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Home My WebLink About2014-12-31 Year End Audited Financial SatementsConsolidated Financial Statements of COUNTY OF NEWELL Year ended December 31, 2014 Management's Responsibility for the Consolidated Financial Statements Management of the County of Newell is responsible for the preparation, accuracy, objectivity, and integrity of the accompanying financial statements and the notes thereto. Management believes that the financial statements present fairly the County's financial position as at December 31, 2014 and the results of its operations for the year then ended. The financial statements have been prepared in accordance with Canadian public sector accounting standards. Financial statements are not precise, since they include certain amounts based on estimates and judgments. Such amounts have been determined on a reasonable basis in order to ensure that the financial statements are presented fairly in all material respects. In fulfilling its responsibilities and recognizing the limits inherent in all systems, management has designed and maintained a system of internal controls to produce reliable information to meet reporting requirements. The system is designed to provide management with reasonable assurance that transactions are properly authorized, reliable financial records are maintained, and assets are properly accounted for and safeguarded. The County Council is responsible for overseeing management in the performance of its financial reporting responsibilities, and for approving the financial statements. Council fulfills these responsibilities by reviewing the financial information prepared by management and discussing relevant matters with management and external auditors. Council is also responsible for recommending the appointment of the County's external auditors. The financial statements have been audited by the independent firm of KPMG LLP, Chartered Accountants. Their report to the Members of Council of the County of Newell, stating the scope of their examination and opinion on the financial statements follows. hi dministrative Officer March 19, 2015 Treasurer MG KPMG LLP Telephone (403) 380-5700 500 Lethbridge Centre Tower Fax (403) 380-5760 400 -4th Avenue South Internet www.kpmg.ca Lethbridge AB T1J 4171 Canada Independent Auditors' Report To the Reeve and Members of Council of the County of Newell. We have audited the accompanying consolidated financial statements of County of Newell (the "County") which comprise the consolidated statement of financial position as at December 31, 2014, and the consolidated statements of financial activities, changes in net financial assets, and cash flows for the year then ended, and notes, comprising a summary of significant accounting policies and other explanatory information. Management's Responsibility for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with Canadian public sector accounting standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditors' Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud.or error. In making those risk assessments, we consider internal control relevant to the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. KPMG LLP is a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity KPMG Canada provides services to KPMG LLP RUM, & Opinion In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of County of Newell as at December 31, 2014, and its results of consolidated financial activities, its changes in net financial assets and its cash flows for the year then ended in accordance with Canadian public sector accounting standards. March 19, 2015 Lethbridge, Canada COUNTY OF NEWELL Consolidated Statement of Financial Position December 31, 2014, with comparative information for 2013 2014 2013 Financial assets Cash and cash equivalents (note 2) $ 27,474,293 $ 24,824,788 Taxes and grants in place of taxes receivable (note 3) 1,270,272 1,116,368 Trade and other receivables (note 4) 10,364,492 8,334,254 Land held for resale 35,139 35,139 Investments (note 5) 35,839,090 33,292,357 Notes receivable (note 6) 3,824,447 5,005,001 Other financial assets 8,235 24,921 78,815,968 