 Consolidated Statement of Financial Position 46 Consolidated Statement of Financial Activities 47 Consolidated Statement of Change in Net Financial Assets 48 Consolidated Statement of Cash Flows 49 Notes to Consolidated Financial Statements 50 Schedule of Segmented Disclosures 66 SECTION 3Financial & Statistical Section Demographics & Other Statistics 69 Expenses by Object 70 Expenses by Function 71 Revenues by Source 72 Page 4 Photo by D. Wiebe Page 5County of Newell - 2020 Annual Financial Report section 1 INTRODUCTION Page 6 Photo by B. Yokoyama Page 7County of Newell - 2020 Annual Financial Report VISION & MISSION STATEMENT VISION STATEMENT To encourage and support sustainable growth and quality of life. MISSION STATEMENT The County of Newell through leadership and policy provides services, structure and stability. GUIDING PRINCIPLES Seeking cooperation with individuals, governments, and organizations Planning for the future growth and development of the municipality Striving for the long-term financial stability of the municipality Supporting the development and sustainability of a strong infrastructure Providing services in a consistent and efficient manner Preserving land for agricultural use Promoting open communication between staff, Council and the public County of Newell - 2020 Annual Financial ReportPage 8 COUNTY PROFILE The County of Newell is a rural municipality located central to Calgary, Medicine Hat and Lethbridge with less than 190 kilometers of separation between each city. The County is a growing transportation hub with the TransCanada Highway #1 and Highway #36 intersecting within our boundaries. CP Rail’s mainline runs through the County, on its track from Montreal to Vancouver. Our geographical position provides ease of access to the oil sands to the north and the United States to the south, creating an ideal trade location for businesses. The population of the Newell region, inclusive of our urban counterparts, is over 24,000. The largest urban communities in the region are the City of Brooks and the Town of Bassano. The County has a positive working relationship with our urban neighbors, which improves the quality of services provided to all of our residents. The County is home to the Eastern Irrigation District (EID) which provides an extensive water supply, storage, and drainage network throughout the region. Water diverted from the Bow River at the Bassano Dam provides for irrigated agriculture, industrial, household and livestock use, as well as many recreational opportunities and enhanced environmental conditions. The County has a dynamic and diverse economy driven by three pillars: Agriculture; Oil and Gas; and Tourism. There are approximately 500 primary agricultural producers in the County, and approximately 1,500 non-agricultural business enterprises within the County and its municipalities. The region boasts extraordinary crop quality with over 300,000 acres of irrigated farmland, 600,000 acres of cultivated dry land farming and 600,000 acres of native and improved rangeland. With a younger work force and average farm receipts in the range of $100,000 to $249,999, the region is home to some of the most profitable farmers in Alberta. The County has one of Alberta’s most active natural gas fields. There are roughly 30,000 wells in the County, which accounts for half of all wells in Alberta, and 37% of all wells in Canada. Approximately 170 production and service companies employ 4,000 to 5,000 people in the energy sector in the region. Key tourism anchors include Lake Newell - one of Canada’s largest man-made lakes, Dinosaur Provincial Park - a UNESCO World Heritage Site, and recreation activity as diverse as golfing, boating, camping, fishing, hunting, and wildlife watching. Population (2016): 7,524 Increase in population (2011 to 2016): 5.4%Median Age: 38 Unemployment rate: 7.1%Median Household Income (2015): $90,880 Number of Farms: 668 2019 Final Budget 5 Agriculture Oil & Gas Tourism COUNTY PROFILE Population (2016): 7,524 Increase in population (2011 to 2016): 5.4% Median Age: 38 Unemployment rate: 7.1% Median Household Income (2015): $90,880 Number of Farms: 668 The County of Newell is a rural municipality located central to Calgary, Medicine Hat and Lethbridge with less than 190 kilometers of separation between each city. The County is a growing transportation hub with the TransCanada Highway #1 and Highway #36 intersecting within our boundaries. CP Rail’s mainline runs through the County, on its track from Montreal to Vancouver. Our geographical position provides ease of access to the oil sands to the north and the United States to the south, creating an ideal trade location for businesses. The population of the Newell region, inclusive of our urban counterparts, is over 24,000. The largest urban communities in the region are the City of Brooks and the Town of Bassano. The County has a positive working relationship with our urban neighbors, which improves the quality of services provided to all of our residents. The County is home to the Eastern Irrigation District (EID) which provides an extensive water supply, storage, and drainage network throughout the region. Water diverted from the Bow River at the Bassano Dam provides for irrigated agriculture, industrial, household and livestock use, as well as many recreational opportunities and enhanced environmental conditions. The County has a dynamic and diverse economy driven by three pillars: Agriculture; Oil and Gas; and Tourism. There are approximately 500 primary agricultural producers in the County, and approximately 1,500 non-agricultural business enterprises within the County and its municipalities. The region boasts extraordinary crop quality with over 300,000 acres of irrigated farmland, 600,000 acres of cultivated dry land farming and 600,000 acres of native and improved rangeland. With a younger work force and average farm receipts in the range of $100,000 to $249,999, the region is home to some of the most profitable farmers in Alberta. The County has one of Alberta’s most active natural gas fields. There are roughly 30,000 wells in the County, which accounts for half of all wells in Alberta, and 37% of all wells in Canada. Approximately 170 production and service companies employ 4,000 to 5,000 people in the energy sector in the region. Key tourism anchors include Lake Newell - one of Canada's largest man-made lakes, Dinosaur Provincial Park - a UNESCO World Heritage Site, and recreation activity as diverse as golfing, boating, camping, fishing, hunting, and wildlife watching. County of Newell - 2020 Annual Financial Report Page 9 COUNTY COUNCIL Councillor Clarence Amulung (403) 793-3813 amulungc@newellmail.caDIVISION 1Rolling HillsCouncillor Wayne Hammergren (403) 501-8909 hammergrenw@newellmail.caDIVISION 4Rainier/Scandia/Bow CityCouncillor Tracy Fyfe (403) 793-7230 fyfet@newellmail.caDIVISION 5Cassils/Lake Newell Resort Councillor Huby Kallen (403) 362-1777 kallenh@newellmail.caDIVISION 2Tilley Councillor Anne Marie Philipsen (403) 793-0574 philipsena@newellmail.caDIVISION 3Patricia/MillicentCouncillor Kelly Christman (403) 641-2274 christmank@newellmail.caDIVISION 6BassanoCouncillor Ellen Unruh (403) 793-3369 unruhe@newellmail.caDIVISION 7RosemaryCouncillor Brian de Jong (403) 501-8378 dejongb@newellmail.caDIVISION 8DuchessReeve Molly Douglass (403) 363-9203 douglassm@newellmail.caDIVISION 9GemCouncillor Lionel Juss (403) 362-0947 jussl@newellmail.caDIVISION 10Brooks County of Newell - 2020 Annual Financial ReportPage 10 ORGANIZATIONAL CHART REEVE & COUNCIL CHIEF ADMINISTRATIVE OFFICER EXECUTIVE ASSISTANT MANAGER OF OPERATIONS MANAGER OF AGRICULTURAL SERVICES MUNICIPAL ENFORCEMENT SUPERVISOR MANAGER OF PLANNING, DEVELOPMENT & ENGINEERING DIRECTOR OF AGRICULTURAL SERVICES DIRECTOR OF INFORMATION & TECHNOLOGY DIRECTOR OF MUNICIPAL SERVICES DIRECTOR OF CORPORATE SERVICES MANAGER OF CORPORATE SAFETY SERVICES RURAL FIRE & EMERGENCY SERVICES COORDINATOR FLEET SERVICES SUPERVISOR County of Newell - 2020 Annual Financial Report Page 11 GFOA CANADIAN AWARD FOR FINANCIAL REPORTING The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Canadian Award for Financial Reporting to the County of Newell for its annual financial report for the fiscal year ended December 31, 2019. The Canadian Award for Financial Reporting program was established to encourage municipal governments throughout Canada to publish high quality financial reports and to provide peer recognition and technical guidance for officials preparing these reports. In order to be awarded a Canadian Award for Financial Reporting, a government unit must publish an easily readable and efficiently organized annual financial report, whose contents conform to program standards. Such reports should go beyond the minimum requirements of generally accepted accounting principles and demonstrate an effort to clearly communicate the municipal government’s financial picture, enhance an understanding of financial reporting by municipal governments, and address user needs. Government Finance Officers Association Presented to County of Newell For its Annual December 31, 2019 Executive Director/CEO Financial Report for the Year Ended Financial ReportingforCanadian Award Text38:Alberta A Canadian Award for Financial Reporting is valid for a period of one year only. We believe our current report continues to conform to the Canadian Award for Financial Reporting program requirements, and we are submitting it to GFOA. County of Newell - 2020 Annual Financial ReportPage 12 MESSAGE FROM THE REEVE 2020 was a history making year due to the pandemic and its resulting economic adversity and societal stress. Thank you to all County of Newell residents for their respect and concern for one another throughout this time. Let’s continue to hold that “community” attitude, remembering to support our local businesses, as well as one another in the weeks ahead. Provision of 2020 municipal services continued effectively in the County, including the operation of our Regional Emergency Operation Centre when COVID numbers were high last spring. As always, our three main service areas - agriculture, planning/development, and public works - are highlighted within this annual report, along with financial information. Much of that financial information has been prepared by Matt Fenske, who has been our Manager of Finance for the last nine years. Matt has recently become our Chief Administrative Officer, following Kevin Stephenson’s resignation as planned for several years. Although Kevin’s leadership will be missed, Matt and his colleagues have been mentored in excellent fashion to carry on in their roles. Our Council has been meeting virtually for the last twelve months, usually from our homes. This method has proved to be successful in carrying out decision making and will remain a viable option for valuable use in the future, even as we hopefully move back to in person meetings. Anyone involved with organizations or committees this past year has been forced to learn all about electronic meeting procedures. This is a good thing. However, the personal contact and nuances of being together “around the table” will never totally be replaced by computer connection. In the summer of 2020, the provincial government made public their proposals for an Assessment Model Review that would determine rates for regulated properties such as oil/gas wells and pipelines. This update, the first since 2005, caused much concern for our municipality and many others who rely on this non-residential assessment as a significant portion of their tax base. Although some adjustments were made, this issue remains a major concern for the County of Newell. Ongoing work to educate our Alberta MLA’s and Ministers continues. Objective, data driven methods to value properties must be put into place. Comparisons with other provinces must be valid when municipal responsibilities are cited, or “apples to apples”. The mill rates and efficiencies of each rural municipality within Alberta need to be considered individually before provincial decisions are made. Sustainability and economic growth obviously remain priorities for our Newell Council and staff. As mandated provincially, Intermunicipal Collaborative Frameworks (ICF’s) were completed with our portion of $1.5 million shared with our four urban neighbours in 2020. Much of this is for recreation services. A Recreation Facility Funding Initiative was also begun to discuss future capital replacements with county reps from hamlet areas. Somewhat different from spring 2020 is a sense of optimism now with early warm weather arriving and with vaccinations happening. Let us hope that we get back to more normal living as soon as possible. Keep in mind this is a municipal election year in Alberta. As always, please feel free to contact your Councillors or Staff by phone or e-mail. It remains important to get accurate information as required, have your questions answered, or report a concern. County of Newell - 2020 Annual Financial Report Page 13 REPORT FROM THE CONTROLLER Introduction The annual financial report provides readers with an opportunity to assess the County’s financial activities and available resources. It also provides an opportunity to analyze and comment on the principal features of the financial information contained in the 2020 audited Consolidated Financial Statements and to highlight key financial results that occurred during the year. Management at the County of Newell is responsible for the information contained in the annual financial report. Photo by L. Hale County of Newell - 2020 Annual Financial ReportPage 14 REPORT FROM THE CONTROLLER 2020 Financial Highlights Consolidated Statement of Financial Position The County improved its already strong financial position in 2020. Financial assets increased by $3.3 million while liabilities decreased by $2.2 million resulting in an overall increase in net financial assets of $5.5 million. The allowance for uncollectible taxes decreased by $185 thousand as balances owing from some oil and gas companies were written off. Non-financial assets, which consist primarily of tangible capital assets and inventory for consumption, decreased by $902 thousand. The