HomeMy WebLinkAbout2017-12-31 2017 Year End Audited Financial StatementsConsolidated Financial Statements of
COUNTY OF NEWELL
Year ended December 31, 2017
Management's Responsibility for the Consolidated Financial Statements
Management of the County of Newell is responsible for the preparation, accuracy, objectivity, and
integrity of the accompanying financial statements and the notes thereto. Management believes that
the financial statements present fairly the County's financial position as at December 31, 2017 and the
results of its operations for the year then ended.
The financial statements have been prepared in accordance with Canadian public sector accounting
standards. Financial statements are not precise, since they include certain amounts based on
estimates and judgments. Such amounts have been determined on a reasonable basis in order to
ensure that the financial statements are presented fairly in all material respects.
In fulfilling its responsibilities and recognizing the limits inherent in all systems, management has
designed and maintained a system of internal controls to produce reliable information to meet
reporting requirements. The system is designed to provide management with reasonable assurance
that transactions are properly authorized, reliable financial records are maintained, and assets are
properly accounted for and safeguarded.
The County Council is responsible for overseeing management in the performance of its financial
reporting responsibilities, and for approving the financial statements. Council fulfills these
responsibilities by reviewing the financial information prepared by management and discussing
relevant matters with management and external auditors. Council is also responsible for
recommending the appointment of the County's external auditors.
The financial statements have been audited by the independent firm of KPMG LLP, Chartered
Professional Accountants. Their report to the Members of Council of the County of Newell, stating the
scope of their examination and opinion on the financial statements follows.
ve Officer
...._.._S� •,. , tip, ' ...
Treasurer
�[9111r! mil
Twill JIL
KPMG LLP
500 Lethbridge Centre Tower
400 - 4th Avenue South
Lethbridge AB TU 4E1
Canada
Tel 403-380-5700
Fax 403-380-5760
INDEPENDENT AUDITORS' REPORT
To the Reeve and Members of Council of the County of Newell.
We have audited the accompanying consolidated financial statements of County of Newell (the
"County") which comprise the consolidated statement of financial position as at December 31,
2017, and the consolidated statements of financial activities, changes in net financial assets, and
cash flows for the year then ended, and notes, comprising a summary of significant accounting
policies and other explanatory information.
Management's Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated
financial statements in accordance with Canadian public sector accounting standards, and for
such internal control as management determines is necessary to enable the preparation of
consolidated financial statements that are free from material misstatement, whether due to fraud
or error.
Auditors' Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on
our audit. We conducted our audit in accordance with Canadian generally accepted auditing
standards. Those standards require that we comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance about whether the consolidated financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the consolidated financial statements. The procedures selected depend on our
judgment, including the assessment of the risks of material misstatement of the consolidated
financial statements, whether due to fraud or error. In making those risk assessments, we
consider internal control relevant to the entity's preparation and fair presentation of the
consolidated financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
entity's internal control. An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of accounting estimates made by management, as well as
evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
KPMG LLP, is a Canadian limited liability partnership and a member firm of the KPMG network of independent
member firms affiliated with KPMG International Cooperative ("KPMG International'), a Swiss entity
KPMG Canada provides services to KPMG LLP
Opinion
In our opinion, the consolidated financial statements present fairly, in all material respects, the
consolidated financial position of County of Newell as at December 31, 2017, and its results of
consolidated financial activities, its changes in net financial assets and its cash flows for the year
then ended in accordance with Canadian public sector accounting standards.
