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Home My WebLink About2004-12-31 Year End Audited Financial SatementsCOUNTY OF NEWELL NO.4 Financial Statements For the year ended December 31, 2004 Young Parkyn McNab LLP COUNTY OF NEWELL NO.4 TABLE OF CONTENTS For the year ended December 31, 2004 AUDITORS' REPORT FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF FINANCIAL POSITION 2 CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES AND CHANGE IN FUND BALANCES 3 CONSOLIDATED STATEMENT OF CHANGES IN FINANCIAL POSITION 4 SCHEDULE OF FINANCIAL ACTIVITIES AND CHANGE IN FUND BALANCE - OPERATING 5 SCHEDULE OF FINANCIAL ACTIVITIES AND CHANGE IN FUND BALANCE - CAPITAL SCHEDULE OF CHANGE IN FUND BALANCE - RESERVES 7 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 8-21 Young Parkyn McNab LLP Young Parkyn McNab LLP CHARTERED ACCOUNTANTS AUDITORS' REPORT To: The Reeve and Members of 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, 2004, 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, 2004 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 17, 2005 Young Parkyn McNab LLP Chartered Accountants COUNTY OF NEWELL NO.4 CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at December 31, 2004 ASSETS Financial assets 2004 2003 Cash and temporary investments (note 2) $ 9,265,020 $ 6,831,376 Taxes and grants in place of taxes receivables (note 3) 447,065 719,916 Trade and other receivables 1,025,766 1,037,090 Land held for resale 525 525 Prepaid expenses 120,199 102,209 Investments (note 4) 995,458 2,137,774 Notes receivable (note 5) 9,949,427 10,477,729 21,803,460 21,306,619 Physical assets Inventory for consumption 425,155 568,701 Capital assets (note 6) 18,869,787 18,302,329 19,294,942 18,871,030 $ 41,098,402 $ 40,177,649 LIABILITIES AND MUNICIPAL EQUITY Liabilities Accounts payable and accrued liabilities $ 771,315 $ 1,134,034 Employee benefit obligation (note 7) 177,798 159,376 Unearned revenue 119,851 285,573 Long-term debt - capital (note 8) 535,589 648,081 Long-term debt - operating (note 9) 8,598,370 9,000,000 Provision for landfill closure and post -closure costs (note 10) 434,186 1,025,186 Provision for gravel pit closure and post -closure costs (note 10) 176,500 176,500 11,950,595 10,094,651 Equity in capital assets (note 13) 18,334,198 17,654,248 30,284,793 27,748,899 $ 41,098,402 $ 40,177,649 Young Parkyn McNab LLP 10,813,609 12,428,750 Municipal equity Fund balances Operating (schedule 1) 513,921 493,921 Capital (schedule 2) (note 11) (697,790) (192,064 Reserves (schedule 3) (note 12) 12 134,464 9,792 794 11,950,595 10,094,651 Equity in capital assets (note 13) 18,334,198 17,654,248 30,284,793 27,748,899 $ 41,098,402 $ 40,177,649 Young Parkyn McNab LLP COUNTY OF NEWELL NO.4 CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES AND CHANGE IN FUND BALANCES For the year ended December 31, 2004 Budget (Unaudited) 2004 2003 Revenue Net municipal property taxes (note 14) $ 10,205,843 $ 10,352,251 $ 9,373,837 Special levies 355,766 355,766 248,669 User fees and sale of goods 1,125,427 1,402,193 1,529,431 Government transfers (note 15) 1,085,056 1,256,151 2,114,093 Penalties and cost of taxes 101,000 154,576 177,185 Investment income 758,650 807,420 438,579 Licenses and permits 44,000 63,534 38,925 Proceeds from local improvements 161,011 161,957 160,910 Proceeds from disposal of capital assets 528,850 1,610,750 691,121 Other revenue 70,114 90,652 100,920 Family and community support 175,568 184,182 164,831 Municipal planning 14,435, 717 16,255, 250 14, 873,670 Expenditures (note 16) Legislative 510,000 428,136 508,921 Administration 1,252,830 1,079,763 1,034,504 General 1,227,747 924,860 366,352 Fire and bylaw enforcement 403,143 462,463 378,609 Ambulance services and first aid 221,247 221,247 178,425 Disaster and emergency measures 136,240 6,039 64,188 Roads, streets, walks and lighting 6,991,424 8,671,767 8,223,598 Water and waste water 181,402 682,488 811,428 Waste management 174,888 182,119 587,532 Family and community support 175,568 184,182 164,831 Municipal planning 335,950 261,957 322,380 Community and agricultural services 812,186 746,445 708,019 