changes in net financial assets and non-financial assets result in a net increase in accumulated surplus of $4.5 million. Consolidated Statement of Financial Activities Revenues were $2.6 million higher than budgeted or 107.4% of budgeted revenues. This is largely due to well-drilling activity in the region which drove well-drilling tax revenues $343 thousand higher than budgeted and returns on investments that were $1.8 million higher than budgeted. Expenses were $421 thousand higher than budgeted or 101.5% of budgeted expenses. As a result of the COVID-19 pandemic, Council approved a discount of 8% for taxes paid by the June 15th deadline at a cost of $1.8 million with funding from the stabilization fund. Tax write offs were $631 thousand higher than budgeted due to oil and gas taxpayers that went bankrupt during the year. Staffing costs were under budget due to lower than expected training expenses, lower overtime costs in the Municipal Services and Agricultural Services departments and staffing which was budgeted for but not hired during the year. Contracted services were under budget primarily due to lower than expected repairs and maintenance on roads and buildings. Materials, goods, supplies and utilities were under budget primarily due to lower than expected repairs and maintenance costs on vehicles and equipment, bridge file work which was not completed and a reduction in the use of road maintenance materials such as gravel and calcium. Transfers to organizations were higher than budgeted as ICF intermunicipal agreements with new funding arrangements were finalized during the year. The County transferred $6.3 million to the Province for the highway 876 paving partnership and for road widening and signal installation at 15th Avenue and 2nd Street at the edge of Brooks. The County ended the year with an annual surplus of $4.5 million. Consolidated Statement of Change in Net Financial Assets Net financial assets increased by $5.5 million, for a total of $98.8 million in net financial assets at the end of the year. This indicates the County can afford to settle its liabilities and is positioned well for replacing or rehabilitating its tangible capital assets as they reach the end of their useful lives. Consolidated Statement of Cash Flows Cash and cash equivalents decreased by $15.1 million in 2020. Operations provided cash of $12.4 million, $5.2 million was used to purchase tangible capital assets, $18.6 million was provided by investing activities and $3.7 million was used to repay long term debt. County of Newell - 2020 Annual Financial Report Page 15 REPORT FROM THE CONTROLLER MANAGEMENT REPORTING & CONTROL The major components of the County’s financial management and control programs include the budget process, accounting procedures, external audit, and various policies which are described below. Budget Process On an annual basis, Council considers a proposed operating budget and a ten-year capital forecast and adopts the operating and capital budgets for the coming year. The budget process involves council, department heads, staff and the public. Council approves the budget taking into account current economic conditions, provincial policy changes and service needs within the County. It should be noted that under provincial legislation sufficient revenues must be raised to meet all budgeted expenditures. After the budget is adopted by Council, expenditures are controlled against budget by formal policies and financial systems designed specifically to prevent budget overruns. Accounting Procedures The County’s accounting system and related internal controls are designed to provide reasonable assurance that financial records are complete and accurate and that assets are safeguarded against loss from unauthorized use or disposition. The County’s Purchasing and Budget Variance policies ensure that controls and reporting requirements are appropriate. Generally accepted accounting principles for local governments are adhered to. External Audit Council is required by the Municipal Government Act to engage independent auditors to express an opinion as to whether the County’s financial statements present fairly, in all material respects, the County’s operating results and financial position. The auditors have full and free access to all County records and they meet periodically with staff to discuss matters arising from the audit or from new policies and procedures. The auditors also provide the County with a management letter providing comments on internal controls. While Council engages an independent auditor to express an opinion on the financial statements, the County’s management is responsible for the preparation of the financial statements and the integrity and objectivity of the financial information and representations contained in the financial statements. Purchasing Policy The County ensures that consistent procedures are followed for purchases through Purchasing Policy 2018-PAD-051 which sets expenditure limits for the County. The policy ensures that items purchased have been approved through the budget process or by separate resolution of Council. County of Newell - 2020 Annual Financial ReportPage 16 Investment Policy The County’s excess funds are invested in accordance with Investment Policy 2019-PAD-032. This policy has as its objectives the preservation of capital, maintenance of liquidity and the realization of a competitive rate of return. Municipal investments are governed by restrictive legislation under the Municipal Government Act. The County’s investment policy meets all of these requirements. Restricted Surplus Policy The County has established specific restricted surplus funds, through Restricted Surplus Policy 2017-PAD-062, to provide for emergent financial needs, stabilize tax rates, set aside funds for the replacement of vehicles, machinery, equipment, infrastructure and facilities and to minimize its financing needs. Maintaining financial health and stability is the guiding principle behind this policy. FINANCIAL INDICATORS DISCUSSION & ANALYSIS The 2020 Consolidated Financial Statements are prepared in compliance with Public Sector Accounting Standards. The consolidated financial statements provide a snapshot of the County’s financial position at its fiscal year end (December 31) and the results of its operations, and changes in both cash flow and net assets for the preceding year. However, the consolidated financial statements do not provide a complete indication of the financial health of the County nor indicate how well it is performing in relation to its economic and fiscal environment. The Annual Financial Report seeks to expand on and explain information in the financial statements by applying PSAB issued Statement of Recommended Practices (SORP) 4: Indicators of Financial Condition. This information may help financial statement users better understand the risks facing the County in maintaining the programs and services it currently provides, as well as the policy and operational decisions it must make in light of its financial health. This SORP is not part of generally accepted accounting principles (GAAP) and there is no requirement for governments to implement its recommendations. Although there are numerous indicators to assess a government’s financial condition, the SORP recommends that, at a minimum, indicators related to sustainability, flexibility and vulnerability be considered. Definitions of these assessors follow, as well as a selection of indicators related to each. REPORT FROM THE CONTROLLER County of Newell - 2020 Annual Financial Report Page 17 SUSTAINABILITY Sustainability measures the ability of the County to maintain its existing programs and services, including maintaining its financial obligations to creditors, without increasing its debt or raising taxes. The following indicators have been selected to assess sustainability. Annual Surplus or Deficit This annual result indicates the extent to which the County’s revenue is more than its expenses during that year. A surplus means revenues exceed expenses while a deficit may indicate the County has not lived within its means. Long-term financial sustainability is dependent upon ensuring that on average, over time, expenses are less than revenues. This requires current taxpayers to fully meet the cost of services. The presence of a surplus does not necessarily represent financial sustainability. When a surplus is achieved, the amount is available for capital expenditures over and above amortization expense. Amortization expense is based on historic cost and does not reflect the increased cost of future asset replacements. Taking future asset replacement costs into account in determining the appropriate level of surplus is a critical step toward financial sustainability. REPORT FROM THE CONTROLLER SUSTAINABILITY Sustainability measures the ability of the County to maintain its existing programs and services, including maintaining its financial obligations to creditors, without increasing its debt or raising taxes. The following indicators have been selected to assess sustainability. Annual Surplus or Deficit This annual result indicates the extent to which the County’s revenue is more than its expenses during that year. A surplus means revenues exceed expenses while a deficit may indicate the County has not lived within its means. Long-term financial sustainability is dependent upon ensuring that on average, over time, expenses are less than revenues. This requires current taxpayers to fully meet the cost of services. The presence of a surplus does not necessarily represent financial sustainability. When a surplus is achieved, the amount is available for capital expenditures over and above amortization expense. Amortization expense is based on historic cost and does not reflect the increased cost of future asset replacements. Taking future asset replacement costs into account in determining the appropriate level of surplus is a critical step toward financial sustainability. The 2017 deficit was driven by the transfer of water infrastructure assets with a value of $33.3 million to Newell Regional Services Corporation (NRSC) during the year. These assets were being held in trust for NRSC as part of the grant funded Regional Water project. NRSC issued 2,986 Class H preferred shares with a value of $2.98 million to the County for its contribution. Financial Assets-to-Liabilities The 2017 deficit was driven by the transfer of water infrastructure assets with a value of $33.3 million to Newell Regional Services Corporation (NRSC) during the year. These assets were being held in trust for NRSC as part of the grant funded Regional Water project. NRSC issued 2,986 Class H preferred shares with a value of $2.98 million to the County for its contribution. County of Newell - 2020 Annual Financial ReportPage 18 REPORT FROM THE CONTROLLER Financial Assets-to-Liabilities This indicator shows the extent to which the County’s future revenues will be required to pay for past transactions or events. A ratio greater than one indicates that financial assets are sufficient to meet obligations and to finance future operations while a ratio less than one may mean a reliance on future revenues or increasing debt to pay for past decisions. This ratio increased by 1.54 in 2020. The County remains in a very strong financial position with $8.89 in financial assets for every $1.00 of financial liability. These financial assets support the County’s long-term financial plan for replacing and rehabilitating its capital assets as they reach the end of their useful lives. This indicator shows the extent to which the County’s future revenues will be required to pay for past transactions or events. A ratio greater than one indicates that financial assets are sufficient to meet obligations and to finance future operations while a ratio less than one may mean a reliance on future revenues or increasing debt to pay for past decisions. This ratio increased by 1.54 in 2020. The County remains in a very strong financial position with $8.89 in financial assets for every $1.00 of financial liability. These financial assets support the County’s long-term financial plan for replacing and rehabilitating its capital assets as they reach the end of their useful lives. County of Newell - 2020 Annual Financial Report Page 19 REPORT FROM THE CONTROLLER Taxes Receivable as a % of Tax Levies The following chart reflects the total uncollected property taxes as a percentage of the total tax levy. Every year, a percentage of property owners are unable to pay property taxes for a variety of reasons. If this percentage increases over time, it may indicate an overall decline in the County’s economic health. Additionally, as uncollected property taxes rise, liquidity decreases. Taxes Receivable as a % of Tax Levies The following chart reflects the total uncollected property taxes as a percentage of the total tax levy. Every year, a percentage of property owners are unable to pay property taxes for a variety of reasons. If this percentage increases over time, it may indicate an overall decline in the County’s economic health. Additionally, as uncollected property taxes rise, liquidity decreases. Taxes Receivable as a % of Tax Levies The following chart reflects the total uncollected property taxes as a percentage of the total tax levy. Every year, a percentage of property owners are unable to pay property taxes for a variety of reasons. If this percentage increases over time, it may indicate an overall decline in the County’s economic health. Additionally, as uncollected property taxes rise, liquidity decreases. County of Newell - 2020 Annual Financial ReportPage 20 FLEXIBILITY Flexibility is the degree to which the County can change its debt burden or raise taxes to respond to rising commitments. Increasing debt and taxation reduces flexibility and the County’s ability to respond to changing circumstances. Debt Servicing Costs-to-Revenues The ratio of debt servicing costs-to-revenues indicates the amount of current revenue that is required to service past borrowing decisions and, as a result, is not available for programs and services. REPORT FROM THE CONTROLLER FLEXIBILITY Flexibility is the degree to which the County can change its debt burden or raise taxes to respond to rising commitments. Increasing debt and taxation reduces flexibility and the County’s ability to respond to changing circumstances. Debt Servicing Costs-to-Revenues The ratio of debt servicing costs-to-revenues indicates the amount of current revenue that is required to service past borrowing decisions and, as a result, is not available for programs and services. 