Chartered Professional Accountants
April 5, 2018
Lethbridge, Canada
COUNTY OF NEWELL
Consolidated Statement of Financial Position
December 31, 2017, with comparative information for 2016
Financial liabilities:
Accounts payable and accrued liabilities
2017
2016
Financial assets:
1,604,991
1,528,839
Cash and cash equivalents (note 2)
$ 2,648,535
$ 21,192,048
Taxes and grants in place of taxes receivable (note 3)
1,312,676
1,294,382
Trade and other receivables (note 4)
14,820,227
20,187,853
Land held for resale
31,491
31,491
Investments (note 5)
72,549,878
46,452,097
Notes receivable (note 6)
789,542
1,773,637
Other financial assets
9,819
9,895
Net financial assets
92,162,168
90, 941,403
Financial liabilities:
Accounts payable and accrued liabilities
2,407,267
2,201,452
Employee benefit obligations (note 8)
1,604,991
1,528,839
Unearned revenue (note 9)
22,000
196,685
Long-term debt - operating (note 10)
789,542
1,537,923
Long-term debt - capital (note 11)
20,020,644
24,414,424
Provision for landfill closure and post -closure costs (note 12)
662,535
313,533
Provision for gravel pit closure and post -closure costs (note 12)
331,814
335,341
Deposit liabilities (note 2)
212,408
198,874
26,051,201
30,727,071
Net financial assets
66,110,967
60,214,332
Non-financial assets:
Prepaid expenses
118,829
114,985
Tangible Capital Assets (note 7)
202,274,435
226,952,338
Inventory for consumption
1,170,123
1,390,753
203,563,387
228,458,076
Contingent liabilities (note 20)
Accumulated surplus (note 13)
$269,674,354
$288,672,408
The accompanying notes are an integral part of these consolidated financial statements.
COUNTY OF NEWELL
Consolidated Statement of Financial Activities
Year ended December 31, 2017, with comparative information for 2016
Other:
Contributed assets -- -- 904,423
Transfer of assets to Newell Regional Services
Corporation -- (30,338,627) --
Government transfers (note 15) -- 173,520 3,868,559
Annual surplus (deficit) 8,292,404 (18,998,054) 13,523,021
Accumulated surplus, beginning of year 288,672,408 288,672,408 275,149,387
Accumulated surplus, end of year $296,964,812 $269,674,354 $ 288,672,408
The accompanying notes are an integral part of these consolidated financial statements.
2
Budget
2017
2016
Revenues:
Net municipal property taxes (note 14)
$ 32,371,964
$ 32,278,376
$ 29,792,314
Special levies
3,112,835
117,189
1,114,708
User fees and sale of goods
1,917,452
2,618,838
2,078,180
Government transfers (note 15)
605,674
638,510
635,998
Penalties and cost of taxes
132,000
210,582
184,855
Investment income
1,270,656
1,234,488
1,642,224
Licenses and permits
152,000
255,278
153,032
Other revenue
143,533
634,705
768,757
Gain (loss) on disposal of tangible
capital assets
-
143,662
(152,875)
39,706,114
38,131,628
36,217,193
Expenses (note 16):
Legislative
572,510
515,343
465,908
Administration
5,057,462
4,381,172
4,303,839
Corporate safety services
340,880
339,779
296,975
Fire and by-law enforcement
1,620,998
1,156,185
1,297,464
Disaster and emergency services
251,406
244,070
212,258
Roads, streets, walks and lighting
12,410,853
10,873,803
10,848,096
Airport
135,400
115,279
120,979
Water and waste water
3,074,693
2,890,116
2,599,895
Waste management
326,824
698,556
313,249
Family and community support
120,466
79,466
64,467
Municipal planning
659,853
571,253
495,112
Community and agricultural services
2,063,117
1,609,879
1,600,315
Subdivision land and development
206,858
190,737
173,915
Recreation and parks
1,898,863
1,873,728
842,609
Culture and library
155,326
155,326
154,470
Other
2,518,201
1,269,883
3,677,603
31,413,710
26,964,575
27,467,154
Annual surplus
before the undernoted
8,292,404
11,167,053
8,750,039
Other:
Contributed assets -- -- 904,423
Transfer of assets to Newell Regional Services
Corporation -- (30,338,627) --
Government transfers (note 15) -- 173,520 3,868,559
Annual surplus (deficit) 8,292,404 (18,998,054) 13,523,021
Accumulated surplus, beginning of year 288,672,408 288,672,408 275,149,387
Accumulated surplus, end of year $296,964,812 $269,674,354 $ 288,672,408
The accompanying notes are an integral part of these consolidated financial statements.
2
COUNTY OF NEWELL
Consolidated Statement of Change in Net Financial Assets
December 31, 2017, with comparative information for 2016
The accompanying notes are an integral part of these consolidated financial statements.