72,632,828 Financial liabilities: Accounts payable and accrued liabilities 3,764,931 5,222,960 Employee benefit obligations (note 8) 415,962 362,731 Unearned revenue (note 9) 1,442,461 1,468,140 Long-term debt - operating (note 10) 2,919,673 3,828,867 Long-term debt - capital (note 11) 27,134,749 20,449,278 Provision for landfill closure and post -closure costs (note 12) 330,466 337,897 Provision for gravel pit closure and post -closure costs (note 12) 315,376 315,376 Deposit liabilities (note 2) 233,692 235,084 36,557,310 32,220,333 Net financial assets 42,258,658 40,412,495 Non-financial assets: Prepaid expenses 58,230 38,460 Tangible Capital Assets (note 7) 201,229,548 179,395,313 Inventory for consumption 1,304,840 1,608,875 202, 592,618 181, 042,648 Contingent liabilities (note 20) Accumulated surplus (note 13) $244,851,276 $221,455,143 The accompanying notes are an integral part of these consolidated financial statements. COUNTY OF NEWELL Consolidated Statement of Financial Activities Year ended December 31, 2014, with comparative information for 2013 Expenses (note 16): Budget 2014 2013 Revenues: 519,000 494,612 456,097 Net municipal property taxes (note 14) $ 28,292,188 $ 28,273,858 $ 27,483,929 Special levies 2,647,753 1,286,003 2,045,909 User fees and sale of goods 1,320,055 1,608,592 1,154,883 Government transfers (note 15) 787,182 1,073,512 886,142 Penalties and cost of taxes 131,250 250,591 153,848 Investment income 1,068,491 1,654,240 1,541,343 Licenses and permits 146,600 185,324 178,424 Other revenue 441,505 2,119,165 1,565,714 Gain (loss) on disposal of tangible 65,466 64,466. 60,829 capital assets - (5,403) 365,342. Community and agricultural services 34,835,024 36,445,882 35,375,534 Expenses (note 16): Legislative 519,000 494,612 456,097 Administration 4,430,652 3,836,352 3,592,537 Corporate safety services 335,797 303,896 260,472 Fire and by-law enforcement 1,511,338 1,341,783 1,283,897 Disaster and emergency services 226,570 197,126 165,893 Roads, streets, walks and lighting 12,870,923 12,128,663 11,790,873 Airport 126,263 120,802 92,484 Water and waste water 1,644,728 2,148,208. 1,376,277 Waste management 296,786 296,786 261,986 Family and community support 65,466 64,466. 60,829 Municipal planning 510,015 473,818 443,448 Community and agricultural services 2,045,847 1,877,240 1,439,801 Subdivision land and development 455,823 342,342 347,863 Recreation and parks 730,404 683,518 826,418 Culture and library 151,056 151,400 138,917 Other 1,504,285 1,469,629 2,600,016 27,424,953 25,930,641 25,137,808 Annual surplus before the undernoted 7,410,071 10,515,241 10,237,726 Other Insurance proceeds 62,969 1,450,000 Contributed from other local government - - 2,795,262 Government transfers (note 15) 13,739,736 10,811,307 6,528,068 Other - 2,006,616 - Annual surplus 21,149,807 23,396,133 21,011,056 Accumulated surplus, beginning of year 221,455,143 221,455,143 200,444,087 Accumulated surplus, end of year $242,604,950 $244,851,276 $ 221,455,143 The accompanying notes are an integral part of these consolidated financial statements. COUNTY OF NEWELL Consolidated Statement of Change in Net Financial Assets December 31, 2014, with comparative information for 2013 (1,697,582) 1,561,898 Use (acquisition) of inventories for consumption 304,035 (486,076) Use (acquisition) of prepaid expenses (19,770) 47,621 Change in net financial assets (1,697,582) 1,846,163 (2,140,808) Net financial assets, beginning of year 40,412,495 40,412,495 42,553,303 Net financial assets, end of year $38,714,913 $ 42,2583658 $ 4034123495 The accompanying notes are an integral part of these consolidated financial statements. 3 Budget 2014 2013 Annual surplus $21,149,807 $ 23,396,133 $ 21,011,056 Acquisition of tangible capital assets (27,821,707) (27,293,957) (28,105,247) Proceeds on disposal of tangible capital assets - 593,747 1,334,764 Amortization of tangible capital assets 4,974,318 4,860,572 4,422,416 (Gain) loss on disposal of tangible capital assets - 5,403 (365,342) (1,697,582) 1,561,898 Use (acquisition) of inventories for consumption 304,035 (486,076) Use (acquisition) of prepaid expenses (19,770) 47,621 Change in net financial assets (1,697,582) 1,846,163 (2,140,808) Net financial assets, beginning of year 40,412,495 40,412,495 42,553,303 Net financial assets, end of year $38,714,913 $ 42,2583658 $ 4034123495 The accompanying notes are an integral part of these consolidated financial statements. 