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HomeMy WebLinkAbout2025 Annual Report2025 ANNUAL FINANCIAL REPORT 1 For the year endingDecember 31, 2025 COUNTY OF NEWELL ALBERTA, CANADA County of Newell, Alberta, Canada 2025 Annual Financial Report For the fiscal period ending December 31, 2025 Produced by the Finance Department in cooperation with all County Departments For information on Programs and Services, or to obtain a copy of this document, contact: Administration Telephone: 403-362-3266 Email: administration@newellmail.ca The 2025 Annual Financial Report is available online at www.countyofnewell.ab.ca Cover Photo: Whispy Wheat Field by Tammy Karasek Cover and other credited photos used throughout this document were submitted to the #myCountyofNewell photo challenge through Newell Connect. 2 SECTION 1 Introduction SECTION 3 Financial & Statistical Section TABLE OF CONTENTS 2025 Annual Financial Report Vision and Mission ............................................................................................................................................... 5 Guiding Principles .................................................................................................................................................. 6 County Profile ............................................................................................................................................................. 7 County Council .......................................................................................................................................................... 9 Organizational Chart ....................................................................................................................................... 10 GFOA Canadian Award for Financial Reporting .................................................................. 11 Message from the Reeve .............................................................................................................................. 12 Report from the Controller ........................................................................................................................... 17 Agricultural Services Report ...................................................................................................................... 29 Municipal Services Report ........................................................................................................................... 34 Planning & Development Report .......................................................................................................... 38 SECTION 2 Consolidated Financial Statements Independent Auditors’ Report .................................................................................................................. 43 Management’s Responsibility for the Consolidated Financial Statements . 45 Consolidated Statement of Financial Position .......................................................................... 46 Consolidated Statement of Operations .......................................................................................... 47 Consolidated Statement of Remeasurement Gains and Losses ........................... 48 Consolidated Statement of Change in Net Financial Assets ...................................... 49 Consolidated Statement of Cash Flows .......................................................................................... 50 Notes to Consolidated Financial Statements .............................................................................. 51 Schedule of Segmented Disclosures .................................................................................................. 68 Schedule of Tangible Capital Assets ................................................................................................... 69 Demographics & Other Statistics .......................................................................................................... 70 Expenses by Object ............................................................................................................................................. 72 Expenses by Function ......................................................................................................................................... 74 Revenues by Source ............................................................................................................................................ 75 Capital Expenditures - by Group ............................................................................................................ 76 Capital Expenditures - by Function ....................................................................................................... 77 3 INTRODUCTION SECTION ONE 2025 Annual Financial Report 4 To encourage and attract sustainable growth and support a high quality of life. Vision Rebecca Arndt Tammy Karasek Lena Neufeld 2025 Annual Financial Report Mission Through leadership, partnership. and effective policy, the County provides services, structure, and stability to its residents.Leslie Smith MISSION & VISION Danielle LaPointe 5 Seek cooperation with individuals, governments & organizations Strive for long-term financial stability Preserving land for agriculture Plan for future growth & development Support development & sustainability of strong infrastructure Provide consistent & efficient services Promote open communication between staff, Council & public 2025 Annual Financial Report GUIDING PRINCIPALS 6 2025 Annual Financial Report The County of Newell is a rural municipality located central to Calgary, Medicine Hat, and Lethbridge with less than 190 kilometers of separation between each city. The County is a growing transportation hub with the TransCanada (Highway #1) and Highway #36 intersecting within our boundaries. CP Rail’s mainline runs through the County on its track from Montreal to Vancouver, and our geographical position provides ease of access to the oil sands to the north and the United States to the south, creating an ideal trade location for businesses. The population of the Newell region, inclusive of our urban counterparts, is over 25,000. The largest urban communities in the region are the City of Brooks and the Town of Bassano. We have positive working relationships with these urban neighbours, which improves the quality of services provided to all Newell residents. The County is home to the Eastern Irrigation District (EID), which provides an extensive water supply, storage, and drainage network throughout the region. Water diverted from the Bow River at the Bassano Dam provides for irrigated agriculture, industrial, household and livestock use, as well as many recreational opportunities and enhanced environmental conditions. The County has a dynamic and diverse economy driven by three pillars: Agriculture, Oil and Gas, and Tourism. There are approximately 500 primary agricultural producers in the County, and approximately 1,500 non-agricultural business enterprises. The region boasts extraordinary crop quality with over 300,000 acres of irrigated farmland, 600,000 acres of cultivated dry land, and 600,000 acres of native and improved rangeland. We are home to some of the most profitable farms in Alberta. COUNTY PROFILE L. Clancy Tammy Karasek 7 County Hamlet Populations Bow City 16 Cassils 22 Gem 29 Lake Newell Resort 437 Patricia 101 Rainier 22 Rolling Hills 273 Scandia 169 Tilley 318 Total 1387 1. TORXEN ENERGY LTD. 2. CANADIAN NATURAL RESOURCES LTD. 3. NGTL GP LTD. 4. ATCO ELECTRIC LTD. 5. JBS FOOD CANADA ULC. 6. CARDINAL ENERGY LTD. 7. ALTALINK MANAGEMENT LTD. 8. FOOTHILLS PIPE LINES (ALTA) LTD. 9. IPC CANADA LTD. 10. ASTARA ENERGY CORP TOP 10 TAX PAYERS Population (2025): 7846 Unemployment Rate (2021): 7% Increase in population from 2021: 1.08% Median Household Income (2023): $101,060 Median Age (2021): 39 Number of Farms: 727 A fourth sector, utility scale renewable energy facilities, are beginning to emerge within the County with solar projects at varying stages that range from application submitted through to fully constructed operational facilities. The County has one of Alberta’s most active natural gas fields; there are roughly 20,400 wells, which accounts for almost 9% of all wells in Alberta. Key tourism anchors include Lake Newell Reservoir - one of Canada’s largest man-made lakes, Dinosaur Provincial Park - a UNESCO World Heritage Site, and recreation activities as diverse as golfing, boating, camping, fishing, hunting, and wildlife watching. 