3
Budget
2017
2016
Annual surplus
$ 8,292,404
$(18,998,054)
$ 13,523,021
Acquisition of tangible capital assets
(11,273,930)
(15,587,875)
(11,733,660)
Contributed tangible capital assets
-
33,324,214
(710,756)
Proceeds on disposal of tangible capital assets
-
556,406
70,432
Amortization of tangible capital assets
6,576,370
6,528,819
6,227,082
(Gain) loss on disposal of tangible capital assets
-
(143,662)
152,875
3,594,844
5,679,847
7,528,994
Use of inventories for consumption
-
220,631
328,706
Acquisition of prepaid expenses
-
(3,844)
(8,874)
Change in net financial assets
3,594,844
5,896,635
7,848,826
Net financial assets, beginning of year
60,214,332
60,214,332
52,365,506
Net financial assets, end of year
$63,809,176
$ 66,110,967
$ 60,214,332
The accompanying notes are an integral part of these consolidated financial statements.
3
COUNTY OF NEWELL
Consolidated Statement of Cash Flows
Year ended December 31, 2017, with comparative information for 2016
2017 2016
Cash provided by (used in):
Operations:
Annual surplus
$(18,998,054)
$ 13,523,021
Items not involving cash:
Amortization
6,528,819
6,227,082
Contributed assets
33,324,214
(710,756)
(Gain) loss on disposal of tangible capital assets
(143,662)
152,875
Change in non-cash financial assets and liabilities:
Taxes and grants in place of taxes receivable
(18,294)
(235,672)
Trade and other receivables
5,367,626
2,939,662
Land held for resale
-
390
Other financial assets
76
(5)
Prepaid expenses
(3,844)
(8,874)
Inventory for consumption
220,631
328,706
Accounts payable and accrued liabilities
205,813
(1,327,345)
Employee benefit obligations
76,153
1,123,213
Unearned revenue
(174,685)
13,701
Landfill closure and post -closure costs
349,002
(4,369)
Gravel pit closure and post -closure costs
(3,527)
(15,254)
26,730,268
22,006,375
Capital activities:
Proceeds on disposal of tangible capital assets
556,406
70,432
Purchase of tangible capital assets
(15,587,875)
(11,733,660)
(15,031,469)
(11,663,228)
Investing activities:
Decrease (increase) in temporary investments
18,196,412
(15,300,412)
Increase in investments
(26,097,781)
(4,189,961)
Payments received,on notes receivable
984,096
1,221,429
(6,917,273)
(18,268,944)
Financing activities:
Repayment of long-term debt:
- operating
(748,381)
(709,366)
- capital
(5,034,630)
(4,942,931)
Proceeds from debt acquired
640,850
-
Increase (decrease) in deposit liabilities
13,534
(45,117)
(5,128,627)
(5,697,414)
Decrease in cash and cash equivalents
(347,101)
(13,623,211)
Cash and cash equivalents, beginning of year
2,995,636
16,618,847
Cash and cash equivalents, end of year (note 2)
$ 2,648,535
$ 2,995,636
Cash and cash equivalents is comprised of:
Cash and temporary investments $ 2,648,535 $ 21,192,048
Less investments with original maturities
greater than 90 days - (18,196,412)
$ 2,648,535 $ 2,995,636
The accompanying notes are an integral part of these consolidated financial statements.
4
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2017
1. Significant accounting policies:
The consolidated financial statements of the County of Newell (the "County") are the
representations of management prepared in accordance with Canadian Public Sector accounting
standards. Significant aspects of the accounting policies adopted by the County are as follows:
(a) Cash and cash equivalents:
Cash and cash equivalents include cash on hand and short-term deposits which are highly
liquid with original maturities of less than three months from the date of acquisition.
(b) Reporting entity:
The consolidated financial statements reflect the assets, liabilities, revenues and expenses,
changes in net financial assets and cash flows of the County, which comprises of all the
organizations that are owned or controlled by the County and are, therefore accountable to
the Council for the administration of their financial affairs and resources.
All significant inter -department transactions and balances are eliminated on consolidation.
Taxes levied also include requisitions for educational, health care, social and other external
organizations that are not part of the County.
