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HomeMy WebLinkAbout2015-12-31 2015 Year End Audited Financial StatementsConsolidated Financial Statements of COUNTY OF NEWELL Year ended December 31, 2015 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, 2015 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. Chief Ad mistrative Officer April 7, 2016 Treasurer LI 1 1, , Ll 61 L bs� KPMG LLP Telephone (403) 380-5700 500 Lethbridge Centre Tower Fax (403) 380-5760 400 — 4th Avenue South Internet www.kpmg.ca Lethbridge AB T1 4E1 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, 2015, 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. KPMG 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, 2015, 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. Chartered Professional Accountants April 7, 2016 Lethbridge, Canada COUNTY OF NEWELL Consolidated Statement of Financial Position December 31, 2015, with comparative information for 2014 2015 2014 Financial assets: Cash and cash equivalents (note 2) $ 19,514,847 $ 27,474,293 Taxes and grants in place of taxes receivable (note 3) 1,058,710 1,270,272 Trade and other receivables (note 4) 23,127,515 10,364,492 Land held for resale 31,881 35,139 Investments (note 5) 42,262,136 35,839,090 Notes receivable (note 6) 2,995,066 3,824,447 Other financial assets 9,890 8,235 Deposit liabilities (note 2) 89,000,045 78,815,968 Financial liabilities: Accounts payable and accrued liabilities 3,528,800 3,764,931 Employee benefit obligations (note 8) 405,626 415,962 Unearned revenue (note 9) 182,984 1,442,461 Long-term debt - operating (note 10) 2,247288 2,919,673 Long-term debt - capital (note 11) 29,357,355 27,134,749 Provision for landfill closure and post -closure costs (note 12) 317,901 330,466 Provision for gravel pit closure and post -closure costs (note 12) 350,594 315,376 Deposit liabilities (note 2) 243,991 233,692 36,634,539 36,557,310 Net financial assets Non-financial assets: 52,365,506 42,258,658 Prepaid expenses 106,111 58,230 Tangible Capital Assets (note 7) 220,958,311 201,229,548 Inventory for consumption 1,719,459 1,304,840 222, 783, 881 202, 592, 618 Contingent liabilities (note 20) Accumulated surplus (note 13) $275,149,387 $244,851,276 The accompanying notes are an integral part of these consolidated financial statements. COUNTY OF NEWELL Consolidated Statement of Financial Activities Year ended December 31, 2015, with comparative information for 2014 Budget 2015 2014 Revenues: Net municipal property taxes (note 14) $ 29,134,814 $ 29,047,827 $ 28,273,858 Special levies 1,159,264 3,767,835 1,286,003 User fees and sale of goods 1,597,279 1,630,866 1,666,294 Government transfers (note 15) 733,790 933,439 1,073,512 Penalties and cost of taxes 131,775 185,269 250,591 Investment income 1,199,787 1,592,290 1,654,240 Licenses and permits 151,600 186,192 185,324 Other revenue 164,410 1,183,327 2,061,463 Gain (loss) on disposal of tangible capital assets - 738,100 (5,403) 34,272,719 39,265,145 36,445,882 Expenses (note 16): Legislative 490,200 477,619 494,612 Administration 4,381,223 4,130,921 3,836,352 Corporate safety services 317,658 298,867 303,896 Fire and by-law enforcement 1,620,685 1,452,592 1,341,783 Disaster and emergency services 225,523 196,389 197,126 Roads, streets, walks and lighting 12,153,328 11,081,105 12,128,663 Airport 124,235 123,604 120,802 Water and