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Home My WebLink About2007-12-31 Year End Audited Financial SatementsConsolidated Financial Statements of COUNTY OF NEWELL NO.4 Year ended December 31, 2007 County of Newell No. 4 KPMG LLP chartered Accountants 500 C c�odge Termho( w 3`30,5700 We have audited the consolidated statement of financial position of the County of Newell No. 4 as at December 31, 2007 and the consolidated statements of financial activities and consolidated cash flows for the year then ended. These financial statements are the responsibility of the County's management, Cur responsibility is to express an opinion on these financial statements based on Our audit, We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the County as at December 31, 2007 and the reSURS Of its financial activities and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles, Chartered Accountants Lethbridge, Canada February 14, 2008 COUNTY OF NEWELL NO.4 Consolidated Statement of Financial Position December 31, 2007, with comparative figures for 2006 2007 2006 Financial Assets: Cash and temporary investments (note 3) $ 24,794,032 $ 22,454,246 Taxes and grants in place of taxes receivable (note 4) 379,050 353,068 Trade and other receivables 4,739,005 1,371,108 Land held for resale 31,881 31,881 Prepaid expenses 125,377 127,963 Investments (note 5) 10,730,345 956,139 Notes receivable (note 6) 8,397,057 8,871,733 Other 5,969 -- 49,202,716 34,166,138 Physical assets: Inventory for consumption 1,153,458 1,176,698 Capital assets (note 7) 19,010,143 19,882,249 20,163,601 21,058,947 $ 69,366,317 $ 55,225,085 Liabilities: Accounts payable and accrued liabilities $ 6,336,076 $ 3,645,829 Employee benefit obligation (note 8) 225,987 176,850 Unearned revenue 47,488 34,192 Long-term debt — capital (note 9) 768,379 947,525 Long-term debt —operating (note 10) 7,256,014 7,727,625 Provision for landfill closure and post -closure costs (note 11) 339,849 348,800 Provision for gravel pit closure and post -closure costs (note 11) 239,284 239,284 Deposit liabilities (note 3) 119,913 106,071 Other liabilities -- 125,408 15,332,990 13,351,584 Municipal Position: Fund balances: Operating 515,524 515,523 Capital (note 12) (222,371) (240,067) Reserves (note 13) 35,498,409 22,663,321 35,791,562 22,938,777 Equity in capital assets (note 14) 18,241,764 18,934,724 54,033,326 41,873,501 Contingent liability (note 21) $ 69,366,317 $ 55,225,085 See accompanying notes to consolidated financial statements. COUNTY OF NEWELL NO.4 Consolidated Statement of Financial Activities Year ended December 31, 2007, with comparative figures for 2006 Budget 2007 2006 Excess of revenues over expenditures (Unaudited) 13,031,931 5,367,537 Revenues: Net municipal property taxes (note 15) $ 21,727,926 $ 21,628,222 $ 18,403,753 Proceeds from local improvements 224,924 242,601 244,957 Special levies 507,227 507,227 429,739 User fees and sale of goods 815,445 666,199 805,779 Government transfers (note 16) 4,031,400 8,350,378 3,973,890 Penalties and cost of taxes 80,500 90,991 64,897 Investment income 757,099 1,718,202 1,521,986 Licenses and permits 65,000 39,250 79,205 Proceeds from disposal of capital assets 596,400 2,750,525 3,089,032 Other revenue 53,100 383,999 217,432 28,859,021 36,377,594 28,830,670 Expenditures: Legislative 472,866 389,543 353,335 Administration 1,880,232 1,888,614 1,180,161 General 1,008,316 945,693 590,907 Corporate safety 236,484 172,157 -- Fire and by-law enforcement 772,619 702,919 532,919 Ambulance services and first aid -- -- 10,441 Disaster and emergency services 51,420 38,348 7,631 Roads, streets, walks and lighting 14,946,895 16,148,017 17,988,508 Water and waste water 404,510 607,995 248,119 Waste management 232,100 223,210 223,761 Family and community support 41,640 38,857 41,499 Municipal planning 321,512 235,524 306,172 Community and agricultural services 1,216,369 1,370,188 1,246,753 