The statements exclude trust assets that are administered for the benefit of external parties.
(c) Basis of accounting:
The financial statements are prepared using the accrual basis of accounting. The accrual
basis of accounting records revenue as it is earned and measurable. Expenses are
recognized as they are incurred and measurable based upon receipt of goods or services
and/or the legal obligation to pay.
Funds from external parties and earnings thereon restricted by agreement or legislation are
accounted for as deferred revenue until used for the purpose specified.
(d) Investments:
Investments are recorded at cost. Where there has been a loss in value of an investment
other than a temporary decline, the investment is written down to reflect the loss.
(e) Requisition over -levy and under -levy:
Over -levies and under -levies arise from the difference between the actual property tax levy
made to cover each requisition and the actual amount requisitioned.
If the actual levy exceeds the requisition, the over -levy is accrued as a liability and property
tax revenue is reduced. Where the actual levy is less than the requisition amount, the under -
levy is accrued as a receivable and as property tax revenue.
Requisition tax rates in the subsequent year are adjusted for any over -levies for the prior year.
9
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2017
1. Significant accounting policies (continued):
(f) Inventories:
Land held for resale is recorded at the lower of cost and net realizable value. Cost includes
costs for land acquisition and improvements required to prepare the land for servicing such as
clearing, stripping, and leveling charges. Related development costs incurred to provide
infrastructure such as water and waste water services, roads, sidewalks and street lighting
are recorded as capital assets under their respective function.
(g) Landfill and gravel pit closure and post -closure costs:
Pursuant to the Alberta Environment Protection and Enhancement Act, the County is required
to fund the closure of its landfill site and provide for post -closure care. Landfill closure and
post -closure activities include the final clay cover, landscaping, as well as surface and ground
water monitoring, leachate control and visual inspection. The requirement is being provided
for over the estimated remaining life of the landfill site based on usage.
The County is required to fund the closure of its gravel pits. Reclamation of these sites
includes providing final cover and landscaping. The requirement is being provided for on an
estimate of expected cost on size of sites.
(h) Government transfers:
Government transfers are recognized in the financial statements as revenues in the period
that the events giving rise to the transfer occurred, providing the transfers are authorized, all
eligibility criteria have been met by the County, and reasonable estimates of the amounts can
be made.
(i) Non-financial assets:
Non-financial assets are not available to discharge existing liabilities and are held for use in
the provision of services. They have useful lives extending beyond the current year and are
not intended for sale in the normal course of operations.
(i) Tangible capital assets:
Tangible capital assets are recorded at cost which includes all amounts that are directly
attributable to acquisition, construction, development or betterment of the asset. The cost,
less residual value, of the tangible capital assets is amortized on a straight-line basis over
the estimated useful life as follows:
Years
Land Improvements
15-45
Buildings
25-70
Engineered structures
15-75
Machinery and equipment
5-40
Vehicles
5-14
Assets under construction are not amortized until the asset is available for productive use.
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2017
1. Significant accounting policies (continued):
(i) Non-financial assets (continued):
(ii) Contributions of tangible capital assets:
Tangible capital assets received as contributions are recorded at fair value at the date of
receipt and recorded as revenue.
(iii) Inventories
Inventories of materials and supplies held for consumption are recorded at the lower of
cost and replacement cost with cost determined by the average cost method.
(iv) Cultural and historical tangible capital assets:
Works of art for display are not recorded as tangible capital assets but are disclosed.
0) Tax Revenue:
Tax revenue results from non-exchange transactions that are paid to governments in
accordance with the laws and regulations established to provide revenue to the government
for public services. The revenue is recognized when the tax has been authorized and the
taxable event has occurred.
(k) Pension expenses:
The County participates in a multi-employer defined benefit pension plan, wherein
contributions for current and past service pension benefits are recorded as expenses in the
year in which they become due.
(1) Use of estimates:
The preparation of the financial statements in conformity with Canadian public sector
accounting standards requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Significant areas requiring the use of management
estimates relate to the determination of allowance for doubtful accounts, provision for closure
and post -closure care, employee benefit obligations and the useful life of tangible capital
assets.
