HomeMy WebLinkAbout2016-12-31 2016 Year End Audited Financial StatementsConsolidated Financial Statements of
COUNTY OF NEWELL
Year ended December 31, 2016
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, 2016 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
Professional 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.
inistrative Officer Treasurer
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,
2016, 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 IlmiEed lia@il'ty partnership and a member firm of the KPMG
network of is
member firms affiliated with KPMG International Cooperative
i'KPMG Internationi a Swiss entity.
KPMG Canada provides services to KPMG LLP
KPMG LLP Telephone (403) 380-5700
500 Lethbridge Centre Tower Fax (403) 380-5760
400 -4th Ave nueSouth Internet www.kpmg.ca
Lethbridge AB T1J 4F1
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,
2016, 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 IlmiEed lia@il'ty partnership and a member firm of the KPMG
network of is
member firms affiliated with KPMG International Cooperative
i'KPMG Internationi a Swiss entity.
KPMG Canada provides services to KPMG LLP
I (�
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, 2016, 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 6, 2017
Lethbridge, Canada
COUNTY OF [NEWELL
Consolidated Statement of Financial Position
December 31, 2016, with comparative information for 2015
Non-financial assets:
Prepaid expenses
2016
2015
Financial assets:
226,952,338
220,958,311
Cash and cash equivalents (note 2)
$ 21,192,048
$ 19,514,847
Taxes and grants in place of taxes receivable (note 3)
1,294,382
1,058,710
Trade and other receivables (note 4)
20,187,853
23,127,515
Land held for resale
31,491
31,881
Investments (note 5)
46,452,097
42,262,136
Notes receivable (note 6)
1,773,637
2,995,066
Other financial assets
9,895
9,890
90,941,403
89,000,045
Financial liabilities:
Accounts payable and accrued liabilities
2,201,452
3,528,800
Employee benefit obligations (note 8)
1,528,839
405,626
Unearned revenue (note 9)
196,685
182,984
Long-term debt - operating (note 10)
1,537,923
2,247,288
Long-term debt - capital (note 11)
24,414,424
29,357,355
Provision for landfill closure and post -closure costs (note 12)
313,533
317,901
Provision for gravel pit closure and post -closure costs (note 12)
335,341
350,594
Deposit liabilities (note 2)
198,874
243,991
30, 727, 071
36, 634, 539
Net financial assets
60,214,332
52,365,506
Non-financial assets:
Prepaid expenses
114,985
106,111
Tangible Capital Assets (note 7)
226,952,338
220,958,311
Inventory for consumption
1,390,753
1,719,459
228,458,076
222,783,881
Contingent liabilities (note 20)
Accumulated surplus (note 13)
$288,672,408
$275,149,387
The accompanying notes are an integral part of these consolidated financial statements.
COUNTY OF NEWELL
Consolidated Statement of Financial Activities
Year ended December 31, 2016, with comparative information for 2015
Budget 2016 2015
Revenues:
Net municipal property taxes (note 14)
$ 29,827,379
$ 29,792,314
$ 29,047,827
Special levies
442,963
1,114,708
3,767,835
User fees and sale of goods
2,109,165
2,078,180
1,630,866
Government transfers (note 15)
579,624
635,998
933,439
Penalties and cost of taxes
131,775
184,855
185,269
Investment income
1,252,509
1,642,224
1,592,290
Licenses and permits
151,600
153,032
186,192
Other revenue
175,448
768,757
1,183,327
Gain (loss) on disposal of tangible
capital assets
-
(152,875)
738,100
34,670,463
36,217,193
39,265,145
Expenses (note 16):
Legislative
504,400
465,908
477,619
Administration
4,563,801
4,303,839.