waste water 1,935,215 2,123,647 2,148,208 Waste management 305,138 306,155 296,786 Family and community support 65,466 64,466 64,466 Municipal planning 499,681 526,626 473,818 Community and agricultural services 1,939,807 1,694,187 1,877,240 Subdivision land and development 358,000 363,370 342,342 Recreation and parks 818,100 758,828 683,518 Culture and library 152,756 152,759 151,400 Other 1,990,237 3,093,711 1,469,629 27,377,352 26,844,846 25,930,641 Annual surplus before the undernoted 6,895,357 12,420,299 10,515,241 Other: Contributed assets - 13,407 - Insurance proceeds - 1,076,683 62,969 Government transfers (note 15) 4,915,433 16,044,107 10,811,307 Other - 743,615 2,006,616 Annual surplus 11,810,800 30,298,111 23,396,133 Accumulated surplus, beginning of year 244,851,276 244,851,276 221,455,143 Accumulated surplus, end of year $256,662,076 $275,149,387 $244,851,276 The accompanying notes are an integral part of these consolidated financial statements. 2 COUNTY OF NEWELL Consolidated Statement of Change in Net Financial Assets December 31, 2015, with comparative information for 2014 Annual surplus Budget 2015 2014 $11,810,800 $ 30,298,111 $ 23,396,133 Acquisition of tangible capital assets (23,924,401) (25,958,833) (27,293,957) Contributed tangible capital assets - (13,407) - Proceeds on disposal of tangible capital assets - 1,236,816 593,747 Amortization of tangible capital assets 4,679,346 5,744,761 4,860,572 (Gain) loss on disposal of tangible capital assets - (738,100) 5,403 (7,434,255) 10,569,348 1,561,898 Use (acquisition) of inventories for consumption - (414,619) 304,035 Use (acquisition) of prepaid expenses - (471881) (19,770) Change in net financial assets (7,434,265) 10,106,848 1,846,163 Net financial assets, beginning of year 42,258,658 42,258,658 40,412,495 Net financial assets, end of year $38,824,403 $ 52,365,506 $ 42,258,658 The accompanying notes are an integral part of these consolidated financial statements. COUNTY OF NEWELL Consolidated Statement of Cash Flows Year ended December 31, 2015, with comparative information for 2014 2015 2014 Cash provided by (used in): Operations: Annual surplus $ 30,298,111 $ 23,396,133 Items not involving cash: Amortization 5,744,761 4,860,572 Contributed assets (13,407) - (Gain) loss on disposal of tangible capital assets (738,100) 5,403 Change in non-cash financial assets and liabilities: Taxes and grants in place of taxes receivable 211,561 (153,904) Trade and other receivables (12,763,023) (2,030,238) Land held for resale 3,258 - Other financial assets (1,655) 16,687 Prepaid expenses (47,881) (19,770) Inventory for consumption (414,619) 304,035 Accounts payable and accrued liabilities (236,131) (1,458,029) Employee benefit obligations (10,336) 53,231 Unearned revenue (1,259,477) (25,679) Landfill closure and post -closure costs (12,565) (7,431) Gravel pit closure and post -closure costs 35,218 - 20,795,716 24,941,010 Capital activities: Proceeds on disposal of tangible capital assets 1,236,816 593,747 Cash used to acquire tangible capital. assets (25,958,833) (27,293,957) (24,722,017) (26,700,210) Investing activities: Decrease in temporary investments 7,956,675 6,608,501 Decrease (increase) in investments (6,423,046) (2,546,733) Payments received on notes receivable 829,381 1,180,554 2,363,010 5,242,322 Financing activities: Repayment of long-term debt: - operating (672,385) (909,194) - capital (3,777,394) (2,160,797) Proceeds from debt issues 6,000,000 8,846,267 Increase (decrease) in deposit liabilities 10,299 (1,392) 1,560,520 5,774,884 Increase (decrease) in cash and cash equivalents (2,771) 9,258,006 Cash and cash equivalents, beginning of year 16,621,618 7,363,612 Cash and cash equivalents, end of year (note 2) $ 16,618,847 $ 16,621,618 Cash and cash equivalents is comprised of: Cash and temporary investments $ 19,514,847 $ 27,474,293 Less investments with original maturities greater than 90 days (2,896,000) (10,852,675) $ 16,618,847 $ 16,621,618 The accompanying notes are an integral part of these consolidated financial statements. COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2015 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, 2015 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 15-45 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. 1.1 COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2015 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. 0) 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. (1) 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. 7 COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2015 1. Significant accounting policies (continued): (m) Adoption of new accounting policy: 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: Cash Temporary investments 2015 2014 $ 16,618,847 $ 16,621,618 2,896,000 10,852,675 $ 19,514,847 27,474,293 Included in cash are amounts aggregating $243,991 (2014 - $233,692) not available for current use. Also included in cash and temporary investments is $424,957 (2014 - $8,000,000) of unexpended debt proceeds. Tax sale surplus Public reserve 2015 $ 12,661 231,330 2014 $ 12,539 221,153 $ 243,991 $ 233,692 Temporary investments consist of GIC's that have an average interest rate of 2.05% (2014 — 1.93%) and mature in periods ranging from April, 2016 to August, 2016. 9 COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2015 3. Taxes and grants in place of taxes receivable: Current year Arrears Allowance for uncollectible taxes 4. Trade and other receivables: Grants Local improvement taxes Other 2015 2014 $ 695,806 462,904 1,158,710 (100,000) $ 600,093 770,179 1,370,272 (100, 000) $ 1,058,710 $ 1,270,272 2015 2014 $ 16,144,745 $ 6,386,377 5,581,086 2,459,349 1,401,684 1,518,766 $ 23,127;515 $ 10,364,492 Local improvement taxes carry annual interest rates ranging from 2.64% - 7.125% and are due between 2016 — 2034. 5. Investments: 2015 2014 Fixed income securities $ 42,177,933 $ 35,754,887 Credit Union Common shares 5 5 Newell Regional Services Corporation: Common shares 20 20 Preferred shares 84,178 84,178 84,198 84,198 $ 42,262,136 $ 35,839,090 Fixed income securities yield interest from 1.34% to 4.95% and mature in periods 2016 through 2025. The investments have an average expected yield of 2.45% and an aggregate market value of $43,184,935 (2014 - $36,187,679). 106A COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2015 6. Notes receivable: 2015 2014 Newell Foundation, repayable in annual installments of $832,967 including interest at 5.5%, maturing in 2018. $ 2,247,288 $ 2,919,673 Tilley and District Fire Association, repayable in annual installments of $96,327 including interest at 3.497%, 433,492 511,917 maturing in 2020. Newell Regional Services Corporation, non-interest bearing, maturing in 2017. 