2016 2017 2018 2019 2020 Debt servicing costs 6,276,518 6,367,116 5,534,150 3,861,241 2,623,837 Revenues 38,393,510 38,131,628 40,216,861 41,678,811 38,375,854 Ratio 16.35%16.70%13.76%9.26%6.84% County of Newell - 2020 Annual Financial Report Page 21 Debt Limits and Debt Payments The County is limited in the amount of debt that it can incur beyond the limitations specified in Alberta Regulation 255/00. The maximum allowable debt the County could hold within this regulation is approximately $57.6 million. The County held outstanding debt balances representing 10.4% of this maximum allowable amount at the end of 2020. This leaves the County with approximately $51.6 million of borrowing room. REPORT FROM THE CONTROLLER Debt per capita is expected to decrease steadily moving forward. The last of the debentures supporting the rural water project is scheduled to be repaid in full by 2023. Debt Limits and Debt Payments The County is limited in the amount of debt that it can incur beyond the limitations specified in Alberta Regulation 255/00. The maximum allowable debt the County could hold within this regulation is approximately $57.6 million. The County held outstanding debt balances representing 10.4% of this maximum allowable amount at the end of 2020. This leaves the County with approximately $51.6 million of borrowing room. Debt per capita is expected to decrease steadily moving forward. The last of the debentures supporting the rural water project is scheduled to be repaid in full by 2023. 2016 2017 2018 2019 2020 Debt limit Maximum allowable debt 54,325,790 57,197,442 60,325,292 62,518,217 57,563,781 Total debt 25,952,347 20,810,186 14,882,255 9,648,333 5,996,703 Percentage used 47.8%36.4%24.7%15.4%10.4% Maximum Allowable Annual Debt Payment Maximum allowable annual debt payment 9,054,298 9,532,907 10,054,215 10,419,703 9,593,964 Annual payments on existing debt 6,336,321 6,367,116 5,534,150 3,861,241 2,623,837 Percentage used 70.0%66.8%55.0%37.1%27.3% Debt Per Capita 3,449 2,766 1,978 1,282 797 County of Newell - 2020 Annual Financial ReportPage 22 Restricted Surplus Restricted surplus funds are included as part of the County’s accumulated surplus. Restricted surplus funds are a critical component of the County’s long-term financing and capital plan. The County’s Restricted Surplus Policy 2017-PAD-062 establishes specific restricted surplus funds to: Stabilize tax rates in the face of variable and uncontrollable factors (consumption, interest rates, unemployment rates, changes in subsidies) Provide financing for one-time or short-term requirements without permanently impacting the tax and utility rates Make provisions for replacement or acquisitions of assets and infrastructure that are currently being consumed and amortized Avoid spikes in funding requirements of the capital plan by reducing the reliance on long-term debt borrowings Provide flexibility to manage debt levels and protect the municipality’s financial position Provide for future liabilities incurred in the current year but paid for in the future Provide a source of internal financing Ensure adequate cash flows REPORT FROM THE CONTROLLER Restricted surplus offers liquidity which enhances the County’s flexibility in addressing operating requirements and in permitting the County to temporarily fund capital projects internally, allowing it time to access debt markets and take advantage of favourable conditions. The level of restricted surplus funds required will vary for a number of reasons including: Services provided by the County Age and condition of infrastructure, inventory of fleet and vehicles supporting County operations Economic conditions and projections Internal debt and restricted surplus policies Restricted Surplus Policy 2017-PAD-062 specifies minimum balances to be maintained for the restricted surplus funds listed below. The County is in compliance with this policy as at December 31, 2020. Restricted Surplus Restricted surplus funds are included as part of the County’s accumulated surplus. Restricted surplus funds are a critical component of the County’s long-term financing and capital plan. The County’s Restricted Surplus Policy 2017-PAD-062 establishes specific restricted surplus funds to: • Stabilize tax rates in the face of variable and uncontrollable factors (consumption, interest rates, unemployment rates, changes in subsidies) • Provide financing for one-time or short-term requirements without permanently impacting the tax and utility rates • Make provisions for replacement or acquisitions of assets and infrastructure that are currently being consumed and amortized • Avoid spikes in funding requirements of the capital plan by reducing the reliance on long-term debt borrowings • Provide flexibility to manage debt levels and protect the municipality’s financial position • Provide for future liabilities incurred in the current year but paid for in the future • Provide a source of internal financing • Ensure adequate cash flows Restricted surplus offers liquidity which enhances the County’s flexibility in addressing operating requirements and in permitting the County to temporarily fund capital projects internally, allowing it time to access debt markets and take advantage of favourable conditions. The level of restricted surplus funds required will vary for a number of reasons including: • Services provided by the County • Age and condition of infrastructure, inventory of fleet and vehicles supporting County operations • Economic conditions and projections • Internal debt and restricted surplus policies Restricted Surplus Policy 2017-PAD-062 specifies minimum balances to be maintained for the restricted surplus funds listed below. The County is in compliance with this policy as at December 31, 2020. Restricted Surplus Restricted surplus funds are included as part of the County’s accumulated surplus. Restricted surplus funds are a critical component of the County’s long-term financing and capital plan. The County’s Restricted Surplus Policy 2017-PAD-062 establishes specific restricted surplus funds to: • Stabilize tax rates in the face of variable and uncontrollable factors (consumption, interest rates, unemployment rates, changes in subsidies) • Provide financing for one-time or short-term requirements without permanently impacting the tax and utility rates • Make provisions for replacement or acquisitions of assets and infrastructure that are currently being consumed and amortized • Avoid spikes in funding requirements of the capital plan by reducing the reliance on long-term debt borrowings • Provide flexibility to manage debt levels and protect the municipality’s financial position • Provide for future liabilities incurred in the current year but paid for in the future • Provide a source of internal financing • Ensure adequate cash flows Restricted surplus offers liquidity which enhances the County’s flexibility in addressing operating requirements and in permitting the County to temporarily fund capital projects internally, allowing it time to access debt markets and take advantage of favourable conditions. The level of restricted surplus funds required will vary for a number of reasons including: • Services provided by the County • Age and condition of infrastructure, inventory of fleet and vehicles supporting County operations • Economic conditions and projections • Internal debt and restricted surplus policies Restricted Surplus Policy 2017-PAD-062 specifies minimum balances to be maintained for the restricted surplus funds listed below. The County is in compliance with this policy as at December 31, 2020. County of Newell - 2020 Annual Financial Report Page 23 Tangible Capital Assets The County’s tangible capital assets (TCA) decreased by a net $1.8 million in 2020 which includes new asset acquisitions of $5.5 million offset by $6.9 million in amortization expense and asset disposals with a net book value of $362 thousand. Significant acquisitions include: $1.75 million – Road reconstruction $1.46 million – EID Drainage Partnership $922 thousand – Vehicles $659 thousand – Machinery and equipment $323 thousand – IT Infrastructure $321 thousand – Fire Apparatus Net Book Value of Tangible Capital Assets-to-Cost of Tangible Capital Assets Net book value of TCA compared to total cost of TCA measures the extent to which the estimated useful lives of the County’s tangible capital assets are available to provide its products and services. As at December 31, 2020 approximately 70% of the County’s assets useful lives remain available to provide future services. REPORT FROM THE CONTROLLER Tangible Capital Assets The County’s tangible capital assets (TCA) decreased by a net $1.8 million in 2020 which includes new asset acquisitions of $5.5 million offset by $6.9 million in amortization expense and asset disposals with a net book value of $362 thousand. Significant acquisitions include: • $1.75 million – Road reconstruction • $1.46 million – EID Drainage Partnership • $922 thousand – Vehicles • $659 thousand – Machinery and equipment • $323 thousand – IT Infrastructure • $321 thousand – Fire Apparatus Net Book Value of Tangible Capital Assets-to-Cost of Tangible Capital Assets Net book value of TCA compared to total cost of TCA measures the extent to which the estimated useful lives of the County’s tangible capital assets are available to provide its products and services. As at December 31, 2020 approximately 69% of the County’s assets useful lives remain available to provide future services. 2016 2017 2018 2019 2020 NBV OF TCA 226,952,338 202,274,436 199,229,568 195,333,426 193,577,678 COST OF TCA 291,174,700 272,222,982 275,077,808 277,753,203 280,867,985 NBV OF TCA-TO-COST OF TCA 77.94%74.30%72.43%70.33%68.92% Page 24 County of Newell - 2020 Annual Financial Report VULNERABILITY Vulnerability is the degree to which the County becomes dependent on, and therefore vulnerable to, sources of funding outside its control or influence. The lower the County’s own-source revenue is, the more it relies on fiscal decisions of others. Government Transfers-to-Total Revenue This indicator demonstrates the level of government transfers compared to total revenues. The higher the percentage, the more reliance the County puts on receipt of funds from other levels of government. These transfers are dependent on policy decisions which are outside the control of the County. The inset chart illustrates that a significant portion of total revenues in some years are attributable to government transfers. It is important to note that the majority of these government transfers have been used for financing major capital projects. The County’s ability to undertake such projects is dependent in large part on grant funding from other levels of government. It is management’s opinion that the County is not exposed to significant risk in terms of its reliance on government transfers for operating to support its products and services. Respectfully Submitted, Stephanie Hanson, CPA, CGA Controller April 8, 2021 REPORT FROM THE CONTROLLER VULNERABILITY Vulnerability is the degree to which the County becomes dependent on, and therefore vulnerable to, sources of funding outside its control or influence. The lower the County’s own-source revenue is, the more it relies on fiscal decisions of others. Government Transfers-to-Total Revenue This indicator demonstrates the level of government transfers compared to total revenues. The higher the percentage, the more reliance the County puts on receipt of funds from other levels of government. These transfers are dependent on policy decisions which are outside the control of the County. The inset chart illustrates that a significant portion of total revenues in some years are attributable to government transfers. It is important to note that the majority of these government transfers have been used for financing major capital projects. The County’s ability to undertake such projects is dependent in large part on grant funding from other levels of government. It is management’s opinion that the County is not exposed to significant risk in terms of its reliance on government transfers for operating to support its products and services. Respectfully Submitted, Stephanie Hanson, CPA, CGA Controller April 8, 2021 2016 2017 2018 2019 2020 Government transfers for capital 3,868,559 173,520 99,880 842,805 1,040,021 Government transfers for operating 635,998 638,510 685,888 4,149,246 600,370 Total transfers 4,504,557 812,030 785,768 4,992,051 1,640,391 Total revenue 40,990,175 38,305,148 40,211,868 42,521,616 39,415,875 Government transfers-to-total revenue 11.0%2.1%2.0%11.7%4.2% Transfers for capital-to-total transfers 85.9%21.4%12.7%16.9%63.4% Transfers for operating-to-total transfers 14.1%78.6%87.3%83.1%36.6% VULNERABILITY Vulnerability is the degree to which the County becomes dependent on, and therefore vulnerable to, sources of funding outside its control or influence. The lower the County’s own-source revenue is, the more it relies on fiscal decisions of others. Government Transfers-to-Total Revenue This indicator demonstrates the level of government transfers compared to total revenues. The higher the percentage, the more reliance the County puts on receipt of funds from other levels of government. These transfers are dependent on policy decisions which are outside the control of the County. The inset chart illustrates that a significant portion of total revenues in some years are attributable to government transfers. It is important to note that the majority of these government transfers have been used for financing major capital projects. The County’s ability to undertake such projects is dependent in large part on grant funding from other levels of government. It is management’s opinion that the County is