HomeMy WebLinkAbout2002-12-31 Year End Audited Financial Satements
COUNTY OF NEWELL NO. 4
Financial Statements
For the Year Ended December 31, 2002
COUNTY OF NEWELL NO. 4
TABLE OF CONTENTS
For the year ended December 31, 2002
1
AUDITORS REPORT
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF FINANCIAL POSITION2
CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES AND
CHANGE IN FUND BALANCES3
CONSOLIDATED STATEMENT OF CHANGES IN FINANCIAL POSITION4
SCHEDULE OF FINANCIAL ACTIVITIES AND CHANGE IN FUND BALANCE - OPERATING5
SCHEDULE OF FINANCIAL ACTIVITIES AND CHANGE IN FUND BALANCE - CAPITAL6
SCHEDULE OF CHANGE IN FUND BALANCE - RESERVES7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS8 - 17
AUDITORS' REPORT
To: the Reeve and Council of the
County of Newell No. 4
We have audited the consolidated statement of financial position of the County of Newell No. 4 as at
December 31, 2002, the consolidated statement of financial activities and change in fund balances, and the
consolidated statement of changes in financial position for the year then ended. These consolidated financial
statements are the responsibility of the municipal administration. Our 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 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 administration, 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, 2002 and the results of its financial activities and the changes in
its financial position for the year then ended in accordance with the disclosed basis of accounting described
in Note 1.
Lethbridge, Alberta
February 20, 2003Chartered Accountants
1
COUNTY OF NEWELL NO. 4
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at December 31, 2002
20022001
ASSETS
Financial assets
Cash and temporary investments (Note 2)$ 7,465,193$ 6,476,742
Taxes and grants in place of taxes receivable (Note 3)586,023479,664
Trade and other receivables668,9881,713,202
Land held for resale1,27545,873
Prepaid expenses62,02989,900
Investments1,519,771-
10,303,2798,805,381
Physical assets
Inventory for consumption523,565594,472
Physical assets (Note 4)16,751,91915,657,483
17,275,48416,251,955
$ 27,578,763$ 25,057,336
LIABILITIES AND MUNICIPAL EQUITY
Liabilities
Accounts payable and accrued liabilities$ 774,717$ 669,849
Vacation accrual112,15793,726
Long-term debt (Note 5)754,440855,012
Provision for landfill closure and post-closure costs (Note 6)651,300300,000
2,292,6141,918,587
Municipal equity
Fund balances
Operating - Schedule 1831,248829,448
Capital - Schedule 2(89,919)(135,471)
Reserves - Schedule 3 (Note 7)8,547,3417,642,301
9,288,6708,336,278
Equity in physical assets15,997,47914,802,471
25,286,14923,138,749
$ 27,578,763$ 25,057,336
See accompanying notes2
COUNTY OF NEWELL NO. 4
CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES AND CHANGE IN FUND BALANCES
For the year ended December 31, 2002
Budget
(Unaudited)20022001
Revenue
Net municipal property taxes (Note 8)$ 7,767,400$ 7,942,161$ 7,194,034
Special levies238,050237,983217,626
User fees and sale of goods 425,2601,126,768441,559
Gain on sale of land held for resale50034,2326,968
Government transfers (Note 9)1,227,8501,120,5174,827,495
Penalties and costs of taxes100,250101,113114,501
Investment income217,540260,504474,898
Licenses and permits45,00061,60660,710
Proceeds from local improvements151,695203,567151,698
Proceeds on disposal of physical assets125,500171,4531,321,609
Other47,90068,45462,904
10,346,94511,328,35814,874,002
(Note 10)
Expenditures
Legislative320,295353,371237,684
Administration936,600887,619720,988
General178,880241,799375,737
Fire and bylaw enforcement351,650330,569284,864
Ambulance services and first aid153,445153,44693,104
Disaster and emergency measures27,5508,3941,345
Roads, streets, walks, and lighting6,439,2156,494,65614,382,374
Water and wastewater16,11020,310108,797
Waste management299,000535,474101,174
Family and community support153,450147,046116,233
Municipal planning282,830240,571274,896
Community and agricultural services629,535606,201720,272
Subdivision land and development5003,3812,745