314,286 392,857 $ 2,995,066 $ 3,824,447 7. Tangible capital assets: Cost 2014 Additions Disposals 2015 Land $ 5,420,350 $ -- $ (67,182) $ 5,353,168 Land improvements 1,832,534 33,118 -- 1,865,652 Buildings 18,855,552 -- (357,800) 18,497,752 Engineered structures 163,196,481 24,154,685 (61,551) 187,289,615 Machinery and equipment 9,777,696 1,625,875 (75,003) 11,328,568 Vehicles 4,117,892 1,325,489 (455,172) 4,988,209 Work in progress, net of transfers 51,444, 048 (1,166, 927) (151, 018) 50,126,103 Total $254,644,553 $ 25,972,240 $ (1,167,726) $279,449,067 Accumulated Amortization amortization 2014 Disposals expense 2015 Land improvements $ 581,118 $ -- $ 120,423 $ 701,541 Buildings 954,590 (201,398) 318,893 1,072,085 Engineered structures 46,430,877 (42,195) 4,028,482 50,417,164 Machinery and equipment 3,404,107 (66,904) 928,213 4,265,416 Vehicles 2,044,312 (358,512) 348,750 2,034,550 Total $ 53,415,004 $ (669,009) $ 5,744,761 $ 58,490,756 10 COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2015 7. Tangible capital assets (continued): Net book value 2015 2014 Land $ 5,353,168 $ 5,420,350 Land improvements 1,164,111 1,251,416 Buildings 17,425,667 17,900,962 Engineered structures 136,872,451 116,765,604 Machinery and equipment 7,063,152 6,406,098 Vehicles 2,953,659 2,073,581 Work in progress 50,126,103 51,444,048 Total $ 220,958,311 $ 201,229,548 Contributed tangible capital assets are recognized at fair value at the date of contribution. The value of contributed assets received during the year is $13,407 (2014 — nil) and has been included in engineered structures. 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 2014 Additions revenue 2015 RCP Grant (Tilley) $ 596,705 $ -- $ (596,705) $ -- Street Improvement Grant 173,520 -- -- 173,520 MSI Capital (Tilley) 639,668 -- (639,668) -- Other 32,568 9,387 (32,491) 9,464 Total $ 1,442,461 $ 9,387 $ (1,268,864) $ 182,984 11 COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2015 10. Long-term debt —operating: 2015 2014 Debenture supported with notes receivable $ 2,247,288 $ 2,919,673 Principal and interest repayments are due as follows: Principal Interest Total 2016 $ 709,366 $ 123,601 $ 832,967 2017 748,381 84,586 832,967 2018 789,541 43,425 832,966 $ 2,247,288 $ 251,612 $ 2,498,900 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 $151,337 (2014 — $206,279). The County's total cash payments for interest in 2015 were $160,582 (2014 - $206,278). 11. Long-term debt — capital: 2015 2014 Tax supported debentures $ 29,357,355 $ 27,134,749 Principal and interest repayments. are due as follows: 12 Principal Interest Total 2016. $ 4,942,931 $ 560,423 $ 5,503,355 2017 5,034,630 468,725 5,503,355 2018 5,121,407 375,165 5,496,572 2019 5,216,386 280,186 5,496,572 2020 3,633,522 190,142 3,823,663 Thereafter 5,408,479 318,013 5,726,492 $ 29,357,355 $ 2,192,654 $ 31,550,009 12 COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2015 11. Long-term debt — capital (continued): Debenture debt is repayable to Alberta Capital Finance Authority and bears interest at rates ranging from 1.124% to 7.125% per annum, before Provincial subsidy, and matures in periods 2018 through 2034. The average annual interest rate is 1.986% for 2015 (2014 — 2.209%). 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 $574,770 (2014 - $494,256). The County's total cash payments for interest in 2015 were $575,812 (2014 - $490,152). 