Subdivision land and development 301,091 12,676 6,527 Recreation and parks 466,005 465,035 450,632 Culture and library 92,362 92,363 91,327 Other -- 14,524 184,441 22,444,421 23,345,663 23,463,133 Excess of revenues over expenditures 6,414,600 13,031,931 5,367,537 Capital financing transactions: Repayment of long-term debt (179,145) (179,146) (177,552) Change in fund balances 6,235,455 12,852,785 5,189,985 Fund balance, beginning of year 22,938,777 22,938,777 17,748,792 Fund balance, end of year $ 29,174,232 $ 35,791,562 $ 22,938,777 See accompanying notes to consolidated financial statements. 2 COUNTY OF NEWELL NO.4 Consolidated Statement of Cash Flows December 31, 2007, with comparative figures for 2006 2007 2006 Cash provided by (used in): Operations: Excess of revenues over expenditures $ 13,031,931 $ 5,367,537 Change in non-cash financial assets and liabilities: Taxes and grants in place of taxes receivable (25,982) 206,072 Trade and other receivables (3,367,897) (525,340) Land held for resale -- 20 Prepaid expenses 2,586 (4,758) Inventory for consumption 23,240 (360,029) Accounts payable and accrued liabilities 2,690,248 2,632,521 Employee benefit obligation 49,137 (25,072) Unearned revenue 13,296 (16,830) Provision for landfill and gravel pit closure and post -closure costs (8,951) (10,431) Other liabilities (125,408) 125,408 Other (5,969) -- 12,276,231 7,389,098 Investing: Decrease (increase) in investments (9,774,206) 3,567 Advances of notes receivable (209,950) -- Receipts of notes receivable 684,626 650,876 (9,299,530) 654,443 Financing: Repayment of long-term debt: - operating (471,611) (447,024) - capital (179,146) (177,552) Increase (decrease) in deposit liabilities 13,842 (96,336) (636,915) (720,912) Increase in cash 2,339,786 7,322,629 Cash and cash equivalents, beginning of year 22,454,246 15,131,617 Cash and cash equivalents, end of year $ 24,794,032 $ 22,454,246 See accompanying notes to consolidated financial statements. K7 COUNTY OF NEWELL NO.4 Statement of Operating Fund Year ended December 31, 2007, with comparative figures for 2006 Excess of revenues over expenditures Budget 2007 2006 Net inter -fund transfers: (Unaudited) Revenues: Net municipal property taxes (note 15) $ 21,727,926 $ 21,628,222 $ 18,403,753 Proceeds from local improvements 224,924 224,906 232,926 Special levies 507,227 507,227 429,739 User fees and sale of goods 815,445 666,199 805,779 Government transfers 1,091,762 1,261,311 1,374,623 Penalties and cost of taxes 80,500 90,991 64,897 Investment income 757,099 1,718,202 1,521,986 Licenses and permits 65,000 39,250 79,205 Other revenue 53,100 302,066 217,432 25,322,983 26,438,374 23,130,340 Expenditures: Legislative 472,866 389,543 353,335 Administration 1,729,548 1,803,367 1,180,161 General 1,008,316 945,693 590,907 Corporate safety services 186,484 125,335 -- Fire and by-law enforcement 772,619 702,919 532,919 Ambulance services and first aid -- -- 10,441 Disaster and emergency services 18,400 4,457 7,631 Roads, streets, walks and lighting 13,415,963 14,239,651 15,314,900 Water and waste water 404,510 607,995 169,222 Waste management 232,100 223,210 223,761 Family and community support 41,640 38,857 41,499 Municipal planning 321,512 235,524 306,172 Community and agricultural services 963,154 1,056,076 1,001,733 Subdivision land and development 301,091 12,676 6,527 Recreation and parks 466,005 465,035 450,632 Culture and library 92,362 92,363 91,327 Other -- 14,524 184,441 20,426,570 20,957,225 20,465,608 Excess of revenues over expenditures 4,896,413 5,481,149 2,664,732 Net inter -fund transfers: Transfer to capital - repayment of long-term debt (179,145) (179,146) (177,552) Transfers from capital 596,400 5,635,492 1,200,596 Transfer to reserves (5,313,668) (10,937,494) (3,687,762) Change in fund balance -- 1 14 Balance, beginning of year 515,523 515,523 515,509 Balance, end of year $ 515,523 $ 515,524 $ 515,523 See accompanying notes to consolidated financial statements. 