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HomeMy WebLinkAbout2003-12-31 Year End Audited Financial Satements COUNTY OF NEWELL NO. 4 Financial Statements For the year ended December 31, 2003 COUNTY OF NEWELL NO. 4 TABLE OF CONTENTS For the year ended December 31, 2003 AUDITORS' REPORT 1 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 - 18 AUDITORS' REPORT To:TheReeve and Members of Council of theCounty of Newell No. 4 We have audited the consolidated statement of financial position of the County of Newell No. 4 as at December 31, 2003, 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 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 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 of Newell No. 4 as at December 31, 2003 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 19, 2004Chartered Accountants 1 COUNTY OF NEWELL NO. 4 CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at December 31, 2003 20032002 ASSETS Financial assets Cash and temporary investments (note 2)$6,831,376$7,465,193 Taxes and grants in place of taxes receivables (note 3)719,916586,023 Trade and other receivables1,037,090508,161 Land held for resale5251,275 Prepaid expenses102,20962,029 Investments (note 4)2,137,7741,519,771 Notes receivable (note 5)10,477,729- 21,306,61910,142,452 Physical assets Inventory for consumption568,701523,565 Physical assets (note 6)18,302,32916,751,919 18,871,03017,275,484 $40,177,649$27,417,936 LIABILITIES AND MUNICIPAL EQUITY Liabilities Accounts payable and accrued liabilities$1,134,036$774,718 Vacation accrual159,376112,158 Unearned revenue285,573- Long-term debt - capital (note 7)648,081754,440 Long-term debt - operating (note 8)9,000,000- Provision for gravel pit closure and post-closure costs (note 9)176,500176,500 Provision for landfill closure and post-closure costs (note 9)1,025,186651,300 12,428,7522,469,116 Municipal equity Fund balances Operating (schedule 1)493,919493,919 Capital (schedule 2)(192,064)(89,919) Reserves (schedule 3) (note 10)9,792,7948,547,341 10,094,6498,951,341 Equity in physical assets17,654,24815,997,479 27,748,89724,948,820 $40,177,649$27,417,936 2 COUNTY OF NEWELL NO. 4 CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES AND CHANGE IN FUND BALANCES For the year ended December 31, 2003 Budget (Unaudited)20032002 Revenue Net municipal property taxes (note 11)$9,269,604$9,373,837$7,942,160 Special levies248,669248,669237,983 User fees and sale of goods1,713,6051,519,5291,126,768 Gain on sale of land held for resale10,0009,90334,232 Government transfers (note 12)1,053,3502,114,0931,120,517 Penalties and cost of taxes100,250177,185101,113 Investment income219,900438,579260,504 Licenses and permits48,00038,92561,606 Proceeds from local improvements162,885160,910203,567 Proceeds from disposal of physical assets455,350691,121171,453 Other revenue67,232100,92068,454 13,348,84514,873,67111,328,357 Expenditures (note 13) Legislative488,231508,922353,370 Administration1,204,7001,034,504887,619 General508,710366,352241,799 Fire and bylaw enforcement376,768378,609330,569 Ambulance services and first aid178,425178,425153,446 Disaster and emergency measures57,35064,1888,394 Roads, streets, walks and lighting6,692,4228,897,1246,494,657 Water and waste water138,332137,90220,310 Waste management182,788587,532535,474 Family and community support161,159164,831147,046 Municipal planning387,440322,380240,571 Community and agricultural services755,311708,019606,201 Subdivision land and development10,0007503,381 Recreation and parks225,940226,544217,295 Culture and library48,28747,92235,262 11,415,86313,624,00410,275,394 Excess of revenue over expenditures 1,932,9821,249,6671,052,963 Capital financing transactions Repayment of long-term debt(106,359)(106,359)(100,572) Change in fund balances $1,826,623$1,143,308$952,391 3 COUNTY OF NEWELL NO. 4 CONSOLIDATED STATEMENT OF CHANGES IN FINANCIAL POSITION For the year ended December 31, 2003 20032002 Cash flows from operating activities Excess of revenue over expenditures$1,249,667$1,052,963 Net change in non-cash working capital items Taxes and grants in place of taxes receivables(133,893)(106,359) Trade and other receivables(528,929)1,044,214 Land held for resale75044,598 Prepaid expenses(40,180)27,871 Inventory for consumption(45,136)70,907 Accounts payable and accrued liabilities359,318104,868 Vacation accrual47,21818,432 Unearned revenue285,573- Provision for landfill closure and post-closure costs373,886351,300 1,568,2742,608,794 Cash flows from investing activities Increase in investments(618,003)(1,519,771) Advances of notes receivable(10,477,729)- (11,095,732)(1,519,771) Cash flows from financing activities Proceeds of long-term debt9,000,000- Repayment of long-term debt(106,359)(100,572) 8,893,641(100,572) (Decrease) increase in cash and temporary investments (633,817)988,451 Cash and temporary investments, beginning of year 