HomeMy WebLinkAbout2021-12-31 2021 Year End Audited Financial Statements Consolidated Financial Statements of
COUNTY OF NEWELL
Year ended December 31, 2021
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, ,va i LLP
CHARTERED PROFESSIONAL ACCOUNTANTS
INDEPENDENT AUDITORS' REPORT
To: The Reeve and Members of Council of
the County of Newell
Opinion
We have audited the consolidated financial statements of the County of Newell which comprise the consolidated
statement of financial position as at December 31, 2021, and the consolidated statements of financial activities,
change in net financial assets and cash flow for the year then ended, and notes to the financial statements,
including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the
financial position of the County of Newell as at December 31, 2021, and its results of operations and its cash flows
for the year then ended in accordance with Canadian public sector accounting standards.
Basis for Opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities
under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial
Statements section of our report. We are independent of the County in accordance with the ethical requirements
that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other
ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management is responsible for the preparation and fair presentation of the consolidatedfinancial statements in
accordance with Canadian public sector accounting standards, and for such internal control as management
determines is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidatedfinancial statements, management is responsible for assessing the County's ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless management either intends to liquidate the County or to cease operations, or
has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the County's financial reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Canadian generally accepted auditing standards will always detect a material misstatement when
it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of
these financial statements. As part of an audit in accordance with Canadian generally accepted auditing standards,
we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
Claresholm.Fort Macleod•Lethbridge.Milk River.Pincher Creek.Tober.Vauxhall ,�
INDEPENDENT AUDITORS' REPORT, continued
. Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
. Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the County's internal control.
. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
. Conclude on the appropriateness of management's use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the County's ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's
report to the related disclosures in the financial statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor's report. However, future events or conditions may cause the company to cease to continue
as a going concern.
. Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events
in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
Report on Other Legal and Regulatory Requirements
. Debt Limit Regulation:
In accordance with Alberta Regulation 255/2000, we confirm that the County is in compliance with
the Debt Limit Regulation. A detailed account of the County's debt limit can be found in note 16.
. Supplementary Accounting Principles and Standards Regulation:
In accordance with Alberta Regulation 313/2000, we confirm that the County is in compliance with
the Supplementary Accounting Principles and Standards Regulation and note the information
required can be found in note 15.
Lethbridge, Alberta � Y�� ���
April 7, 2022 Chartered Professional Accountants
Claresholm.Fort Macleod•Lethbridge•Milk River.Pincher Creek.Taber.Vauxhall 2
MANAGEMENT REPORT
The consolidated financial statements are the responsibility of the management of the County of Newell.
These consolidated financial statements have been prepared from information provided by management.
Financial statements are not precise since they include certain amounts based on estimates and judgments.
Management has determined such amounts on a reasonable basis in order to ensure that the consolidated
financial statements are presented fairly, in all material respects.
The County maintains systems of internal accounting and administrative controls that are designed to provide
reasonable assurance that the financial information is relevant, reliable and accurate and that the County's assets
are properly accounted for and adequately safeguarded.
The elected Council of the County is responsible for ensuring that management fulfils its responsibilities for
financial statements. Council carries out its responsibility principally through the Finance and Administration and
General Services committees.
The Council meets annually with management and the external auditors to discuss internal controls over the
financial reporting process, auditing matters and financial reporting issues, and to satisfy itself that each party is
properly discharging its responsibilities. Council also considers the engagement or re-appointment of the external
auditors. Council reviews the monthly financial reports.
The consolidated financial statements have been audited by Avail LLP Chartered Professional Accountants, the
external auditors, in accordance with Canadian generally accepted auditing standards on behalf of the Council,
residents and ratepayers of the County. Avail LLP has full and free access to the Council.