not exposed to significant risk in terms of its reliance on government transfers for operating to support its products and services. Respectfully Submitted, Stephanie Hanson, CPA, CGA Controller April 8, 2021 2016 2017 2018 2019 2020 Government transfers for capital 3,868,559 173,520 99,880 842,805 1,040,021 Government transfers for operating 635,998 638,510 685,888 4,149,246 600,370 Total transfers 4,504,557 812,030 785,768 4,992,051 1,640,391 Total revenue 40,990,175 38,305,148 40,211,868 42,521,616 39,415,875 Government transfers-to-total revenue 11.0%2.1%2.0%11.7%4.2% Transfers for capital-to-total transfers 85.9%21.4%12.7%16.9%63.4% Transfers for operating-to-total transfers 14.1%78.6%87.3%83.1%36.6% Page 25County of Newell - 2020 Annual Financial Report Photo by D. Wiebe County of Newell - 2020 Annual Financial ReportPage 26 AGRICULTURAL SERVICES REPORT Agricultural Service Boards (ASB) became an Alberta reality in 1945, making 2020 the 75th anniversary of their creation. Although we will not remember the year for this great milestone, Agriculture is a still a staple in every community and the County of Newell is no different. Your ASB continued to support the agriculture industry as best it could and completed the programming you will read about today. Your ASB’s mission is: “Working together we strive to guide viable growth and sustainability in the County of Newell by implementing programs in areas of weed, pest and soil control as well as programs focused on sound agronomics and environmental stewardship.” Our Core values include: • Creating Partnerships • Being Proactive • Being Client Focused • Being Credible • Encouraging Landowner Cooperation • Encouraging Resource Conservation Programming revolving around weed, pest and soil control are still the priority, but a combination of environmental programs and vegetation management are part of the mix. Outlined in the report are the highlights. Weed Control The ASB manages vegetation in municipal rights of ways, municipal owned land, hamlet open spaces and within our partner municipalities. Regulated weed species under the Weed Control Act are top priority and present a constant battle. For this reason, the ASB employs 4 Vegetation Management Technicians to aid ratepayers in their control efforts as well as identify risks and maintain established infestations. Invasive species spread via transportation corridors and water ways and the ASB keeps a close eye on those vectors. You have access to some well-trained weed control and identification staff. If you have tough to control weeds or are having trouble identifying threats, please ask them for help. County of Newell - 2020 Annual Financial Report Page 27 AGRICULTURAL SERVICES REPORT Pest Control Over the last ¾ of a century the species of pests may have changed but monitoring and reporting have remained a constant. This season the ASB surveyed: • 211 canola fields during flowering and 3 fields during swathing for signs of Clubroot • 52 locations for grasshopper populations • 825 sites for Coyote RAI (Relative Abundance Index) • 6 potato fields for signs of Bacterial Ring Rot • 8 corn fields for signs of Fusarium graminearum • 7 wheat fields for signs of Fusarium graminearum The ASB also offers programming and sell pest control products to help mitigate the effects of pests in our County. They include: 1. Coyote Control Incentive Program (1925 coyotes harvested) 2. Trap Rentals – Skunk/Racoon 6 renters, 166 rental days, 3. Magpie traps 3 Renters, 27 rental days, sold 1 new trap 4. Richardson Ground Squirrel control (3054 bottles of 2%LSC sold, 118 landowners) 5. Grain bugs and Richardson Ground Squirrels – (Sold 27 Phostoxin Flasks, 3 landowners) 6. Installed 3 new hawk nesting poles on County owned land 7. Operated 2 hamlet and 1 Airport gopher control programs using Rozol RTU (3 weeks) 8. Rabies Surveillance Partnership (1 week of trapping/monitoring) 9. Disinfectant one potato cellar for storage pests County of Newell - 2020 Annual Financial ReportPage 28 AGRICULTURAL SERVICES REPORT Environmental ProgrammingThrough a partnership with the Alberta Government, the ASB offers environmental programming. This programming encourages information sharing and helps us partner with others to provide different learning opportunities. It also enables us to commit time to Environmental Farm Plans and some CAP grant help. In 2020 the following opportunities were available and utilized: 1. 6 Environmental Farm Plans completed others started. 2. Nutrient Management Workshop - 40 Participants 3. Helped organize the Nutrient Management Seminar Series (2021 delivery) 4. Hosted Virtual Rural Roots Ag Days Your ASB is also proud to sponsor and work with: 1. Alberta Farm Animal Care Association 2. Farm Safety Center 3. Farming Smarter 4. Alberta Invasive Species Council 5. Ag For Life 6. South Region Municipalities (Virtual Weed/Pest ID training (100 Participants)) MowingThe ASB operates 2 distinct mowing programs. Right of way mowing and County owned property mowing. Both take place to compliment weed control efforts, improve drainage, improve right of way safety and for aesthetics. In total the ASB mowed 4100 miles (one way) on the roadsides and invested over 1500 hours maintaining vegetation in hamlets, subdivisions and airports. County of Newell - 2020 Annual Financial Report Page 29 AGRICULTURAL SERVICES REPORT Rental EquipmentThe ASB has a number of equipment rentals available. Rental units are charged out as close to cost recovery as possible. Usage for 2020 is as follows: 1. Loading Chute and Panels – 6 renters 2. Calf table – 4 renters 3. Livestock scale – 9 renters 4. 30 foot weed wipe – 3 renters. 5. Boomless sprayers (2) – 1 renter 6. Three Point Hitch Sprayer – 2 renters 7. Quad Sprayer – 1 renter 8. Double disc drill - 13 renters, 1801.9 acres 9. No Till Drills (2) – 56 renters, 3536.4 acres 10. Brillion Seeders (2) – 8 renters, 449.2 acres 11. Tandem Axle BBQ – 2 users Emerson Bridge Park CampgroundEmerson Bridge Campground is a beautiful campground located where Highway 36 intersects the Red Deer River. This campground boasts large sites, large cottonwood trees and the peaceful serenity of nature. The campground has a total of 64 designated campsites, 49 of which are power sites, 9 non-power sites and 6 overflow sites. Beyond all of these great features, the campground is owned by the County and the operation and maintenance falls under the responsibility of the ASB. The 2020 camping season kicked off with only long term stays allowed. But shortly after opening for long term, COVID-19 restrictions were eased and we were able to open for regular business. Overall, Emerson had a 43% occupancy rate, with our highest occupancy rates being powered sights on weekends being 66%. Total registration revenue for 2020 was $90,975, which is up from the 2019 $78,066. County of Newell - 2020 Annual Financial ReportPage 30 AGRICULTURAL SERVICES REPORT Other Programming Some other great programs and activities include the Calgary Stampede Farm Family Award, Rural Beautification Program, seed cleaning plant inspections/licensing, roadside seeding (27 miles) and the ASB is happy to offer various pest and agronomic recommendations. The ASB strives to partner with other organizations in projects of mutual benefit. These partners include Alberta Conservation Association, Newell Regional Solid Waste Management Authority, Partners in Habitat Development, Canadian Pacific Railway, Volker Stevin, Alberta Infrastructure, Grasslands Public Schools, the local Oil and Gas industry, TD Tree Days and other municipalities. The ASB continues to be active in promoting and protecting agriculture. If you have questions/concerns or require more information on any of the programming, please feel free to contact the ASB office at 403-362-3266 or check out our website www.countyofnewell.ab.ca and remember to follow the County on social media for timely information sharing. ASB related issues and concerns are dealt with at regular Council meetings. Respectfully Submitted, Todd Green, Director of Agricultural Services Photo by L. Virostek County of Newell - 2020 Annual Financial Report Page 31 Photo by O. Liboiron County of Newell - 2020 Annual Financial ReportPage 32 MUNICIPAL SERVICES REPORT Municipal Services consists of multiple smaller departments which include Fleet Services, Municipal Enforcement, Public Works & Engineering - Transportation (Roads), Airport, Water, Wastewater (Sewer), Storm Water, Solid Waste Services, and Planning & Development — all necessary Departments to encourage and support sustainable growth and quality of life. Through responsible management, innovation and teamwork, these Departments strive to provide dependable, high levels of service at reasonable costs. The following are key highlights from Departments in 2020. Municipal Enforcement Services Municipal Enforcement Department continues with service provisions in partner jurisdictions including the Town of Bassano, Villages of Duchess and Rosemary, the Eastern Irrigation District, and the Village of Hussar. Partnership services are cost recovered on an hourly rate basis under contract. The Department continues to engage and educate the public. Monthly priorities for the department match that of the Selective Traffic Enforcement Program (STEP) of the Province, which are identified on the Alberta Traffic Safety Calendar. The Department patrolled partner jurisdictions for 960 hours, same as 2019. In addition to this, the Department patrolled County jurisdictions, including rural areas, multi-lot subdivisions, and Hamlets. The Department issued 165 tickets and 228 warnings in 2020 related to Provincial offences within the County and partner jurisdictions. The Top Five Provincial offenses, representing 66% of all offences in 2020, included violations of: Speeding (160), Traffic Safety Act (44), Vehicle Equipment Regulation (23), Fail to Produce Insurance (17), and Commercial Vehicle Safety Regulation (14). 3 tickets and 160 warnings were also issued in 2020 related to Bylaw offences within the County and partner jurisdictions. The Top Five Bylaw offenses, representing 66% of all Bylaw offences in 2020, included violations of: Unsightly Property (48), Sidewalk Snow/Ice Removal (24), Sprinkling of Road Allowance (15), Dog Control – At Large (11), and Unauthorized Road Use (9). Photo by M. Harbicht County of Newell - 2020 Annual Financial Report Page 33 MUNICIPAL SERVICES REPORT Public Works & Engineering Services The Public Works & Engineering departments collectively and collaboratively manage 1456 kms of gravel road and 232 kms of paved road surfaces, through established preventative maintenance and capital improvement programs. The Departments strive to provide well maintained gravel surfaced roads utilizing 8 grader operators responsible for an average of 185 kms of gravel road each. It takes 20 working days (1 month) to complete one round of maintenance services per beat. Over the course of the spring, summer, and fall maintenance seasons grader operators in 2020 performed 8570 kms of gravel road surface maintenance, compared to 8881 kms in 2019. Additionally, the Departments re-surfaced 387.2 kms, or 26.5% of the total gravel road surfaces in the County, compared to 388.1 kms (26.6%) in 2019. The 2020 program consumed 40,228 cubic meters of crushed aggregates and was completed at a total cost of $687,273.00 averaging $1,774.98/km compared to 42,012 cubic meters at a total cost of $689,498.00 averaging $1,776.60/km in 2019. The Departments offer Dust Abatement services where 104,309 linear meters (104.31 kms) of dust abatement were applied to gravel surfaced roads in 2020 compared to 129,951 linear meters (129.95 kms) in 2019. The program consisted of 281 applications from Residential (256) and Non- Residential (25), compared to 306 applications from Residential (280) and Non-Residential (26) in 2019. Including County Aggregate Haul Roads and intersection treatments, the 2020 program consumed 1,531,580 litres of dust abatement product over 11 working days with two active crews, at a total cost of $400,561.57, averaging $3.84/Lm. In comparison, the 2019 program consumed 2,120,570 litres, taking 16 working days to complete, at a total cost of $588,434.00, averaging $4.53/Lm. The Departments completed 41.38 kms of road shoulder pulls in 2020 in effort to return roads to standard classified width, to elevate and re-shape the road surface. In 2019 the program rehabilitated 48.25 kms of road. In addition to the gravel road network the County provides a ban free paved road network. The ban free driving surface permits producers to transport commodities from field to market year-round, unrestricted. In 2020 the County continued the grade, base, and pave work on Highway 876 from Highway 1 to Highway 544 in partnership with Alberta Transportation. The project was completed in early summer and closed with a project cost of $20,098,053 for the 22.52 kms. Another important part of preserving the paved road infrastructure in the County is performing timely enhancements on them. A preliminary engineering study was completed on One Tree Road from Hwy 544 south to RR142 in 2020, and the recommended overlay was designed and tendered. That overlay project was awarded at a cost of $2,521,995, for construction in 2021. In preparation for the overlay the contractor replaced two bridge sized culverts, one non-bridge sized culvert, and added extensions to three additional bridge files to improve the safety of the road network and extend the life of the structures. Photo by M. Harbicht County of Newell - 2020 Annual Financial ReportPage 34 MUNICIPAL SERVICES REPORT The Departments, now in the ninth year of partnership with the EID, continue with improvements of $2 million annually ($1 million each party), as approved by EID Board and County Council. Progress in 2019 included the completion of the final 10.4 kms in Rainier South, the final 16 kms of drainage in Rainier North, including the final 4.5 kms in Millicent due to finalization of land acquisition from Her Majesty the Queen (HMQ). In 2018, approximately 8.4 kms of drainage in the Rainier south area were completed, whereas 10.3 kms were completed there in 