Subdivision land and development 10,000 - 750 Recreation and parks 238,855 368,842 226,544 Culture and library 65,765 66,506 47,922 12,737,245 14,286, 814 13,624, 003 Excess of revenue over expenditures 1,698,472 1,968,436 1,249,667 Capital financing transactions Repayment of long-term debt (112,492) (112,492) (106,359) Change in fund balances 1,585,980 1,855,944 1,143,308 Fund balance, beginning of year 10,094,651 10,094,651 8,951,343 Fund balance, end of year $ 11,680,631 $ 11,950,595 $ 10,094,651 Young Parkyn McNab LLP COUNTY OF NEWELL NO.4 CONSOLIDATED STATEMENT OF CHANGES IN FINANCIAL POSITION For the year ended December 31, 2004 2004 2003 Cash flows from operating activities Excess of revenue over expenditures $ 1,968,436 $ 1,249,667 Net change in non-cash working capital items Taxes and grants in place of taxes receivables 272,851 (133,893) Trade and other receivables 11,324 (528,929) Land held for resale - 750 Prepaid expenses (17,990) (40,180) Inventory for consumption 143,546 (45,136) Accounts payable and accrued liabilities (362,719) 359,318 Vacation accrual 18,422 47,218 Unearned revenue (165,722) 285,573 Provision for landfill closure and post -closure costs (591,000) 373,886 1,277,148 1,568,274 Cash flows from investing activities Decrease (increase) in investments 1,142,316 (618,003) Advances of notes receivable - (10,477,729) Receipts of notes receivable 528,302 - 1,670,618 (11,095,732) Cash flows from financing activities Proceeds of long-term debt - 9,000,000 Repayment of long-term debt (514,122) (106,359) (514,122) 8,893,641 Increase (decrease) in cash and temporary investments 2,433,644 (633,817) Cash and temporary investments, beginning of year 6,831,376 7,465,193 Cash and temporary investments, end of year $ 9,265,020 $ 6,831,376 Young Parkyn McNab LLP 4 COUNTY OF NEWELL NO.4 SCHEDULE 1 SCHEDULE OF FINANCIAL ACTIVITIES AND CHANGE IN FUND BALANCE - OPERATING For the Year Ended December 31, 2004 Budget (Unaudited) 2004 2003 Revenue 13,889,024 14,630,235 13,553,196 Net municipal property taxes (note 14) $ 10,205,843 $ 10,352,251 $ 9,373,837 Special levies 355,766 355,766 248,669 User fees and sale of goods 1,125,427 1,402,193 1,529,431 Government transfers (note 15) 1,067,213 1,253,831 1,496,250 Penalties and cost of taxes 101,000 154,576 177,185 Investment income 758,650 807,420 438,579 Licenses and permits 44,000 63,534 38,925 Proceeds from local improvements 161,011 150,012 149,400 Other revenue 70,114 90,652 100,920 10,584,594 11,291,653 10,750,109 Excess of revenue over expenditures 3,304,430 3,338,582 2,803,087 Net interfund transfers Transfer to capital - repayment of long-term debt (schedule 2) (112,492) (112,492) (106,359) Transfer to capital (schedule 2) (1,199,900) (530,061) (1,417,098) Transfer to reserves (schedule 3) (1,992,038) (2,676,029) (1,279,630) Change in fund balance - 20,000 Fund balance, beginning of year 493,921 493,921 493,921 Fund balance, end of year $ 493,921 $ 513,921 $ 493,921 Young Parkyn McNab LLP 5 13,889,024 14,630,235 13,553,196 Expenditures (note 16) Legislative 510,000 428,136 508,921 Administration 1,119,080 1,025,086 953,641 General 1,227,747 924,860 366,352 Fire and bylaw enforcement 358,413 415,065 376,438 Ambulance services and first aid 221,247 221,247 178,425 Disaster and emergency measures 7,490 6,039 20,011 Roads, streets, walks and lighting 5,284,529 6,433,411 6,285,137 Water and waste water 145,352 131,570 137,902 Waste management 174,888 177,879 587,532 Family and community support 175,568 184,182 164,831 Municipal planning 335,950 261,957 322,380 Community and agricultural services 709,710 646,873 573,323 Subdivision land and development 10,000 - 750 Recreation and parks 238,855 368,842 226,544 Culture and library 65,765 66,506 47,922 10,584,594 11,291,653 10,750,109 Excess of revenue over expenditures 3,304,430 3,338,582 2,803,087 Net interfund transfers Transfer to capital - repayment of long-term debt (schedule 2) (112,492) (112,492) (106,359) Transfer to capital (schedule 2) (1,199,900) (530,061) (1,417,098) Transfer to reserves (schedule 3) (1,992,038) (2,676,029) (1,279,630) Change in fund balance - 20,000 