Chief Admi istrative Officer Treasurer
AVa��LLP Chartered Professional Accountants 3
COUNTY OF NEWELL
Consolidated Statement of Financial Position
December 31, 2021,with comparative information for 2020
2021 2020
Financial Assets:
Cash and cash equivalents (note 2) $ 5,090,552 $ 11,564,795
Taxes and grants in place of taxes receivable (note 3) 970,381 1,087,977
Trade and other receivables (note 4) 6,122,439 7,422,804
Land held for resale 19,748 19,748
Investments(note 5) 111,830,045 91,273,931
Other financial assets 4,910 -
Total Financial Assets 124,038,075 111,369,256
Financial Liabilities:
Accounts payable and accrued liabilities 2,853,802 3,240,987
Employee benefit obligations (note 7) 1,308,676 1,546,624
Unearned revenue(note 8) 2,672,217 687,952
Long-term debt-capital (note 9) 3,514,130 5,996,703
Provision for landfill closure and post-closure costs (note 10) 322,929 331,035
Provision for gravel pit closure and post-closure costs(note 10) 416,059 416,059
Deposit liabilities (note 2) 272,523 272,155
Other financial liabilities - 34,406
Total Financial Liabilities 11,360,336 12,525,921
Net Financial Assets 112,677,739 98,843,335
Non-Financial Assets:
Prepaid expenses 196,970 123,383
Tangible capital assets (note 6) 194,344,664 193,577,678
Inventory for consumption 2,478,880 2,649,265
Total Non-Financial Assets 197,020,514 196,350,326
Contingent liabilities(note 18)
Accumulated surplus(note 11) $309,698,253 $295,193,661
The accompanying notes are an integral part of these consolidated financial statements.
4
COUNTY OF NEWELL
Consolidated Statement of Financial Activities
Year ended December 31, 2021,with comparative information for 2020
Budget 2021 2020
Revenues
Net municipal property taxes(note 12) $30,674,877 $30,827,136 $ 30,819,752
Special levies 2,269,570 119,569 117,475
User fees and sale of goods 2,590,500 2,740,132 3,053,93�
Governmenttransfers (note 13) 1,407,056 1,455,236 600,370
Penalties and cost of taxes 186,000 143,606 288,153
Investment income 1,302,125 2,689,649 2,919,828
Licenses and permits 180,500 280,361 215,277
Other revenue 141,177 835,390 379,013
Gain (loss)on disposal of tangible
capital assets - 122,462 (17,950)
Total Revenues 38,751,805 39,213,541 38,375,854
Expenses (note 14):
Legislative 603,832 443,261 342,334
Administration 4,540,782 4,112,615 4,255,174
Corporate safety services 464,815 448,100 471,669
Police 393,982 402,788 227,481
Fire and by-law enforcement 1,647,867 1,444,632 1,265,257
Disaster and emergency services 289,340 235,875 220,033
Roads, streets, walks and lighting 12,085,266 10,793,262 10,805,690
Airport 45,189 32,534 64,096
Water and wastewater 3,103,019 2,686,739 3,001,461
Waste management 348,991 348,491 342,572
Family and community support 68,070 67,070 67,070
Municipal planning 590,776 628,615 511,565
Community and agricultural services 2,186,252 1,914,176 1,718,743
Subdivision land and development 192,920 186,846 151,375
Recreation and parks 1,769,681 1,527,483 1,645,492
Culture and library 213,800 197,075 181,725
Other 862,450 913,111 3,225,955
Total Expenses 29,407,302 26,382,673 28,497,692
Annual surplus
before the undernoted 9,344,773 12,830,868 9,878,162
Other:
Contributed to other governments (850,000) (1,123,289) (6,369,690)
Insurance proceeds - 5,773 -
Governmenttransfers (note 13) 4,252,889 2,791,240 1,040,021
Annual surplus 12,747,662 14,504,592 4,548,493
Accumulated surplus, beginning of year 295,193,661 295,193,661 290,645,168
Accumulated surplus, end of year $307,941,323 $309,698,253 $295,193,661
The accompanying notes are an integral part of these consolidated financial statements.
5
COUNTY OF NEWELL
Consolidated Statement of Change in Net Financial Assets
December 31, 2021, with comparative information for 2020
Budget 2021 2020
Annual surplus $ 12,747,662 $ 14,504,592 $ 4,548,493
Acquisition of tangible capital assets (14,671,034) (8,523,023) (5,507,222)
Proceeds on disposal of tangible capital assets 245,000 733,214 344,221
Amortization of tangible capital assets 7,051,180 7,145,286 6,900,798
(Gain)loss on disposal of tangible capital assets - (122,462) 17,950
5,372,808 13,737,607 6,304,240
Use(acquisition)of inventories for consumption - 170,385 (875,663)
Use(acquisition)of prepaid expenses - (73,588) 21,723
Change in net financial assets 5,372,808 13,834,404 5,450,300
Net financial assets, beginning of year 98,843,335 98,843,335 93,393,034
Net financial assets, end of year $104,216,143 $112,677,739 $ 98,843,335
The accompanying notes are an integral part of these consolidated financial statements.