2017. Previously completed projects include Cassils (15.2 kms), Rolling Hills (36.8 kms), Scandia (33 kms), and most recently Rainier (65 kms) and Millicent (28.8 kms). Future planned work includes Bow City area scheduled in 2020 consisting of 13.0 kms of improvements. Following that, the program is scheduled to move north to Rosemary where 185.7 kms of improvements are planned over 4 years commencing in as early as late summer 2020. Water Services The County Rural Water System consists of 1152 kms of water line servicing residences and businesses. The number of active water users as of December 31, 2020 is 1207 active users of 1566 registered users, or 77% active, up from 1183 active users of 1563 registered users, or 75% active in 2019. Closing Remarks 2020 was an unprecedented year with a global pandemic affecting everyone, including how the Department provided services. Our dedicated team continued to deliver the public services, showing perseverance and commitment to the community which we serve. These team members provide public services 365 days per year that encourage and support sustainable growth and quality of life in our great region. Whether it be plowing roads to keep our motoring public safe during their travels, replacing culverts to ensure runoff waters flow freely reducing risk of flooding, or maintenance of traffic control devices, staff’s efforts and dedication to the County and ratepayers are truly appreciated. Respectfully Submitted, Mark Harbicht, Director of Municipal Services Photo by M. Harbicht County of Newell - 2020 Annual Financial Report Page 35 Photo by C. Kleinsasser County of Newell - 2020 Annual Financial ReportPage 36 PLANNING & DEVELOPMENT REPORT There were a lot of changes in the Planning and Development department in 2020. The 13-year long contract with the Oldman River Regional Services Commission was discontinued in September and the processing of subdivisions and land use amendments was brought in house in efforts to provide a better service to the residents of the County. The department issued a Request for Proposal to procure a contracted planning service and entered into a formal agreement with ISL Engineering and Land Services to provide planning assistance and help provide a smooth transition after ORRSC’s departure. We worked closely with ISL to complete a Strength, Weakness, Opportunities and Threats (SWOT) analysis. The intent was to create a road map on how the County’s Planning and Development functions can be improved and provide a recommended go forward plan. The final report has been completed and will assist in building the department workplan for the coming years. The department is excited for the future of Planning and Development in the County of Newell and have kicked off a re-write of the Land Use Bylaw. The goal of the project is to simplify the development process while ensuring the appropriate amount of control remains in place to protect adjacent landowners and affected parties. A more user friendly and consistent document is expected to be adopted in September of 2021. Subdivisions The County began to provide in house subdivision services in June 2020. The department processed 13 of the 20 subdivision applications that were submitted to the County this year. The department has had a steep learning curve, but the transition has been successful. The goal was to provide a more streamlined process and increase the availability of assistance to applicants of the County. The department believes that these goals have been achieved and is looking forward to providing a consistent service going forward. Planning and Development Report – 2020 In Review There were a lot of changes in the Planning and Development department in 2020. The 13-year long contract with the Oldman River Regional Services Commission was discontinued in September and the processing of subdivisions and land use amendments was brought in house in efforts to provide a better service to the residents of the County. The department issued a Request for Proposal to procure a contracted planning service and entered into a formal agreement with ISL Engineering and Land Services to provide planning assistance and help provide a smooth transition after ORRSC’s departure. We worked closely with ISL to complete a Strength, Weakness, Opportunities and Threats (SWOT) analysis. The intent was to create a road map on how the County’s Planning and Development functions can be improved and provide a recommended go forward plan. The final report has been completed and will assist in building the department workplan for the coming years. The department is excited for the future of Planning and Development in the County of Newell and have kicked off a re-write of the Land Use Bylaw. The goal of the project is to simplify the development process while ensuring the appropriate amount of control remains in place to protect adjacent landowners and affected parties. A more user friendly and consistent document is expected to be adopted in September of 2021. Subdivisions The County began to provide in house subdivision services in June 2020. The department processed 13 of the 20 subdivision applications that were submitted to the County this year. The department has had a steep learning curve, but the transition has been successful. The goal was to provide a more streamlined process and increase the availability of assistance to applicants of the County. The department believes that these goals have been achieved and is looking forward to providing a consistent service going forward. County of Newell Subdivision Stats # of Subdivisions Boundary Line Adj NEWLY CREATED LOTS (By Use) Residential Commercial Industrial Country Res Agriculture Misc TOTAL 2020 20 5 8 9 17 2019* 23 3 10 1 1 14 8 34 2018* 15 1 9 5 15 2017* 15 6 4 1 4 3 1 13 2016* 13 2 3 2 4 4 1 14 2015* 14 1 1 1 10 3 15 2014* 20 1 2 1 23 6 32 * Data provided by ORRSC Land Use Bylaw Amendments A land use amendment is a change to the land use district of a parcel of land to allow for a development that is currently not allowed according to the Land Use Bylaw. In 2020, 5 land use amendment were completed for the purpose of development and 1 was to allow for a subdivision that was larger than the maximum parcel size allowed in the original land use district. Land Use Amendments 2020 6 2016 3 2019 9 2015 6 2018 7 2014 7 2017 3 County of Newell - 2020 Annual Financial Report Page 37 PLANNING & DEVELOPMENT REPORT Land Use Bylaw Amendments A land use amendment is a change to the land use district of a parcel of land to allow for a development that is currently not allowed according to the Land Use Bylaw. In 2020, 5 land use amendment were completed for the purpose of development and 1 was to allow for a subdivision that was larger than the maximum parcel size allowed in the original land use district. Intermunicipal Development Plans (IDPs) The County of Newell completed all the IDP’s with its municipal neighbours in early 2020 as mandated by changes to the Municipal Government Act. The department had set out to update the IDP with the City of Brooks in 2020 but it has yet to be completed. The City of Brooks and the County have a working IDP in place. The department is hopeful that updates can be made in 2021, with some direction coming out of the SWOT analysis completed by ISL. Development & Construction Permits Educating the public is a top priority in 2021, including Land Use Bylaw policies, rules regarding development, and development on road allowances. The department looks forward to updating the Land Use Bylaw policies and having procedures in place to keep permitting consistent and equitable. Planning and Development Report – 2020 In Review There were a lot of changes in the Planning and Development department in 2020. The 13-year long contract with the Oldman River Regional Services Commission was discontinued in September and the processing of subdivisions and land use amendments was brought in house in efforts to provide a better service to the residents of the County. The department issued a Request for Proposal to procure a contracted planning service and entered into a formal agreement with ISL Engineering and Land Services to provide planning assistance and help provide a smooth transition after ORRSC’s departure. We worked closely with ISL to complete a Strength, Weakness, Opportunities and Threats (SWOT) analysis. The intent was to create a road map on how the County’s Planning and Development functions can be improved and provide a recommended go forward plan. The final report has been completed and will assist in building the department workplan for the coming years. The department is excited for the future of Planning and Development in the County of Newell and have kicked off a re-write of the Land Use Bylaw. The goal of the project is to simplify the development process while ensuring the appropriate amount of control remains in place to protect adjacent landowners and affected parties. A more user friendly and consistent document is expected to be adopted in September of 2021. Subdivisions The County began to provide in house subdivision services in June 2020. The department processed 13 of the 20 subdivision applications that were submitted to the County this year. The department has had a steep learning curve, but the transition has been successful. The goal was to provide a more streamlined process and increase the availability of assistance to applicants of the County. The department believes that these goals have been achieved and is looking forward to providing a consistent service going forward. County of Newell Subdivision Stats # of Subdivisions Boundary Line Adj NEWLY CREATED LOTS (By Use) Residential Commercial Industrial Country Res Agriculture Misc TOTAL 2020 20 5 8 9 17 2019* 23 3 10 1 1 14 8 34 2018* 15 1 9 5 15 2017* 15 6 4 1 4 3 1 13 2016* 13 2 3 2 4 4 1 14 2015* 14 1 1 1 10 3 15 2014* 20 1 2 1 23 6 32 * Data provided by ORRSC Land Use Bylaw Amendments A land use amendment is a change to the land use district of a parcel of land to allow for a development that is currently not allowed according to the Land Use Bylaw. In 2020, 5 land use amendment were completed for the purpose of development and 1 was to allow for a subdivision that was larger than the maximum parcel size allowed in the original land use district. Land Use Amendments 2020 6 2016 3 2019 9 2015 6 2018 7 2014 7 2017 3 Intermunicipal Development Plans (IDPs) The County of Newell completed all the IDP’s with its municipal neighbours in early 2020 as mandated by changes to the Municipal Government Act. The department had set out to update the IDP with the City of Brooks in 2020 but it has yet to be completed. The City of Brooks and the County have a working IDP in place. The department is hopeful that updates can be made in 2021, with some direction coming out of the SWOT analysis completed by ISL. Development and Construction Permits Educating the public is a top priority in 2021, including Land Use Bylaw policies, rules regarding development, and development on road allowances. The department looks forward to updating the Land Use Bylaw policies and having procedures in place to keep permitting consistent and equitable. Notable developments in 2020 include the Canalta development north of Brooks. This application triggered the installation of traffic lights at the north end of the City of Brooks. The County was able to secure a partnership with the City of Brooks and Alberta Transportation to share the cost of installation and improve safety and traffic flow at the intersection. A development permit was approved following the AUC approval of the Brooks Solar 2 project, and there were some sizable additions to the JBS meat packing plant. Development Permits Issued Permitted Discretionary Total # of DPs 2020 55 24 79 2019 63 37 100 2018 66 35 101 2017 55 36 91 2016 89 42 131 2015 103 39 142 2014 97 38 135 0 2 4 6 8 10 12 14 16 18 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2020 Development Permits Residential Non-Residential Home Occ 2019 Totals Intermunicipal Development Plans (IDPs) The County of Newell completed all the IDP’s with its municipal neighbours in early 2020 as mandated by changes to the Municipal Government Act. The department had set out to update the IDP with the City of Brooks in 2020 but it has yet to be completed. The City of Brooks and the County have a working IDP in place. The department is hopeful that updates can be made in 2021, with some direction coming out of the SWOT analysis completed by ISL. Development and Construction Permits Educating the public is a top priority in 2021, including Land Use Bylaw policies, rules regarding development, and development on road allowances. The department looks forward to updating the Land Use Bylaw policies and having procedures in place to keep permitting consistent and equitable. Notable developments in 2020 include the Canalta development north of Brooks. This application triggered the installation of traffic lights at the north end of the City of Brooks. The County was able to secure a partnership with the City of Brooks and Alberta Transportation to share the cost of installation and improve safety and traffic flow at the intersection. A development permit was approved following the AUC approval of the Brooks Solar 2 project, and there were some sizable additions to the JBS meat packing plant. Development Permits Issued Permitted Discretionary Total # of DPs 2020 55 24 79 2019 63 37 100 2018 66 35 101 2017 55 36 91 2016 89 42 131 2015 103 39 142 2014 97 38 135 0 2 4 6 8 10 12 14 16 18 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2020 Development Permits Residential Non-Residential Home Occ 2019 Totals Notable developments in 2020 include the Canalta development north of Brooks. This application triggered the installation of traffic lights at the north end of the City of Brooks. The County was able to secure a partnership with the City of Brooks and Alberta Transportation to share the cost of installation and improve safety and traffic flow at the intersection. A development permit was approved following the AUC approval of the Brooks Solar 2 project, and there were some sizable additions to the JBS meat