Fund balance, beginning of year 493,921 493,921 493,921 Fund balance, end of year $ 493,921 $ 513,921 $ 493,921 Young Parkyn McNab LLP 5 COUNTY OF NEWELL NO.4 SCHEDULE 2 SCHEDULE OF FINANCIAL ACTIVITIES AND CHANGE IN FUND BALANCE - CAPITAL For the year ended December 31, 2004 Budget (Unaudited) 2004 2003 Revenue Government transfers $ 17,843 $ 2,320 $ 617,843 Proceeds from local improvements - 11,945 11,510 Proceeds from disposal of capital assets 528,850 1,610,750 691,121 Young Parkyn McNab LLP 6 546,693 1,625,015 1,320,474 Expenditures (note 16) (1,605,958) (1,370,146) (1,553,420) Administration 133,750 54,677 80,863 Fire and bylaw enforcement 44,730 47,398 2,171 Disaster and emergency measures 128,750 - 44,177 Roads, streets, walks, and lighting 1,706,895 2,238,356 1,938,461 Water and waste water 36,050 550,918 673,526 Waste management - 4,240 - Community and agricultural services 102,476 99,572 134,696 Young Parkyn McNab LLP 6 2,152,651 2,995,161 2,873,894 Deficiency of revenue over expenditures (1,605,958) (1,370,146) (1,553,420) Capital financing transactions and net interfund transfers Transfer from operating - repayment of long-term debt (schedule 1) 112,492 112,492 106,359 Transfer from operating (schedule 1) 1,199,900 530,061 1,417,098 Transfer from reserves (schedule 3) 406,058 334,359 34,177 Repayment of long-term debt (note 13) (112,492) (112,492) (106,359) Change in fund balance - (505,726) (102,145) Fund balance, beginning of year (192,064) (192,064) (89,919) Fund balance, end of year (note 11) $ (192,064) $ (697,790) $ (192,064) Young Parkyn McNab LLP 6 COUNTY OF NEWELL NO.4 SCHEDULE3 SCHEDULE OF CHANGE IN FUND BALANCE - RESERVES For the year ended December 31, 2004 Budget (Unaudited) 2004 2003 Fund balance, beginning of year $ 9,792,794 $ 9,792,794 $ 8,547,341 Net interfund transfers Transfer from operating (schedule 1) 1,992,038 2,676,029 1,279,630 Transfer to capital (schedule 2) (406,058) (334,359) (34,177) Fund balance, end of year (note 12) $ 11,378,774 $ 12,134,464 $ 9,792,794 Young Parkyn McNab LLP 7 COUNTY OF NEWELL NO.4 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2004 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 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. 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, the municipality has met any eligibility criteria, and reasonable estimates of the amounts can be made. Expenditures are recognized in the period the goods and services are acquired and a liability is incurred or transfers are due. (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. Young Parkyn McNab LLP 8 COUNTY OF NEWELL NO.4 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2004 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 physical 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 or under -levies of 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. Young Parkyn McNab LLP COUNTY OF NEWELL NO.4 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2004 Significant accounting policies, continued (j) 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 2004 were $148,151 (2003 - $112,181). Total current service contributions by the employees of the County to the Local Authorities Pension Plan in 2004 were $126,769 (2003 - $92,980). At December 31, 2003, the LAPP disclosed an actuarial deficiency of $445.0 million. (k) 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. (1) Landfill and gravel pit closure and post -closure liability 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. (m) 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. (n) 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). Young Parl<yn McNab LLP 10 COUNTY OF NEWELL NO.4 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2004 Significant accounting policies, continued (o) Capital fund Capital fund represents the amounts available to finance (or the shortfall in financing available for) capital projects. (p) 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. (q) 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. Cash and temporary investments 2004 2003 Cash $ 1,818,174 $ 736,140 Temporary investments 7,446,846 6 095,236 $ 9,265,020 $ 6,831,376 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 2004 2003 Current year $ 324,424 $ 284,137 Arrears 274,981 585,765 599,405 869,902 Allowance for uncollectible taxes (152,340) (149,986) $ 447,065 $ 719,916 Young Parkyn McNab LLP 11 4. 