4,130, 921
Corporate safety services
318,432
296,975
298,867
Fire and by-law enforcement
1,457,435
1,297,464
1,452,592
Disaster and emergency services
219,436
212,258
196,389
Roads, streets, walks and lighting
11,790,754
10,848,096
11,081,105
Airport
129,352
120,979
123,604
Water and waste water
2,691,633
2,599,895
2,123,647
Waste management
309,420
313,249
306,155
Family and community support
65,466
64,467
64,466
Municipal planning
560,731
495,112
526,626
Community and agricultural services
2,027,982
1,600,315
1,694,187
Subdivision land and development
336,597
173,915
363,370
Recreation and parks
888,542
842,609
758,828
Culture and library
154,470
154,470
152,759
Other
2,485,045
3,677,603
3,093,711
28,503,496
27,467,154
26,844,846
Annual surplus
before the undernoted
6,166,967
8,750,039
12,420,299
Other:
Contributed assets 904,423 13,407
Insurance proceeds - - 1,076,683
Government transfers (note 15) 3,582,342 3,868,559 16,044,107
Other - - 743,615
Annual surplus 91749,309 13,523,021 30,298,111
Accumulated surplus, beginning of year 275,149,387 275,149,387 244,851,276
Accumulated surplus, end of year $284,898,696 $288,672,408 $275,149,387
The accompanying notes are an integral part of these consolidated financial statements.
COUNTY OF NEWELL
Consolidated Statement of Change in Net Financial Assets
December 31, 2016, with comparative information for 2015
The accompanying notes are an integral part of these consolidated financial statements.
9
Budget
2016
2015
Annual surplus
$ 9,749,309
$ 13,523,021
$ 30,298,111
Acquisition of tangible capital assets
(12,177,100)
(11,733,660)
(25,958,833)
Contributed tangible capital assets
-
(710,756)
(13,407)
Proceeds on disposal of tangible capital assets
-
70,432
1,236,816
Amortization of tangible capital assets
5,670,089
6,227,082
5,744,761
(Gain) loss on disposal of tangible capital assets
-
152,875
(738,100)
3,242,298
7,528,994
10,569,348
Use (acquisition) of inventories for consumption
-
328,706
(414,619)
Use (acquisition) of prepaid expenses
-
(8,874)
(47,881)
Change in net financial assets
3,242,298
7,848,826
10,106,848
Net financial assets, beginning of year
52,365,506
52,365,506
42,258,658
Net financial assets, end of year
$55,607,804
$ 60,214,332
$ 52,365,506
The accompanying notes are an integral part of these consolidated financial statements.
9
COUNTY OF NEWELL
Consolidated Statement of Cash Flows
Year ended December 31, 2016, with comparative information for 2015
Cash and cash equivalents is comprised of:
Cash and temporary investments $ 21,192,048 $ 19,514,847
Less investments with original maturities
greater than 90 days (18,196,412) (2,896,000)
$ 2,995,636 $ 16,618,847
The accompanying notes are an integral part of these consolidated financial statements.
4
2016
2015
Cash provided by (used in):
Operations:
Annual surplus
$ 13,523,021
$ 30,298,111
Items not involving cash:
Amortization
6,227,082
5,744,761
Contributed assets
(710,756)
(13,407)
(Gain) loss on disposal of tangible capital assets
152,875
(738,100)
Change in non-cash financial assets and liabilities:
Taxes and grants in place of taxes receivable
(235,672)
211,561
Trade and other receivables
2,939,662
(12,763,023)
Land held for resale
390
3,258
Other financial assets
(5)
(1,655)
Prepaid expenses
(8,874)
(47,881)
Inventory for consumption
328,706
(414,619)
.Accounts payable and accrued liabilities
(1,327,345)
(236,131)
Employee benefit obligations
1,123,213
(10,336)
Unearned revenue
13,701
(1,259,477)
Landfill closure and post -closure costs
(4,369)
(12,565)
Gravel pit closure and post -closure costs
(15,254)
35,218
22,006,375
20,795,716
Capital activities:
Proceeds on disposal of tangible capital assets
70,432
1,236,816
Purchase of tangible capital assets
(11,733,660)
(25,958,833)
(11,663,228)
(24,722,017)
Investing activities:
Decrease (increase) in temporary investments
(15,300,412)
7,956,675
Increase in investments
(4,189,961)
(6,423,046)
Payments received on notes receivable
1,221,429
829,381
(18,268,944)
2,363,010
Financing activities:
Repayment of long-term debt:
- operating
(709,366)
(672,385)
-capital
(4,942,931)
(3,777,394)
Proceeds from debt acquired
-
6,000,000
Increase (decrease) in deposit liabilities
(45,117)
10,299
(5,697,414)
1,560,520
Increase (decrease) in cash and cash equivalents
(13,623,211)
(2,771)
Cash and cash equivalents, beginning of year
16,616,847
16,621,618
Cash and cash equivalents, end of year (note 2)
$ 2,995,636
$ 16,618,847,
Cash and cash equivalents is comprised of:
Cash and temporary investments $ 21,192,048 $ 19,514,847
Less investments with original maturities
greater than 90 days (18,196,412) (2,896,000)
$ 2,995,636 $ 16,618,847
The accompanying notes are an integral part of these consolidated financial statements.