packing plant. County of Newell - 2020 Annual Financial ReportPage 38 PLANNING & DEVELOPMENT REPORT The Planning and Development team endeavors to help landowners create living and working spaces that are suitable to the site and will not negatively affect others around them. We are working to improve our processes and procedures in order to provide the best service we can. Respectfully Submitted, Maria Jackson, Supervisor of Planning & Development Construction Permits Construction permits are required by the Alberta Safety Codes Act. Accredited municipalities, like the County of Newell, are responsible for the administration of the Safety Codes Act. Park Enterprises reviews all building and private sewage permit applications for code compliance and issues the permits on behalf of the County. The County and Park Enterprises have been working together to develop an enforcement procedure to ensure consistent follow up with projects that require permits or additional action taken. Construction Permits Construction permits are required by the Alberta Safety Codes Act. Accredited municipalities, like the County of Newell, are responsible for the administration of the Safety Codes Act. Park Enterprises reviews all building and private sewage permit applications for code compliance and issues the permits on behalf of the County. The County and Park Enterprises have been working together to develop an enforcement procedure to ensure consistent follow up with projects that require permits or additional action taken. Construction Permits 2020 2019 2018 2017 2016 2015 Average (5 year) Building 68 55 73 70 83 94 75 Electrical 137 163 198 153 182 205 180 Gas 49 57 64 72 64 92 70 Plumbing 31 28 57 48 69 63 53 PSDS 19 16 17 18 22 28 20 Total 294 319 409 361 420 482 398 The Planning and Development team endeavors to help landowners create living and working spaces that are suitable to the site and will not negatively affect others around them. We are working to improve our processes and procedures in order to provide the best service we can. 0 5 10 15 20 25 30 35 40 Jan Feb March April May June July Aug Sept Oct Nov Dec 2020 Construction Permits Building Electrical Gas Plumbing PSDS County of Newell - 2020 Annual Financial Report Page 39 Photo by D. Wiebe Page 40 Photo by D. Wiebe Page 41County of Newell - 2020 Annual Financial Report section 2 CONSOLIDATED FINANCIAL STATEMENTS Page 42 Photo by D. Wiebe County of Newell - 2020 Annual Financial Report Page 43 CONSOLIDATED FINANCIAL STATEMENTS 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 consolidatedfinancial statements are presented fairly, in all material respects. The County maintains systems of internal accounting and administrative controls that are designed to providereasonable assurance that the financial information is relevant, reliable and accurate and that the County's assetsare 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 andGeneral Services committees. The Council meets annually with management and the external auditors to discuss internal controls over thefinancial reporting process, auditing matters and financial reporting issues, and to satisfy itself that each party isproperly discharging its responsibilities.Council also considers the engagement or re-appointment of the externalauditors.Council reviews the monthly financial reports. The consolidated financial statements have been audited by Avail LLP Chartered Professional Accountants, theexternal 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. Chief Administrative Officer Treasurer 3 County of Newell - 2020 Annual Financial ReportPage 44 CONSOLIDATED FINANCIAL STATEMENTS INDEPENDENT AUDITORS' REPORT To:The Reeve and Members of Council oftheCounty of Newell OpinionWe have audited the consolidated financial statements of the County of Newell which comprise the consolidatedstatement of financial position as at December 31, 2020, 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, thefinancial position of the County of Newell as at December 31, 2020, and its results of operations and its cash flowsfor the year then ended in accordance with Canadian public sector accounting standards. Basis for OpinionWe conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilitiesunder those standards are further described in the Auditor's Responsibilities for the Audit of the FinancialStatements section of our report. We are independent of the County in accordance with the ethical requirementsthat are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our otherethical responsibilities in accordance with these requirements. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion. Responsibilities of Management and Those Charged with Governance for the Financial StatementsManagement is responsible for the preparation and fair presentation of the consolidated financial statements inaccordance with Canadian public sector accounting standards, and for such internal control as managementdetermines is necessary to enable the preparation of financial statements that are free from materialmisstatement, whether due to fraud or error. In preparing the consolidated financial statements, management is responsible for assessing the County’s ability tocontinue as a going concern, disclosing, as applicable, matters related to going concern and using the goingconcern basis of accounting unless management either intends to liquidate the County or to cease operations, orhas 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 Financial Statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a wholeare free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includesour opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted inaccordance with Canadian generally accepted auditing standards will always detect a material misstatement whenit exists. Misstatements can arise from fraud or error and are considered material if, individually or in theaggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis ofthese 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: 1 County of Newell - 2020 Annual Financial Report Page 45 CONSOLIDATED FINANCIAL STATEMENTS INDEPENDENT AUDITORS' REPORT, continued ·Identify and assess the risks of material misstatement of the financial statements, whether due tofraud or error, design and perform audit procedures responsive to those risks, and obtain auditevidence that is sufficient and appropriate to provide a basis for our opinion. The risk of notdetecting a material misstatement resulting from fraud is higher than for one resulting from error, asfraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override ofinternal control. ·Obtain an understanding of internal control relevant to the audit in order to design audit proceduresthat are appropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of the County’s internal control. ·Evaluate the appropriateness of accounting policies used and the reasonableness of accountingestimates and related disclosures made by management. ·Conclude on the appropriateness of management’s use of the going concern basis of accountingand, based on the audit evidence obtained, whether a material uncertainty exists related to eventsor 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’sreport to the related disclosures in the financial statements or, if such disclosures are inadequate, tomodify our opinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor’s report. However, future events or conditions may cause the company to cease to continueas a going concern. ·Evaluate the overall presentation, structure and content of the financial statements, including thedisclosures, and whether the financial statements represent the underlying transactions and eventsin a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope andtiming of the audit and significant audit findings, including any significant deficiencies in internal control that weidentify 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 withthe Debt Limit Regulation. A detailed account of the County's debt limit can be found in note 16. ·Supplementary Accounting Principles and Standards Regulation:In accordance with Alberta Regulation 313/2000, we confirm that the County is in compliance withthe Supplementary Accounting Principles and Standards Regulation and note the informationrequired can be found in note 15. Lethbridge, Alberta April 8, 2021 Chartered Professional Accountants 2 County of Newell - 2020 Annual Financial ReportPage 46 CONSOLIDATED FINANCIAL STATEMENTS 4 COUNTY OF NEWELL Consolidated Statement of Financial Position December 31, 2020, with comparative information for 2019 2020 2019 Financial Assets:Cash and cash equivalents (note 2)$ 11,564,795 $ 26,681,744Taxes and grants in place of taxes receivable (note 3)1,087,977 1,321,064Trade and other receivables (note 4)7,422,804 7,417,461Land held for resale 19,749 19,748Investments (note 5)91,273,931 72,655,027 Total Financial Assets 111,369,256 108,095,044 Financial Liabilities:Accounts payable and accrued liabilities 3,240,987 2,205,551Employee benefit obligations (note 7)1,546,624 1,470,819Unearned revenue (note 8)687,952 230,488Long-term debt - capital (note 9)5,996,703 9,648,333Provision for landfill closure and post-closure costs (note 10)331,035 340,388Provision for gravel pit closure and post-closure costs (note 10)416,059 416,059Deposit liabilities (note 2)272,155 307,215Other financial liabilities 34,406 83,156 Total Financial Liabilities 12,525,921 14,702,010 Net Financial Assets 98,843,335 93,393,034 Non-Financial Assets: Prepaid expenses 123,383 145,106Tangible capital assets (note 6)193,577,678 195,333,426Inventory for consumption 2,649,265 1,773,602 Total Non-Financial Assets 196,350,326 197,252,134 Contingent liabilities (note 18) Accumulated surplus (note 11)$295,193,661 $290,645,168 The accompanying notes are an integral part of these consolidated financial statements. County of Newell - 2020 Annual Financial Report Page 47 CONSOLIDATED FINANCIAL STATEMENTS 5 COUNTY OF NEWELL Consolidated Statement of Financial Activities Year ended December 31, 2020, with comparative information for 2019 Budget 2020 2019 Revenues:Net municipal property taxes (note 12)$ 30,814,808 $ 30,819,752 $ 29,653,558Special levies 117,476 117,475 118,918User fees and sale of goods 2,567,785 3,053,936 3,939,006Government transfers (note 13)640,048 600,370 4,149,246Penalties and cost of taxes 191,000 288,153 321,397Investment income 1,116,000 2,919,828 2,788,328Licenses and permits 155,500 215,277 185,448Other revenue 126,967 379,013 558,461Gain (loss) on disposal of tangiblecapital assets -(17,950)(35,551) Total Revenues 35,729,584 38,375,854 41,678,811 Expenses (note 14):Legislative 545,228 342,334 478,695Administration4,696,994 4,255,174 4,245,460Corporate safety services 495,970 471,669 428,417Police214,547 227,481 -Fire and by-law enforcement 1,464,461 1,265,257 1,725,647Disaster and emergency services 294,134 220,033 221,852Roads, streets, walks and lighting 12,401,805 10,805,690 11,133,537Airport82,947 64,096 115,718 Water and wastewater 3,077,940 3,001,461 2,878,882Waste management 341,596 342,572 335,958Family and community support 68,070 67,070 65,755Municipal planning 540,335 511,565 545,420Community and agricultural services 2,154,135 1,718,743 1,808,897Subdivision land and development 201,691 151,375 197,438Recreation and parks 1,039,983 1,645,492 915,686Culture and library 161,576 181,725 161,745Other295,000 3,225,955 575,027 Total Expenses 28,076,412 28,497,692 25,834,134 Annual surplusbefore the undernoted 7,653,172 9,878,162 15,844,677 Other:Contributed to other governments (7,801,500)(6,369,690)(4,420,725)Government transfers (note 13)1,168,149 1,040,021 842,805 Annual surplus 1,019,821 4,548,493 12,266,757 Accumulated surplus, beginning of year 290,645,168 290,645,168 278,378,411 Accumulated surplus, end of year $291,664,989 $295,193,661 $ 290,645,168 The accompanying notes are an integral part of these consolidated financial statements. County of Newell - 2020 Annual Financial ReportPage 48 CONSOLIDATED FINANCIAL STATEMENTS Photo by B. Doerksen 6 COUNTY OF NEWELL Consolidated Statement of Change in Net Financial Assets December 31, 2020, with comparative information for 2019 Budget 2020 2019 Annual surplus $ 1,019,821 $ 4,548,493 $ 12,266,757 Acquisition of tangible capital assets (8,735,724)(5,507,222)(3,319,320)Contributed (transferred) tangible capital assets ---Proceeds on disposal of tangible capital assets 217,000 344,221 142,425Amortization of tangible capital assets 7,027,632 6,900,798 7,037,486(Gain) loss on disposal of tangible capital assets -17,950 35,551 (471,271)6,304,240 16,162,899 Use (acquisition) of inventories for consumption (3,100,000)(875,663)365,925Use (acquisition) of prepaid expenses -21,723 (13,475) Change in net financial assets (3,571,271)5,450,300 16,515,349 Net financial assets, beginning of year 93,393,034 93,393,034 76,877,685 Net financial assets, end of year $89,821,763 $ 98,843,335 $ 93,393,034 The accompanying notes are an integral part of these consolidated financial statements. County of Newell - 2020 Annual Financial Report Page 49 CONSOLIDATED FINANCIAL STATEMENTS 7 COUNTY OF NEWELL Consolidated Statement of Cash Flows Year ended December 31, 2020, with comparative information for 2019 2020 2019 Cash provided by (used in):Operations:Annual surplus $ 4,548,493 $ 12,266,757Items not involving cash:Amortization 6,900,798 7,037,486Loss (gain) on disposal of tangible capital assets 17,950 35,551Change in non-cash financial assets and liabilities:Taxes and grants in place of taxes receivable 233,087 379,158Trade and other receivables (5,344)4,732,103Other financial assets -6,495Prepaid expenses 21,723 (13,475)Inventory for consumption (875,663)365,925Accounts payable and accrued liabilities 1,035,436 (2,006,831)Employee benefit obligations 75,805 (109,279)Unearned revenue 457,464 (67,476)Landfill closure and post-closure costs (9,354)(20,989)Other financial liabilities (48,751)83,156 12,351,645 22,688,582Capital activities:Proceeds on disposal of tangible capital assets 344,221 142,425Purchase of tangible capital assets (5,507,222)(3,319,320) (5,163,001)(3,176,895)Investing activities: Decrease (increase) in investments (18,618,904)9,016,556 (18,618,904)9,016,556Financing activities:Repayment of long-term debt:- capital (3,651,630)(5,233,923)Increase (decrease) in deposit liabilities (35,060)37,924(3,686,690)(5,195,999) Increase (decrease) in cash and cash equivalents (15,116,950)23,332,244Cash and cash equivalents, beginning of year 26,681,744 3,349,499 Cash and cash equivalents, end of year (note 2)$ 11,564,795 $ 26,681,744 Cash and cash equivalents is comprised of: Cash $ 11,564,795 $ 26,681,744 $ 11,564,795 $ 26,681,744 The accompanying notes are an integral part of these consolidated financial statements. County of Newell - 2020 Annual Financial ReportPage 50 CONSOLIDATED FINANCIAL STATEMENTS 8 COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2020 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 amortized cost. Investment premiums and discounts are amortized over the life of the respective investments. 