4 COUNTY OF NEWELL NO.4 Statement of Capital Fund Year ended December 31, 2007, with comparative figures for 2006 Balance, end of year $ (240,067) $ (222,371) $ (240,067) See accompanying notes to consolidated financial statements. 5 Budget 2007 2006 (Unaudited) Revenues: Government transfers $ 2,939,638 $ 7,089,067 $ 2,599,267 Proceeds from local improvements -- 17,695 12,031 Proceeds from disposal of capital assets 596,400 2,750,525 3,089,032 Other -- 81,933 — 3,536,038 9,939,220 5,700,330 Expenditures: Administration 150,684 85,247 -- Corporate safety 50,000 46,822 -- Disaster and emergency services 33,020 33,891 -- Roads, streets, walks and lighting 1,530,932 1,908,366 2,673,608 Water and waste water -- -- 78,897 Community and agricultural services 253,215 314,112 245,020 2,017,851 2,388,438 2,997,525 Excess of revenues over expenditures 1,518,187 7,550,782 2,702,805 Net inter -fund transfers: To operating fund (596,400) (5,635,492) (1,200,596) To reserves (921,787) (1,897,594) (1,554,043) Change in fund balance -- 17,696 (51,834) Balance, beginning of year (240,067) (240,067) (188,233) Balance, end of year $ (240,067) $ (222,371) $ (240,067) See accompanying notes to consolidated financial statements. 5 COUNTY OF NEWELL NO.4 Statement of Reserves Year ended December 31, 2007, with comparative figures for 2006 Balance, beginning of year Add (deduct): Transfer from operating Transfer from capital Budget 2007 2006 (Unaudited) $ 22,663,321 5,313,668 921,787 $ 22,663,321 10,937,494 1,897,594 $ 17,421,516 3,687,762 1,554,043 Balance, end of year $28,898,776 $ 35,498,409 $ 22,663,321 See accompanying notes to consolidated financial statements. C COUNTY OF NEWELL NO.4 Notes to Consolidated Financial Statements Year ended December 31, 2007 1. Significant accounting policies: The consolidated financial statements of the County of Newell No. 4 (the "County") are the representations of management prepared in accordance with accounting principles for local governments as established by the Public Sector Accounting Board of the Canadian Institute of Chartered Accountants. Significant aspects of the accounting policies adopted by the County are as follows: (a) Reporting entity: The consolidated financial statements reflect the assets, liabilities, revenues and expenditures, changes in fund balances and change in financial position 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. Taxes levied also includes 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. Interdepartmental and organizational transactions and balances are eliminated. (b) Basis of accounting: Revenues are accounted for in the period in which the transactions or events occurred that gave rise to the revenues. Funds from external parties and earnings thereon restricted by agreement or legislation are accounted for as deferred revenue until used for the purpose specified. (c) Fund accounting: Funds consist of the operating, capital and reserve funds. Transfers between funds are recorded as adjustments to the appropriate equity account. (d) 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. (e) 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. 7 COUNTY OF NEWELL NO.4 Notes to Consolidated Financial Statements Year ended December 31, 2007 1. Significant accounting policies (continued): (f) Inventories: Inventories of materials and supplies for consumption are valued at the lower of cost and net realizable value with cost determined by the average cost method. 