6
COUNTY OF NEWELL
Consolidated Statement of Cash Flows
Year ended December 31, 2021, with comparative information for 2020
2021 2020
Cash provided by (used in):
Operations:
Annual surplus $ 14,504,592 $ 4,548,493
Items not involving cash:
Amortization 7,145,286 6,900,798
Loss (gain)on disposal of tangible capital assets (122,462) 17,950
Change in non-cash financial assets and liabilities:
Taxes and grants in place of taxes receivable 117,595 233,087
Trade and other receivables 805,145 (5,344)
Other financial assets - -
Prepaid expenses (73,588) 21,723
Inventory for consumption 170,385 (875,663)
Accounts payable and accrued liabilities (387,184) 1,035,436
Employee benefit obligations (237,948) 75,805
Unearned revenue 2,479,484 457,464
Landfill closure and post-closure costs (8,106) (9,354)
Otherfinancialliabilities (39,316) (48,751)
24,353,883 12,351,645
Capital activities:
Proceeds on disposal of tangible capital assets 733,214 344,221
Purchase of tangible capital assets (8,523,023) (5,507,222)
(7,789,809) (5,163,001)
Investing activities:
Decrease(increase) in investments (20,556,114) (18,618,904)
(20,556,114) (18,618,904)
Financing activities:
Repayment of long-term debt:
- capital (2,482,572) (3,651,630)
Increase (decrease) in deposit liabilities 369 (35,060)
(2,482,203) (3,686,690)
Increase (decrease) in cash and cash equivalents (6,474,243) (15,116,950)
Cash and cash equivalents, beginning of year 11,564,795 26,681,744
Cash and cash equivalents, end of year(note 2) $ 5,090,552 $ 11,564,795
Cash and cash equivalents is comprised of:
Cash $ 5,090,552 $ 11,564,795
$ 5,090,552 $ 11,564,795
The accompanying notes are an integral part of these consolidated financial statements.
7
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2021
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)Loans receivable:
Loans receivable are initially recognized at cost, net of any transactions costs, with interest
income recognized using the effective interest method. Loans receivable are subsequently
measured at amortized cost net of any valuation allowances.
8
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2021
1. Significant accounting policies (continued):
(f) 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.
(g) 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 wastewater services, roads,sidewalks and street lighting are
recorded as capital assets under their respective function.
(h) 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.
(i) 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.
9
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2021
1. Significant accounting policies (continued):
Q) Non-financial assets:
Non-financial assets are not available to discharge existing liabilities and are held for use in the
provision of services. They have useful lives extending beyond the current year and are not
intended for sale in the normal course of operations.
(i) Tangible capital assets:
Tangible capital assets are recorded at cost which includes all amounts that are directly
attributable to acquisition, construction, development or betterment of the asset. The cost,
less residual value, of the tangible capital assets is amortized on a straight-line basis over
the estimated useful life as follows:
Years
Land Improvements 15-45
Buildings 25-70
Engineered structures 15-75
Machinery and equipment 5-40
Vehicles 5-14
Assets under construction are not amortized until the asset is available for productive
use.
(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.
(k) 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.
(I) 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.
10
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2021
1. Significant accounting policies (continued):
(m) 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.
(n)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 managemenYs
estimate of the cost of post-remediation including operation, maintenance and monitoring. No
contaminated sites have been identified.
2. Cash and cash equivalents:
2021 2020
Cash $ 5,090,552 $ 11,564,795
$ 5,090,552 $ 11,564,795
Included in cash are amounts aggregating $272,523 (2020 - $272,155) not available for current
use.