4
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2016
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, 2016
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.
A
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2016
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 pre disclosed.
(j) Tax Revenue:
Tax revenue results from non-exchange transactions that are paid to governments in
accordance with the laws and regulations established to provide revenue to the government
for public services. The revenue is recognized when the tax has been authorized and the
taxable event has occurred.
(k) Pension expenses:
The County participates in a multi-employer defined benefit pension plan, wherein
contributions for current and past service pension benefits are recorded as expenses in the
year in which they become due.
(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.
M
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2016
1. Significant accounting policies (continued):
(m) Contaminated sites:
Contaminated sites are a result of contamination being introduced into air, soil, water or
sediment of a chemical, organic or radioactive or live organism that exceeds an
environmental standard. The liability is recorded net of any expected recoveries. A liability for
remediation of a contaminated site is recognized when a site is not in productive use and is
management's estimate of the cost of post -remediation including operation, maintenance and
monitoring. No contaminated sites have been identified.
2. Cash and cash equivalents:
Cash
Temporary investments
2016 2015
$ 2,995,636 $ 16,618,847
18,196,412 2,896,000
$ 21,192,048 $ 19,514, 847
Included in cash are amounts aggregating $198,874 (2015 - $243,991) not available for current
use.
2016 2015
Tax sale surplus $ 12,769 $ 12,661
Public reserve 186,105 231,330
$ 198,874 $ 243,991
Temporary investments consist of GIC's that have an average interest rate of 1.68% (2015 —
2.05%) and mature in periods ranging from June, 2017 to December, 2017.
R
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2016
3. Taxes and grants in place of taxes receivable:
2016
Current $ 599,967
Arrears 794,415
1,394,382
Allowance for uncollectible taxes (100,000)
4. Trade and other receivables:
$ 1,294,382
2015
$ 462,904
695,806
1,158,710
(100,000)
$ 1,058,710
2016 2015
Grants $ 12,990,945 $ 16,144,745
Local improvement taxes 6,132,749 5,581,086
Other 1,064,159 1,401,684
$ 20,187,853 $ 23,127,515
Local improvement taxes carry annual interest rates ranging from 2.64% - 7.125% and are due
between 2017 — 2041.
5. Investments:
2016 2015
Fixed income securities $ 43,367,894 $ 42,177,933
Credit Union Common shares 5 5
Newell Regional Services Corporation:
i Common shares 20 20
Preferred shares 84,178 84,178
84,198 84,198
$ 46,452,097 $ 42,262,136
i Fixed income securities yield interest from 1.61% to 4.95% and mature in periods 2017 through
2027. The investments have an average expected yield of 2.50% and an aggregate market value
of $46,757,445 (2015 - $43,184,935).