12. Provision for landfill and gravel pit closure and post -closure costs: Alberta environmental law requires closure and post -closure care of landfill sites, which includes final covering and landscaping, pumping of ground water and leachates from the site, and on- going environmental monitoring, site inspections and maintenance. The accrued liability for the remaining post -closure costs of the County's landfill and closure and post -closure costs for the County's gravel pits are based on an estimate of future discounted costs. All landfill sites are closed. One site will be reclaimed in 2016, while post -closure costs associated on another are expected until 2028. The estimated closure and post -closure costs for the landfill are $317,901 and $350,594 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. 13 COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2015 13. Accumulated surplus: Equity in tangible Unrestricted capital Restricted Total Total net assets assets (1) Surplus (2) 2015 2014 Beginning balance $ 1,932,102 $182,094,799 $60,824,375 $244,851,276 $221,455,143 Annual surplus 30,298,111 -- -- 30,298,111 23,396,133 Transfers to restricted surplus (35,889,223) -- 35,889,223 -- -- Transfers from restricted surplus 15,415,334 -- (15,415,334) -- -- Amortization of tangible capital. assets 5,744,761 (5,744,761) -- -- Net book value of assets disposed 498,716 (498,716) -- -- -- Capital assets internally funded (12,383,430) 12,383,430 -- -- -- Capital assets debt funded (13,575,403) 13,575,403 -- -- -- Contributed assets (13,407) 13,407 - - - Debt issued 6,000,000 (6,000,000) -- -- -- Unexpended debt 7,575,402 (7,575,402) -- -- -- Debt paid (3,777,393) 3,777,393 -- -- -- Total $ 1,825,570 $192,025,553 $81,298,264 $275,149,387 $244,851,276 (1) Equity in tangible capital assets: 2015 2014 Tangible capital assets $ 279,449,067 $ 254,644,553 Accumulated amortization (58,490,756) (53,415,005) Long-term debt (note 11) (29,357,355) (27,134,749) Unexpended debt proceeds 424,597 8,000,000 $ 192,025,553 $182,094,799 14 COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2015 13. Accumulated surplus (continued): (2) Restricted surplus is comprised of funds internally restricted as follows: 14. Net municipal property taxes: 2015 2014 Paving $ 7,260,029 $ 6,416,381 Infrastructure 19,921,173 13,633,516 Future Projects 32,309,837 23,773,760 Vehicles, Machinery & Equipment 7,244,960 6,184,837 Regional Enhancement 3,390,161 3,421,192 Stabilization 5,768,951 2,847,112 Facilities 2,464,260 1,133,647 Fire Apparatus 1,898,512 1,183,916 Tilley 837,205 850,988 Unexpended Budget Appropriation 203,176 1,379,026 $ 81,298,264 $ 60,824,375 14. Net municipal property taxes: Requisitions: Alberta School Foundation Fund 12,483,556 12,529,765 12,475,317 Newell Foundation 893,217 893,217 787,427 13, 376, 773 13, 422, 982 13, 262, 744 Net municipal property taxes $ 29,134,814 $ 29,047,827 $ 28,273,858 15 Budget 2015 2014 Taxation: Real property taxes $ 14,711,005 $ 14,680,494 $ 14,112,735 Linear property taxes 27,471,802 27,461,535 27,113,790 Government grants in place of property taxes 328,780 328,780 310,077 42,511,587 42,780,809 41,536,602 Requisitions: Alberta School Foundation Fund 12,483,556 12,529,765 12,475,317 Newell Foundation 893,217 893,217 787,427 13, 376, 773 13, 422, 982 13, 262, 744 Net municipal