2025 Annual Financial Report Leslie Smith 8 Neil Johnson 403-793-4206 johnsonn@newellmail.ca DIVISION 7 North & East of Brooks Ben Hofer 403-793-0457 hoferb@newellmail.ca DIVISION 8 Duchess Arno Doerksen - Reeve 403-363-0253 doerksena@newellmail.ca DIVISION 9 Gem/Rosemary Kelly Christman - Deputy Reeve 403-793-0014 christmank@newellmail.ca DIVISION 6 Bassano Holly Johnson 403-363-4701 johnsonh@newellmail.ca DIVISION 4 Scandia/Rainier/Bow City/Cassils Dan Baumgarten 403-829-7608 baumgartend@newellmail.ca DIVISION 1 Rolling Hills Adena Skanderup 403-633-2224 skanderupa@newellmail.ca DIVISION 2 Tilley Lynette Kopp 403-363-5677 koppl@newellmail.ca DIVISION 3 Patricia/Millicent Greg Skriver 403-409-4281 skriverg@newellmail.ca DIVISION 5 South of Brooks/Lake Newell Resort/ Kinbrook 2025 Annual Financial Report COUNTY COUNCIL 9 Chief Administrative Officer Executive Assistant Manager of Personnel & Safety Services Reeve & Council Director of Agricultural Services Manager of Agricultural Services Manager of Parks & Facilities CDC SouthProject Coordinator Director of Municipal Services Municipal Enforcement Supervisor Manager ofPlanning,Development &EngineeringServices Manager of Operations Director of Corporate Services Corporate Services Supervisor Controller Newell Regional Fire Chief Director of Information & Technology Services Information & Technology Supervisor Communications Officer ORGANIZATIONAL CHART 2025 Annual Financial Report 10 2025 Annual Financial Report The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Canadian Award for Financial Reporting to County of Newell for its annual financial report for the fiscal year ended December 31, 2024. The Canadian Award for Financial Reporting program was established to encourage municipal governments throughout Canada to publish high quality financial reports and to provide peer recognition and technical guidance for officials preparing these reports. To be awarded a Canadian Award for Financial Reporting, a government unit must publish an easily readable and efficiently organized annual financial report, whose contents conform to program standards. Such reports should go beyond the minimum requirements of generally accepted accounting principles and demonstrate an effort to clearly communicate the municipal government’s financial picture, enhance an understanding of financial reporting by municipal governments, and address user needs. A Canadian Award for Financial Reporting is valid for a period of one year only. We believe our current report continues to conform to the Canadian Award for Financial Reporting program requirements, and we are (will be) submitting it to GFOA to determine its eligibility for another award. GFOA CANADIAN AWARD FOR FINANCIAL REPORTING 11 Our primary responsibility as a Council is to set the overall direction for the County of Newell while considering all aspects of the municipality to ensure we maintain safe and sustainable communities for our constituents. We do this by developing and evaluating our programs and policies to ensure that they are operating in the best interests of County residents. In October of 2025, Council began the first year of a four-year term with two new Councillors, and has recently completed a strategic planning session to set the priorities for this term. Several items identified by previous Council have been completed, and significant progress has been made towards achieving other goals that have been reaffirmed as priorities. Here are some of the highlights from 2025. The Municipal Election in October 2025 and electoral division boundary changes resulted in some changes to County Council. Three Council members chose not to run again – we thank Councillors Dan Short, Ellen Unruh, and Amanda Philpott for their years of service and wish them the best in their future endeavors. Councillors Dan Baumgarten (acclaimed), Division 1 – Rolling Hills and Benjamin Hofer (elected), Division 8 - Duchess were welcomed to Council and introduced to the public via livestream during the October 30, 2025 Organizational Meeting. Council is proud of the strong regional collaboration we’ve built and the positive relationships we continue to maintain with our urban neighbours. The former Joint Services Committee has been reconstructed into the Intermunicipal Affairs Committee with a Terms of Reference outlining objectives that include collaboration, strengthening positive intermunicipal relations, discussing matters of mutual interest, and communicating each municipality’s unique priorities and challenges. The Intermunicipal Affairs Committee will provide a shared forum for delegations to present matters of common interest to all participating municipalities, rather than meeting with each Council separately. Another goal is to provide regional training opportunities, which started off strong with a Council orientation by George Cuff immediately following the Municipal Election. 2025 Annual Financial Report A MESSAGE FROM THE REEVE Tammy Karasek 12 Efforts to revitalize the Crop Diversification Centre South started with a dedicated Projects Coordinator hired in January 2025 to manage the initiative and the progress has been impressive. Significant renovations and clean up were required to get the facilities ready for future tenants and by the end of 2025, several office and greenhouse spaces were occupied with formal agreements in place. The CDC South has received significant attention from the media and is well on its way to reclaiming its status as a center for agricultural research and innovation. Council is pleased with the progress made by the County’s Agricultural Services department, and we look forward to what the future may bring. More information and updates can be found at https://countyofnewell.ab.ca/cdcsouth. 2025 Annual Financial Report 13 Photos courtesy of Brooks Newell Region During a review of Agricultural Services policies in February, the 100 Year Farm Awards program was discussed. The recommendation from staff was to rescind the policy as the program had been in place for approximately twenty years with no applications ever having been received. Each family was invited to a Council meeting where they were presented with a commemorative award and asked to share some history about their farm. 2025 Annual Financial Report Instead of discontinuing the program, Council provided direction that the 100 Year Farm Awards be advertised to the public. As a result, we were able to celebrate families who have been farming in the County of Newell for 100 or more years. 