Contributions of tangible capital assets are recorded at estimated fair value at the date of
receipt.
Actual results could differ from those estimates.
7
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2017
1. Significant accounting policies (continued):
(m) Contaminated sites:
Contaminated sites are a result of contamination being introduced into air, soil, water or
sediment of a chemical, organic or radioactive or live organism that exceeds an
environmental standard. The liability is recorded net of any expected recoveries. A liability for
remediation of a contaminated site is recognized when a site is not in productive use and is
management's estimate of the cost of post -remediation including operation, maintenance and
monitoring. No contaminated sites have been identified.
2. Cash and cash equivalents:
Cash
Temporary investments
2017
$ 2,648,535
$ 2,648,535
2016
$ 2,995,636
18,196,412
$ 21,192,048
Included in cash are amounts aggregating $212,408 (2016 - $198,874) not available for current
use.
Tax sale surplus
Public reserve
C
2017
$ 20,532
191,876
2016
$ 12,769
186,105
$ 212,408 $ 198,874
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2017
3. Taxes and grants in place of taxes receivable:
2017
Current $ 703,962
Arrears 708,715
1,412,676
Allowance for uncollectible taxes (100,000)
4. Trade and other receivables:
$ 1,312,676
2016
$ 599,967
794,415
1,394,382
(100,000)
$ 1,294,382
2017 2016
Grants $ 7,809,602 $ 12,990,945
Local improvement taxes 5,656,126 6,132,749
Other 1,354,499 1,064,159
$ 14,820,227 $ 20,187,853
Local improvement taxes carry annual interest rates ranging from 2.64% - 4.44% and are due
between 2018 — 2041.
5. Investments:
2017 2016
Fixed income securities $ 69,479,617 $ 43,367,894
Credit Union Common shares 5 5
Newell Regional Services Corporation:
Common shares 20 20
Preferred shares 3,070,236 84,178
3,070,256 84,198
$ 72,549,878 $ 46,452,097
Fixed income securities yield interest from 1.74% to 10.22% and mature in periods 2018 through
2031. The investments have an average expected yield of 3.15% and an aggregate market value
of $69,105,496 (2016 - $46,757,445).
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2017
6. Notes receivable:
2017 2016
Newell Foundation, repayable in annual installments of
$832,967 including interest at 5.5%, maturing in 2018
$ 789,542
$ 1,537,922
Newell Regional Services Corporation
-
235,715
$ 789,542
$ 1,773,637
7. Tangible capital assets:
Cost
2016
Additions
Disposals
2017
Land $
5,353,168
$ --
$ (2,000)
$ 5,351,168
Land improvements
2,037,162
--
--
2,037,162
Buildings
19,160,729
1,808,934
--
20,969,663
Engineered structures
210,653,643
13,548,656
(35,900)
224,166,399
Machinery and equipment
11,885,537
536,544
(834,608)
11,587,473
Vehicles
5,095,143
1,335,007
(342,872)
6,087,278
Work in progress, net
of transfers
36,989,318
(1,615,844)
(33,349,638)
2,023,836
Total $291,174,700
$ 15,613,297
$ (34,565,018)
$272,222,979
Accumulated
Amortization
amortization
2016
Disposals
expense
2017
Land improvements $
832,994
$ --
$ 132,968
$ 965,962
Buildings
1,389,690
--
326,286
1,715,976
Engineered structures
54,467,144
(35,900)
4,737,061
59,168,305
Machinery and equipment
5,165,433
(476,865)
925,572
5,614,140
Vehicles
2,367,101
(289,872)
406,932
2,484,161
Total $
64,222,362
$ (802,637)
$ 6,528,819
$ 69,948,544
10
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2017
7. Tangible capital assets (continued):
Net book value
2017
2016
Land $
5,351,168
$ 5,353,168
Land improvements
1,071,200
1,204,168
Buildings
19,253,687
17,771,039
Engineered structures
164,998,094
156,186,499
Machinery and equipment
5,973,333
6,720,104
Vehicles
3,603,117
2,728,042
Work in progress
2,023,836
36,989,318
Total
$ 202,274,435 $ 226,952,338
Contributed tangible capital assets are recognized at fair value at the date of contribution.