E
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2016
6. Notes receivable:
2016 2015
Newell Foundation, repayable in annual installments of
$832,967 including interest at 5.5%, maturing in 2018 $ 1,537,922 $ 2,247,288
Tilley and District Fire Association - 433,492
Newell Regional Services Corporation, non-interest bearing,
maturing in 2017 235,715 314,286
$ 1,773,637 $ 2,995,066
7. Tangible capital assets:
Cost
2015
Additions
Disposals
2016
Land
$ 5,353,168
$ --
$ --
$ 5,353,168
Land improvements
1,865,652
179,486
(7,976)
2,037,162
Buildings
18,497,752
662,977
--
19,160,729
Engineered structures
187,289,615
23,855,646
(491,618)
210,653,643
Machinery and equipment 11,328,568
697,138
(140,169)
11,885,537
Vehicles
4,988,209
182,067
(75,133)
5,095,143
Work in progress, net
of transfers
50,126,103
(13,132,898)
(3,887)
36,989,318
Total
$279,449,067
$ 12,444,416
$ (718,783)
$291,174,700
Accumulated
amortization 2015
Land improvements $
701,541
Buildings
1,072,085
Engineered structures
50,417,164
Machinery and equipment
4,265,416
Vehicles
2,034,550
Total $ 58,490,756
Disposals
41
(328,438)
(100,303)
(66,735)
$ (495,476)
10
Amortization
expense
$ 131,453
317,605
4,378,418
1,000,320
399,286
$ 6,227,082
2016
$ 832,994
1,389,690
54,467,144
5,165,433
2,367,101
$ 64,222,362
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2016
7. Tangible capital assets (continued):
Net book value
Land
Land improvements
Buildings
Engineered structures
Machinery and equipment
Vehicles
Work in progress
Total
2016 2015
$ 5,353,168 $ 5,353,168
1,204,168
1,164,111
17,771,039
17,425,667
156,186,499
136,872,451
6,720,104
7,063,152
2,728,042
2,953,659
36, 989,318
50,126,103
$ 226,952,338 $ 220,958,311
Contributed tangible capital assets are recognized at fair value at the date of contribution. The
value of contributed assets received during the year is $710,756 (2015 — $13,407) and has been
included in buildings and land improvements.
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) or are entitled to these benefits within
the next budgetary year.
Sick
The sick liability is comprised of the sick pay that employees are deferring to future years.
Employees have either earned the benefits (and are vested) or are entitled to them within the next
budgetary year.
9. Unearned Revenue:
Description
2015 Received
Street Improvement Grant $ 173,520 --
Other 9,464 23,165
Total
$ 182,984 $ 23,165
11
Recognized as
revenue 2016
-- $ 173,520
(9,464) 23,165
$ (9,464) $ 196,685
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2016
10. Long-term debt — operating:
Debenture supported with notes receivable
Principal and interest repayments are due as follows:
2016 2015
$ 1,537,923 $ 2,247,288
Principal Interest Total
2017 $ 748,381 $ 84,586 $ 832,967
2018 789,542 43,425 832,967
$ 1,537,923 $ 128,011 $ 1,665,934
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 $113,847 (2015 — $151,337).
The County's total interest paid in 2016 was $123,601 (2015 - $160,582).
11. Long-term debt —capital:
2016 2015
Tax supported debentures $ 24,414,424 $ 29,357,355
Principal and interest repayments are due as follows:
$ 24;414,424 $ 1,632,230 $ 26,046,654
12
Principal
Interest
Total
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
3,823,664
2021
2,463,873
122,386
2,586,259
Thereafter
2,944,606
195,626
3,140,232
$ 24;414,424 $ 1,632,230 $ 26,046,654
12
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2016
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 2.014% for 2016 (2015 -- 1.986%). For
qualifying debentures, the Province of Alberta rebates 60%b of interest in excess of 8%, 9% and
11%a 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 $556,235 (2015 - $574,770).
The County's total interest paid in 2016 was $560,422 (2015 - $575,812).
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 is expected to be reclaimed in 2017, while post -closure
costs associated on another are expected until 2028.