Recreation and parks217,510217,295202,444
Culture and library35,25535,26241,086
10,041,82510,275,39417,663,743
305,1201,052,964(2,789,741)
Excess (deficiency) of revenue over expenditures
Capital financing transaction
Repayment of long-term debt(100,575)(100,572)(95,111)
$ 204,545$ 952,392$ (2,884,852)
Change in fund balances
See accompanying notes3
COUNTY OF NEWELL NO. 4
CONSOLIDATED STATEMENT OF CHANGES IN FINANCIAL POSITION
For the year ended December 31, 2002
20022001
Cash flows from operating activities
Excess (deficiency) of revenue over expenditures$ 1,052,964$ (2,789,741)
Change in non-cash working capital items
Taxes and grants in place of taxes receivable(106,359)41,789
Trade and other receivables1,044,214(984,340)
Land held for resale44,598169,514
Inventory for consumption70,907(82,159)
Prepaid expenses27,871(2,120)
Accounts payable and accrued liabilities104,868(328,388)
Vacation accrual18,4313,841
Provision for landfill closure and post closure351,300300,000
2,608,794(3,671,604)
Cash flows from investing activities
Increase in investments(1,519,771)-
Cash flows from financing activities
Long-term debt repaid(100,572)(95,111)
988,451(3,766,715)
Change in cash and equivalents during the year
6,476,74210,243,457
Cash and temporary investments, beginning of year
$ 7,465,193$ 6,476,742
Cash and temporary investments, end of year
See accompanying notes4
COUNTY OF NEWELL NO. 4
SCHEDULE 1
SCHEDULE OF FINANCIAL ACTIVITIES AND CHANGE IN FUND BALANCE - OPERATING
For the Year Ended December 31, 2002
Budget
(Unaudited)20022001
Revenue
Net municipal property taxes (Note 8)$ 7,767,400$ 7,942,161$ 7,194,034
Special levies238,050237,983217,626
User fees and sale of goods425,2601,126,768441,559
Gain on sale of land held for resale50034,2326,968
Government transfers 1,227,8501,104,4644,763,778
Penalties and costs of taxes100,250101,113114,501
Investment income217,540260,504472,950
Licenses and permits45,00061,60660,710
Proceeds from local improvements151,695150,330151,698
Other47,90068,45462,904
10,221,44511,087,61513,486,728
(Note 10)
Expenditures
Legislative320,295353,371237,684
Administration915,200852,509666,222
General178,880241,799375,737
Fire and bylaw enforcement351,650330,569284,864
Ambulance services and first aid153,445153,44693,104
Disaster and emergency measures6,9508,3941,345
Roads, streets, walks, and lighting4,874,1154,876,5869,413,091
Water and wastewater 16,11020,31013,921
Waste management299,000535,474101,174
Family and community support153,450147,046116,233
Municipal planning282,830240,571274,896
Community and agricultural services553,625533,291492,997
Subdivision land and development5003,3812,745
Recreation and parks217,510217,295202,444
Culture and library35,25535,26241,086
8,358,8158,549,30412,317,543
1,862,6302,538,3111,169,185
Excess of revenue over expenditures
Net interfund transfers
Transfer to capital - repayment of long-term debt(100,575)(100,572)(95,111)
Transfer to capital(1,529,010)(1,528,207)(2,797,625)
Transfer from (to) reserves(233,045)(907,732)1,732,373
- 1,8008,822
Change in fund balance
829,448829,448820,626
Fund balance, beginning of year
$ 829,448$ 831,248$ 829,448
Fund balance, end of year
See accompanying notes5
COUNTY OF NEWELL NO. 4
SCHEDULE 2
SCHEDULE OF FINANCIAL ACTIVITIES AND CHANGE IN FUND BALANCE - CAPITAL
For the year ended December 31, 2002
Budget
(Unaudited)20022001
Revenue
Government transfers$ - $ 16,053$ 63,717
Local improvement levy- 53,237-
Investment income- - 1,948
Proceeds from disposal of physical assets125,500171,4531,321,609
125,500240,7431,387,274
(Note 10)
Expenditures
Administration21,40035,11054,766
Roads, streets, walks, and lighting1,565,1001,618,0704,969,283
Disaster and emergency services20,600- -
Water and wastewater - - 94,876
Community and agricultural services75,91072,910227,275
1,683,0101,726,0905,346,200
(1,557,510)(1,485,347)(3,958,926)
Excess of expenditures over revenue
Capital financing transactions and net
interfund transfers
Repayment of long-term debt(100,575)(100,572)(95,111)
Transfer from operating