7,465,1936,476,742 Cash and temporary investments, end of year $6,831,376$7,465,193 4 COUNTY OF NEWELL NO. 4 SCHEDULE1 SCHEDULE OF FINANCIAL ACTIVITIES AND CHANGE IN FUND BALANCE - OPERATING For the Year Ended December 31, 2003 Budget (Unaudited)20032002 Revenue Net municipal property taxes (note 11)$9,269,604$9,373,837$7,942,160 Special levies248,669248,669237,983 User fees and sale of goods1,713,6051,519,5291,126,768 Gain on sale of land held for resale10,0009,90334,232 Government transfers1,037,3501,496,2501,104,464 Penalties and cost of taxes100,250177,185101,113 Investment income219,900438,579260,504 Licenses and permits48,00038,92561,606 Proceeds from local improvements162,885149,400150,330 Other revenue67,232100,92068,454 12,877,49513,553,19711,087,614 Expenditures (note 13) Legislative488,231508,922353,370 Administration995,600953,641852,509 General508,710366,352241,799 Fire and bylaw enforcement374,368376,438330,569 Ambulance services and first aid178,425178,425153,446 Disaster and emergency measures26,75020,0118,394 Roads, streets, walks and lighting4,854,7416,285,1374,876,587 Water and waste water138,332137,90220,310 Waste management171,288587,532535,474 Family and community support161,159164,831147,046 Municipal planning387,440322,380240,571 Community and agricultural services618,191573,323533,291 Subdivision land and development10,0007503,381 Recreation and parks225,940226,544217,295 Culture and library48,28747,92235,262 9,187,46210,750,1108,549,304 Excess of revenue over expenditures 3,690,0332,803,0872,538,310 Net interfund transfers Transfer to capital - repayment of long-term debt(106,359)(106,359)(100,572) Transfer to capital(1,724,951)(1,417,098)(1,528,207) Transfer to reserves(1,858,723)(1,279,630)(907,733) Change in fund balance --1,798 Fund balance, beginning of year As previously restated831,246831,246829,448 Prior period error correction (note 14)-(337,327)(337,327) As restated831,246493,919492,121 Fund balance, end of year $831,246$493,919$493,919 5 COUNTY OF NEWELL NO. 4 SCHEDULE2 SCHEDULE OF FINANCIAL ACTIVITIES AND CHANGE IN FUND BALANCE - CAPITAL For the year ended December 31, 2003 Budget (Unaudited)20032002 Revenue Government transfers$16,000$617,843$16,053 Proceeds from local improvements-11,51053,237 Proceeds from disposal of physical assets455,350691,121171,453 471,3501,320,474240,743 Expenditures (note 13) Administration209,10080,86335,110 Fire and bylaw enforcement2,4002,171- Disaster and emergency measures30,60044,177- Roads, streets, walks, and lighting1,837,6812,611,9871,618,070 Waste management11,500-- Community and agricultural services137,120134,69672,910 2,228,4012,873,8941,726,090 Deficiency of revenue over expenditures (1,757,051)(1,553,420)(1,485,347) Capital financing transactions and netinterfund transfers Repayment of long-term debt(106,359)(106,359)(100,572) Transfer from operating - repayment of long-term debt106,359106,359100,572 Transfer from operating1,724,9511,417,0981,528,207 Transfer from reserves32,10034,1772,692 Change in fund balance -(102,145)45,552 Fund balance, beginning of year (89,919)(89,919)(135,471) Fund balance, end of year $(89,919)$(192,064)$(89,919) 6 COUNTY OF NEWELL NO. 4 SCHEDULE3 SCHEDULE OF CHANGE IN FUND BALANCE - RESERVES For the year ended December 31, 2003 Budget (Unaudited)20032002 Fund balance, beginning of year $8,547,341$8,547,341$7,642,300 Netinterfund transfers Transfer from operating1,858,7231,279,630907,733 Transfer to capital(32,100)(34,177)(2,692) Fund balance, end of year $10,373,964$9,792,794$8,547,341 7 COUNTY OF NEWELL NO. 4 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2003 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 requisitions for 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 For reporting purposes, established 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 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 physical assets under their respective function. 8 COUNTY OF NEWELL NO. 4 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2003 1.Significant accounting policies, continued (g)Physical assets Physical assets are reported as expenditures in the period that they are acquired. Physical assets are recorded at cost except for donated assets, which are recorded at estimated fair value when acquired. 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 amortized. (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 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. (i)Local authorities pension plan TheCounty 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. TheCounty 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 to the Local Authorities Pension Plan in 2003 were $112,181 (2002 - $86,856). Total current service contributions by the employees of the County to the Local Authorities Pension Plan in 2003 were $92,980 (2002 - $70,613). At December 31, 2002 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. 