3 COUNTY OF NEWELL Consolidated Statement of Cash Flows Year ended December 31, 2014, with comparative information for 2013 Capital activities: Proceeds on disposal of tangible capital assets 593,747 1,334,764 Cash used to acquire tangible capital assets (27,293,957) (28,105,247) (26,700,210) (26,770,483) Investing activities Decrease in temporary investments 2014 2013 Cash provided by (used in): (2,546,733) 2,609,371 Operations: 1,180,554 915,762 Annual surplus $ 23,396,133 $ 21,011,056 Items not involving cash: Amortization 4,860,572 4,422,416 (Gain) loss on disposal of tangible capital assets 5,403 (365,342) Change in non-cash financial assets and liabilities: (2,160,797) (1,665,739) Taxes and grants in place of taxes receivable (153,904) (225,457) Trade and other receivables (2,030,238) (2,075,674) Other financial assets 16,687 (24,921) Prepaid expenses (19,770) 47,621 Inventory for consumption 304,035 (486,076) Accounts payable and accrued liabilities (1,458,029) (2,030,248) .Employee benefit obligations 53,231 40,816 Unearned revenue (25,679) 412,379 Landfill closure and post -closure costs (7,431) 45,682 Other financial liabilities - (7,371) 24,941,010 20,764,881 Capital activities: Proceeds on disposal of tangible capital assets 593,747 1,334,764 Cash used to acquire tangible capital assets (27,293,957) (28,105,247) (26,700,210) (26,770,483) Investing activities Decrease in temporary investments 6,608,501 3,333,745 Decrease (increase) in investments (2,546,733) 2,609,371 Payments received on notes receivable 1,180,554 915,762 5,242,322 6,858,878 Financing activities: Repayment of long-term debt: -operating (909,194) (650,277) -capital (2,160,797) (1,665,739) Proceeds from debt issues 8,846,267 5,000,000 Increase (decrease) in deposit liabilities (1,392) 76,814 5,774,884 2,760,798 Increase in cash and cash equivalents 9,258,006 Cash and cash equivalents, beginning of year 7,363,612 3,749,538 Cash and cash equivalents, end of year (note 2) $ 16,621,618 $ 7,363,612 The accompanying notes are an integral part of these consolidated financial statements. El COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2014 1. Significant accounting policies: The consolidated financial statements of the County of Newell (the "County") are the representations of management prepared in accordance with Canadian Public Sector accounting standards. Significant aspects of the accounting policies adopted by the County are as follows: (a) Cash and cash equivalents: Cash and cash equivalents include cash on hand and short-term deposits which are highly liquid with original maturities of less than three months from the date of acquisition. (b) Reporting entity: The consolidated financial statements reflect the assets, liabilities, revenues and expenses, changes in net financial assets and cash flows of the County, which comprises of all the organizations that are owned or controlled by the County and are, therefore accountable to the Council for the administration of their financial affairs and resources. All significant inter -department transactions and balances are eliminated on consolidation. Taxes levied also include requisitions for educational, health care, social and other external organizations that are not part of the County. The statements exclude trust assets that are administered for the benefit of external parties. (c) Basis of accounting: The financial statements are prepared using the accrual basis of accounting. The accrual basis of accounting records revenue as it is earned and measurable. Expenses are recognized as they are incurred and measurable based upon receipt of goods or services and/or the legal obligation to pay. Funds from external parties and earnings thereon restricted by agreement or legislation are accounted for as deferred revenue until used for the purpose specified. (d) Investments: Investments are recorded at cost. Where