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) Capital assets: Capital assets are reported as expenditures in the period that they are acquired. Capital assets are recorded at cost except for donated assets, which are recorded at estimated fair value when acquired. Government contributions for the acquisition of capital assets are recorded as capital revenue and do not reduce the related capital asset costs. Capital assets are not amortized. (h) 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. (i) Prepaid local improvements charges: Construction and borrowing costs associated with local improvement projects are recovered through annual special property assessments during the period of the related borrowing. These levies are collectible from property owners for work performed by the County. Where a taxpayer has elected to prepay the outstanding local improvement charge, such amounts are recorded as deferred revenue. Deferred revenue is amortized to revenue on a straight-line basis over the remaining term of the related borrowings. In the event that the prepaid amounts are applied against the related borrowing, the deferred revenue is amortized to the revenue by an amount equal to the debt repayment. 8 COUNTY OF NEWELL NO.4 Notes to Consolidated Financial Statements Year ended December 31, 2007 1. Significant accounting policies (continued): Q) Local Authorities Pension Plan: The County participates in a multi-employer defined benefit pension plan. This plan is accounted for as a defined contribution plan. Employees of the County participate in the Local Authorities Pension Plan (LAPP), which is covered by the Public Sector Pension Plans Act. The Plan serves about 133,000 people and about 389 employers. It 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 5.525% of pensionable earnings up to the year's maximum pensionable earnings under the Canada Pension Plan and 7.4% on pensionable earnings above this amount. Employees of the County are required to make current service contributions of 4.525% of pensionable salary up to the year's maximum pensionable salary and 6.4% on pensionable salary above this amount. Total current service contributions by the County to the Local Authorities Pension Plan in 2007 were $210,633 (2006 - $163,684). Total current service contributions by the employees of the County to the Local Authorities Pension Plan in 2007 were $186,219 (2006 - $144,010). At December 31, 2006, the LAPP disclosed an actuarial deficiency of $1,288.9 million. (k) Landfill and gravel pit closure and post -closure costs: Pursuant to the Alberta Environment Protection and Enhancement Act, the County is required to fund the closure of its landfill site and gravel pits and provide for post -closure care. Closure and post -closure activities include the final clay cover, landscaping, as well as surface and ground water monitoring, leachate control and visual inspection. The requirement is being provided for over the estimated remaining life of the landfill site and gravel pit based on usage. (1) Use of estimates: The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount 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 expenditure during the period. 9 COUNTY OF NEWELL NO.4 Notes to Consolidated Financial Statements Year ended December 31, 2007 1. Significant accounting policies (continued): (m) Operating fund: Operating fund represents the amounts available to offset future operational revenue requirements (or the shortfall which will be financed from future operational revenues). (n) Capital fund: Capital fund represents the amounts available to finance (or the shortfall in financing available for) capital projects. (o) Reserve fund: Reserve fund represents the amounts set aside to finance future operating and capital expenditures. Reserves are established at the discretion of Council. Transfers to and/or from the reserve fund are reflected as an adjustment to the respective fund. (p) Equity in capital assets: Equity in capital assets represents the County's net investment in its total capital assets, after deducting work -in -progress, the portion financed by third parties through debenture, bond, and mortgage debts, long-term capital borrowing, capitalized leases, and other capital liabilities. 