- repayment of long-term debt100,575100,57295,111
Transfer from operating1,529,0101,528,2072,797,625
Transfer from reserves28,5002,6921,130,140
- 45,552(31,161)
Change in fund balance
(135,471)(135,471)(104,310)
Fund balance, beginning of year
$ (135,471)$ (89,919)$ (135,471)
Fund balance, end of year
See accompanying notes6
COUNTY OF NEWELL NO. 4
SCHEDULE 3
SCHEDULE OF CHANGE IN FUND BALANCE - RESERVES
For the year ended December 31, 2002
Budget
(Unaudited)2,0022001
$ 7,642,301$ 7,642,301$ 10,504,814
Fund balance, beginning of year
Net interfund transfers
Transfer from (to) operating233,045907,732(1,732,373)
Transfer to capital(28,500)(2,692)(1,130,140)
204,545905,040(2,862,513)
Change in fund balance
$ 7,846,846$ 8,547,341$ 7,642,301
Fund balance, end of year
See accompanying notes7
COUNTY OF NEWELL NO. 4
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the year ended December 31, 2002
1.Significant Accounting Policies
The consolidated financial statements of the County of Newell No. 4 are the representations of
management prepared in accordance with local government accounting standards 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, revenue and expenditures,
changes in fund balances and change in financial position of the reporting entity which comprises
all of 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 operating requisitions for many educational, health care, social and
other external organizations that are not part of the municipal reporting entity.
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
The basis of accounting followed in the financial statement presentation includes revenue
recognized in the period in which the transactions or events occurred that gave rise to the revenue,
and expenditures recognized in the period the goods and services are acquired and a liability is
incurred or transfers are due, with the exception of pension expenditures as disclosed in Note 1(i).
(c)
Fund accounting
Management funds consist of the operating, capital and reserve funds. Transfers between funds
are recorded as adjustments to the appropriate equity account. Gains or losses from land sales
are recorded as operating fund revenue or expenditures.
(d)
Government transfers
Government transfers are recognized in the financial statements as revenue in the period that the
events giving rise to the transfer occurred, providing the transfers are authorized, any eligibility
criteria have been met by the County, and reasonable estimates of the amounts can be made.
(e)
Investments
Investments are recorded at cost.
(f)
Inventories
Inventories of materials and supplies 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 or net realizable value. Cost includes costs
for land acquisition and improvements required to prepare the land for servicing such as clearing,
stripping, and levelling charges. Related development costs incurred to provide infrastructure such
as water and wastewater services, road, sidewalks, and street lighting are recorded as physical
assets under their respective function.
(g)
Physical assets
Physical assets are reported as expenditures in the period they are acquired.
Physical assets are recorded at cost except for donated assets, which are recorded at their
estimated fair value.
8
COUNTY OF NEWELL NO. 4
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the year ended December 31, 2002
1.Significant accounting policies (continued)
(g)
Physical assets (continued)
Government contributions for the acquisition of physical assets are recorded as capital revenue
and do not reduce the related physical asset costs.
Physical assets are not depreciated.
(h)
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 collectable from property owners for work performed by the County.
Where a taxpayer has elected to prepay the outstanding local improvement charges, 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 borrowing.
In the event that the prepaid amounts are applied against the related borrowing, the deferred
revenue is amortized to revenue by an amount equal to the debt repayment.