there has been a loss in value of an investment other than a temporary decline, the investment is written down to reflect the loss. (e) Requisition over -levy and under -levy: Over -levies and under -levies arise from the difference between the actual property tax levy made to cover each requisition and the actual amount requisitioned. If the actual levy exceeds the requisition, the over -levy is accrued as a liability and property tax revenue is reduced. Where the actual levy is less than the requisition amount, the under - levy is accrued as a receivable and as property tax revenue. Requisition tax rates in the subsequent year are adjusted for any over -levies for the prior year. 5 COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2014 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 gravel pits and provide for post -closure care. 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 and gravel pit based on usage. (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: Assets under construction are not amortized until the asset is available for productive use. M Years Land Improvements 15-45 Buildings 25-70 Engineered structures 15-75 Machinery and equipment 5-40 Vehicles 5-14 Assets under construction are not amortized until the asset is available for productive use. M COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31. 2014 1. Significant accounting policies (continued): (i) Non-financial assets (continued): (ii) Contributions of tangible capital assets: Tangible capital assets received as contributions are recorded at fair value at the date of receipt and recorded as revenue. (iii) Inventories Inventories of materials and supplies held for consumption are recorded at the lower of cost and replacement cost with cost determined by the average cost method. (iv) Cultural and historical tangible capital assets: Works of art for display are not recorded as tangible capital assets but are disclosed. Q) 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. (k) Use of estimates: The preparation of the financial statements in conformity with generally accepted accounting principles 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. 7 COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2014 2. Cash and cash equivalents: Cash Temporary investments 2014 2013 $ 16,621,618 $ 7,363,612 10,852,675 17,461,176 $ 27,474,293 $ 24,824,788 Included in cash are amounts aggregating $233,692 (2013 - $235,084) not available for current use. Also included in cash and temporary investments is $8,000,000 (2013 - $5,072,945) of unexpended debt proceeds. Tax sale surplus Public reserve 2014 2013 12,539 $ 12,396 221,153 222,688 $ 233,692 $ 235,084 Temporary investments consist of GIC's that have an average interest rate of 1.93% (2013 — 1.83%) and mature in periods ranging from February, 2015 to December, 2015. Cash and cash equivalents are comprised of: Cash and temporary investments Less investments with original maturities greater than 90 days 3. Taxes and grants in place of taxes receivable: Current year Arrears Allowance for uncollectible taxes 2014 2013 $ 27,474,293 (10,852,675) $ 24,824,788 (17,461,176) $ 16,621,618 $ 7,363,612 2013 600,093 $ 588,708 770,179 627,660 1,370,272 1,216,368 (100,000) (100,000) $ 1,270,272 $ 1,116,368 COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2014 4. Trade and other receivables: 2014 2013 Grants $ 6,386,377 $ 4,864,825 Local improvement taxes 2,459,349 1,776,548 Other 1,518,766 1,692,881 S. Investments: $ 10,364,492 $ 8,334,254 2014 2013 Fixed income securities $ 35,754,887 $ 33,208,154 Credit Union Common shares 5 5 Newell Regional Services Corporation: Common shares 20 20 Preferred shares 84,178 84,178 84,198 84,198 $ 35,839,090 $ 33,292,357 Long-term investments consist of fixed income securities that yield interest from 1.34% to 5.23% and mature in periods 2016 through 2023. The investments have an average expected yield of 2.63% and an aggregate market value of $36,187,679 (2013 - $32,722,792). 