2. Tangible capital assets: Effective for fiscal years commencing on or after January 1, 2009, revised standards have been issued for the recognition, measurement and disclosure of tangible capital assets. The revised standards provide guidance on the recognition and measurement of tangible capital assets including amortization over their estimated useful lives. The County is progressing with its implementation plan and expects to be complete by December 31, 2008. 3. Cash and temporary investments: its, 2007 2006 Cash Temporary investments $ 3,468,254 21,325,778 $ 3,840,000 18,614,246 $ 24,794,032 $ 22,454,246 Included in cash are amounts aggregating $119,913 (2006 - $106,071) not available for current use. 2007 2006 Tax sale surplus Public reserve $ 15,850 104,063 $ 17,074 88,997 $ 119,913 $ 106,071 its, COUNTY OF NEWELL NO.4 Notes to Consolidated Financial Statements Year ended December 31, 2007 4. Taxes and grants in place of taxes receivable: 2007 2006 Current year $ 203,947 $ 168,816 Arrears 327,443 336,592 531,390 505,408 Allowance for uncollectible taxes (152,340) (152,340) $ 379,050 $ 353,068 5. Investments: Long-term investments consist of fixed income securities with an aggregate market value of $10,730,345 (2006 - $956,139). 6. Notes receivable: 11 2007 2006 Newell Foundation This note is repayable in annual installments of $896,630 including interest at 5.5%. This note receivable expires in 2018. $ 7,256,014 $ 7,727,625 City of Brooks This note is repayable in annual installments of $131,082 including interest at 5.25%. This note receivable expires in 2013. 660,043 751,662 Bow Slope Fire Division This note is repayable in annual installments of $32,113 including interest at 4.39%. This note receivable expires in 2013. 166,224 189,997 Rosemary Fire Division This note is repayable in annual installments of $38,583 including interest at 5.125%. This note receivable expires in 2010. 104,826 136,417 Rolling Hills Fire division This note is repayable in annual installments of $39,585 including interest at 3.954°/x. This note receivable expires in 2014. 209,950 -- Patricia and Duchess Fire Hall This note is repayable in annual installments of $38,583 including interest at 5.125%. This note receivable expires in 2007. -- 66,032 $ 8,397,057 $ 8,871,733 11 COUNTY OF NEWELL NO. 4 Notes to Consolidated Financial Statements Year ended December 31, 2007 7. Capital assets: 2007 2006 2007 2006 Land $ 919,406 $ 919,406 Buildings 692,706 684,332 Distribution systems - water and sewer 4,688,125 4,688,125 Other engineering structures 960,605 960,605 Machinery, equipment and furnishings 8,411,804 9,904,104 Vehicles 3,337,497 2,725,677 79,271 $ 19,010,143 $ 19,882,249 8. Employee benefit obligation: 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. 9. Long-term debt - capital: Debenture debt is repayable to Alberta Capital Finance Authority and bears interest at rates ranging from 4.307% to 11.75% per annum, before Provincial subsidy, and matures in periods 2008 through 2017. The average annual interest rate is 7.1% for 2007 (2006 - 7.1%). For qualifying debentures, the Province of Alberta rebates 60% of interest in excess of 8%, 9% and 11% to a maximum annual rate of 12.5%, depending on the date borrowed. Debenture debt is issued on the credit and security of the Count of Newell No. 4 at large. Interest on long-term debt amounted to $45,818 (2006 - $55,260). The County's total cash payments for interest in 2007 were $45,818 (2006 - $55,260). 