(i)
Local authorities pension plan
Employees of the County of Newell No. 4 participate in the Local Authorities Pension Plan (LAPP),
which is covered by the Public Sector Pension Plans Act. This is a multi-employer defined benefit
pension plan and is accounted for as a defined contribution plan. 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.
The County of Newell No. 4 is required to make current service contributions to the Plan of 5.025%
of pensionable earnings up to the Canada Pension Plan Year's Maximum Pensionable Earnings
and 6.9% for the excess.
Total current service contributions by the County of Newell No. 4 to the Local Authorities Pension
Plan in 2002 were $86,856 (2001 - $76,881). Total current service contributions by the employees
of the County of Newell No. 4 to the Local Authorities Pensions Plan in 2002 were $70,613 (2001 -
$61,671).
At December 31, 2001, the Plan disclosed an actuarial surplus of $635.0 million.
(j)
Reserves for future expenditures
Reserves are established at the discretion of Council to set aside funds for future operating and
capital expenditures. Transfers to and/or from reserves are reflected as an adjustment to the
respective fund.
(k)
Equity in physical assets -
Equity in physical assets represents the County of Newell's net investment in its total physical
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.
9
COUNTY OF NEWELL NO. 4
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the year ended December 31, 2002
1.Significant accounting policies (continued)
(l)
Measurement uncertainty
Financial statements, by their nature,contain estimates and are subject to measurement
uncertainty. Accounts receivable are stated after evaluation as to their collectibility and an
appropriate allowance for doubtful accounts is provided based on management's best information
available at the time. Pension plan obligations are based on actuarial valuations extrapolated to
the reporting date. The effect on the financial statements of changes in such estimates in future
periods could be significant.
(m)
Landfill closure and post-closure liability
Pursuant to the Alberta Environmental Protection and Enhancement Act, the County is required
to fund the closure of its landfill site and provide for post-closure care of the facility. 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.
2.Cash and temporary investments
20022001
Cash $ 1,257,724$ 511,069
Temporary investments6,207,4695,965,673
$ 7,465,193$ 6,476,742
The temporary investments are comprised of term deposits with interest rates ranging from 2% to 4%.
The investments mature within the next year. The market value of these investments approximates the
cost.
3.Taxes and grants in place of taxes receivable
20022001
Current year$ 285,035$ 306,422
Arrears447,405317,202
732,440623,624
Allowance for uncollectible taxes(146,417)(143,960)
$ 586,023$ 479,664
10
COUNTY OF NEWELL NO. 4
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the year ended December 31, 2002
4.Capital assets
20022001
Land$ 968,988$ 970,838
Buildings1,040,5101,033,985
Distribution system - water and sewer3,096,2453,088,561
Other engineering structures960,605960,605
Machinery, equipment and furnishings8,867,6358,124,306
Vehicles1,817,9361,479,188
$ 16,751,919$ 15,657,483
5.Long-term debt
20022001
Tax supported debentures$ 754,440$ 855,012
Current portion$ 106,359$ 100,572
Principal and interest repayments are as follows:
PrincipalInterestTotal
2003$ 106,359$ 44,774$ 151,133
2004112,49238,641151,133
2005113,41932,139145,558
2006119,95925,599145,558
2007125,82211,888137,710
Thereafter176,38938,156214,545
$ 754,440$ 191,197$ 945,637
Debenture debt is repayable to Alberta Municipal Financing Corporation and bears interest at rates
ranging from 5.375% to 11.75% per annum, before Provincial subsidy, and matures in periods 2004
through 2017. The average annual interest rate is 5.9% for 2002 (2001 - 5.9%). For qualifying
debentures, the Province of Alberta rebates 60% of interest in excess of 8%, 9% and 11% to a
maximum annual rate of 12.5%, depending on the date borrowed. Debenture debt is issued on the
credit and security of the County of Newell No. 4 at large.
6.Provision for landfill closure and post-closure costs
The accrued liability for closure and post-closure care of the Countys landfill is based on an estimate
of future costs.
The estimated closure and post-closure costs are $651,300 all of which have been accrued in the
financial statements.