9 COUNTY OF NEWELL NO. 4 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2003 1.Significant accounting policies, continued (k)Equity in physical assets Equity in physical assets represents the County'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. (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 and gravel pit closure and post-closure liability Pursuant to the Alberta Environment Protection and Enhancement Act, the Countyis 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. 2.Cash and temporary investments 20032002 Cash$736,140$1,257,724 Temporary investments6,095,2366,207,469 $6,831,376$7,465,193 Temporary investments are comprised of Government of Canada Treasury bills and bonds. The investments mature within the next year. The market value of these investments approximates the cost. 3.Taxes and grants in place of taxes receivables 20032002 Current year$284,137$285,035 Arrears585,765447,405 869,902732,440 Allowance for uncollectible taxes(149,986)(146,417) $719,916$586,023 10 COUNTY OF NEWELL NO. 4 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2003 4.Long-term investments 20032002 Fixed income securities$1,635,448$1,026,909 Common equity securities524,710492,862 $2,160,158$1,519,771 The market value of these investments approximates the cost. 5.Notes receivable 20032002 Newell Foundation This note is repayable in annual installments of $896,630 including interest at 5.5%. This note receivable expires in 2018.$9,000,000$- Town of Brooks This note is repayable in annual installments of $131,082 including interest at 5.25%. This note receivable expires in 2013.1,000,000- Bow Slope fire division This note is repayable in annual installments of $32,113 including interest at 4.39%. This note receivable expires in 2013.255,481- Rosemary fire division This note is repayable in annual installments of $38,583 including interest at 5.125%. This note receivable expires in 2010.222,248- $10,477,729$- 6.Physical assets 20032002 Land$975,955$968,988 Buildings1,040,5101,040,510 Distribution system - water and sewer3,809,9013,096,245 Other engineering structures960,605960,605 Machinery, equipment and furnishings9,447,0188,867,635 Vehicles2,068,3401,817,936 $18,302,329$16,751,919 11 COUNTY OF NEWELL NO. 4 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2003 7.Long-term debt - capital 20032002 Tax supported debentures$648,081$754,440 Current portion$112,492$106,359 Principal and interest repayments are due as follows: PrincipalInterestTotal 2004$112,492$38,641$151,133 2005113,41932,139145,558 2006119,95925,600145,559 2007119,04518,665137,710 2008125,82211,888137,710 Thereafter57,34419,49176,835 $648,081$146,424$794,505 Debenture debt is repayable to Alberta Capital Finance Authority 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 2003 (2002 - 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. 8.Long-term debt - operating 20032002 Tax supported debentures$9,000,000$- Current portion$401,630$- 12 COUNTY OF NEWELL NO. 4 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2003 8.Long-term debt - operating, continued Principal and interest repayments are due as follows: PrincipalInterestTotal 2004$401,630$495,000$896,630 2005423,720472,910896,630 2006447,025449,606896,631 2007471,611425,019896,630 2008497,550399,081896,631 Thereafter6,758,4642,207,8418,966,305 $9,000,000$4,449,457$13,449,457 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 No. 4 at large. 9.Provision for landfill and gravel closure and post-closure costs The accrued liability for closure and post-closure costs of the County's landfill and gravel pit is based on an estimate of future costs. The estimated closure and post-closure costs for the landfill are $1,025,186, and $176,500 for the gravel pit, all of which have been accrued in the financial statements. 13 COUNTY OF NEWELL NO. 4 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2003 10.Reserves Reserves for operating and capital activities changed as follows: 2002IncreaseDecrease2003 Operating Hard surface$465,178$987,437$252,430$1,200,185 Debt reduction1,253,88237,9695,9841,285,867 Municipal surplus3,135,374175,9952,047,3161,264,053 Secondary highway #862220,9937,213997227,209 Public transportation156,8986,252997162,153 Special road project197,9636,864997203,830 Office renovations136,1553,688628139,215 Fire truck60,8191,08130,17031,730 Road work6--6 Public works - other23,45961510523,969 Gravel crushing51,2281,22920952,248 Garbage pits349,5939,834355,1874,240 Agriculture Service Board135,2149,434628144,020 Planning89,8192,45817,83974,438 Future expenditures1,190,957138,7655,7971,323,925 Purchase of gravel102,4607,5922,248107,804 Secondary highway #847-575,3702,492572,878 Shop12,39361510512,903 Bow Slope fire truck-255,481-255,481 Rosemary fire truck-222,247-222,247 Brooks Recreation Centre-1,000,000-1,000,000 7,582,3913,450,1392,724,1298,308,401 Capital Scandia