The County donated assets with a carrying value of $33,324,414 to Newell Regional Services
Corporation during the year. These assets were held in trust as part of the regional water project.
The assets were transferred in exchange for $2,986,058 Class H preferred shares with the
difference being recorded as a transfer to Newell Regional Services Commission on the
statement of financial activities.
8. Employee benefit obligations:
Vacation
The vacation liability is comprised of the vacation that employees are deferring to future years.
Employees have either earned the benefits (and are vested) or are entitled to these benefits within
the next budgetary year.
Sick
The sick liability is comprised of the sick pay that employees are deferring to future years.
Employees have either earned the benefits (and are vested) or are entitled to them within the next
budgetary year.
9. Unearned Revenue:
Recognized as
Description 2016 Received revenue
Street Improvement Grant $ 173,520 --
Other 23,165 22,000
Total
$ 196,685 $ 22,000
11
(173,520)
(23,165)
$ (196,685)
2017
22,000
$ 22,000
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2017
10. Long-term debt — operating:
Debenture supported with notes receivable
Principal and interest repayments are due as follows:
2018
Principal
$ 789,542
$ 789,542
2017 2016
$ 789,542 $ 1,537,923
Interest Total
$ 43,425 $ 832,967
$ 43,425 $ 832,967
Debenture debt is repayable to Alberta Capital Finance Authority and bears interest at 5.5% per
annum, before Provincial subsidy, and matures in 2018. Debenture debt is issued on the credit
and security of the County of Newell at large.
Interest on long-term debt amounted to $74,295 (2016 — $113,847).
The County's total interest paid in 2017 was $84,585 (2016 - $123,601).
11. Long-term debt — capital:
Tax supported debentures
Principal and interest repayments are due as follows:
Principal
2018
$ 5,138,389
2019
5,233,923
2020
3,651,630
2021
2,482,572
2022
1,845,476
Thereafter
1,668,654
$ 20,020,644
12
2017 2016
$ 20,020,644 $ 24,414,424
Interest Total
$ 395,760 $ 5,534,149
300,227
5,534,150
209,611
3,861,241
141,266
2,623,838
81,869
1,927,345
333,370
2,002,024
$ 1,462,103 $ 21,482,747
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2017
11. Long-term debt —capital (continued):
Debenture debt is repayable to Alberta Capital Finance Authority and bears interest at rates
ranging from 1.124% to 3.406% per annum, before Provincial subsidy, and matures in periods
2018 through 2042. The average annual interest rate is 2.095% for 2017 (2016 — 2.014%). 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 at large.
Interest on long-term debt amounted to $476,748 (2016 - $556,235).
The County's total interest paid in 2017 was $468,725 (2016 - $560,422).
12. Provision for landfill and gravel pit closure and post -closure costs:
Alberta environmental law requires closure and post -closure care of landfill sites, which includes
final covering and landscaping, pumping of ground water and leachates from the site, and on-
going environmental monitoring, site inspections and maintenance.
The accrued liability for the remaining post -closure costs of the County's landfill and closure and
post -closure costs for the County's gravel pits are based on an estimate of future discounted
costs. All landfill sites are closed. One site is expected to be reclaimed in 2018, while post -closure
costs associated on another are expected until 2028.
The estimated closure and post -closure costs for the landfill are $662,535 and $331,814 for the
gravel pits, all of which have been accrued in the financial statements.
The County has not designated assets for settling closure and post -closure liabilities.