11
COUNTY OF NEWELL NO. 4
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the year ended December 31, 2002
7.Reserves
Reserves for operating and capital activities changed as follows:
2001IncreaseDecrease2002
Operating
Hard surface$ 453,134$ 12,044$ - $ 465,178
Debt reduction1,236,31317,569- 1,253,882
Municipal surplus2,247,113930,72142,4593,135,375
Secondary highway 862214,8836,110- 220,993
Public transportation152,5984,299- 156,897
Special road project193,1384,825- 197,963
Office renovations133,6982,457- 136,155
Fire truck30,00030,819- 60,819
Road work245,506- 245,5006
Public works - other35,033819- 35,852
Gravel crushing50,0001,228- 51,228
Garbage pits480,9948,599140,000349,593
Agriculture Service Board94,8861,638- 96,524
Planning25,00064,819- 89,819
Future expenditures1,168,84522,113- 1,190,958
Purchase of gravel100,0002,460- 102,460
6,861,1411,110,520427,9597,543,702
Capital
Scandia water reservoir4,879128- 5,007
Patricia sewer1,74146- 1,787
Scandia sewer23,686624- 24,310
Rolling Hills water & sewer6,297158- 6,455
Rolling Hills sewage lagoon2,04455992,000
Patricia water system3,958104- 4,062
Rainier water system133- 3598
Lake Newell road prepaid4,8121043484,568
Future expenditures - general
administration116,58268,5202,692182,410
Machinery and equipment496,546152,961- 649,507
Vehicle replacement120,4822,953- 123,435
781,160225,6533,1741,003,639
$ 7,642,301$ 1,336,173$ 431,133$ 8,547,341
12
COUNTY OF NEWELL NO. 4
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the year ended December 31, 2002
8.Net municipal property taxes
Budget
(Unaudited)20022001
Taxation
Real property taxes$ 5,795,935$ 5,781,795$ 5,526,275
Linear property taxes11,118,84011,308,22810,611,239
Government grants in place of property taxes178,805178,836190,744
17,093,58017,268,85916,328,258
Requisitions
Alberta School Foundation Fund9,274,0709,274,1349,082,117
Newell Foundation52,11052,56452,107
9,326,1809,326,6989,134,224
$ 7,767,400$ 7,942,161$ 7,194,034
9.Government transfers
Budget
(Unaudited)20022001
Provincial transfers
Shared-cost agreements and grants$ 1,219,200$ 1,112,919$ 4,818,842
Local government transfers
Shared-cost agreements and grants8,6507,5988,653
$ 1,227,850$ 1,120,517$ 4,827,495
Total government transfers
13
COUNTY OF NEWELL NO. 4
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the year ended December 31, 2002
10.Expenditures by object
Budget
(Unaudited)20022001
OPERATING
Salaries, wages and benefits$ 2,897,415$ 2,971,773$ 2,538,555
Contracted and general services2,945,9202,659,9047,549,613
Materials, goods, supplies and utilities1,550,7101,924,8251,346,360
Provisions for allowances- 17,913
Transfers to organizations886,660853,597708,259
Bank charges and short term interest1,7505161,708
Interest on long term debt50,56050,56156,022
Other expenditures25,80070,215117,026
8,358,8158,549,30412,317,543
CAPITAL
Purchase of physical assets1,683,0101,726,0905,346,200
$ 10,041,825$ 10,275,394$ 17,663,743
11.Trust funds
Trust funds administered by the County on behalf of others consist of the following:
20022001
Tax Sale Surplus$ 17,919$ 19,877
Public Reserve541,744554,326
Scholarships126,353122,256
$ 686,016$ 696,459
The above trust funds are not recorded in the financial statements (Note 1(a)).