5. 6. COUNTY OF NEWELL NO.4 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2004 Long-term investments 2004 2003 Fixed income securities $ 995,458 $ 1,613,064 Common equity securities - 524,710 $ 995,458 $ 2,137,774 The market value of these investments approximates the cost. Notes receivable Newell Foundation This note is repayable in annual installments of $896,630 including interest at 5.5%. This note receivable expires in 2018. Town of Brooks This note is repayable in annual installments of $131,082 including interest at 5.25%. This note receivable expires in 2013. 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. 2004 2003 $ 8,598,370 $ 9,000,000 921,418 1,000,000 234,584 255,481 Rosemary Fire Division This note is repayable in annual installments of $38,583 including interest at 5.125%. This note receivable expires in 2010. 195,055 222,248 $ 9,949,427 $ 10,477,729 Capital assets Young Parkyn McNab LLP 12 2004 2003 Land $ 980,195 $ 975,955 Buildings 1,040,510 1,040,510 Distribution system - water and sewer 4,327,573 3,809,901 Other engineering structures 960,605 960,605 Machinery, equipment and furnishings 9,095,151 9,447,018 Vehicles 2,465,753 2,068,340 $ 18,869,787 $ 18,302,329 Young Parkyn McNab LLP 12 COUNTY OF NEWELL NO.4 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2004 7. Employee benefit obligations Vacation The vacation liability is comprised of the vacation that employees are deferring to future years. Employees have either earned the benefits (and are vested) or are entitled to these benefits within the next budgetary year. 8. Long-term debt - capital 2004 2003 Tax supported debentures $ 535,589 $ 648,081 Current portion $ 113,419 $ 112,492 Principal and interest repayments are due as follows: Principal Interest Total 2005 $ 113,419 $ 32,139 $ 145,558 2006 119,959 25,600 145,559 2007 119,045 18,665 137,710 2008 125,822 11,888 137,710 2009 9,972 4,705 14,677 Thereafter 47,372 14,786 62,158 $ 535,589 $ 107,783 $ 643,372 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 2006 through 2017. The average annual interest rate is 7.9% for 2004 (2003 - 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. Interest on long-term debt amounted to $38,641 (2003 - $44,774). The County's total cash payments for interest in 2004 were $38,641 (2003 - $44,774). Young Parkyn McNab LLP 13 9. Long-term debt - operating COUNTY OF NEWELL NO.4 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2004 2004 2003 Debenture supported with notes receivable $ 8,598,370 $ 9,000,000 Current portion $ 423,720 $ 401,630 Principal and interest repayments are due as follows: Principal Interest Total 2005 $ 423,720 $ 472,910 $ 896,630 2006 447,025 449,606 896,631 2007 471,611 425,019 896,630 2008 497,550 399,081 896,631 2009 524,915 371,716 896,631 Thereafter 6,233,549 1,836,125 8,069,674 $ 8,598,370 $ 3,954,457 $ 12,552,827 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. Interest on long-term debt amounted to $489,492 (2003 - $123,411). The County's total cash payments for interest in 2004 were $495,000 (2003 - $0). 10. Provision for landfill and gravel closure and post -closure costs 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 costs. The estimated closure and post -closure costs for the landfill are $434,186, and $176,500 for the gravel pits, all of which have been accrued in the financial statements. Young Parkyn McNab LLP 14 COUNTY OF NEWELL NO.4 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2004 11. Capital fund 2004 2003 Amounts to be financed: Patricia Curbstops $ (5,423) $ (6,291) Rolling Hills Water Treatment Plant (61,040) (72,117) Lake Newell Sewer Line (619,756) (113,656) Patricia Lagoon Discharge (11,571) - $ (697,790) $ (192,064) The shortfall in the Patricia Curbstop and Rolling Hills Water Treatment Plant projects will be funded through tax levies. The shortfall in the Lake Newell Sewer Line project will be funded through a debenture in 2005. The shortfall in the Patricia Lagoon Discharge project is expected to be funded through a government grant. 