12 2007 2006 Tax supported debentures $ 768,379 $ 947,525 Principal and interest repayments are due as follows: Principal Interest Total 2008 $ 188,539 $ 36,425 $ 224,964 2009 75,419 26,511 101,930 2010 79,271 22,659 101,930 2011 75,459 18,578 94,037 2012 78,860 15,177 94,037 Thereafter 270,831 24,846 295,677 $ 768,379 $ 144,196 $ 912,575 Debenture debt is repayable to Alberta Capital Finance Authority and bears interest at rates ranging from 4.307% to 11.75% per annum, before Provincial subsidy, and matures in periods 2008 through 2017. The average annual interest rate is 7.1% for 2007 (2006 - 7.1%). For qualifying debentures, the Province of Alberta rebates 60% of interest in excess of 8%, 9% and 11% to a maximum annual rate of 12.5%, depending on the date borrowed. Debenture debt is issued on the credit and security of the Count of Newell No. 4 at large. Interest on long-term debt amounted to $45,818 (2006 - $55,260). The County's total cash payments for interest in 2007 were $45,818 (2006 - $55,260). 12 COUNTY OF NEWELL NO.4 Notes to Consolidated Financial Statements Year ended December 31, 2007 10. Long-term debt — operating: 2007 2006 Debenture supported with notes receivable $ 7,256,014 $ 7,727,625 Principal and interest repayments are due as follows: $ 7,256,014 $ 2,606,918 $ 9,862,932 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 Count of Newell No. 4 at large. Interest on long-term debt amounted to $418,553 (2006 — $443,476). The County's total cash payments for interest in 2007 were $425,019 (2006 - $449,606). 11. Provision for landfill and gravel pit closure and post -closure costs: Alberta environmental law requires closure and post -closure care of landfill sites, which includes final covering and landscaping, pumping of ground water and leachates from the site, and on- going environmental monitoring, site inspections and maintenance. The accrued liability for the remaining post -closure costs of the County's landfill and closure and post -closure costs for the County's gravel pit is based on an estimate of future discounted costs. The estimated closure and post -closure costs for the landfill are $339,849, and $239,284 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 Principal Interest Total 2008 $ 497,550 $ 399,080 $ 896,630 2009 524,915 371,715 896,630 2010 553,785 342,845 896,630 2011 584,243 312,387 896,630 2012 616,377 280,253 896,630 Thereafter 4,479,144 900,638 5,379,782 $ 7,256,014 $ 2,606,918 $ 9,862,932 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 Count of Newell No. 4 at large. Interest on long-term debt amounted to $418,553 (2006 — $443,476). The County's total cash payments for interest in 2007 were $425,019 (2006 - $449,606). 11. Provision for landfill and gravel pit closure and post -closure costs: Alberta environmental law requires closure and post -closure care of landfill sites, which includes final covering and landscaping, pumping of ground water and leachates from the site, and on- going environmental monitoring, site inspections and maintenance. The accrued liability for the remaining post -closure costs of the County's landfill and closure and post -closure costs for the County's gravel pit is based on an estimate of future discounted costs. The estimated closure and post -closure costs for the landfill are $339,849, and $239,284 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 NO.4 Notes to Consolidated Financial Statements Year ended December 31, 2007 12. Capital fund Amounts to be financed: Patricia Curbstops Rolling Hills Water Treatment Plant Patricia Lagoon Discharge Scandia Raw Water Irrigation Patricia Raw Water Irrigation Aimoto Raw Water Irrigation 2007 2006 $ (2,438) (27,940) (63,847) (101,291) (5,855) (21,000) $ (3,501) (38,925) (69,495) (101,291) (5,855) (21,000) $ (222,371) $ (240,067) The shortfall in the above projects will be funded through local improvement levies 13. Reserves: Reserves for operating and capital activities changed as follows: Rosemary fire truck Opening Transfers in Transfers out Ending balance Operating: 173,279 9,573 97,915 84,937 Annual Paving Tax $ 5,788,324 $ 8,933,953 $ 5,885,587 $ 8,836,690 Municipal surplus 6,737,657 1,107,708 496,593 7,348,772 Debt reduction 1,365,801 48,421 12,268 1,401,954 Future expenditures 1,313,486 46,129 10,158 1,349,457 Brooks Recreation 103,454 3,769 9,794 97,429 Centre 751,662 -- 