14
COUNTY OF NEWELL NO. 4
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the year ended December 31, 2002
12.Salary and benefits disclosure
Disclosure of salaries and benefits for municipal officials, the chief administrative officer and designated
officers as required by Alberta Regulation 313/2000 is as follows:
(2)
No. of(1)Benefits &2002No. of2001
PersonsSalaryAllowancesTotalPersonsTotal
Reeve Wayne Daniels1$ 3,825$ - $ 3,8251$ 1,800
Councillors
Division 1- Wayne Daniels120,8501,44522,295115,331
Division 2 - Vince Fabian122,95028323,233116,950
Division 3 - Jan-Sep
- Norma Berg-- - - 17,287
Division 3 - Gordon Musgrove124,1501,53625,68613,897
Division 4 - Chris Vermeeren122,8751,49824,373116,977
Division 5 - Jack Harbinson121,6751,45723,132117,594
Division 6 - Jan-Sep
- Ruth Steinbach-- - - 18,907
Division 6 - Ed Moss120,2504020,29013,375
Division 7 - Marg Loewen 123,1001,50224,602117,131
Division 8 - Art Eckert123,55090424,454116,800
Division 9 - Jan-Sep
- Margaret Douglas-- - - 18,775
Division 9 - Allan Pickett116,0501,28317,33313,907
Division 10 - Cory Baksa126,5501,60828,158119,986
$ 225,825$ 11,556$ 237,381$ 158,717
Chief Administrative Officer
- Alan Martens1$ 93,000$ 12,394$ 105,3941$ 90,934
Designated Officers -2169,333
- John Dell164,7758,77573,550-
- Steve Wylie158,6049,57568,179-
- Trevor Schulz115,9692,11918,088-
- Scott Simpson131,4374,32135,758-
$ 263,785$ 37,184$ 300,969$ 577,701
(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 Canada Pension Plan, Employment
Insurance, pension, health care, dental coverage, vision coverage, group life insurance, accidental
disabilityand 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.
15
COUNTY OF NEWELL NO. 4
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the year ended December 31, 2002
13.Debt limits
Section 276(2) of the Municipal Government Act requires that debt and debt limits as defined by Alberta
Regulation 255/00 for the County of Newell No. 4 be disclosed as follows:
20022001
Total debt limit$ 16,888,602$ 22,215,427
Total debt754,440855,012
Total unused debt limit$ 16,134,162$ 21,360,415
Debt servicing limit$ 2,814,767$ 3,702,571
Debt servicing151,133151,133
Amount of unused service on debt$ 2,663,634$ 3,551,438
The debt limit is calculated at 1.5 times revenue of the County (as defined in Alberta Regulation 255/00)
and the debt service limit is calculated at 0.25 times such revenue. Incurring debt beyond these
limitations requires approval by the Minister of Municipal Affairs. These thresholds are guidelines used
by Alberta Municipal Affairs to identify municipalities which could be at financial risk if further debt is
acquired. The calculation taken alone does not represent the financial stability of the County. Rather,
the financial statements must be interpreted as a whole.
14.Contingencies
(a)The County of Newell No. 4 is a member of the Alberta Local Authorities Reciprocal Insurance
Exchange. 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.
(b)Employees of the County of Newell No. 4 are allowed to accrue sick leave to a maximum of 90
days or 60 days depending on job title. As at December 31, 2002, the amount of accumulated sick
leave was approximately $310,000. The amount was not recorded in the financial statements as
there is no certainty the full amount will be used. The amount of accumulated sick leave is not paid
out to employees of the County when they leave their position.
(c)The County of Newell No. 4 is responsible for the reclamation of open gravel pit sites. The total
estimated costs of reclaiming the pits is $60,000. This amount was not recorded in the financial
statements as at December 31, 2002 as the County does not intend to close them in the next fiscal
year. However, the County is liable for these reclamation costs in the future.
15.Financial instruments
The Countys financial instruments consist of cash and temporary investments, receivables, bank
overdrafts, accounts payable, accrued liabilities and long term debt. It is managements opinion that
the County is not exposed to significant interest, currency or credit risk arising from these financial
statements. Unless otherwise noted, the fair value of these financial instruments approximates their
carry values.
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COUNTY OF NEWELL NO. 4
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the year ended December 31, 2002
16.Comparative figures
Where necessary the comparative figures for the 2001 year have been reclassified to conform with
2002 financial statement presentation.
17.Approval of Financial Statements
These financial statements were approved by Council and Management.
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