2021 2020
Tax sale surplus $ 29,337 $ 29,162
Public reserve 231,684 231,583
Bow City Cemetery Perpetual Care Fund 11,501 11,410
$ 272,523 $ 272,155
11
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2021
3. Taxes and grants in place of taxes receivable:
2021 2020
Current $ 678,790 $ 694,095
Arrears 874,591 868,882
1,553,381 1,562,977
Allowance for uncollectible taxes (583,000) (475,000)
$ 970,381 $ 1,087,977
4. Trade and other receivables:
2021 2020
Grants $ - $ 495,219
Local improvement taxes 4,220,730 4,567,606
Other 1,901,709 2,359,979
$ 6,122,439 $ 7,422,804
Local improvement taxes carry annual interest rates ranging from 2.64°/a-4.44°/a and are due
between 2030—2041.
5. Investments:
2021 2020
Fixed income securities $108,759,781 $ 88,203,668
Credit Union Common shares 7 7
Newell Regional Services Corporation:
Common shares 20 20
Preferred shares 3,070,236 3,070,236
3,070,263 3,070,263
$111,830,045 $ 91,273,931
Fixed income securities have effective interest rates of 1.61% to 4.86% with maturity dates from
June 2022 through July 2035. The fixed income securities have an aggregate market value of
$108,353,663 (2020-$89,821,927).
12
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2021
6. Tangible capital assets:
Cost 2020 Additions Disposals 2021
Land $ 5,364,747 $ 3,307 $ - $ 5,368,054
Land improvements 2,105,958 32,662 - 2,138,620
Buildings 21,124,038 - - 21,124,038
Engineered structures 230,164,090 3,716,086 (70,498) 233,809,678
Machinery and equipment 11,924,160 590,038 (1,384,379) 11,129,817
Vehicles 7,154,231 1,458,522 (1,135,652) 7,477,100
Work in progress, net
of transfers 3,030,761 2,722,408 - 5,753,169
Total $280,867,985 $ 8,523,023 $ (2,590,530) $286,800,477
Accumulated Amortization
amortization 2020 Disposals expense 2021
Land improvements $ 1,309,163 $ - $ 49,560 $ 1,358,723
Buildings 2,777,892 - 354,925 3,132,817
Engineered structures 72,726,193 (62,350) 5,205,824 77,869,667
Machinery and equipment 7,302,196 (1,185,413) 911,045 7,027,828
Vehicles 3,174,862 (732,015) 623,932 3,066,779
Total $ 87,290,306 $ 1,979,778 $ 7,145,286 $ 92,455,813
Net book value 2021 2020
Land $ 5,368,054 $ 5,364,747
Land improvements 779,897 796,795
Buildings 17,991,221 18,346,146
Engineered structures 155,940,010 157,437,897
Machinery and equipment 4,101,991 4,621,964
Vehicles 4,410,321 3,979,369
Work in progress 5,753,169 3,030,761
Total $194,344,664 $193,577,678
Contributed tangible capital assets are recognized at fair value at the date of contribution.
No contributed tangible capital assets received in 2021.
13
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2021
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:
2021 2020
Government contributions $ 1,617,092 $ 107,095
Prepaid taxes 975,285 491,630
Other 79,839 89,227
Total $ 2,672,217 $ 687,952
Government contributions in unearned revenue consist of the fol�owing:
Recognized as
Description 2020 Received revenue 2021
ACP $ 59,415 $ 416 $ - $ 59,831
FGTF - 431,001 (431,001) -
MSI - 2,847,580 (2,186,870) 660,710
Other 47,680 2,477,478 (1,628,606) 896,552
Total $ 107,095 $ 5,756,473 $(4,246,477) $1,617,092
14
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2021
9. Long-term debt—capital:
2021 2020
Tax supported debentures $ 3,514,130 $ 5,996,703
Principal and interest repayments are due as follows:
Principal Interest Total
2022 $ 1,845,476 $ 81,869 $ 1,927,345
2023 623,877 47,872 671,749
2024 62,110 34,163 96,273
2025 64,208 32,065 96,273
2026 66,376 29,896 96,273
Thereafter 852,084 189,375 1,041,457
$ 3,514,130 $ 415,239 $ 3,929,370
Debenture debt is repayable to Alberta Capital Finance Authority and bears interest at rates ranging
from 2.177 to 3.406% per annum and matures in periods 2022 through 2042. The average annual
interest rate is 2.76%for 2021 (2020—2.60%). Debenture debt is issued on the credit and security
of the County of Newell at large.
Interest on long-term debt amounted to$138,334(2020-$206,179).