91,619 660,043 Secondary highway 66,124 32,984 30,883 68,225 #847 610,965 20,939 4,907 626,997 Special road project 578,222 401,930 25,907 954,245 Hard surface 266,448 9,573 2,454 273,567 Bow Slope fire truck 189,997 -- 23,772 166,225 Secondary highway 66,032 -- 66,032 -- #862 239,903 9,573 2,454 247,022 Rosemary fire truck 136,418 -- 31,592 104,826 Public transportation 173,279 9,573 97,915 84,937 Agriculture Service Board 22,364 3,521 6,007 19,878 Office renovations 175,840 8,207 94,541 89,506 Purchase of gravel 114,130 4,559 1,178 117,511 Planning 103,454 3,769 9,794 97,429 Road work 282,812 196,736 -- 479,548 Fire truck 66,124 32,984 30,883 68,225 Gravel crushing 55,719 2,079 442 57,356 Public works - other 34,475 35,639 5,007 65,107 Shop 14,061 628 147 14,542 Patricia and Duchess fire hall 66,032 -- 66,032 -- Economic Development 33,076 44,950 294 77,732 Garbage pits -- 8,786 -- 8,786 19,120,249 10,929,657 6,899,551 23,150,355 14 COUNTY OF NEWELL NO.4 Notes to Consolidated Financial Statements Year ended December 31, 2007 13. Reserves (continued): Transfers Transfers Ending Opening in out balance Operating: Brought forward $ 19,120,249 $ 10,929,657 $ 6,899,551 $ 23,150,355 Municipal Sustainability -- 46,822 -- Disaster and emergency services Initiative -- 2,103,798 -- 2,103,798 Water and waste water -- 4,596,549 119,870 4,476,679 Rolling Hills fire truck -- 209,950 -- 209,950 19,120,249 17,839,954 7,019,421 29,940,782 Capital: Machinery and equipment 1,221,452 2,023,963 319,582 2,925,833 Future expenditures - general administration 2,041,588 272,025 118,671 2,194,942 Vehicle replacement 193,523 162,783 24,356 331,950 Rolling Hills water and sewer 23,361 9,927 -- 33,288 Scandia water reservoir 37,214 7,494 24,280 20,428 Lake Newell road prepaid 3,219 -- 348 2,871 Patricia sewer 17,715 11,785 -- 29,500 Lake Newell sewer 5,000 5,000 -- 10,000 Parks -- 8,815 -- 8,815 3,543,072 2,501,792 487,237 5,557,627 $ 22,663,321 $ 20,341,746 $ 7,506,658 $ 35,498,409 14. Equity in capital assets: Budget 2007 2006 (Unaudited) Acquisition of capital assets: Administration $ 150,684 $ 85,247 $ •- Corporate safety -- 46,822 -- Disaster and emergency services 33,020 33,891 -- Roads, streets, walks, and lighting 1,530,932 1,908,366 2,673,609 Water and waste water -- -- 78,897 Community and agricultural services 253,215 314,112 245,020 1,967,851 2,388,438 2,997,526 Disposal of capital assets (cost): Administration -- (8,426) (14,459) Fire and by-law enforcement -- (65,554) -- Roads, streets, walks and lighting (581,400) (3,134,936) (3,359,276) Community and agricultural services (15,000) (51,628) (198,233) (596,400) (3,260,544) (3,571,969) 15 COUNTY OF NEWELL NO.4 Notes to Consolidated Financial Statements Year ended December 31, 2007 14. Equity in capital assets (continued): Taxation: Real property taxes Budget 2007 2006 Capital financing: Capital debt issued Capital debt repaid from operating (Unaudited) $ -- 179,145 -- 179,146 $ -- 177,552 Government grants in place of property 179,145 179,146 177,552 Change in equity balance Equity balance, beginning of year 1,550,596 18,934,724 (692,960) 18,934,724 (396,891) 19,331,615 Equity balance, end of year $ 20,485,320 $ 18,241,764 $ 18,934,724 Balance consists of: Capital assets (note 7) Long-term debt — capital (note 9) $ 19,010,142 (768,379) $ 19,882,249 (947,525) Alberta School Foundation Fund 11,679,657 $ 18,241,764 $ 18,934,724 15. Net municipal property taxes: 432,248 432,248 427,640 Budget 2007 2006 (Unaudited) Taxation: Real property taxes $ 10,237,178 $ 10,227,227 $ 9,335,222 Linear property taxes 23,347,002 23,383,325 20,340,415 Government grants in place of property taxes 255,651 254,942 260,561 33,839,831 33,865,494 29,936,198 Requisitions: Alberta School Foundation Fund 11,679,657 11,805,024 11,104,805 Newell Foundation 432,248 432,248 427,640 12,111,905 12,237,272 11,532,445 $ 21,727,926 $ 21,628,222 $ 18,403,753 16 COUNTY