6. Notes receivable: 2014 2013 Newell Foundation, repayable in annual installments of $832,967 including interest at 5.5%, maturing in 2018. $ 2,919,673 $ 3,828,867 Tilley and District Fire Association, repayable in annual installments of $96,327 including interest at 3.497°/x, 511,917 587,693 maturing in 2020. Newell Regional Services Corporation, non-interest bearing, maturing in 2017. 392,857 550,000 Rolling Hills Fire Division - 38,441 $ 3,824,447 $ 5,005,001 COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2014 7. Tangible capital assets: 461,245 634,149 42,999,460 3,311,101 2,085,489 $ - $ 119,873 — 320,441 3,431,417 (534,104) 729,529 (402,907) 259,312 $ 581,118 954,590 .46,430,877 3,506,526 1,941,894 Total $ Cost 2013 Additions Disposals 2014 Land $ 5,420,350 $ -- $ $ 5,420,350 Land improvements 1,817,579 14,955 Work in progress 1,832,534 Buildings 18,790,780 64,772 $179,395,313 18,855,552 Engineered structures 123,836,549 39,359,932 — 163,196,481 Machinery and equipment 10,266,664 1,051,161 (1,050,029) 10,267,796 Vehicles 3,591,803 522,121 (486,132) 3,627,792 Work in progress, net of transfers 65,163,032 (13,718,984) 51,444,048 Total $228,886,757 $ 27,293,957 $ (1,536,161) $254,644,553 Accumulated Amortization amortization 2013 Disposals expense 2014 Land improvements $ Buildings Engineered structures Machinery and equipment Vehicles 461,245 634,149 42,999,460 3,311,101 2,085,489 $ - $ 119,873 — 320,441 3,431,417 (534,104) 729,529 (402,907) 259,312 $ 581,118 954,590 .46,430,877 3,506,526 1,941,894 Total $ 49,491,444 $ (937,011) $ 4,860,572 $ 53,415,005 18,156,631 Engineered structures 116,765,604 80,837,089 Net book value 6,761,270 2014 2013 Land $ 5,420,350 $ 5,420,350 Land improvements 1,251,416 1,356,334 Buildings 17,900,962 18,156,631 Engineered structures 116,765,604 80,837,089 Machinery and equipment 6,761,270 6,955,563 Vehicles 1,685,898 1,506,314 Work in progress 51,444,048 65,163,032 Total $ 201,229,548 $179,395,313 10 COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31. 2014 8. Employee benefit obligations: Vacation The vacation liability is comprised of the vacation that employees are deferring to future years. Employees have either earned the benefits (and are vested) and are entitled to these benefits within the next budgetary year. 9. Unearned Revenue: Recognized as Description 2013 Additions revenue 2014 Rural Water Deposits $ 479,168 RCP Grant (Tilley) Total Street Improvement Grant 173,520 MSI Capital (Tilley) 639,668 Other 175,784 $ 269,648 1,250,000 20,000 $ (748,816) (653,295) (163,216) 596,705 173,520 639,668 32,568 Total $ 1,468,140 $ 1,539,648 $ (1,565,327) 1,442,461 10. Long-termdebt— operating: 2014 2013 Debenture supported with notes receivable $ 2,919,673 $ 3,828,867 Principal and interest repayments are due as follows: Debenture debt is repayable to Alberta Capital Finance Authority and bears interest at 5.5% per annum, before Provincial subsidy, and matures in 2018. Debenture debt is issued on the credit and security of the County of Newell at large. Interest on long-term debt amounted to $206,279 (2013 — $255,294). The County's total cash payments for interest in 2014 were $206,278 (2013 - $246,353). 11 Principal Interest Total 2015 $ 672,385 $ 160,582 $ 832,967 2016 709,366 123,601 832,967 2017 748,381 84,586 832,967 2018 789,541 43,425 832,966 $ 2,919,673 $ 412,194 $ 3,331,867 Debenture debt is repayable to Alberta Capital Finance Authority and bears interest at 5.5% per annum, before Provincial subsidy, and matures in 2018. Debenture debt is issued on the credit and security of the County of Newell at large. Interest on long-term debt amounted to $206,279 (2013 — $255,294). The County's total cash payments for interest in 2014 were $206,278 (2013 - $246,353). 