The County's total interest paid in 2021 was$141,265 (2020-$209,611).
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 2022, while post-closure costs
associated on another are not expected until 2028.
The estimated closure and post-closure costs for the landfills are$322,929 and $416,059 for the
gravel pits, all of which have been accrued in the financial statements.
15
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2021
11. Accumulated surplus:
Equity in
tangible
Unrestricted capital Restricted Total Total
net assets assets (�) Surplus (2) 2021 2020
Beginning
balance $ 8,059,067 $187,580,976 $99,553,618 $295,193,661 $290,645,168
Annual surplus
(deficit) 14,504,592 - - 14,504,592 4,548,493
Transfers to
restricted surplus (17,608,743) - 17,608,743 - -
Transfers from
restricted surplus 6,767,747 - (6,767,747) - -
Amortization of
tangible capital
assets 7,145,285 (7,145,285) - - -
Net book value
of assets disposed 610,752 (610,752) - - -
Capital assets
internally
funded (8,523,023) 8,523,023 - - -
Debt paid-capital (2,482,572) 2,482,572 - - -
Total $ 8,473,105 $190,830,534 $110,394,614 $309,698,253$295,193,661
���Equity in tangible capital assets:
2021 2020
Tangible capital assets (note 6) $ 286,800,477 $280,867,985
Accumulated amortization (note 6) (92,455,813) (87,290,306)
Long-term debt—capital (note 9) (3,514,130) (5,996,703)
$ 190,830,534 $187,580,976
16
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2021
11. Accumulated surplus (continued):
(2) Restricted surplus is comprised of funds internal�y restricted as follows:
2021 2020
Paving $ 7,783,329 $ 5,861,505
Infrastructure 62,235,994 53,090,121
Future Projects 5,567,630 6,447,953
Vehicles, Machinery& Equipment 13,283,797 12,177,665
Regional Enhancement 1,285,298 2,151,337
Stabilization 5,000,000 5,000,000
Facilities 3,980,115 3,575,932
Fire Apparatus 4,435,703 4,629,076
Recreation 5,504,273 5,202,501
Tilley 50,662 50,662
Unexpended Budget Appropriation 1,267,813 1,366,866
$110,394,614 $99,553,618
12. Net municipal property taxes:
Budget 2021 2020
Taxation:
Real property taxes $ 16,916,808 $ 16,895,746 $ 17,078,027
Linear property taxes 25,632,824 25,640,913 26,606,568
Government grants in place of property
taxes 387,802 392,338 384,357
42,937,434 42,928,998 44,068,952
Requisitions:
Alberta School Foundation Fund 11,709,713 11,543,929 12,687,318
Newell Foundation 356,179 356,179 361,580
Designated Industrial Property 196,665 201,753 200,302
12,262,557 12,101,861 13,249,200
Net municipal property taxes $30,674,877 $30,827,136 $ 30,819,752
17
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2021
13. Government transfers:
Budget 2021 2020
Transfers for operating:
Provincial government $ 1,075,765 $ 1,170,745 $ 290,620
Local government 331,291 284,491 309,750
1,407,056 1,455,236 600,370
Transfers for capital:
Provincial government 4,252,889 2,707,103 949,205
� Local government - 84,137 90,816
4,252,889 2,791,240 1,040,021
$ 5,689,945 $ 4,246,476 $ 1,640,391
14. Expenses by object:
Budget 2021 2020
Salaries, wages and benefits $ 8,415,101 $ 7,722,815 $ 7,838,554
Contracted and general services 4,669,998 3,454,122 3,595,775
Materials, goods, suppiies and utilities 5,012,287 4,193,413 4,044,176
Transfers to organizations 3,260,000 2,818,335 2,690,666
Bank charges and short-term interest 9,750 9,242 9,433
Interest on long-term debt 141,266 138,334 206,179
Other expenditures 847,450 901,126 3,212,111
Amortization 7,051,180 7,145,286 6,900,798
$29,407,302 $26,382,673 $ 28,497,692
18
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2021
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:
2021 2020
Benefits &
Salary(1) Allowances(2) Total Total
Council:
Division 1 -Amulung $ 17,546 $ 3,581 $ 21,127 $ 26,188
Division 1 -Short 8,747 1,206 9,953 -
Division 2- Kallen 18,105 4,614 22,719 29,371
Division 2-Skanderup 7,112 1,112 8,224 -
Division 3-Philipsen 19,004 4,675 23,679 31,370
Division 3- Kopp 7,132 1,113 8,245 -
Division 4- Hammergren 15,550 1,517 17,067 23,840
Division 4- H. Johnson 5,555 1,007 6,562 -
Division 5- Fyfe 16,528 4,508 21,036 26,444
Division 5-Skriver 6,353 430 6,783 -
Division 6-Christman 25,326 5,748 31,074 30,040
Division 7- Unruh 22,881 5,585 28,466 27,222
Division 8- De Jong 16,748 4,067 20,815 23,929
Division 8-Philpott 7,112 682 7,794 -
Division 9- Douglass 24,991 1,829 26,820 34,702
Division 9- Doerksen 7,873 1,165 9,038 -
Division 10-Juss 17,506 4,574 22,080 28,844