The estimated closure and post -closure costs for the landfill are $313,533 and $335,341 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, 2016
13. Accumulated surplus:
Equity in
tangible
Unrestricted capital Restricted Total Total
net assets assets (1) Surplus (2) 2016 2015
Beginning
balance
$ 1,825,570
$192,025,553
$81,298,264 $275,149,387 $244,851,276
Annual surplus
13,523,021
--
-- 13,523,021 30,298,111
Transfers to
restricted surplus
(13,675,827)
--
13,675,827 -- --
Transfers from
restricted surplus
10,345,331
-
(10,345,331) -- --
Amortization of
tangible capital
assets
6,227,082
(6,227,082)
-- --
Net book value
of assets disposed 223,307
(223,307)
--
Capital assets
internally
funded
(11,309,063)
11,309,063
-- -- --
Capital assets
debt funded
(424,597)
424,597
-- - --
Contributed assets
(710,756)
710,756
-- - --
Unexpended debt
424,597
(424,597)
-- - --
Debt paid - capital
(4,942,931)
4,942,931
-- -- --
Total
$ 1,505,734
$202,537,914
$84,628,760 $288,672,408 $275,149,387
(1) Equity in tangible capital assets:
Tangible capital assets (note 7)
Accumulated amortization (note 7)
Long-term debt — capital (note 11)
Unexpended debt proceeds
14
2016
$ 291,174, 700
(64,222,362)
(24,414,424)
$ 202,537,914
2015
$ 279,449,067
(58,490,756)
(29,357,355)
424,597
$192,025,553
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2016
13. Accumulated surplus (continued):
(2) Restricted surplus is comprised of funds internally restricted as follows:
Paving
Infrastructure
Future Projects
Vehicles, Machinery & Equipment
Regional Enhancement
Stabilization
Facilities
Fire Apparatus
Tilley
Unexpended Budget Appropriation
14. Net municipal property taxes:
Taxation:
Real property taxes
Linear property taxes
Government grants in place of property
taxes
Requisitions:
Alberta School Foundation Fund
Newell Foundation
Net municipal property taxes
2016 2015
$ 6,501,897 $ 7,260,029
28,282,967
19,921,173
26,086,018
32,309,837
8,359,816
7,244,960
3,390,161
3,390,161
5,762,969
5,768,951
2,688,639
2,464,260
3,224,453
1,898,512
50,662
837,205
281,178
203,176
$ 84,628,760 $ 81,298,264
Budget
2016
2015
$ 15,567,293
$ 15,611,840
$ 14,680,494
27,328,192
27,489,906
27,461,535
371,825
355,528
328,780
43,267,310
43,457,274
42,780,809
12,529,765
12,754,794
12,529,765
910,166
910,166
893,217
13,439,931
13, 664, 960
13,422,982
$ 29,827,379
$ 29,792,314
$ 29,047,827
15
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2016
15. Government transfers:
$ 28,503,496 $ 27,467,154 $ 26,844,846
16
Budget
2016
2015
Transfers for operating:
Provincial government
$ 216,387
$ 406,850
$ 535,630
Local government
363,237
229,148
397,809
579,624
635,998
933,439
Transfers for capital:
Provincial government
3,582,342
3,757,309
16,044,107
Local government
-
111,250
-
3,582,342
3,868,559
16,044,107
$ 4,161,966
$ 4,504,557
$ 16,977,546
16. Expenses by object:
Budget
2016
2015
Salaries, wages and benefits
$ 8,319,137
$ 7,430,179
$ 7,451,402
Contracted and general services
4,748,440
3,725,751
4,040,966
Materials, goods, supplies and utilities
4,954,203
3,985,928
3,966,506
Transfers to organizations
4,103,102
4,264,050
4,892,329
Bank charges and short-term interest
4,500
5,370
4,246
Interest on long-term debt
684,025
670,082
735,351
Other expenditures
20,000
1,158,712
9,285
Amortization
5,670,089
6,227,082
5,744,761
$ 28,503,496 $ 27,467,154 $ 26,844,846
16
COUNTY OF NEWELL
(Dotes to Consolidated Financial Statements
Year ended December 31, 2016
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:
Benefits &
Salary (1) Allowances (2) Total
Council:
Division 1
$ 30,076
$ 5,071
$ 35,147
Division 2
29,817
5,060
34,877
Division 3
30,386
5,084
35,470
Division 4
24,936
2,561
27,497
Division 5
28,128
4,986
33,114
Division 6
27,144
4,943
32,087
Division 7
28,519
5,003
33,522
Division 8
26,707
1,393
28,100
Division 9
49,018
2,409
51,427
Division 10
27,079
4,940
32,019
2015
Total
$ 30,275
36,135
36,624
32,337
33,076
35,510
34,127
33,213
54,012
32,126
$ 301,810 $ 41,450 $ 343,260 $ 357,435
Chief Administrative Officer $ 216,307 $ 49,294 $ 265,601 $ 261,869
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, 2016
18. Debt limits:
Section 276(2) of the Municipal Government Act requires that debt and debt limits as defined by
Alberta Regulation 255100 for the County be disclosed as follows:
2016 2015
Total debt limit $ 54,325,790 $ 58,897,718
Total debt (25,952,347) (31,604,643)
$ 28,373,443
2016
Debt servicing limit $ 9,054,298
Debt servicing (6,336,321)
$ 2,717,977
$ 27,293,075
2015
$ 9,816,286
(6,336, 321)
$ 3,479,965
The debt limit is calculated at 1.5 times revenue of the County (as defined in Alberta Regulation
255100) 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 pian 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 244,621
people and about 426 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 2016 were $613,239 (2015 -
$609,423). Total current service contributions by the employees of the County to the LAPP in
2016 were $565,546 (2015 - $561,814).