14 2025 Annual Financial Report While celebrating the past is important, so too is ensuring we are prepared for the future of our communities. The County’s Fire & Emergency Services Department expanded with the addition of the Newell Regional Deputy Fire Chief position who assists the Newell Regional Fire Chief with inspections and day-to-day activities. A request from the City of Brooks to join the Newell Regional Emergency Advisory Committee was also approved, joining the County, Town of Bassano, and the Villages of Duchess and Rosemary, allowing for coordinated efforts in emergency prevention, mitigation, preparedness, response, and recovery. At the request of the Alberta Emergency Management Agency, a Special Meeting of Council was held in May, where they approved the deployment of County fire personnel and equipment to assist with wildfires in Northern Alberta. Alongside these efforts to keep our communities safe, Council continues to support the programs and spaces that bring people together. The Recreation Facility Improvement policy was updated to include definitions for urgent and emergency situations, and funding applications must include clear budgets with specific funding sources and usage statistics wherever possible. Funding applications approved under this policy in 2025 include the upgrade and/or replacement of the ice plants at the rinks in Duchess, Rolling Hills, and Rosemary. Council also approved Regional Enhancement Reserve funding to install new lockers at the JBS Canada Centre in the City of Brooks. Recreation is an important part of life in our region, and we are working toward sustainable funding for facilities and services. Ian McNiven We also strive to provide consistent funding for recreation providers through Recreation Service Agreements with our urban municipal partners and local agricultural societies. For the most part, recreation services in the County are provided by volunteers, and we are so appreciative of their efforts. Several major infrastructure projects made progress in 2025. The Lake Newell Resort Pathway project was awarded, and significant progress was made towards its construction. Once completed, this pathway will directly connect to the Kinbrook Connection Pathway, expanding recreational opportunities for both residents and visitors by enhancing access to our region’s natural beauty. In addition, the 2025 Street Improvement Program at Lake Newell Resort included major infrastructure upgrades to Blue Heron Drive (Block 1) and White Pelican Way (Block 4), as engineering assessments of road conditions, drainage, and underground services, deemed these roadways as having reached end of life. 15 2025 Annual Financial Report Council has many opportunities throughout the year to meet with neighbouring municipalities and representatives from other levels of government to bring attention to issues and topics that are unique to our region. This year, the County’s own Councillor Kelly Christman was elected to the Rural Municipalities of Alberta Board of Directors representing District 1 (southern Alberta). Preventing the spread of aquatic invasive species is important to maintaining the health of our irrigation systems, so Council provided a letter encouraging the province to install boat dip tank technology to prevent contaminated watercraft from entering our waters. Other letters were provided in support of: widening SH873 south of Brooks to PR103 the development of additional rental housing units in Brooks by the Brooks Housing Society expansion of the Silver Sage grounds construction of a building to house antique tractors at the Brooks & District Museum and Historical Society Council would like to recognize and thank the dedicated staff of the County of Newell for their continued service. Under the leadership of CAO Matt Fenske, their commitment and professionalism provide a strong foundation for the work we do and the services we deliver. We also remain committed to open and transparent communication with our residents. Whether through Council meetings, community engagement, or direct conversations, we value your input and encourage you to stay connected and involved. It is together that we continue to build a strong, resilient, and connected County of Newell. The County also joined as a project partner for a Regional Transportation Study initiated by the City of Brooks. 16 Tammy Karasek 2025 Annual Financial Report Introduction Consolidated Statement of Financial Position The County improved its already strong financial position in 2025. Financial assets increased by $8.3 million, while liabilities decreased by $1.1 million, resulting in an overall increase in net financial assets of $9.4 million. Cash and cash equivalents increased by $2.83 million due to the increase in funds held in the current account and temporary investments. Investments increased by $4.17 million related to the increase in the long-term portfolio. Trade and other receivables increased by $1.07 million due to a significant outstanding receivable from the Province. Unearned revenue decreased $1.49 million due to a decrease in deferred tax revenue and grant funds awarded for capital projects that were recognized as revenue in 2025. Non-financial assets, which consist primarily of tangible capital assets and inventory for consumption, increased by $6.27 million. The changes in net financial assets and non-financial assets resulted in a net $15.63 million increase in the accumulated surplus. Consolidated Statement of Operations REPORT FROM THE CONTROLLER The annual financial report provides readers with an opportunity to assess the County’s financial activities and available resources. It also provides an opportunity to analyze and comment on the principal features of the financial information contained in the 2025 audited Consolidated Financial Statements, and to highlight key financial results that occurred during the year. Management at the County of Newell is responsible for the information contained in the annual financial report. 2025 FINANCIAL HIGHLIGHTS Overall revenues were $4.02 million higher than projected coming in at 109.5% of budget, which was an increase of $1.89 million over 2024. Noteworthy items on the revenue side included return on investments that was $2.43 million more than budget and $560 thousand less than 2024 investment income earned. Special levies were $604 thousand more than budget and $1.355 million more than 2024 due to local improvement levies recognized in 2025. Net property taxes increased over 2024 by $826 thousand due in part to a $1.34 million increase in property tax revenue over that generated in the previous year combined with an additional $571 thousand in requisitions submitted. 17 Catherine Siakaluk 2025 Annual Financial Report While overall expenses were $2.59 million lower than projected (92.95% of budget), they were higher than 2024 levels by $1.61 million. Staffing costs were slightly under budget but were $687 thousand higher than previous year due to cost-of-living adjustments approved during the year and the addition of new positions in 2025. Contracted services came in under budget and $239 thousand above 2024 due to an increase in conference and membership fees, an increase in IM professional services as well as a decrease in contracted repairs and maintenance. Materials, goods supplies and utilities were under budget, but higher than the 2024 amount by $221 thousand, primarily due to an increase in electricity costs and an increase in water usage with the completion of the water project and additional meters hooked up. Administrative expenses in 2025 were lower than budget and the previous year due to lower-than-expected IM professional services, IM hardware and IM software costs. Roads, streets, walks and lighting expenses were lower than budget by $1.07 million due to lower-than- expected gravel and paved road maintenance costs, fuel costs and gravel usage. Expenses for 2025 were lower than 2024 due to a decrease in costs for bridge