Division 10- N. Johnson 6,673 1,082 7,755 -
$ 250,742 $ 48,495 $ 299,237 $ 281,950
CAO -Stephenson $ 208,054 $ 42,587 $ 250,641 $ 298,547
CAO -Fenske $ 185,348 $ 47,130 $ 232,475 $ -
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 allowance figures also include the employer's share of the costs of additional
taxable benefits including special leave with pay, financial planning services, retirement
planning services, concessionary loans, travel allowances, car allowances, and club
memberships, if applicable.
19
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2021
16. 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:
2021 2020
Total debt limit $ 58,820,313 $ 57,563,781
Total debt (3,514,130) (5,996,703)
Unused debt limit $55,306,183 $ 51,567,078
2021 2020
Debt servicing limit $ 9,803,386 $ 9,593,964
Debt servicing (1,927,345) (2,623,837)
Unused debt servicing limit $ 7,876,041 $ 6,970,127
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 275,863 people
and about 433 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°/a 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 2021 were $566,959 (2020 -
$565,882). Total current service contributions by the employees of the County to the LAPP in 2021
were$514,242 (2020-$514,397).
At December 31, 2020, the LAPP disclosed an actuarial surplus of$5.0 billion.
20
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2021
18. Contingent liabilities:
The County of Newell is a member of the Alberta Municipal Insurance Exchange (MUNIX). Under
the terms of inembership, the County of Newell could become liable for its proportionate share of
any claim losses in excess of the funds held by the exchange. Any liability incurred would be
accounted for as a current transaction in the year the losses are determined.
With the changes to the collective agreement with the National Police Federation,the County could
have a potential liability for the retroactive pay increases identified in the agreement. It is unknown
if costs will be downloaded to the County and the specific amounts associated with the retroactive
pay rates are not yet finalized. As a result, no amounts have been accrued in the financial
statements as at December 31,2021.
19. Contractual Obligations:
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$659,018 for
2022. 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
afterApril 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.
21
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2021
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.
22
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2021
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
2021 budget approved by Council on April 8, 2021.
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 caused
economic uncertainty. The duration and impact of the pandemic, as well as the effectiveness of
government responses, remain unclear at this time.
Potential impacts on the County could include future decreases in revenues and delays in
completing capital project work, temporary declines in investment income, closure of facilities
including recreation, library,and administrative buildings,temporary and/or permanent termination
of public employees and mandatory working from home requirements 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 savings
measures have been instituted where appropriate. The County continues to follow protocols set by
the Alberta Government and to make suitable adjustments in the face of the pandemic.
Administration is not aware of any material impairments, at this time, that will impact the financial
assets or liabilities of the County due to the pandemic.
The situation is continually changing and the future impact on the County is not readily determinable
at this time.
23
COUNTY OF NEWELL Schedule 1
Schedule of Segmented Disclosures
Year ended Decem6er 31,2021,with comparative information for 2020.
Generel Public Works& Generel Public Works&
Government Transportation Public Utilities Total 2021 Govemment Transportatlon Public Utflities Total 2020
REVENUE
PROPERTYTAXES ' $42,928,998. - - $42,928,998. $44,068,952. - - $44,068,952.
LESS_.REQUISITIONS _.._..._....................................�.•—•... _..___._...................__....._....$12,101,861..:_....._....._...._.............�.. - .__.�.................__.....:.......�..�$12.101,861. $13�249,200. - - $13,249�200.