property taxes $ 29,134,814 $ 29,047,827 $ 28,273,858 15 COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2015 15. Government transfers: Budget 2015 2014 Transfers for operating: Provincial government $ 347,392 $ 535,630 $ 728,883 Local government 386,398 397,809 344,629 733,790 933,439 1,073,512 Transfers for capital: Provincial government 4,915,433 16,044,107 10,811,280 Local government - - 27 4,915,433 16, 044,107 10, 811, 307 16. Expenses by object: $ 5,649,223 $ 16,977,546 $ 11,884,819 Budget 2015 2014 Salaries, wages and benefits $ 8,177,529 $ 7,451,402 $ 7,376,785 Contracted and general services 4,927,054 4,040,966 5,025,408 Materials, goods, supplies and utilities 5,043,129 3,966,506. 4,827,107 Transfers to organizations 3,775,104 4,892,329 3,084,247 Bank charges and short-term interest 1,500 4,246 1,873 Interest on long-term debt 753,690 735,351 700,535- 00,535_Other Otherexpenditures 20,000 9,285 54,114 Amortization 4,679,346 5,744,761 4,860,572 $ 27,377,352 $ 26,844,846 $ 25,930,641 16 COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2015 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: $ 317,217 $ 40,218 $ 357,435 $ 366,384 Chief Administrative Officer $ 212,072 $ 49,797 $ 261,869 $ 252,347 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. 17 2015 2014 Benefits & Salary (1) Allowances (2) Total Total Council: Division 1 $ 25,578 $ 4,697 $ 30,275 $ 38,397 Division 2 31,209 4,926 36,135 34,699 Division 3 31,679 4,945 36,624 40,596 Division 4 29,693 2,644 32,337 30,524 Division 5 28,270 4,806 33,076 31,120 Division 6 30,609 4,901 35,510 37,592 Division 7 29,280 4,847 34,127 36,162 Division 8 31,695 1,518 33,213 32,587 Division 9 51,847 2,165 54,012 49,971 Division 10 27,357 4,769 32,126 34,736 $ 317,217 $ 40,218 $ 357,435 $ 366,384 Chief Administrative Officer $ 212,072 $ 49,797 $ 261,869 $ 252,347 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. 17 COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2015 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: 2015 2014 Total debt limit $ 58,897,718 $ 54,668,823 Total debt (31,604,643) (30,054,422) $ 27,293,075 $ 24,614,401 2015 2014 Debt servicing limit $ 9,816,286 $ 9,111,471 Debt servicing (6,336,321) (5,186,171) $ 3,479,965 $ 3,925,300 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 237,612 people and about 423 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 2015 were $609,423 (2014 $572,455). Total current service contributions by the employees of the County to the LAPP in 2015 were $561,814 (2014 - $527,661). At December 31, 2014, the LAPP disclosed an actuarial deficiency of $2.4 billion. 18 COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2015 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. 21. Recent accounting pronouncements: The Public Sector Accounting Board recently announced the following accounting pronouncements: (a) Financial instruments: This section establishes recognition, measurement, and disclosure requirements for derivative and non -derivative instruments. The standard requires fair value measurements of derivative instruments and equity instruments; all other financial instruments can be measured at either cost or fair value depending upon elections made by the government. Unrealized gains and losses will be presented on the new statement of remeasurement gains and losses arising from the adoption