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. Gains on principal protected notes are recognized as income when sold. (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. County of Newell - 2020 Annual Financial Report Page 51 CONSOLIDATED FINANCIAL STATEMENTS 9 COUNTY OF NEWELL Notes to Consolidated Financial StatementsYear ended December 31, 2020 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 clay 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 15-45Buildings25-70Engineered structures 15-75Machinery and equipment 5-40Vehicles5-14 Assets under construction are not amortized until the asset is available for productive use. County of Newell - 2020 Annual Financial ReportPage 52 CONSOLIDATED FINANCIAL STATEMENTS 10 COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2020 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. (j) 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. (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. (l) 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. County of Newell - 2020 Annual Financial Report Page 53 CONSOLIDATED FINANCIAL STATEMENTS 11 COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2020 1. Significant accounting policies (continued): (m) Contaminated sites: Contaminated sites are a result 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 management’s estimate of the cost of post-remediation including operation, maintenance and monitoring. No contaminated sites have been identified. 2. Cash and cash equivalents: 2020 2019 Cash $ 11,564,795 $ 26,681,744 $ 11,564,795 $ 26,681,744 Included in cash are amounts aggregating $272,155 (2019 - $307,214) not available for currentuse. 2020 2019 Tax sale surplus $29,162 $28,125Public reserve 231,583 267,781Bow City Cemetery Perpetual Care Fund 11,410 11,308 $ 272,155 $ 307,214 County of Newell - 2020 Annual Financial ReportPage 54 CONSOLIDATED FINANCIAL STATEMENTS 12 COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2020 3. Taxes and grants in place of taxes receivable: 2020 2019 Current $ 694,095 $ 998,879Arrears868,882 981,685 1,562,977 1,980,564Allowance for uncollectible taxes (475,000)(659,500) $ 1,087,977 $ 1,321,064 4. Trade and other receivables: 2020 2019 Grants $ 495,219 $ 495,219Local improvement taxes 4,567,606 4,930,592Other2,359,979 1,991,650 $ 7,422,804 $ 7,417,461 Local improvement taxes carry annual interest rates ranging from 2.64% - 4.44% and are duebetween 2030 – 2041. 5. Investments: 2020 2019 Fixed income securities $ 88,203,668 $ 69,584,764 Credit Union Common shares 7 7Newell Regional Services Corporation: Common shares 20 20Preferred shares 3,070,236 3,070,236 3,070,263 3,070,263 $ 91,273,931 $ 72,655,027 Fixed income securities have effective interest rates of 1.65% to 3.05% with maturity dates from September 2021 through December 2030. The fixed income securities have an aggregate market value of $89,821,927 (2019 - $69,887,759). County of Newell - 2020 Annual Financial Report Page 55 CONSOLIDATED FINANCIAL STATEMENTS 13 COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2020 6. Tangible capital assets: Cost 2019 Additions Disposals 2020 Land $ 5,358,661 $6,786 $(700) $ 5,364,747Land improvements 2,057,429 48,529 - 2,105,958Buildings 21,124,038 -- 21,124,038Engineered structures 228,581,935 3,228,770 (1,646,615) 230,164,090Machinery and equipment 11,296,228 982,381 (354,449) 11,924,160Vehicles 6,301,624 1,243,283 (390,676) 7,154,231Work in progress, netof transfers 3,033,288 (2,527)- 3,030,761 Total $ 277,753,203 $ 5,507,222 $ (2,392,440) $ 280,867,985 Accumulated Amortizationamortization2019Disposalsexpense 2020 Land improvements $ 1,226,400 $-$82,763 $ 1,309,163Buildings 2,422,967 - 354,925 2,777,892Engineered structures 69,211,600 (1,601,642) 5,116,239 72,726,193Machinery and equipment 6,724,214 (257,988) 835,969 7,302,196Vehicles 2,834,597 (170,639) 510,902 3,174,862 Total $ 82,419,777 $ 2,030,269 $ 6,900,798 $ 87,290,306 Net book value 2020 2019 Land $ 5,364,747 $ 5,358,661Land improvements 796,795 831,029Buildings 18,346,146 18,701,071Engineered structures 157,437,897 159,370,339Machinery and equipment 4,621,964 4,572,013Vehicles 3,979,369 3,467,025Work in progress 3,030,761 3,033,288 Total $ 193,577,678 $ 195,333,426 Contributed tangible capital assets are recognized at fair value at the date of contribution. County of Newell - 2020 Annual Financial ReportPage 56 CONSOLIDATED FINANCIAL STATEMENTS 14 COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2020 7. 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. 8. Unearned Revenue: 2020 2019 Government contributions $ 107,095 $83,392Prepaid taxes 491,630 107,878Other89,227 39,218 Total $ 687,952 $ 230,488 Government contributions in unearned revenue consist of the following: Recognized asDescription2019Receivedrevenue 2020 ACP $ 63,106 $-$ (3,691) $ 59,415FGTF2,106 851,062 (853,168)-Other 18,180 43,136 (13,636)47,680 Total $ 83,392 $ 894,198 $ (870,495) $ 107,095 County of Newell - 2020 Annual Financial Report Page 57 CONSOLIDATED FINANCIAL STATEMENTS 15 COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2020 9. Long-term debt – capital: 2020 2019 Tax supported debentures $ 5,996,703 $ 9,648,333 Principal and interest repayments are due as follows: Principal Interest Total 2021 $ 2,482,572 $ 141,266 $ 2,623,838 2022 1,845,476 81,869 1,927,3452023623,877 47,872 671,749202462,110 34,163 96,273202564,208 32,065 96,273Thereafter918,459 219,271 1,137,730 $ 5,996,703 $ 556,504 $ 6,553,207 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 2020 through 2042. The average annual interest rate is 2.60% for 2020 (2019 – 2.357%). Debenture debt is issued on the credit and security of the County of Newell at large. Interest on long-term debt amounted to $206,179 (2019 - $295,745). The County’s total interest paid in 2020 was $209,611 (2019 - $300,226). 10. 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 2021, while post-closure costs associated on another are not expected until 2028. The estimated closure and post-closure costs for the landfills are $331,035 and $416,059 for the gravel pits, all of which have been accrued in the financial statements. County of Newell - 2020 Annual Financial ReportPage 58 CONSOLIDATED FINANCIAL STATEMENTS 16 COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2020 11. Accumulated surplus: Equity in tangibleUnrestrictedcapital Restricted Total Totalnet assets assets (1)Surplus (2)2020 2019 Beginningbalance $ 8,129,921 $185,685,093 $96,830,154 $290,645,168 $278,378,411Annual surplus(deficit)4,548,493 --4,548,493 12,266,757Transfers torestricted surplus (17,549,172)-17,549,172 --Transfers fromrestricted surplus 14,825,708 - (14,825,708)--Amortization oftangible capitalassets 6,900,798 (6,900,798)---Net book valueof assets disposed 362,170 (362,170)---Capital assetsinternallyfunded (5,507,222)5,507,222 ---Debt paid - capital (3,651,629)3,651,629 --- Total $ 8,059,067 $187,580,976 $99,553,618 $295,193,661 $290,645,168 (1)Equity in tangible capital assets: 2020 2019 Tangible capital assets (note 6)$ 280,867,985 $ 277,753,204Accumulated amortization (note 6)(87,290,306)(82,419,778)Long-term debt – capital (note 9)(5,996,703)(9,648,333) $ 187,580,976 $ 185,685,093 County of Newell - 2020 Annual Financial Report Page 59 CONSOLIDATED FINANCIAL STATEMENTS 17 COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2020 11. Accumulated surplus (continued): (2) Restricted surplus is comprised of funds internally restricted as follows: 2020 2019 Paving $ 5,861,505 $ 3,971,925Infrastructure53,090,121 49,231,522Future Projects 6,447,953 10,232,443Vehicles, Machinery & Equipment 12,177,665 12,129,527Regional Enhancement 2,151,337 2,258,874Stabilization5,000,000 5,000,000Facilities3,575,932 3,357,238Fire Apparatus 4,629,076 4,453,508Recreation5,202,501 4,233,046Tilley50,662 50,662Unexpended Budget Appropriation 1,366,866 1,911,408 $ 99,553,618 $ 96,830,154 12. Net municipal property taxes: Budget 2020 2019 Taxation: Real property taxes $ 17,073,458 $ 17,078,027 $ 16,779,251 Linear property taxes 26,640,673 26,606,568 26,204,690 Government grants in place of property taxes 396,124 384,357 376,684 44,110,255 44,068,952 43,360,625 Requisitions: Alberta School Foundation Fund 12,733,565 12,687,318 12,573,774 Newell Foundation 361,580 361,580 901,241 Designated Industrial Property 200,302 200,302 232,052 13,295,447 13,249,200 13,707,067 Net municipal property taxes $ 30,814,808 $ 30,819,752 $ 29,653,558 County of Newell - 2020 Annual Financial ReportPage 60 CONSOLIDATED FINANCIAL STATEMENTS 18 COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2020 13. Government transfers: Budget 2020 2019 Transfers for operating: Provincial government $ 293,009 $ 290,620 $ 3,867,691 Local government 347,039 309,750 281,555 640,048 600,370 4,149,246 Transfers for capital: Provincial government 950,976 949,205 842,805 Local government 217,173 90,816 - 1,168,149 1,040,021 842,805 $ 1,808,197 $ 1,640,391 $ 4,992,051 14. Expenses by object: Budget 2020 2019 Salaries, wages and benefits $ 8,496,311 $ 7,838,554 $ 7,933,001 Contracted and general services 4,736,039 3,595,775 3,430,120 Materials, goods, supplies and utilities 5,123,237 4,044,176 4,690,632 Transfers to organizations 2,194,330 2,690,666 1,874,628 Bank charges and short-term interest 9,250 9,433 11,502 Interest on long-term debt 209,613 206,179 295,746 Other expenditures 280,000 3,212,111 561,018 Amortization 7,027,632 6,900,798 7,037,486 $ 28,076,412 $ 28,497,692 $ 25,834,134 County of Newell - 2020 Annual Financial Report Page 61 CONSOLIDATED FINANCIAL STATEMENTS 19 COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2020 15. 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: 2020 2019 Benefits &Salary (1)Allowances (2)Total Total Council: Division 1 - Amulung $ 21,322 $ 4,866 $ 26,188 $ 35,758 Division 2 - Kallen 23,198 6,172 29,371 36,141 Division 3 - Philipsen 25,074 6,297 31,370 38,462 Division 4 - Hammergren 20,730 3,111 23,840 28,326 Division 5 - Fyfe 20,453 5,990 26,444 30,239 Division 6 - Christman 23,826 6,214 30,040 31,877 Division 7 - Unruh 21,184 6,039 27,222 32,599 Division 8 - De Jong 22,290 1,639 23,929 30,999 Division 9 - Douglass 32,358 2,344 34,702 45,848 Division 10 - Juss 22,705 6,140 28,844 31,095 $ 233,140 $ 48,810 $ 281,950 $ 341,344 Chief Administrative Officer $ 243,074 $ 55,472 $ 298,547 $ 281,396 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. County of Newell - 2020 Annual Financial ReportPage 62 CONSOLIDATED FINANCIAL STATEMENTS 20 COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2020 16. Debt limits: Section 276(2) of the Municipal Government Act requires that debt and debt limits as defined byAlberta Regulation 255/00 for the County be disclosed as follows: 2020 2019 Total debt limit $ 57,563,781 $ 62,518,217Total debt (5,996,703)(9,648,333) Unused debt limit $ 51,567,078 $ 52,869,884 2020 2019 Debt servicing limit $ 9,593,964 $ 10,419,703Debt servicing (2,623,837)(3,861,241) Unused debt servicing limit $ 6,970,127 $ 6,558,462 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. 17. 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 274,151 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 9.39% of pensionable earnings up to the year’s maximum pensionable earnings under the Canada Pension Plan and 13.84% on pensionable earnings above this amount. Employees of the County are required to make current service contributions of 8.39% of pensionable salary up to the year’s maximum pensionable salary and 12.84% on pensionable salary above this amount. Total current service contributions by the County to the LAPP in 2020 were $565,882 (2019 - $541,429). Total current service contributions by the employees of the County to the LAPP in 2020 were $514,397 (2019 - $491,755). At December 31, 2019, the LAPP disclosed an actuarial surplus of $7.9 billion. County of Newell - 2020 Annual Financial Report Page 63 CONSOLIDATED FINANCIAL STATEMENTS 21 COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2020 18. Contingent liabilities: The County of Newell is a member of the Alberta Municipal Insurance Exchange (MUNIX). Under the terms of membership, 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 liability incurred would be accounted for as a current transaction in the year the losses are determined. 19. Contractual Obligations: The County has agreed to provide funding of up to $850,000 to the City of Brooks for the Hort Main Pipeline Expansion project which is expected to be complete in 2021. The County has agreed to provide operational funding to the City of Brooks for the provision of recreation, parks, and culture services used by County residents. The contribution is $648,640 for 2021. The contributions increase by 1.6 per cent annually. The agreement expires December 31, 2024. 20. 