materials; decrease in operating costs for vehicles and machinery which includes fuel, repairs and maintenance; and there was an increase in staffing costs due to cost-of-living adjustments. Disaster and Emergency Services expenses for 2025 were higher than 2024 due to an increase in staffing costs with the addition of the Deputy Fire Chief position and one time contribution to other local government agencies. Subdivision land and development expenses for 2025 were higher than 2024 by $1.132 million due to the County assuming operation of the Crop Diversification Centre (CDC) in April 2025. The County processed payments in the amount of $735 thousand in 2025 to the Province for policing costs. The final outcome was that the County ended 2025 with an Annual Surplus of $15.63 million. Bill ChristiansonBryce UrzadaLaurie Baron 18 2025 Annual Financial Report Consolidated Statement of Change in Net Financial Assets Consolidated Statement of Change of Cash Flows Budget Process Accounting Procedures The County’s accounting system and related internal controls are designed to provide reasonable assurance that financial records are complete and accurate, and that assets are safeguarded against loss from unauthorized use or disposition. The County’s Purchasing and Budget Variance policies ensure that controls and reporting requirements are appropriate. Generally accepted accounting principles for local governments are adhered to. External Audit Net financial assets increased by $9.4 million, for a total of $158 million in net financial assets at the end of the year. This indicates the County can afford to settle its liabilities and is positioned well for replacing or rehabilitating its tangible capital assets as they reach the end of their useful lives. Cash and cash equivalents increased by $2.83 million in 2025. Operations generated cash of $26.2 million with $15.08 million allocated to purchase tangible capital assets, $4.17 million was invested in interest generating instruments and $733 thousand was added to long term debt which included $825 thousand debt received and $92 thousand was applied to pay down debt. MANAGEMENT REPORTING AND CONTROL The major components of the County’s financial management and control programs include the budget process, accounting procedures, external audit, and various policies which are described below. On an annual basis, Council considers a proposed operating budget and a ten-year capital forecast and adopts the operating and capital budgets for the coming year. The budget process involves Council, Department Heads, Staff and input from the public. Council approves the budget taking into account current economic conditions, provincial policy changes and service needs within the County. It should be noted that under provincial legislation, sufficient revenues must be raised to meet all budgeted expenditures. After the budget is adopted by Council, expenditures are controlled against budget by formal policies and financial systems designed specifically to prevent budget overruns. Council is required by the Municipal Government Act to engage independent auditors to express an opinion as to whether the County’s financial statements present fairly, in all material respects, the County’s operating results and financial position. The auditors have full and free access to all County records, and they meet periodically with staff to discuss matters arising from the audit or from new policies and procedures. The auditors also provide the County with a management letter that comments on internal controls. Gail Volek Natalie Sturch 19 2025 Annual Financial Report While Council engages an independent auditor to express an opinion on the financial statements, the County’s management is responsible for the preparation of the financial statements and the integrity and objectivity of the financial information and representations contained in the financial statements. Purchasing Policy The County ensures that consistent procedures are followed for purchases through Purchasing Policy 2018- PAD-051 which sets expenditure limits for the County. The policy ensures that items purchased have been approved through the budget process or by separate resolution of Council. Investment Policy The County’s excess funds are invested in accordance with Investment Policy POL-052-24. This policy has as its objectives, the preservation of capital, maintenance of liquidity and the realization of a competitive rate of return. Municipal investments are governed by restrictive legislation under the Municipal Government Act. The County’s investment policy meets all of these requirements. Restricted Surplus Policy The County has established specific restricted surplus funds, through Restricted Surplus Policy POL-014-025, to provide for emergent financial needs, stabilize tax rates, set aside funds for the replacement of vehicles, machinery, equipment, infrastructure and facilities and to minimize its financing needs. Maintaining financial health and stability is the guiding principle behind this policy. FINANCIAL INDICATORS DISCUSSION AND ANALYSIS The 2025 Consolidated Financial Statements are prepared in compliance with Public Sector Accounting Standards (PSAS). While the consolidated financial statements provide a snapshot of the County’s financial position at year end (December 31), including results of operations and changes in cash flow and net assets, they do not present a complete picture of the County’s overall financial health. They also do not indicate how well the County is performing in relation to its broader economic and fiscal environment. The Annual Financial Report seeks to expand on and explain information in the financial statements by applying PSAS’s Statement of Recommended Practices (SORPs), specifically SORP-4 Indicators of Financial Condition. This information may help financial statement users better understand the risks facing the County in maintaining the programs and services it currently provides, as well as the policy and operational decisions it must make in light of its financial health. This SORP does not form part of the generally accepted accounting principles (GAAP) and there is no requirement for governments to implement its recommendations. Although there are numerous indicators to assess a government’s financial condition, SORP-4 recommends that at a minimum, indicators related to sustainability, flexibility, and vulnerability be considered. Definitions of these indicators follow, as well as a selection of indicators related to each. 20 Annual Surplus or Deficit 2025 Annual Financial Report SUSTAINABILITY Sustainability measures the County’s ability to maintain its existing programs and services, including maintaining its financial obligations to creditors, without increasing its debt or raising taxes. The following indicators have been selected to assess sustainability. This annual result indicates the extent to which the County’s revenue is more than its expenses during that year. A surplus means revenues exceed expenses while a deficit may indicate the County has not lived within its means. Long-term financial sustainability is dependent upon ensuring that on average, over time, expenses are less than revenues. This requires current taxpayers to fully meet the cost of services. The presence of a surplus does not necessarily represent financial sustainability. When a surplus is achieved, the amount is available for capital expenditures over and above amortization expense. Amortization expense is based on historic cost and does not reflect the increased cost of future asset replacements. Taking future asset replacement costs into account in determining the appropriate level of