OF NEWELL NO.4 Notes to Consolidated Financial Statements Year ended December 31, 2007 16. Government transfers: 17. Expenditures by object: Budget 2007 2006 (Unaudited) Operating: Salaries, wages and benefits Budget 2007 2006 (Unaudited) 10,522,325 11,853,137 Provincial transfers: Materials, goods, supplies and utilities 2,617,377 2,086,553 Shared -cost agreements and grants $ 1,084,708 $ 1,250,133 $ 1,367,746 Shared -cost agreements and grants — capital 2,864,638 7,034,611 2,599,267 880 3,949,346 8,284,744 3,967,013 Federal transfers: Other expenditures 89,820 200,832 Shared — cost agreements and grants — capital 75,000 54,457 -- Local government transfers: Shared -cost agreements and grants 7,054 11,177 6,877 $ 4,031,400 $ 8,350,378 $ 3,973,890 17. Expenditures by object: Budget 2007 2006 (Unaudited) Operating: Salaries, wages and benefits $ 5,345,165 $ 5,039,030 $ 4,194,829 Contracted and general services 10,522,325 11,853,137 12,459,800 Materials, goods, supplies and utilities 2,617,377 2,086,553 2,010,140 Transfers to organizations 1,380,345 1,312,706 1,110,313 Bank charges and short-term interest 700 596 880 Interest on long-term debt 470,838 464,371 498,736 Other expenditures 89,820 200,832 190,910 20,426,570 20,957,225 20,465,608 Capital: Purchase of capital assets 2,017,851 2,388,438 2,997,525 $ 22,444,421 $ 23,345,663 $ 23,463,133 17 COUNTY OF NEWELL NO.4 Notes to Consolidated Financial Statements Year ended December 31, 2007 18. Trust funds: 2007 2006 Scholarship funds: Land of Promise Scholarship $ 8,985 $ 8,982 John W. Smidstrup Scholarship 64,323 64,136 $ 73,308 $ 73,118 The above trust funds are not recorded in the financial statements (note 1(a)). 19. 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: 2007 2006 Benefits & Salary (1) Allowances (2) Total Total Council: Reeve $ 5,500 $ - $ 5,500 $ 5,400 Division 1 26,510 4,063 30,573 26,182 Division 2 28,355 1,127 29,482 23,633 Division 3 31,538 4,290 35,828 30,704 Division 4 27,200 3,428 30,628 30,814 Division 5 20,304 1,449 21,753 20,223 Division 6 22,783 3,879 26,662 23,888 Division 7 22,858 3,899 26,757 23,256 Division 8 29,018 2,341 31,359 26,857 Division 9 27,585 2,191 29,776 28,782 Division 10 25,261 2,456 27,717 25,174 $ 266,912 $ 29,123 $ 296,035 $ 264,913 Chief Administrative Officer $ 122,837 $ 23,156 $ 145,993 $ 132,562 Designated officers $ 93,623 $ 18,679 $ 112,302 $ 227,551 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. 18 COUNTY OF NEWELL NO.4 Notes to Consolidated Financial Statements Year ended December 31, 2007 20. 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: 2007 2006 Total debt limit $ 43,905,657 $ 39,333,509 Total debt 8,024,393 8,675,150 $ 35,881,264 $ 30,658,359 2007 2006 Debt servicing limit $ 7,317,610 $ 6,555,585 Debt servicing 1,121,594 1,121,594 $ 6,196,016 $ 5,433,991 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. 21. Contingent liability: The County of Newell No. 4 is a member of the Alberta Municipal Insurance Exchange (MUNIX). Under the terms of membership, the County of Newell No. 4 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. 19 COUNTY OF NEWELL NO.4 Notes to Consolidated Financial Statements Year ended December 31, 2007 22. Financial instruments: The County of Newell No. 4's financial instruments consist of cash and temporary investments, receivables, accounts payable and accrued liabilities, and long-term debt. It is management's opinion that the County is not exposed to significant interest, currency or credit risk arising from these financial instruments. Unless otherwise noted, the fair value of these financial instruments approximate their carrying values. 22. Comparative figures: Where necessary the comparative figures for the 2006 year have been reclassified to conform with 2007 financial statement presentation. 24. Approval of financial statements: These financial statements were approved by Council and Management. 20