11 COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2014 11. Long-termdebt— capital: 2014 2013 Tax supported debentures $ 27,134,749 $ 20,449,278 Principal and interest repayments are due as follows: Principal Interest Total 2015 $ 3,777,394 $ 575,811 $ 4,353,205 2016 3,769,679 496,271 4,265,950 2017 3,848,154 417,797 4,265,951 2018 3,921,557 337,611 4,259,168 2019 4,003,012 256,155 4,259,167 Thereafter 7,814,953 497,801 8,312,754 $ 27,134,749 $ 2,581,446 $ 29,716,195 Debenture debt is repayable to Alberta Capital Finance Authority and bears interest at rates ranging from 1.637% to 7.125% per annum, before Provincial subsidy, and matures in periods 2015 through 2034. The average annual interest rate is 2.209% for 2014 (2013 — 2.39%). For qualifying debentures, the Province of Alberta rebates 60% of interest in excess of 8%, 9% and 11% to a maximum annual rate of 12.5%, depending on the date borrowed. Debenture debt is issued on the credit and security of the County of Newell at large. Interest on long-term debt amounted to $494,256 (2013 - $384,355). The County's total cash payments for interest in 2014 were $490,152 (2013 - $380,386). 12. Provision for landfill and gravel pit closure and post -closure costs: Alberta environmental law requires closure and post -closure care of landfill sites, which includes final covering and landscaping, pumping of ground water and leachates from the site, and on- going environmental monitoring, site inspections and maintenance. The accrued liability for the remaining post -closure costs of the County's landfill and closure and post -closure costs for the County's gravel pit is based on an estimate of future discounted costs. The estimated closure and post -closure costs for the landfill are $330,466 and $315,376 for the gravel pits, all of which have been accrued in the financial statements. The County has not designated assets for settling closure and post -closure liabilities. 12 COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2014 13. Accumulated surplus: Equity in tangible Unrestricted capital Restricted Total Total net assets assets (1) Surplus (2) 2014 2013 Beginning $ 254,644,553 $ 228,886,757 Accumulated amortization balance $ -- $164,018,980 $57,436,163 $221,455,143 $200,444,087 Annual surplus 23,396,133 8,000,000 -- 23,396,133 21,011,056 Transfers to restricted surplus (14,365,118) 14,365,118 -- -- Transfers from restricted surplus 10,976,906 (10,976,906) Amortization of tangible capital assets 4,860,572 (4,860,572) Net book value of assets disposed 599,151 (599,151) — Capital assets internally funded (21,374,745) 21,374,745 — Capital assets debt funded (5,919,212) 5,919,212 — Debt issued 8,846,267 (8,846,267) — Unexpended debt (2,927,055) 2,927,055 — Debt paid (2,160,797) 2,160,797 — — — Total $ 1,932,102 $182,094,799 $60,824,375 $244,851,276 $221,455,143 (i) Equity in tangible capital assets: 2014 2013 Tangible capital assets $ 254,644,553 $ 228,886,757 Accumulated amortization (53,415,005) (49,491,444) Long-term debt (note 11) (27,134,749) (20,449,278) Unexpended debt proceeds 8,000,000 5,072,945 $ 182,094,799 $ 164,018,980 13 COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2014 13. Accumulated surplus (continued): (2) Restricted surplus is comprised of funds internally restricted as follows: 2014 2013 Paving $ 6,416,381 $ 7,427,991 Infrastructure 13,633,516 11,917,807 Future Projects 23,773,760 21,286,610 Vehicles, Machinery & Equipment 6,184,837 5,764,056 Regional Enhancement 3,421,192 3,457,464 Stabilization 2,847,112 2,847,112 Facilities 1,133,647 913,490 Fire Apparatus 1,183,916 598,150 Tilley 850,988 850,725 Unexpended Budget Appropriation 1,379,026 2,372,758 $ 60,824,375 $ 57,436,163 14. Net municipal property taxes: Budget 2014 2013 Taxation Real property taxes $ 14,115,185 $ 14,112,735 $ 13,651,062 Linear property taxes 27,140,721 27,113,790 26,508,789 Government grants in place of property taxes 299,026 310,077 304,537 41,554,932 41,536,602 40,464,388 Requisitions: Alberta School Foundation Fund 12,475,317 12,475,317 12,204,007 Newell Foundation 787,427 787,427 776,452 13, 262, 744 13, 262, 744 12, 980, 459 Net municipal property taxes $ 28,292,188 $ 28,273,858 $ 27,483,929 14 COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2014 15. Government transfers: Budget 2014 2013 Transfers for operating: Provincial government $ 439,784 $ 728,883 $ 532,942 Local government 347,398 344,629 353,200 787,182 1,073,512 886,142 Transfers for capital: Provincial government 13,739,736 10,811,280 6,521,623 Local government - 27 6,445 13,739,736 10,811,307 6,528,068 16. Expenses by object: $ 14,526,918 $ 11,884,819 $ 7,414,210 2014 Salaries, wages and benefits $ 7,632,364 $ 7,376,785 $ 6,814,669 Contracted and