surplus is a critical step toward financial sustainability. Karma HeningerLaurie BaronVanessa Plett 21 2025 Annual Financial Report Financial Assets-to-Liabilities This indicator shows the extent to which the County’s future revenues will be required to pay for past transactions or events. A ratio greater than one indicates that financial assets are sufficient to meet obligations and to finance future operations while a ratio less than one may mean a reliance on future revenues or increasing debt to pay for past decisions. This ratio increased by 1.97 in 2025. The County remains in a very strong financial position with $15.01 in financial assets for every $1.00 of financial liability. These financial assets support the County’s long-term financial plan for replacing and rehabilitating its capital assets as they reach the end of their useful lives. Susie Martens 22 2025 Annual Financial Report Taxes Receivable as a % of Taxes Levied The following chart reflects the total uncollected property taxes as a percentage of the total tax levy. Every year, a percentage of property owners are unable to pay property taxes for a variety of reasons. If this percentage increases over time, it may indicate an overall decline in the County’s economic health. Additionally, as uncollected property taxes rise, liquidity decreases. 23 2025 Annual Financial Report Debt Servicing Costs-to-Revenues FLEXIBILITY Flexibility is the degree to which the County can change its debt burden or raise taxes to respond to rising commitments. Increasing debt and taxation reduces flexibility and the County’s ability to respond to changing circumstances. The ratio of debt servicing costs-to-revenues indicates the amount of current revenue that is required to service past borrowing decisions and, as a result, is not available for programs and services. 24 2025 Annual Financial Report Debt Limits and Debt Payments The County is limited in the amount of debt that it can incur beyond the limitations specified in Alberta Regulation 255/00. The maximum allowable debt the County could hold within this regulation is approximately $69.8 million. The County held outstanding debt balances representing 5.1% of this maximum allowable amount at the end of 2025. This leaves the County with approximately $66.19 million of borrowing room. Debt per capita increased in 2025 as the County borrowed funds to finance the Lake Newell Resort Community Pathway project, which cost will be recovered through a local improvement tax. 25 Restricted Surplus 2025 Annual Financial Report Restricted surplus funds are included as part of the County’s accumulated surplus. Restricted surplus funds are a critical component of the County’s long-term financing and capital plan. The County’s Restricted Surplus Policy POL-014-25 establishes specific restricted surplus funds to: Stabilize tax rates in the face of variable and uncontrollable factors (consumption, interest rates, unemployment rates, changes in subsidies) Provide financing for one-time or short-term requirements without permanently impacting the tax and utility rates. Make provisions for replacement or acquisitions of assets and infrastructure that are currently being consumed and amortized. Avoid spikes in capital plan funding requirements by reducing the reliance on long-term debt borrowings. Provide flexibility to manage debt levels and protect the municipality’s financial position. Provide for future payment on liabilities incurred in the current year. Provide a source of internal financing. Ensure adequate cash flows. Restricted surplus provides liquidity, enhancing the County’s flexibility to meet operating needs and temporarily fund capital projects internally while it accesses debt markets under favourable conditions. The level of restricted surplus funds to retain may vary for a number of reasons, including: A change in services provided by the County. Age and condition of infrastructure, fleet equipment and vehicles supporting County operations. Economic conditions and projections. Internal debt and restricted surplus policies. Restricted Surplus Policy POL-014-25 specifies minimum balances to be maintained for the restricted surplus funds listed below. The County is in compliance with this policy as of December 31, 2025. 26 2025 Annual Financial Report Tangible Capital Assets Net Book Value of Tangible Capital Assets-to-Cost of Tangible Capital Assets $18.20 million – Water Distribution System (transferred to capital) $705 thousand – Buildings (transferred to capital) $5.43 million – Road Reconstruction $1.90 million – Land Improvements $358 thousand – Drainage $291 thousand - Bridges No tangible capital assets were contributed to the County during the 2025 calendar year. Net book value of TCA compared to total cost of TCA measures the extent to which the estimated useful lives of the County’s tangible capital assets are available to provide its products and services. As of December 31, 2025 approximately 64.66% of the useful life of the County’s assets remains available to provide future services. The County’s tangible capital assets (TCA) increased by a net $6.46 million in 2025. Key changes included new asset acquisitions of $15.3 million, transfers from WIP of $18.93 million, $8.46 million in amortization expense and asset disposals with a net book value of $275 thousand. Significant acquisitions included: $1.83 million - Vehicles $889 thousand – Machinery and equipment $584 thousand – IT Infrastructure $423 thousand – Lagoon upgrades $365 thousand – Fire Apparatus $316 thousand – Road reconstruction Work-in-Progress (WIP) decreased by a net $8.14 million in 2025. Key changes included: 27 2025 Annual Financial Report Government Transfers-to-Total Revenue VULNERABILITY Vulnerability is the degree to which the County becomes dependent on, and therefore vulnerable to sources of funding outside its control or influence. The lower the County’s own-source revenue is, the more it relies on fiscal decisions of others. This indicator demonstrates the level of government transfers compared to total revenues. The higher the percentage, the more reliance the County puts on receipt of funds from other levels of government. These transfers are dependent on policy decisions, which are outside the County’s control. The inset chart illustrates that a significant portion of total revenues in some years are attributable to government transfers. It is important to note that the majority of these government transfers have been used for financing major capital projects. The County’s ability to undertake such projects is dependent in large part on grant funding from other levels of government. It is management’s opinion that the County is not exposed to significant risk in terms of its reliance on government transfers for operating to support its products and services. Respectfully Submitted, Stephanie Hanson, CPA, CGA Controller Debbie Lea 28 2025 Annual Financial Report 2025 Programming CP line (66 miles, cost recovery): GPS/inspect/control Road network: 1528.5 Km sprayed – 1231.5 km of local roads and 297 km of highways (under contract), selective control Bow River (60 miles of control work) - spraying and picking Inspected EID delivery system 520 acres controlled under the Private Weed Control policy Controlled weeds in 8 Grasslands Public School Grounds (Cost recovery) Controlled weeds in parks, municipal owned land, and cemeteries (Bassano, Brooks and Duchess - cost recovery) Major weeds of concern include but are not limited to: Scentless Chamomile, Black Henbane, Downy Brome, Baby’s Breath, Yellow Toadflax, Canada Thistle, Burdock, Diffuse and Spotted Knapweed, Tall Buttercup and Hound’s Tongue. AGRICULTURAL SERVICES