At December 31, 2015, the LAPP disclosed an actuarial deficiency of $923 million.
18
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2016
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, 2016
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 thb
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 2016
23. Budget information:
The budget information presented in these consolidated financial statements is based upon the
2016 budget approved by Council on March 24, 2016.
24. Approval of financial statements:
These financial statements were approved by Council and Management.
21
COUNTY OF NEWELL
Schedule of Segmented Disclosures
Year ended December 31, 2016, with comparative information for 2015
Revenue
Net taxes for municipal purposes
Special levies
User Fees and sale of goods
Government transfers - operating
Penalties and costs of taxes
Investment income
License and permits
Other
Gain (loss) on disposal of capital assets
Expenses
Salaries, wages and benefits
Contracted and general services
Materials, goods, supplies and utilities
Transfer to Organization
Bank charges and short term interest
Interest on long-term debt
Other expenditures
Amortization
Annual surplus (deficit)
before the undernoted
Other
Insurance proceeds
Contributed assets
Government transfers - capital
Other
Annual surplus (deficit)
Public Works
General and
Government Transportation Public Utilities
Schedule 1
Public Works
Total General and
2016 Government Transportation Public Utilities
$ 29,792,314
$ $
- $
29,792,314
$ 29,047,827 $
- $
311,243
803,465
1,114,708
307,382
530,515
257,732
1,289,933
2,078,180
410,806
222,619
530,998
-
105,000
635,998
749,745
-
184,855
-
184,855
185,269
1,642,224
-
1,642,224
1,592,290
153,032
-
153,032
186,192
-
496,637
97,925
174,195
768,757
555,660
67,732
10,305
(163,180)
-
(152,875)
(4,845)
820,557
33,652,123
192,477
2,372,593
36,217,193
33,030,326
1,111,108
4,890,664
2,539,515
-
7,430,179
4,863,579
2,587,823
1,481,460
1,560,180
684,111
3,725,751
1,708,660
1,877,413
1,243,977
1,991,618
750,333
3,985,928
1,231,125
2,023,859
4,241,371
22,679
4,264,050
4,887,381
-
5,370
-
5,370
4,246
113,847
556,235
670,082
160,582
1,158,712
-
-
1,158,712
(3,873)
13,158
990,695
4,336,601
899,786
6,227,082
933,778
4,127,291
14,126,096
10,427,914
2,913,144
27,467,154
13,785,498
10,629,544
19,526,027
(10,235,437)
(540,551)
8,750,039
19,244,828
(9,518,436)
904,423 - 904,423
- 3,868,559 3,868,559
$ 20,430,450 $ (10,235,437) $ 3,328,008 $ 13,523,021
3,460,453
997,241
183,694
559,935
(77,612)
5,123,711
454,873
711,522
4,948
574,769
683,692
2,429,804
2,693,907
1,076,683 -
- 13,407 -
520,583 15,523,524
- - 743,615
$ 20,321,511 $ (8,984,446) $ 18,961,046 $
Total
2015
29,047,827
3,767,835
1,630,866
933,439
185,269
1,592,290
186,192
1,183,327
738,100
39,265,145
7,451,402
4,040,966
3,966,506
4,892,329
4,246
735,351
9,285
5,744,761
26,844,846
12,420,299
1,076,683
13,407
16,044,107
743,615
30,298,111