12. Reserves Reserves for operating and capital activities changed as follows: Young Parkyn McNab LP 15 2003 Increase Decrease 2004 Operating Annual Paving Tax $ - $ 2,026,982 $ 11,036 $ 2,015,946 Municipal surplus 1,264,053 1,235,078 627,049 1,872,082 Debt reduction 1,285,867 44,609 21,553 1,308,923 Future expenditures 1,323,925 43,884 109,395 1,258,414 Brooks Recreation Centre 1,000,000 - 78,582 921,418 Secondary highway #847 572,878 20,673 9,703 583,848 Special road project 203,830 144,807 3,859 344,778 Hard surface 1,200,185 1,052,947 1,997,917 255,215 Bow Slope fire truck 255,481 - 20,897 234,584 Secondary highway#862 227,209 7,657 3,859 231,007 Rosemary fire truck 222,247 - 27,193 195,055 Public transportation 162,153 6,508 2,922 165,739 Agriculture Service Board 144,020 43,340 50,921 136,439 Office renovations 139,215 4,858 11,996 132,075 Purchase of gravel 107,804 3,682 2,200 109,286 Planning 74,438 13,827 1,069 87,197 Road work 6 64,833 307 64,532 Fire truck 31,730 31,689 632 62,787 Gravel crushing 52,248 1,952 802 53,399 Public works - other 23,969 651 267 24,352 Shop 12,903 651 267 13,287 Garbage pits 4,240 - 4,240 - 8,308,401 4,748,628 2,986,666 10,070,363 Young Parkyn McNab LP 15 COUNTY OF NEWELL NO.4 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2004 12. Reserves, continued Capital Machinery and equipment 943,214 518,544 235,473 1,226,285 Future expenditures - general administration 359,595 329,270 23,229 665,636 Vehicle replacement 129,680 45,238 50,948 123,970 Scandia sewer 24,644 - - 24,644 Rolling Hills water and sewer 6,543 - - 6,543 Scandia water reservoir 5,076 - - 5,076 Patricia water system 4,118 - - 4,118 Lake Newell road prepaid 4,263 - 348 3,915 Rolling Hills sewage lagoon 2,174 - 98 2,076 Patricia sewer 1,811 - - 1,811 Ranier water system 63 - 36 27 Lake Newell sewer prepaid 3,212 - 3,212 - 1,484,393 893,052 313,344 2,064,101 $ 9,792,794 $ 5,641,680 $ 3,300,010 $ 12,134,464 Young Parkyn McNab LLP 16 COUNTY OF NEWELL NO.4 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2004 13. Equity in capital assets Balance consists of: Capital assets (note 6) $ 18,869,787 $ 18,302,329 Long-term debt - capital (note 8) (535,589) (648,081) $ 18,334,198 $ 17,654,248 Young Parkyn McNab «P 17 Budget (2,427,703) (1,323,484) Capital financing (Unaudited) 2004 2003 Acquisition of capital assets 112,492 112,492 106,359 Administration $ 133,750 $ 54,677 $ 80,863 Fire and bylaw enforcement 44,730 47,397 2,171 Disaster and emergency measures 128,750 - 44,177 Roads, street, walks, and lighting 1,706,895 2,238,357 1,938,461 Water and waste water 36,050 550,918 673,526 Waste Management - 4,240 - Community and agricultural services 102,476 99,572 134,696 2,152,651 2,995,161 2,873,894 Disposal of capital assets (cost) Administration - (3,393) (4,217) Roads, street, walks, and lighting - (2,399,550) (1,287,337) Agricultural Service Board - (24,76p)_ (31,930) Balance consists of: Capital assets (note 6) $ 18,869,787 $ 18,302,329 Long-term debt - capital (note 8) (535,589) (648,081) $ 18,334,198 $ 17,654,248 Young Parkyn McNab «P 17 - (2,427,703) (1,323,484) Capital financing Capital debt repaid from operating 112,492 112,492 106,359 Change in equity balance 2,265,143 679,950 1,656,769 Equity balance, beginning of year 17,654,248 -17,654,248 15,997,479 Equity balance, end of year $ 19,919,391 $ 18,334,198 $ 17,654,248 Balance consists of: Capital assets (note 6) $ 18,869,787 $ 18,302,329 Long-term debt - capital (note 8) (535,589) (648,081) $ 18,334,198 $ 17,654,248 Young Parkyn McNab «P 17 COUNTY OF NEWELL NO.4 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2004 14. Net municipal property taxes 15. Government transfers Budget (Unaudited) 2004 2003 Taxation Real property taxes $ 7,165,872 $ 7,271,952 $ 6,761,288 Linear property taxes 13,580,342 13,614,696 12,573,544 Government grants in place of property taxes 191,533 190,441 194,341 Local government transfers 20,937,747 21,077,089 