REPORT The ASB manages vegetation in municipal rights of ways, municipal owned land, hamlet open spaces and within our partner municipalities. Regulated weed species under the Weed Control Act are top priority and present a constant battle. For this reason, the ASB employs four Seasonal Vegetation Management Technicians to aid ratepayers in their control efforts as well as identify risks and maintain established infestations. Invasive species spread via transportation corridors and water ways and the ASB keeps a close eye on those vectors. If you have tough to control weeds or are having trouble identifying threats, please call the ASB team for help. Weed Control Diffuse Knapweed Pale Yellow Iris Burdock Yellow Toadflax The Agricultural Services Board (ASB) and the Agricultural Services Department is guided by four Acts of the Alberta Government: the Agricultural Services Board Act, the Weed Control Act, the Agricultural Pests Act, and the Soil Conservation Act. With guidance from this legislation, your ASB enacts policy and programming to support the agriculture industry and residents. Although environmental programming and vegetation management are part of the day-to-day tasks, programming revolving around weed, pest, and soil control are still the priority. 29 Pest Control 2025 Annual Financial Report Environmental Programming The ASB offers environmental programming through a partnership with the Alberta Government. This programming promotes information sharing and helps us partner with others to provide different learning opportunities. It also requires the allocation of time to Environmental Farm Plans and pursue Sustainable Canadian Agricultural Partnership (SCAP) Grants. Soil Conservation Well prepared producers (with some help from Mother nature) kept soil erosion concerns to a minimum. While specific pest species may change over time, the ASB’s commitment to monitoring and reporting remains consistent. This season, the ASB surveyed: 226 canola fields for signs of Clubroot 100 locations for grasshopper populations 825 sites for Coyote RAI (Relative Abundance Index) 5 potato fields for signs of Bacterial Ring Rot 7 wheat fields for signs of Fusarium graminearum The ASB also offers programming and sells pest control products to help mitigate the negative effects pests have on our County. They include: Trap Rentals: six skunk/racoon for 141 rental days Magpie traps: one renter for 136 rental days, one trap sold Grain bugs and Richardson Ground Squirrels – Sold 14 Phostoxin Flasks to 3 landowners Built one new hawk pole for a producer, monitored three on County lands, 2 new nests Disinfected 3 potato cellars for storage pests Teena KetchmarkColette Jako 30 In 2025, local programs supported learning, sustainability, and community engagement through the following initiatives: 37 Environmental Farm Plans completed; 9 others started. Grasslands Know your Food Ag day – 120 Participants Tree Health seminar – 79 Participants Pollinator Week seminar – 15 participants Mowing 2025 Annual Financial Report The ASB offers a range of equipment rentals, priced near cost recovery. In 2025, usage included: Loading Chute & Panels – 9 renters Calf table – 3 renters Livestock scale – 3 renters Boomless sprayers (2) – 3 renters Insecticide sprayer – 1 renter Weed wipe applicator – 1 renters Three point hitch sprayer – 3 renters Double disc drill - 11 renters, 1460.6 acres No till drills (2) – 51 renters, 2455 acres Brillion seeders (2) – 7 renters, 105.1 acres Tandem axle BBQ – 25 users Your ASB is also proud to sponsor and work with: Farm Safety Center Alberta Invasive Species Council Ag For Life Brooks Fish and Game (Aqueduct site): replaced dead trees, helped irrigate tree planting and site maintenance EID Tree Planting : aided in planting and mulching six sites, and helped with maintenance of 12 sites The ASB runs two mowing programs: roadside rights-of-way and County-owned properties. These support weed control, improve drainage and safety, and enhance aesthetics. In 2025, 6347.29 miles (one way) on the roadsides and invested over 2400 hours maintaining vegetation in hamlets, subdivisions, and airports. Rental Equipment Samantha Plett 31 Emerson Bridge Park Campground Emerson Bridge Campground, nestled where Highway 36 meets the Red Deer River, offers spacious sites, towering cottonwoods, and a peaceful natural setting. The campground is owned by the County and operated by the ASB. It has 12 full-service sites, 51 power sites, 21 non-power sites, and 7 overflow spots. The 2024 season saw favourable camping weather, and many visitors took advantage of the longer-term rental options. Overall seasonal occupancy reached 27.65%, with powered sites at 34.6% and non-powered sites at 6.9%. 2025 Annual Financial Report Despite strong usage, revenue declined compared to the previous year, totaling $108,270 in 2025, down from $125,341 in 2024. 32 Other Programming 2025 Annual Financial Report The ASB continues to promote and protect agriculture through a variety of programs, including the Calgary Stampede Farm Family Award, Rural Beautification Program, seed plant inspections and licensing, roadside seeding, and pest and agronomic support. If you have questions or want more information, contact the ASB office at 403-362-3266, visit www.countyofnewell.ab.ca, and follow the County on social media for updates. ASB matters are addressed during regular Council meetings. 2025 Calgary Stampede Farm Family Retzlaff family - Saddleridge Farming Co. We proudly collaborate with partners such as the Alberta Conservation Association, Newell Regional Solid Waste Management Authority, Partners in Habitat Development, CPKC Rail, Volker Stevin, Alberta Infrastructure, Grasslands Public Schools, the local oil and gas industry, and neighboring municipalities on projects of mutual benefit. 2025 Rural Beautification Winners 1st Place Winners John & Teena Ketchmark 2nd Place Winners David & Kathlyn Peltzer 3rd Place Winners Mark & Krista Kasdorf 33 2025 Annual Financial Report Municipal Services includes several departments: Fleet Services, Municipal Enforcement, Public Works and Engineering (Transportation/Roads), Airport, Water, Wastewater (Sewer), Stormwater, Solid Waste Services, and Planning and Development. Together, these departments support sustainable growth and enhance quality of life. Through responsible management, innovation and teamwork, these departments strive to provide dependable, high levels of service at reasonable costs. The following are key highlights and accomplishments from Municipal Services departments in 2025. Municipal Enforcement Services MUNICIPAL SERVICES REPORT Municipal Enforcement Department continues providing service in partner jurisdictions including the Town of Bassano, Villages of Duchess and Rosemary, and the Eastern Irrigation District. Partnership services are cost recovered on an hourly rate basis under contract. The Department continues to engage and educate the public. Monthly priorities for the Department match that of the Selective Traffic Enforcement Program (STEP) of the Province, which are identified on the Alberta Traffic Safety Calendar. Patrols in partner jurisdictions totalled 668 hours, down from 765 hours in 2024 due to the retirement of Municipal Enforcement Supervisor J. Nesbitt and the subsequent recruitment process. Enforcement staff also continued patrols throughout the County, including rural areas, multi-lot subdivisions, and hamlets. Bylaw-related investigations accounted for 61% of all enforcement actions, with the highest volumes tied to the Traffic Bylaw (87), Community Standards Bylaw (55), and Dog Control Bylaw (52), along with activity related to the AIS program and parking. Provincial offences made up 57% of all Provincial Act violations, most commonly under the Traffic Safety Act. These included speeding (146), speeding in an active construction zone (34), stop sign infractions (13), unregistered vehicles (13), and uninsured motor vehicles (12). In 2025, 497 investigations were completed, resulting in 294 violations and 90 warnings issued across the County and partner jurisdictions. These were issued under County bylaws, municipal partner bylaws, and applicable provincial legislation. 