of PS 1201. There will also be a requirement to disclose the nature and extent of risks arising from financial instruments and clarification is given for the de- recognition of financial liabilities. As the Municipality does not invest in derivatives or equity instruments based on its investment policy, it is anticipated that the adoption of this standard will have a minimal impact on the Municipality. This standard is effective for fiscal years beginning on or after April 1, 2019. (b) Foreign currency translation: This section 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, 2019. (c) Related party transactions: This section provides guidance on the definition of a related party and establishes the disclosure requirements for transactions between related parties. This standard is effective for fiscal years beginning on or after April 1, 2017. 19 COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2015 21. Recent accounting pronouncements: (d) Financial statement presentation: The implementation of this standard requires a new statement of re -measurement gains and losses separate from the statement of operations. This new statement will include the unrealized gains and losses arising from the remeasurement of financial instruments and items denominated in a foreign currency. This standard is effective for fiscal years beginning on or after April 1, 2019. Management is assessing the impact of the adoption of these standards which is not known or reasonably estimable at this time. 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. 20 COUNTY OF NEWELL Notes to Consolidated Financial Statements Year ended December 31, 2015 23. Budget information: The budget information presented in these consolidated financial statements is based upon the 2015 budget approved by Council on April 9, 2015. 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: $ 70,346,430 Adjustments: Transfers from restricted surplus (17,781,505) Transfers to organizations (13,376,773) Total budgeted revenue 39,188,152 Expenses: Approved budget: 70,346,430 Adjustments: Tangible capital assets (23,924,401) Debt principal repayments (3,652,514) Unfunded portion of amortization 1,810,416 Transfers to restricted surplus (3,060,806) Transfers to inventory (765,000) Transfers to organizations (13,376,773) Total budgeted expenses 27,377,352 Budgeted annual surplus $ 11,810,800 24. Comparative information: Certain comparative information has been reclassified from those previously presented to conform to the presentation of the 2015 financial statements 25. Approval of financial statements: These financial statements were approved by Council and Management. 21 CO U N T Y O F N E W E L L Schedule 1 Sc h e d u l e o f S e g m e n t e d D i s c l o s u r e s Ye a r e n d e d D e c e m b e r 3 1 , 2 0 1 5 , w i t h c o m p a r a t i v e i n f o r m a t i o n f o r 2 0 1 4 Ge n e r a l Go v e r n m e n t Pu b l i c W o r k s an d Tr a n s p o r t a t i o n P u b l i c U t i l i t i e s T o t a l 20 1 5 Ge n e r a l Go v e r n m e n t Pu b l i c W o r k s an d Tr a n s p o r t a t i o n P u b l i c U t i l i t i e s Total 2014 Re v e n u e Ne t t a x e s f o r m u n i c i p a l p u r p o s e s 2 9 , 0 4 7 , 8 2 7 $ - $ - $ 2 9 , 0 4 7 , 8 2 7 $ 2 8 , 2 7 3 , 8 5 8 $ - $ - $ 2 8 , 2 7 3 , 8 5 8 $ Sp e c i a l l e v i e s 3 0 7 , 3 8 2 - 3 , 4 6 0 , 4 5 3 3 , 7 6 7 , 8 3 5 2 7 7 , 4 0 9 - 1 , 0 0 8 , 5 9 4 1 , 2 8 6 , 0 0 3 Us e r F e e s a n d s a l e o f g o o d s 4 1 0 , 8 0 6 2 2 2 , 8 1 9 9 9 7 , 2 4 1 1 , 6 3 0 , 8 6 6 5 9 6 , 8 5 8 2 5 3 , 1 2 0 7 5 8 , 6 1 4 1 , 6 0 8 , 5 9 2 Go v e r n m e n t t r a n s f e r s - o p e r a t i n g 7 4 9 , 7 4 5 - 1 8 3 , 6 9 4 9 3 3 , 4 3 9 7 3 8 , 1 3 5 1 7 , 4 0 6 3 1 7 , 9 7 1 1 , 0 7 3 , 5 1 2 Pe n a l t i e s a n d c o s t s o f t a x e s 1 8 5 , 2 6 9 - - 1 8 5 , 2 6 9 2 5 0 , 5 9 1 - - 2 5 0 , 5 9 1 In v e s t m e n t i n c o m e 1 , 5 9 2 , 2 9 0 - - 1 , 5 9 2 , 2 9 0 1 , 6 5 4 , 2 4 0 - - 1 , 6 5 4 , 2 4 0 Li c e n s e a n d p e r m i t s 1 8 6 , 1 9 2 - - 1 8 6 , 1 9 2 1 8 5 , 3 2 4 - - 1 8 5 , 3 2 4 Ot h e r 5 5 5 , 6 6 0 6 7 , 7 3 2 5 5 9 , 9 3 5 1 , 1 8 3 , 3 2 7 8 3 6 , 1 1 8 6 7 , 8 5 5 1 , 2 1 5 , 1 9 2 2 , 1 1 9 , 1 6 5 Ga i n ( l o s s ) o n d i s p o s a l o f c a p i t a l a s s e t s ( 4 , 8 4 5 ) 8 2 0 , 5 5 7 ( 7 7 , 6 1 2 ) 7 3 8 , 1 0 0 5 4 2 ( 5 , 9 4 5 ) - ( 5 , 4 0 3 ) 33 , 0 3 0 , 3 2 6 1 , 1 1 1 , 1 0 8 5 , 1 2 3 , 7 1 1 3 9 , 2 6 5 , 1 4 5 3 2 , 8 1 3 , 0 7 5 3 3 2 , 4 3 6 3 , 3 0 0 , 3 7 1 3 6 , 4 4 5 , 8 8 2 Ex p e n s e s Sa l a r i e s , w a g e s a n d b e n e f i t s 4 , 8 6 3 , 5 7 9 2 , 5 8 7 , 8 2 3 - 7 , 4 5 1 , 4 0 2 4 , 6 2 3 , 1 9 1 2 , 7 5 3 , 5 9 4 - 7 , 3 7 6 , 7 8 5 Co n t r a c t e d a n d g e n e r a l s e r v i c e s 1 , 7 0 8 , 6 8 0 1 , 8 7 7 , 4 1 3 4 5 4 , 8 7 3 4 , 0 4 0 , 9 6 6 1 , 5 6 6 , 4 8 8 2 , 8 1 3 , 0 3 0 6 4 5 , 8 9 0 5 , 0 2 5 , 4 0 8 Ma t e r i a l s , g o o d s , s u p p l i e s a n d u t i l i t i e s 1 , 2 3 1 , 1 2 5 2 , 0 2 3 , 8 5 9 7 1 1 , 5 2 2 3 , 9 6 6 , 5 0 6 1 , 4 9 4 , 4 5 3 2 , 3 1 6 , 3 9 0 1 , 0 1 6 , 2 6 4 4 , 8 2 7 , 1 0 7 Tr a n s f e r t o O r g a n i z a t i o n 4 , 8 8 7 , 3 8 1 - 4 , 9 4 8 4 , 8 9 2 , 3 2 9 3 , 0 8 4 , 2 4 7 - - 3 , 0 8 4 , 2 4 7 Ba n k c h a r g e s a n d s h o r t t e r m i n t e r e s t 4 , 2 4 6 - - 4 , 2 4 6 1 , 8 7 3 - - 1 , 8 7 3 In t e r e s t o n l o n g - t e r m d e b t 1 6 0 , 5 8 2 - 5 7 4 , 7 6 9 7 3 5 , 3 5 1 2 0 6 , 2 7 9 - 4 9 4 , 2 5 6 7 0 0 , 5 3 5 Ot h e r e x p e n d i t u r e s ( 3 , 8 7 3 ) 1 3 , 1 5 8 - 9 , 2 8 5 1 2 , 6 1 9 4 1 , 4 9 5 - 5 4 , 1 1 4 Am o r t i z a t i o n 9 3 3 , 7 7 8 4 , 1 2 7 , 2 9 1 6 8 3 , 6 9 2 5 , 7 4 4 , 7 6 1 8 0 4 , 6 4 8 3 , 7 6 7 , 3 4 0 2 8 8 , 5 8 4 4 , 8 6 0 , 5 7 2 13 , 7 8 5 , 4 9 8 1 0 , 6 2 9 , 5 4 4 2 , 4 2 9 , 8 0 4 2 6 , 8 4 4 , 8 4 6 1 1 , 7 9 3 , 7 9 8 1 1 , 6 9 1 , 8 4 9 2 , 4 4 4 , 9 9 4 2 5 , 9 3 0 , 6 4 1 An n u a l s u r p l u s ( d e f i c i t ) be f o r e t h e u n d e r n o t e d 1 9 , 2 4 4 , 8 2 8 ( 9 , 5 1 8 , 4 3 6 ) 2 , 6 9 3 , 9 0 7 1 2 , 4 2 0 , 2 9 9 2 1 , 0 1 9 , 2 7 7 ( 1 1 , 3 5 9 , 4 1 3 ) 8 5 5 , 3 7 7 1 0 , 5 1 5 , 2 4 1 Ot h e r In s u r a n c e p r o c e e d s 1 , 0 7 6 , 6 8 3 - - 1 , 0 7 6 , 6 8 3 6 2 , 9 6 9 - - 6 2 , 9 6 9 Co n t r i b u t e d a s s e t s - 1 3 , 4 0 7 - 1 3 , 4 0 7 - - - - Go v e r n m e n t t r a n s f e r s - c a p i t a l - 5 2 0 , 5 8 3 1 5 , 5 2 3 , 5 2 4 1 6 , 0 4 4 , 1 0 7 - 7 6 4 , 7 9 3 1 0 , 0 4 6 , 5 1 4 1 0 , 8 1 1 , 3 0 7 Ot h e r - - 7 4 3 , 6 1 5 7 4 3 , 6 1 5 - - 2 , 0 0 6 , 6 1 6 2 , 0 0 6 , 6 1 6 An n u a l s u r p l u s ( d e f i c i t ) 2 0 , 3 2 1 , 5 1 1 $ ( 8 , 9 8 4 , 4 4 6 ) $ 1 8 , 9 6 1 , 0 4 6 $ 3 0 , 2 9 8 , 1 1 1 $ 2 1 , 0 8 2 , 2 4 6 $ ( 1 0 , 5 9 4 , 6 2 0 ) $ 1 2 , 9 0 8 , 5 0 7 $ 2 3 , 3 9 6 , 1 3 3 $