general services 5,777,210 5,025,408 4,949,447 Materials, goods, supplies and utilities 5,101,893 4,827,107 4,007,534 Transfers to organizations - 3,232,088 3,084,247 4,177,337 Bank charges and short-term interest 750 1,873 830 Interest on long-term debt 686,330 700,535 639,649 Other expenditures 20,000 54,114 125,926 Amortization 4,974,318 4,860,572 4,422,416 $ 27,424,953 $ 25,930,641 $ 25,137,808 15 COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2014 17. Salary and benefits disclosure: Disclosure of salaries and benefits for elected municipal officials and the chief administrative officer as required by provincial regulation is as follows: 2014 2013 Benefits & Salary (1) Allowances (2) Total Total Council Division 1 $ 33,350 $ 5,047 $ 38,397 $ 32,352 Division 2 29,800 4,899 34,699 30,031 Division 3 35,461 5,135 40,596 35,119 Division 4 27,924 2,600 30,524 21,588 Division 5 26,365 4,755 31,120 25,341 Division 6 32,577 5,015 37,592 30,392 Division 7 31,206 4,956 36,162 32,790 Division 8 31,064 1,523 32,587 31,723 Division 9 47,708 2,263 49,971 46,203 Division 10 29,836 4,900 34,736 31,495 $ 325,291 $ 41,093 $ 366,384 $ 317,034 Chief Administrative Officer $ 207,717 $ 44,630 $ 252,347 $ 240,136 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. 16 COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2014 18. Debt limits: Section 276(2) of the Municipal Government Act requires that debt and debt limits as defined by Alberta Regulation 255/00 for the County be disclosed as follows: 2014 2013 Total debt limit $ 54,668,823 $ 55,238,301 Total debt (30,054,422) (24,278,145) $24,614,401 $ 30,960,156 2014 2013 Debt servicing limit $ 9,111,471 $ 9,206,384 Debt servicing (5,186,171) (3,518,232) $ 3,925,300 $ 5,688,152 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. The calculation taken alone does not represent the financial stability of the County. Rather, the financial statements must be interpreted as a whole. 19. Local authorities pension plan: The County participates in a multi-employer defined benefit pension plan. This plan is accounted for as a defined contribution plan. Employees of the County participate in the Local Authorities Pension Plan (LAPP), which is one of the plans covered by the Public Sector Pension Plans Act. The LAPP serves about 230,534 people and about 418 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 11.39% of pensionable earnings up to the year's maximum pensionable earnings under the Canada Pension Plan and 15.84% on pensionable earnings above this amount. Employees of the County are required to make current service contributions of 10.39% of pensionable salary up to the year's maximum pensionable salary and 14.84% on pensionable salary above this amount. Total current service contributions by the County to the LAPP in 2014 were $572,455 (2013 - $455,921). Total current service contributions by the employees of the County to the LAPP in 2014 were $527,661 (2013 - $417,856). At December 31, 2013, the LAPP disclosed an actuarial deficiency of $4.86 billion. 17 COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2014 20. 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. The County has been named defendant in legal actions. In the opinion of management these matters are without substantial merit and no provision has been made in the accounts. 21. Recent accounting pronouncements: The Public Sector Accounting Board recently announced the following accounting pronouncements: (a) Liability for contaminated sites: This accounting pronouncement establishes standards on how to account for and report a liability associated with the remediation of contaminated sites. It is effective for fiscal years beginning on or after April 1, 2014, with early adoption encouraged. (b) Financial instruments: This accounting pronouncement establishes standards on how to account for and report all types of financial instruments including derivatives. Financial instruments include primary instruments and derivative instruments. It is effective for fiscal years beginning on or after April 1, 2015 for governments and for fiscal years beginning on or after April 1, 2012 for government