34 2025 Annual Financial Report Completed gravel road improvements to the following: Range Road 142 from Township Road 191 to Township Road 193 Range Road 161 from Township Road 162 south for 800 meters (drainage only) Public Works & Engineering Services The Public Works and Engineering Departments work together to manage 1,457 km of gravel roads and 233 km of paved surfaces through established preventative maintenance and capital improvement programs. These departments are committed to maintaining high- quality gravel road surfaces. Eight grader operators are each responsible for an average of 185 km of roadway, with one full maintenance cycle per beat completed over approximately 20 working days. Dust abatement services covered 130,812 linear metres (130.8 km) of gravel roads in 2025, up from 125,818 linear metres (125.8 km) in 2024. Carried forward to 2026, due to timing of the year and contractor availability, road improvements to the following: Township Road 194 from Range Road 145 to Highway 1 Range Road 143 from Township Road 192 to Township Road 193 During the spring, summer, and fall maintenance seasons, operators completed 10,629 km of gravel road maintenance, compared to 9,936 km in 2025. In addition, 326.4 km, or 22.4% of the County’s gravel road network, was resurfaced, compared to 359.0 km, or 24.7%, in 2024. The 2025 program utilized 37,137 cubic metres of crushed aggregate at a total cost of $581,603, averaging $1,781 per kilometre. This compares to 40,386 cubic metres at a total cost of $642,318, averaging $1,789 per kilometre in 2024. Including County Aggregate Haul Roads and intersection treatments, the 2025 program applied 2,558,504 litres of dust abatement product over 18 working days using two active crews. The total cost was $523,843, averaging $4.00 per linear metre. In comparison, the 2024 program applied 2,710,211 litres over 13 working days at a total cost of $481,165.66, averaging $3.82 per linear metre. The program included 384 applications, consisting of 347 residential and 37 non-residential locations, compared to 367 applications in 2024 (332 residential and 35 non-residential). 35 2025 Annual Financial Report The Kinbrook Connection Pathway Partnership, a 12.4 km pathway linking Kinbrook Island Provincial Park and the City of Brooks, was completed in 2025. A grand opening ceremony was held on September 25 with project partners, invited dignitaries, and members of the public. The County also maintains a ban-free paved road network, allowing producers to transport commodities from field to market year-round without restriction. Preserving this infrastructure requires timely upgrades and strategic planning. In 2025, planning and design were completed for Range Road 150, from Highway 1 south to Highway 542 (Cassils Road). This project will bring the roadway up to the standards established by Council for the truck route around the west and south of Brooks. The improvements will enhance connections to industrial subdivisions and provide an alternative route for industrial traffic, including hazardous materials, overweight, and over-dimensional loads, around the City of Brooks. Land acquisition is currently underway to secure the necessary right-of-way for construction. Now in its fourteenth year of partnership with the Eastern Irrigation District (EID), the County continues to advance joint infrastructure improvements through an annual $2 million investment, shared equally between both parties. In 2025, work included 3.20 km of roadside ditch improvements as part of Rosemary Phase III. With this phase now complete, efforts have shifted to Rolling Hills Phase II, focusing on improvements to the southern and eastern areas. 36 2025 Annual Financial Report Water Services Closing Remarks The County’s Rural Water System consists of 1,435 km of waterline servicing residences and businesses, an increase from 1,321 km in the previous year. As of December 31, 2025, there were 1,540 active users out of 2,032 registered users, representing 76% active participation. Both active and registered user numbers increased following the completion of CNWP Phase II. The Municipal Services team’s role within municipal government involves overseeing the infrastructure and essential services that residents depend on each day. This accountability calls for strategic asset management, efficient use of resources, and a steadfast focus on public safety. Efforts are consistently directed toward delivering dependable, value-driven services while preserving the quality of life within the community. In comparison, 2024 recorded 1,427 active users out of 1,820 registered users, representing 78% active participation. Respectfully Submitted, Mark Harbicht Director of Municipal Services Construction of the Lake Newell Resort Pathway, a 4.3 km connection between the Hamlet and the Kinbrook Connection Pathway, is nearing completion. Remaining work is limited to landscaping and seeding, with completion anticipated in late spring. 37 2025 Annual Financial Report Development activity in the County of Newell remains strong. 2025 saw an 18% increase in Development Permits compared to last year and a 66% increase in approved subdivisions. Construction Permit revenue remained comparable to 2024 and reflects an 84% increase over 2023. This sustained growth demonstrates continued investment and confidence in the County. Development In 2025, a total of 13 Development Permits were approved for new businesses, reflecting continued economic growth and diversification across the County. Three new retail businesses were approved, including a market garden, an online retail operation, and a storefront in Patricia specializing in locally raised beef and other goods. In addition, three new self-storage businesses were established this year. The County approved two new agricultural processing businesses focused on producing organic fertilizer; one in Martin Industrial and another north of Bassano. Additional approvals included an auto wrecking and parts sales business in the Ralore subdivision and a vehicle repair business specializing in paintless dent repair. The County issued 11 Development Permits for oversized ground-mounted solar installations, demonstrating continued interest in renewable energy development. Two Home-Based Businesses were approved; one for small engine repair in Rolling Hills and another for a dog and cat grooming business located north of the City of Brooks. Residential growth remained steady, with 10 new single-family dwellings and 9 manufactured homes approved. This year’s strong performance across residential, commercial, agricultural, and renewable energy sectors highlights a healthy and diversifying local economy. With increased permit activity and new business development, the County is well-positioned for continued growth in the year ahead. PLANNING & DEVELOPMENT REPORT Rachelle Undershute 38 2025 Annual Financial Report In Alberta, construction permits are required to ensure that all new construction, renovations, and structural changes comply with provincial safety standards and local bylaws. Proper permitting and inspections protect property owners and the public by confirming work meets applicable building, electrical, plumbing, gas, and fire codes. Without the required permits, developers may face stop-work orders, complications during property sales, and potential denial of insurance claims related to unpermitted work. Electrical permits were the most frequently issued permit type in 2025, consistent with previous years. Any electrical work, including new construction, renovations, panel installations, or service upgrades, requires an electrical permit to ensure compliance and safety. 