water reservoir5,00769-5,076 Patricia sewer1,78724-1,811 Scandia sewer24,310334-24,644 Rolling Hills water and sewer6,45588-6,543 Rolling Hills sewage lagoon2,000272982,174 Patricia water system4,06256-4,118 Ranier water system98-3563 Lake Newell road prepaid4,568443494,263 Future expenditures - general administration182,410182,2685,929358,749 Machinery and equipment610,818368,86235,620944,060 Vehicle replacement123,4358,9312,686129,680 Lake Newell road prepaid-3,212-3,212 964,950564,16044,7171,484,393 $8,547,341$4,014,299$2,768,846$9,792,794 14 COUNTY OF NEWELL NO. 4 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2003 11.Net municipal property taxes Budget (Unaudited)20032002 Taxation Real property taxes$6,665,509$6,761,288$5,781,796 Linear property taxes12,587,59512,573,54411,308,228 Government grants in place of property taxes190,061194,341178,835 19,443,16519,529,17317,268,859 Requisitions Alberta School Foundation Fund9,979,0729,960,8479,274,135 Newell Foundation194,489194,48952,564 10,173,56110,155,3369,326,699 $9,269,604$9,373,837$7,942,160 12.Government transfers Budget (Unaudited)20032002 Provincial transfers Shared-cost agreements and grants$1,029,722$1,489,828$1,096,866 Shared-cost agreements and grants - capital16,000617,84316,053 1,045,7222,107,6711,112,919 Local government transfers Shared-cost agreements and grants7,6286,4227,598 $1,053,350$2,114,093$1,120,517 13.Expenditures by object Budget (Unaudited)20032002 Operating Salaries, wages and benefits$3,532,289$3,404,474$2,971,773 Contracted and general services3,271,2764,090,9372,659,345 Materials, goods, supplies and utilities1,481,0782,063,7071,922,211 Provisions for allowances-1,15117,913 Transfers to organizations817,645958,577853,597 Bank charges and short-term interest200177516 Interest on long-term debt44,774168,18550,561 Other expenditures40,20062,90273,388 9,187,46210,750,1108,549,304 15 COUNTY OF NEWELL NO. 4 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2003 13.Expenditures by object, continued Capital Purchase of physical assets2,228,4012,873,8941,726,091 $11,415,863$13,624,004$10,275,395 14.Prior period error correction The prior year's figures have been corrected to reflect expenditures in the amount of $337,327 which were not previously recorded. The effect of this correction is a decrease in the operating fund balance as at January 1, 2002 of $337,327, a decrease in accounts receivable of $160,827, and an increase in accounts payable and accrued liabilities of $176,500. 15.Trust funds Trust funds are administered by the County on behalf of others consist of the following: 20032002 Tax sale surplus$18,422$17,919 Public reserve500,160541,744 Scholarships110,919126,353 $629,501$686,016 The above trust funds are not recorded in the financial statements (Note 1a). 16.Salary and benefits disclosure Disclosure of salaries and benefits for elected municipal officials, the chief administrative officer and designated officers as required by Alberta Regulation 313/2000 is as follows: (1)(2) Benefits & Salaryallowances20032002 Council Reeve$5,400$-$5,400$3,825 Division 127,2703,26230,53222,295 Division 234,56069835,25823,233 Division 337,2603,33840,59825,686 Division 434,1103,16237,27224,373 Division 530,4203,13033,55023,132 Division 638,70011538,81520,290 Division 733,5703,14836,71824,602 Division 834,8302,29737,12724,454 Division 919,7102,83022,54017,333 Division 1049,6803,67653,35628,158 16 COUNTY OF NEWELL NO. 4 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2003 Chief Administrative Officer99,00013,533112,533105,394 Designated officers (3)$184,563$28,600$213,163$195,575 (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.Debt limits Section 276(2) of the Municipal Government Act requires that debt and debt limits as defined by Alberta Regulation 255/00 for the County be disclosed as follows: 20032002 Total debt limit$21,383,742$16,888,602 Total debt9,648,081754,440 $11,735,661$16,134,162 Debt servicing limit$3,563,957$2,814,767 Debt servicing1,047,763151,133 $2,516,194$2,663,634 The debt limit is calculated at 1.5 times revenue of the municipality (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 municipality. Rather, the financial statements must be interpreted as a whole. 18.Contingency TheCounty 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. 17 COUNTY OF NEWELL NO. 4 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2003 19.Financial instruments TheCounty of Newell No. 4's financial instruments consist of cash and temporary investments, receivables, bank overdraft, 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 approximates their carrying values. 20.Comparative figures Where necessary the comparative figures for the 2002 year have been reclassified to conform with 2003 financial statement presentation. 21.Approval of financial statements These financial statements were approved by Council and Management. 18