organizations, with early adoption encouraged. (c) Foreign currency translation: This accounting pronouncement establishes standards on how to account for and report transactions that are denominated in a foreign currency in government financial statements. It is effective for fiscal years beginning on or after April 1, 2015 for governments and for fiscal years beginning on or after April 1, 2012 for government organizations, with early adoption encouraged. (d) Related party transactions: This accounting pronouncement establishes standards on how to account for and report related party transactions. It is effective for fiscal years beginning on or after April 1, 2017, with early adoption encouraged. (e) Financial statement presentation: This accounting pronouncement establishes general reporting principles for the disclosure of information in government financial statements. It is effective for fiscal years beginning on or after April 1, 2015, with early adoption permitted. iE% COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2014 21. Recent accounting pronouncements (continued): (f) Portfolio investments: This accounting pronouncement establishes standards on how to account for and report portfolio investments. It is effective for fiscal years beginning on or after April 1, 2015, with early adoption permitted. Management is assessing the impact of the adoption of these standards which is not known or reasonably estimable at this time. 22. Segmented Disclosures: Segmented disclosures (Schedule 1) are intended to enable users to better understand the government reporting entity and the major expense and revenue activities of the County. The segments have been selected based upon functional activities provided by the County. For each reported segment, revenues and expenses represent both amounts directly attributable to the segment and amounts that are allocated on a reasonable basis. The functional areas that have been separately disclosed, along with the services they provide are as follows: (a) General government is comprised of Council, Legislative, Corporate Administration, Finance, Information and Computer Services, Planning, Economic Development, Corporate Safety, Agricultural Services, Fire and Disaster Services, Bylaw Enforcement, Community Services, Recreation, Parks and Programs and Library. (b) Public Works and Transportation is comprised of Roads and Engineering Services. (c) Public Utilities is comprised of Water, Wastewater and Solid Waste. WE COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2014 23. Budget information: The budget information presented in these consolidated financial statements is based upon the 2014 budget approved by Council on March 20, 2014. Adjustments to budgeted values were required to provide comparative budget values based on the full accrual basis of accounting. The following chart reconciles the approved budget with the budget information presented in these consolidated statements. Revenue: Approved budget: $ 73,893,698 Adjustments: Transfers from restricted surplus Transfers to organizations (12,056,194) (13,262,744) Total budgeted revenue 48,574,760 Expenses Approved budget: $ 73,893,698 Adjustments Tangible capital assets (27,821,707) Debt principal repayments (2,059,721) Unfunded amortization 1,888,642 Transfers to restricted surplus (5,213,215) Transfers to organizations (13,262,744) Total budgeted expenses 27,424,953 annual 24. Approval of financial statements: 21,149, 807 These financial statements were approved by Council and Management. 20 P r U U) W f O C H c n a � e c i � t0 R 8 M N W M V V N V S r V' A O i f0 W W N O W� V V N V M W V M M M V -'W" O 6l O) W W M V A M W M W W m V W co 'I1 V7 W M N 'O to N V m r r m N N r W V N W W T r W W M N N M V O .- W .-- LO — 'O M M W m O— W •- V r N W W V' V 'O V 'O N M N C) M W r o 4) W W n W ' W v_ M VM' N in ' N tO O MO b 'Mn 'Ld N fA 47 W W O W M V W N r W V V N W W M V W W M O W MWO V -M mN N fPr m W aWo_ M n n v v m m W V N W N N N N MI^ N M O A O O V r O N M M O 0 N V W M W N O N ui V n N V M — .- V C' N tW0 O� Wc0 O O V r M W O W i0 Hl N M �- V W r V N W. 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