39 2025 Annual Financial Report Revenue generated from electrical permits also exceeded that of other disciplines. This is largely attributable to the high volume of irrigation projects across the County, as well as continued growth in solar development, including the industrial solar project located north of Duchess. The County hired a new Alberta Safety Codes Inspection Agency this year. This change reinforces our commitment to safe, compliant, and efficient development practices. In 2025, the County processed four Land Use Amendments, supporting responsible growth while improving regulatory clarity and flexibility. The County worked collaboratively with the Town of Bassano to establish a new Direct Control District for the Bassano Airport. In addition, policies within the Land Use Bylaw were updated to strengthen and support airport-related development, benefiting all airports within the County. Several text amendments to the Land Use Bylaw were adopted to streamline processes and introduce flexibility where appropriate. Notably, amendments now allow the Development Authority to consider applications on nonconforming parcels without requiring a change to the Land Use District. Such applications may only be approved if the proposed development does not interfere with neighbourhood amenities, does not materially affect the use, enjoyment, or value of neighbouring properties, and conforms to the uses prescribed in the Land Use Bylaw. The definition of “Secondary Suite” was also updated to provide greater clarity. Land Use Amendments Debbie Lea Darla Wiebe Ashley Ferguson 40 2025 Annual Financial Report Further amendments increased the allowable size of Solar (Freestanding) installations to better reflect the scale of renewable energy development occurring within the County. This change enables a more efficient and streamlined permitting process. Setback requirements from subdivision roads were also revised to maximize the developable area on parcels accessed by local subdivision roads. Additionally, one site-specific Land Use Amendment was approved in Scandia. The amendment redesignated two parcels from Business, Hamlet District to Residential, Rural District, allowing an existing building to be used as a residence. These amendments reflect the County’s commitment to responsive planning, economic development, and regulatory efficiency. In 2025, the County received 17 subdivision applications. Of these, 15 were presented to the Municipal Planning Commission, and all 15 were approved. By year end, 9 subdivisions were finalized and endorsed for registration at Land Titles. Under Alberta’s planning framework, subdivision approval is governed by the Municipal Government Act, which requires that proposed subdivisions demonstrate appropriate access, servicing, and compliance with the Land Use Bylaw before final endorsement. Registration at the provincial Land Titles Office legally creates the new parcels, allowing them to be sold or developed. Road Closures Road allowances running north–south are called range roads and occur at one-mile intervals. Township roads run east–west and are spaced every two miles. The department continues to work together with the EID to ensure that road allowances are being closed prior to the installation of new irrigation systems. This will reduce County liability and ensure exclusive use of the lands for the lease holder. Six road closure and lease applications were approved by Council in 2025. Subdivisions Allison Hickey 41 2025 Annual Financial Report CONSOLIDATEDFINANCIALSTATEMENTS SECTION TWO 42 2025 Annual Financial Report 43 2025 Annual Financial Report 44 2025 Annual Financial Report 45 2025 Annual Financial Report 46 2025 Annual Financial Report 47 2025 Annual Financial Report 48 2025 Annual Financial Report 49 2025 Annual Financial Report 50 2025 Annual Financial Report 51 2025 Annual Financial Report 52 2025 Annual Financial Report 53 2025 Annual Financial Report 54 2025 Annual Financial Report 55 2025 Annual Financial Report 56 2025 Annual Financial Report 57 2025 Annual Financial Report 58 2025 Annual Financial Report 59 2025 Annual Financial Report 60 2025 Annual Financial Report 61 2025 Annual Financial Report 62 2025 Annual Financial Report 63 2025 Annual Financial Report 64 2025 Annual Financial Report 65 2025 Annual Financial Report 66 2025 Annual Financial Report 67 2025 Annual Financial Report 68 2025 Annual Financial Report 69 2025 Annual Financial Report FINANCIAL &STATISTICAL SECTION THREE 70 2025 Annual Financial Report Genevieve Marie Darla Wiebe 71 2025 Annual Financial Report Expenses by Object Salaries, wages and benefits: Contracted and general services: Materials, goods, supplies and utilities: Transfers to organizations: Other expenditures: Amortization: Significant items driving variances in total expenses trends across the period include: Increased in 2022, 2023, 2024 and in 2025 due to cost-of-living adjustments. Increasing Membership, Conference Fees ($93 thousand in 2021 to $287 thousand in 2025). Increasing water usage charges from NRSC as additional water users access the rural system ($607 thousand in 2021 to $894 thousand in 2025). Transfers to other municipalities in the County under the Regional Enhancement & Cooperation Agreements & ICF agreements. 2021 ($1.91 million), 2022 ($2.02 million), 2023 ($2.65 million), 2024 ($2.59 million), 2025 ($3.063 million). Policing costs transferred to Province. 2021 ($390 thousand), 2022 ($531 thousand), 2023 ($695 thousand), 2024 ($788 thousand), 2025 ($735 thousand). Adjustment to the allowance for doubtful property taxes receivable in 2021 ($212 thousand); 2022 ($92 thousand), 2023 ($253 thousand), 2024 ($75 thousand), 2025 ($334 thousand). Discounts on taxes in 2021 ($687 thousand); 2022 ($608 thousand), 2023 ($719 thousand), 2024 ($635 thousand), 2025 ($520 thousand). Total cost of tangible capital assets (net of work-in-progress assets) has increased from $287 million in 2021 to $334 million in 2025 which had been contributing to the increase in annual amortization expense. 72 2025 Annual Financial Report Expenses by Object (con’t) Laurie Baron 73 2025 Annual Financial Report Expenses by Function 74 Revenues by Source 2025 Annual Financial Report Property taxes continue to be the most significant source of revenue for the County, comprising from 72.86% to 78.6% of total operating revenues over the period reported above. A few of the more significant items driving variances in total revenue trends across the period include: Government transfers for operating and capital, which are dependent on other levels of government Investment Income which is dependent on the return on investment of the County’s temporary and long-term portfolio investments Special levies, which include local improvement taxes, depend on local improvement projects completed in a given year User fees and sales of goods, included well drilling tax, which the Province cancelled in 2021 Other revenue in 2023, 2024 & 2025 includes revenue received from the County’s response to wildfires in the Province. 75 Leslie Smith Samantha Plett Laurie Baron 2025 Annual Financial Report Capital Expenditures 76 2025 Annual Financial Report 77