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, 2022. (b) Foreign currency translation: This section establishes 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, 2022. County of Newell - 2020 Annual Financial ReportPage 64 CONSOLIDATED FINANCIAL STATEMENTS 22 COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2020 20. Recent accounting pronouncements (continued): (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, 2024. (d) Asset retirement obligations: Under this new standard, an asset retirement obligation (ARO) is a legal obligation associated with the retirement of a tangible capital asset controlled by a public sector entity. An ARO will include post-retirement operation, maintenance, and monitoring costs. A liability will be recognized when specific criteria are met, with a corresponding increase to the carrying amount of the related tangible capital asset and expensing the amount in a rational and systematic manner. This new standard will replace the current standard for “Liability for Contaminated Sites” and will be effective for fiscal years beginning on or after April 1, 2022. (e) Revenue: The new standard establishes overall guidance on how to account for and report revenue. The standard makes a distinction between transactions that include performance obligations (exchange transactions) and those that do not (non- exchange transactions). A performance obligation is an enforceable promise to provide specific goods or services to a specific payor. Revenue from transactions with performance obligations is recognized as the public sector entity satisfies a performance obligation by providing the goods or services to a payor. Once a performance obligation is identified, an assessment is needed to determine whether revenue recognition occurs over a period of time or at a point in time. This standard is effective for fiscal years beginning on or after April 1, 2022. Management is assessing the impact of the adoption of these standards which is not known or reasonably estimable at this time. County of Newell - 2020 Annual Financial Report Page 65 CONSOLIDATED FINANCIAL STATEMENTS 23 COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2020 21. 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. 22. Budget information: The budget information presented in these consolidated financial statements is based upon the 2020 budget approved by Council on April 9, 2020. 23. Approval of financial statements: These financial statements were approved by Council and Management. 24. COVID-19 Events have occurred as a result of the COVID-19 (coronavirus) pandemic that have causedeconomic uncertainty. The duration and impact of the pandemic, as well as the effectiveness ofgovernment responses, remain unclear at this time. Potential impacts on the County’s business could include future decreases in revenue and delaysin completing capital project work, temporary declines in investment income, closure of facilities,temporary and/or permanent termination of public employees and mandatory working from homerequirements for those able to do so. The County has continued to develop strategies to manage the impacts of the COVID-19 outbreak.Administration continues to monitor revenue, expenses, and projects for the County. Cost savingmeasures have been instituted where appropriate. The County continues to follow protocols setby the Alberta Government and to make suitable adjustments in the face of the pandemic. Management is not aware of any material impairments, at this time, that will impact the financialassets or liabilities of the County due to the pandemic. The situation is continually changing and the future impact on the County is not readily determinableat this time. County of Newell - 2020 Annual Financial ReportPage 66 SCHEDULE OF SEGMENTED DISCLOSURES Photo by B. ChristiansonPhoto by B. Christianson COUNTY OF NEWELL Schedule 1 Schedule of Segmented Disclosures Year ended December 31, 2020, with comparative information for 2019 GeneralGovernment Public WorksandTransportation Public Utilities Total2020 GeneralGovernment Public WorksandTransportation Public Utilities Total2019 RevenueNet taxes for municipal purposes 30,819,752$-$-$30,819,752$29,653,558$-$-$29,653,558$ Special levies --117,475 117,475 --118,918 118,918User Fees and sale of goods 1,030,348 306,966 1,716,622 3,053,936 1,958,423 356,937 1,623,646 3,939,006 Government transfers - operating 540,985 -59,385 600,370 4,069,334 25,749 54,163 4,149,246 Penalties and costs of taxes 288,153 --288,153 321,397 --321,397Investment income 2,919,828 --2,919,828 2,788,328 --2,788,328 License and permits 215,277 --215,277 185,448 --185,448 Other 350,602 1,989 26,422 379,012 430,432 2,116 125,913 558,461 Gain (loss) on disposal of capital assets 37,440 (55,390)-(17,950)(24,311)(7,780)(3,460)(35,551) 36,202,385 253,565 1,919,904 38,375,854 39,382,609 377,022 1,919,180 41,678,812Expenses Salaries, wages and benefits 5,052,907 2,785,647 -7,838,554 5,167,663 2,765,338 -7,933,001 Contracted and general services 1,490,762 1,157,522 947,491 3,595,775 1,611,737 1,056,843 761,540 3,430,120 Materials, goods, supplies and utilities 1,252,702 1,742,511 1,048,964 4,044,176 1,540,811 2,136,237 1,013,585 4,690,633 Transfers to organizations 2,671,186 -19,480 2,690,666 1,855,148 -19,480 1,874,628Bank charges and short term interest 9,433 --9,433 11,502 --11,502 Interest on long-term debt --206,179 206,179 --295,746 295,746 Other expenditures 3,211,854 -257 3,212,111 560,868 -150 561,018Amortization1,113,563 4,665,573 1,121,662 6,900,798 1,228,515 4,684,632 1,124,339 7,037,486 14,802,407 10,351,253 3,344,033 28,497,693 11,976,244 10,643,050 3,214,840 25,834,135 Annual surplus (deficit) before the undernoted 21,399,978 (10,097,688)(1,424,129)9,878,161 27,406,365 (10,266,028)(1,295,660)15,844,677 Other Contributed to other governments (100,811)(6,268,879)-(6,369,690)-(4,420,725)-(4,420,725) Government transfers - capital -1,040,021 -1,040,021 -842,805 -842,805 Annual surplus (deficit)21,299,167$(15,326,546)$(1,424,129)$4,548,493$27,406,365$(13,843,948)$(1,295,660)$12,266,757$ Page 67County of Newell - 2020 Annual Financial Report Photo by D. Wiebe Page 68 section 3 STATISTICAL SECTION County of Newell - 2020 Annual Financial Report Page 69 Demographics & Other StatisticsSTATISTICAL SECTION Photo by B. Urzada Demographics & Other Statistics 2016 2017 2018 2019 2020 Population 7,524 7,524 7,524 7,524 7,524 Dwelling units 3,073 3,069 3,114 3,099 3,107 Area in hectares 619,600 619,600 619,600 619,600 619,600 Continuous full-time employees 65 65 63 60 62 Debt supported by property taxes 24,414,424 20,020,644 14,882,255 9,648,333 5,996,703 Debt supported by notes receivable 1,537,923 789,542 - - - Debt per capita 3,449 2,766 1,978 1,282 797 Net Municipal Property Taxes 29,792,314 32,278,376 32,982,614 29,653,558 30,819,752 Annual surplus (deficit)13,523,021 (18,998,054) 8,704,057 12,266,757 4,548,493 Accumulated surplus 288,672,408 269,674,354 278,378,411 290,645,168 295,193,661 Net financial assets 60,214,332 66,110,967 76,877,685 93,393,034 98,843,335 Permits Issued: Building Permit 83 70 73 55 69 Electrical Permit 182 153 198 163 152 Gas Permit 64 72 64 57 50 Plumbing Permit 69 48 57 28 32 Private Sewage Permit 22 18 17 16 19 420 361 409 319 322 County of Newell - 2020 Annual Financial ReportPage 70 Expenses by ObjectSTATISTICAL SECTION Expenses by Object Significant items driving variances in total expenses trends across the period include: Salaries, wages and benefits: • Increases over time are due to annual cost-of-living adjustments and movement up the salary grid. Materials, goods, supplies and utilities: • Landfill reclamation costs of $372 thousand and bridge repairs of $200 thousand in 2017. • Increasing water usage charges from NRSC as additional water users access the rural system ($200 thousand in 2016 to $396 thousand in 2020). • AFFRCS radios purchased in 2019 at $323 thousand. Transfers to organizations: • Transfers under the Regional Enhancement & Cooperation Agreement & new ICF agreements finalized in 2020 to other municipalities in the County of Newell in 2016 ($2.3 million), 2017 ($330 thousand); ($496 thousand), 2020 ($816 thousand) Other expenditures: • $1.1 million employee sick time liability arising from a policy change in 2016 • Adjustment to MSI grant funding receivable of $765 thousand in 2017. • Adjustment to the allowance for doubtful property taxes receivable in 2019 ($561 thousand), 2020 ($537 thousand) • Discounts on taxes of $1.8 million in 2020 Amortization: • Total cost of tangible capital assets (net of work-in-progress assets) has increased from $254 million in 2016 to $278 million in 2020 which had been contributing to the increasing of annual amortization expense. For 2020, disposals and assets fully amortized led the slight decrease over the prior year. EXPENSES 2016 2017 2018 2019 2020 YEAR ENDED DECEMBER 31st Salaries, wages and benefits 7,430,179$ 7,895,217$ 7,893,075$ 7,933,001$ 7,838,554$ Contracted and general services 3,725,751 3,455,799 3,793,283 3,430,120 3,595,775 Materials, goods, supplies and utilities 3,985,928 4,796,641 4,602,510 4,690,632 4,044,176 Transfers to organizations 4,264,050 2,920,646 1,608,763 1,874,628 2,690,666 Bank charges 5,370 6,014 6,407 11,502 9,433 Interest on debt 670,082 551,044 423,942 295,746 206,179 Other expenditures 1,158,712 810,395 49,120 561,018 3,212,112 Amortization 6,227,082 6,528,819 6,916,087 7,037,486 6,900,798 TOTAL EXPENSES BY OBJECT 27,467,156$ 26,964,575$ 25,293,188$ 25,834,134$ 28,497,693$ Expenses by Object Significant items driving variances in total expenses trends across the period include: Salaries, wages and benefits: • Increases over time are due to annual cost-of-living adjustments and movement up the salary grid. Materials, goods, supplies and utilities: • Landfill reclamation costs of $372 thousand and bridge repairs of $200 thousand in 2017. • Increasing water usage charges from NRSC as additional water users access the rural system ($200 thousand in 2016 to $396 thousand in 2020). • AFFRCS radios purchased in 2019 at $323 thousand. Transfers to organizations: • Transfers under the Regional Enhancement & Cooperation Agreement & new ICF agreements finalized in 2020 to other municipalities in the County of Newell in 2016 ($2.3 million), 2017 ($330 thousand); ($496 thousand), 2020 ($816 thousand) Other expenditures: • $1.1 million employee sick time liability arising from a policy change in 2016 • Adjustment to MSI grant funding receivable of $765 thousand in 2017. • Adjustment to the allowance for doubtful property taxes receivable in 2019 ($561 thousand), 2020 ($537 thousand) • Discounts on taxes of $1.8 million in 2020 Amortization: • Total cost of tangible capital assets (net of work-in-progress assets) has increased from $254 million in 2016 to $278 million in 2020 which had been contributing to the increasing of annual amortization expense. For 2020, disposals and assets fully amortized led the slight decrease over the prior year. EXPENSES 2016 2017 2018 2019 2020YEAR ENDED DECEMBER 31st Salaries, wages and benefits 7,430,179$ 7,895,217$ 7,893,075$ 7,933,001$ 7,838,554$ Contracted and general services 3,725,751 3,455,799 3,793,283 3,430,120 3,595,775 Materials, goods, supplies and utilities 3,985,928 4,796,641 4,602,510 4,690,632 4,044,176 Transfers to organizations 4,264,050 2,920,646 1,608,763 1,874,628 2,690,666 Bank charges 5,370 6,014 6,407 11,502 9,433 Interest on debt 670,082 551,044 423,942 295,746 206,179 Other expenditures 1,158,712 810,395 49,120 561,018 3,212,112 Amortization 6,227,082 6,528,819 6,916,087 7,037,486 6,900,798 TOTAL EXPENSES BY OBJECT 27,467,156$ 26,964,575$ 25,293,188$ 25,834,134$ 28,497,693$ County of Newell - 2020 Annual Financial Report Page 71 Expenses by FunctionSTATISTICAL SECTION Expenses by Function EXPENSES 2016 2017 2018 2019 2020 YEAR ENDED DECEMBER 31st Legislative 465,908$ 515,343$ 467,697$ 478,695$ 342,334$ Administration 4,303,839 4,381,172 4,510,648 4,245,460 4,255,175 Corporate safety services 296,975 339,779 318,794 428,417 471,669 Police - - - - 227,481 Fire and bylaw enforcement 1,297,464 1,156,185 1,172,017 1,725,647 1,265,257 Disaster and emergency services 212,258 244,070 244,948 221,852 220,033 Roads, streets, walks and lighting 10,848,096 10,873,803 11,411,031 11,133,537 10,805,691 Airport 120,979 115,279 111,071 115,718 64,096 Water and waste water 2,599,895 2,890,116 2,925,322 2,878,882 3,001,461 Waste management 313,250 698,556 470,972 335,958 342,572 Family and community support 64,466 79,466 64,466 65,755 67,070 Municipal planning 495,112 571,253 479,191 545,420 511,565 Community and agricultural services 1,600,315 1,609,879 1,783,155 1,808,897 1,718,743 Subdivision land and development 173,915 190,737 186,695 197,438 151,375 Recreation and parks 842,609 1,873,728 828,494 915,686 1,645,492 Culture and library 154,470 155,326 160,653 161,745 181,725 Other 3,677,604 1,269,883 158,034 575,027 3,225,954 TOTAL EXPENSES BY FUNCTION 27,467,156$ 26,964,575$ 25,293,188$ 25,834,134$ 28,497,693$ County of Newell - 2020 Annual Financial ReportPage 72 Revenues by SourceSTATISTICAL SECTION Revenues by Source Property taxes continue to be the most significant source of revenue for the County, comprising from 74% to 80% of total operating revenues over the period reported above. A few of the more significant items driving variances in total revenue trends across the period include: • Government transfers for operating and capital, which are dependent on other levels of government; • Contributed assets received from the Tilley Fire Association in 2016; • Special levies, which include local improvement taxes, and depend on local improvement projects completed in a given year REVENUES 2016 2017 2018 2019 2020 YEAR ENDED DECEMBER 31st Net municipal property taxes $29,792,314 $32,278,376 $32,982,614 $29,653,558 $30,819,752 Special levies 1,114,708 117,189 114,362 118,918 117,475 User fees and sale of goods 2,078,180 2,618,838 3,310,758 3,939,006 3,053,936 Government transfers 635,998 638,510 685,888 4,149,246 600,370 Penalties and cost of taxes 184,855 210,582 280,078 321,397 288,153 Investment income 1,642,224 1,234,488 2,000,408 2,788,328 2,919,828 Licenses and permits 153,032 255,278 213,321 185,448 215,277 Other revenue 768,761 634,705 421,622 558,461 379,013 Gain (loss) on disposal of TCA (152,879) 143,662 102,936 (35,551) (17,950) Operating revenues 36,217,193 38,131,628 $40,111,987 $41,678,811 $38,375,854 Other: Contributed assets 904,423 - - - - Government transfers for capital 3,868,559 173,520 99,880 842,805 1,040,021 4,772,982 173,520 99,880 842,805 1,040,021 TOTAL REVENUE 40,990,175$ 38,305,148$ 40,211,867$ 42,521,616$ 39,415,875$ Photo by S. Plett Photo by S. Martens