� _..........__._.................._......_...__._._............_...__.............�....._..........-----...........�...�_.._..........__�._....Y._.
NET IVIUNICIPAL PROPERTYTAXES $30,827,136. - - $30,827,136. $30,819,752. - - $30,819,752.
SPECIAL LEYIES - - $119,569. $119,569. - - $117,475. $117,475.
SALES OF GOODS&SERVICES $540,039. $355,460. $1,844,634. $2,740,132. $1,030,348. $306,966. $1,716,622. $3,053,936.
GOVERNMENTTRANSFERS FOR OPERATING $1,393,961. - $61,275. $1,455,236. $540,985. - $59,385. $600,370.
PENALTIES AND COST OF TAXES $143,606. - - $143,606. $288,153. - - $288,153.
INVESTMENT INCOME $2,689,649. - - $2,689,649. $2,979,828. - - $2,919,828.
LICENSESANDPERMITS $280,361. - - $280,361. $215,277. - _ $Z�s�Z77,
OTHER REVENUE $787,418. $12,580. $35,392. $835,390. $350,602. $1,989. $26,422. $379,012.
GAIN(LOSS)ON DISPOSAL OF TANGIBLE CAPITAL ASSETS $32 116. $90 346. - $122 462 $37 440 ($55 390) ($17 950)
TOTAL REVENUE $36,694,286. $458,386. $2,060,870. $39,213,542. $36,202,385. $253,565. $1,919,904. $38,375,854.
EXPENSES
SALARIES,WAGES AND BENEFITS $4,945,329. $2,777,486. - $7,722,815. $5,052,907. $2,785,647. - $7,838,554.
CONTRACTED&GENERAL SERVICES $1,890,453. $948,150. $615,520. $3,454,122. $1,490,762. $1,157,522. $947,491. $3,595,775.
MATERIALS,GOODS,SUPPLIES&UTILITIES $1,233,706. $1,819,418. $1,140,289. $4,193,413. $1,252,702. $1,742,511. $1,048,964. $4,044,176.
TRANSFERS TO ORGANIZATIONS $2,798,854. - $19,481. $2,818,335. $2,671,186. - $19,480. $2,690,666.
BANK CHARGES&SHORT-TERM INTEREST $9,242. - - $9,242. $9,433. - - $9,433.
INTEREST ON LONG-TERM DEBT - $135,334. $138,334. - - $206,179. $206,179.
OTHER EXPENDITURES $900,558. $356. $213. $901,126. $3,21'1,854. - $257. $3,212,112.
AMORTIZATION $1,173,141. $4,850,751. $1,121,394. $7,145,286. $1,113,563. $4,665,573. $1,121,662. $6,900,798.
TOTAL EXPENSES $12,951,283. $10,396,161. $3,035,231. $26,382,673. $14,802,407. $10,351,253. $3,344,033. $28,497,693.
ANNUAL SURPLUS(DEFICI'�BEFORE THE UNDERNOTED $23,743,004. ($9,937,775.) ($974,360.) $12,830,869. $21,399,978. ($10,097,689.) ($1,424,130.) $9,878,161.
OTHER:
CONTRIBUTED TO OTHER GOVERNMENTS AND AGENCIES ($850,000.) ($273,289. -
INSURANCE PROCEEDS � ($1,123,289.) ($100,811.) ($6,268,879.) - ($6,369,690.)
$3,272. $2,501. - $5,773. - - -
GOVERNMENTTRANSFERSFORCAPITAL $2,791,240. - $2,791,240. - $1,040,021. - $1,040,021.
ANNUAL SURPLUS(DEFICI� $22,896,276. ($7,417,323.) ($974,360.) $14,504,593. $21,299,167. ($15,326,547.) ($1,424,130.) $4,548,492.
ACCUMULATED SURPLUS,BEGINNING OF YEAR $299,334,802. $2,208,598. ($6,350,040.) $295,193,660. $299,375,072. $1,280,120. ($10,010,025.) $290,645,168.
ACCUMULATED SURPLUS.END OF YEAR $322.231.078. /$5.208.425.) ($7 324 400.) $309 698 253 $320 674 239 ($14 046 427 1 ($11 434 155) $295 193 660
24