19,529,173 Requisitions 7,054 7,054 6,422 Alberta School Foundation Fund 10,440,474 10,433,408 9,960,847 Newell Foundation 291,430 291,430 194,489 10,731,904 10,724,838 10,155,336 $ 10,205,843 $ 10,352,251 $ 9,373,837 15. Government transfers Young Parkyn McNab ILP 18 Budget (Unaudited) 2004 2003 Provincial transfers Shared -cost agreements and grants $ 1,060,159 $ 1,246,777 $ 1,489,828 Shared -cost agreements and grants - capital 17,843 2,320 617,843 1,078,002 1,249,097 2,107,671 Local government transfers Shared -cost agreements and grants 7,054 7,054 6,422 $ 1,085,056 $ 1,256,151 $ 2,114,093 Young Parkyn McNab ILP 18 COUNTY OF NEWELL NO.4 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2004 16. Expenditures by object 17. Trust funds Trust funds administered by the County on behalf of others consist of the following: 2004 2003 Tax sale surplus $ 23,844 $ 18,422 Public reserve 319,374 500,160 Scholarships 112,001 110,919 $ 455,219 $ 629,501 The above trust funds are not recorded in the financial statements (Note 1a). Young Parkyn McNab 11P 19 Budget (Unaudited) 2004 2003 Operating Salaries, wages and benefits $ 3,741,300 $ 3,798,045 $ 3,404,473 Contracted and general services 3,370,928 3,811,383 4,090,937 Materials, goods, supplies and utilities 1,654,739 1,903,287 2,063,707 Provisions for allowances 211,778 2,365 1,151 Transfers to organizations 1,050,977 1,244,199 958,577 Bank charges and short-term interest 750 204 177 Interest on long-term debt 533,642 528,133 168,185 Other expenditures 20,280 1 4,037 62,902 10,584,394 11,291,653 10,750,109 Capital Purchase of capital assets 2,152 651 2,995,161 2,873,894 $ 12,737,045 $ 14,286,814 $ 13,624,003 17. Trust funds Trust funds administered by the County on behalf of others consist of the following: 2004 2003 Tax sale surplus $ 23,844 $ 18,422 Public reserve 319,374 500,160 Scholarships 112,001 110,919 $ 455,219 $ 629,501 The above trust funds are not recorded in the financial statements (Note 1a). Young Parkyn McNab 11P 19 COUNTY OF NEWELL NO.4 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2004 18. 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: (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. Young Parkyn McNab uc 20 (1) Salary (2) Benefits & allowances 2004 2003 Council Reeve - Jan -Oct $ 4,340 $ - $ 4,340 $ 5,400 Reeve - Oct -Dec 1,074 - 1,074 - Division 1 24,210 3,077 27,287 30,532 Division 2 - Jan -Oct 20,238 459 20,697 35,258 Division 2 - Oct -Dec 5,024 185 5,209 - Division 3 - Jan -Oct 25,278 2,522 27,800 40,598 Division 3 - Oct -Dec 4,754 732 5,486 - Division 4 27,720 3,193 30,913 37,272 Division 5 - Jan -Oct 19,968 2,347 22,315 33,550 Division 5 - Oct -Dec 4,349 128 4,477 - Division 6 - Jan -Oct 25,818 80 25,898 38,815 Division 6 - Oct -Dec 4,844 735 5,579 - Division 7 - Jan -Oct 28,878 2,641 31,519 36,718 Division 7 - Oct -Dec 4,709 731 5,440 - Division 8 28,125 2,146 30,271 37,127 Division 9 - Jan -Oct 14,568 2,169 16,737 22,540 Division 9 - Oct -Dec 4,979 359 5,338 - Division 10 - Jan -Oct 31,758 2,905 34,663 53,356 Division 10 - Oct -Dec 5,474 577 6,051 - Chief Administrative Officer 102,994 14,899 117,893 112,533 Designated officers (3) $ 198,067 $ 32,693 $ 230,760 $ 213,163 (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. Young Parkyn McNab uc 20 COUNTY OF NEWELL NO.4 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2004 19. 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: 2004 9nn� Total debt limit $ 24,379,395 $ 21,383,742 Total debt 9,133,959 9,648,081 $ 15,245,436 $ 11,735,661 Debt servicing limit $ 4,063,233 $ 3,563,957 Debt servicing 1,042,188 1 047,763 $ 3,021,045 $ 2,516,194 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. 20. Contingency 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. 21. Financial instruments The County 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. 22. Comparative figures Where necessary the comparative figures for the 2003year have been reclassified to conform with 2004 financial statement presentation. 23. Approval of financial statements These financial statements were approved by Council and Management. Young Parkyn McNab LLP 21