13
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2017
13. Accumulated surplus:
Equity in
tangible
Unrestricted capital Restricted Total Total
net assets assets (1) Surplus (2) 2017 2016
Beginning
balance
$ 1,505,734
$202,537,914
$84,628,760 $288,672,408 $275,149,387
Annual surplus
(deficit)
(18,998,054)
--
-- (18,998,054) 13,523,021
Transfers to
restricted surplus
(20,721,496)
--
20,721,496 -- --
Transfers from
restricted surplus
19,218,644
--
(19,218,644) -- --
Amortization of
tangible capital
assets
6,528,819
(6,528,819)
-- --
Net book value
of assets disposed 412,745
(412,745)
-- -- --
Capital assets
internally
funded
(14,947,025)
14,947,025
-- -- --
Capital assets
debt funded
(640,850)
640,850
-- -- --
Transferred assets
33,324,214
(33,324,214)
-- -- --
Debt issued
640,850
(640,850)
-- -- --
Debt paid - capital
(5,034,630)
5,034,630
-- -- --
Total
$ 1,288,951
$182,253,791
$86,131,612 $269,674,354 $288,672,408
(1) Equity in tangible capital assets:
Tangible capital assets (note 7)
Accumulated amortization (note 7)
Long-term debt — capital (note 11)
14
2017
$ 272,222,979
(69,948,544)
(20,020,644)
$ 182,253,791
2016
$ 291,174,700
(64,222,362)
(24,414,424)
$ 202,537,914
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2017
13. Accumulated surplus (continued):
(2) Restricted surplus is comprised of funds internally restricted as follows:
Paving
Infrastructure
Future Projects
Vehicles, Machinery & Equipment
Regional Enhancement
Stabilization
Facilities
Fire Apparatus
Recreation
Tilley
Unexpended Budget Appropriation
14. Net municipal property taxes:
Taxation:
Real property taxes
Linear property taxes
Government grants in place of property
taxes
Requisitions:
Alberta School Foundation Fund
Newell Foundation
Net municipal property taxes
2017 2016
$ 127,805
$ 6,501,897
38,522,787
28,282,967
19,513,713
26,086,018
9,478,581
8,359,816
4,428,874
3,390,161
5,400,277
5,762,969
2,893,968
2,688,639
3,156,346
3,224,453
1,417,008
-
50,662
50,662
1,141,591
281,178
$ 86,131,612 $ 84,628,760
Budget
2017
2016
$ 17,375,227
$ 17,285,035
$ 15,611,840
27,734,366
27,732,086
27,489,906
367,943
366,827
355,528
45,477,536
45,383,948
43,457,274
12,207,543
12,207, 543
12,754,794
898,029
898,029
910,166
13,105,572
13,105,572
13,664,960
$ 32,371,964
$ 32,278,376
$ 29,792,314
15
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2017
15. Government transfers:
Budget 2017 2016
Transfers for operating:
Provincial government $ 388,676 $ 405,145 $ 406,850
Local government 216,998 233,365 229,148
605,674 638,510 635,998
Transfers for capital:
Provincial government - 173,520 3,757,309
Local government - - 111,250
173,520 3,868,559
$ 31,413, 710 $ 26, 964, 575 $ 27,467,154
16
$ 605,674
$ 812,030
$ 4,504,557
16. Expenses by object:
Budget
2017
2016
Salaries, wages and benefits
$ 8,410,144
$ 7,895,217
$ 7,430,179
Contracted and general. services
4,900,998
3,455,799
3,725,751
Materials, goods, supplies and utilities
5,799,044
4,796,641
3,985,928
Transfers to organizations
5,146,293
2,920,646
4,264,050
Bank charges and short-term interest
8,000
6,014
5,370
Interest on long-term debt
552,861
551,044
670,082
Other expenditures
20,000
810,395
1,158,712
Amortization
6,576,370
6,528,819
6,227,082
$ 31,413, 710 $ 26, 964, 575 $ 27,467,154
16
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2017
17. Salary and benefits disclosure:
Disclosure of salaries and benefits for elected municipal officials and the chief administrative officer
as required by provincial regulation is as follows:
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
2017
2016
Benefits &
Salary (1)
Allowances (2)
Total
Total
Council:
Division 1 -Amulung
$ 31,724
$ 5,380
$ 37,104
$ 35,147
Division 2 - Kallen
6,749
947
7,696
-
Division 2 - Simpson
20,577
4,224
24,801
34,877
Division 3 - Philipsen
28,421
5,224
33,655
35,470
Division 4 - Hammergren
25,981
2,671
28,652
27,497
Division 5 - Fyfe
27,512
5,193
32,705
33,114
Division 6 - Christman
28,551
5,346
33,897
32,087
Division 7 - Unruh
27,883
5,210
33,093
33,522
Division 8 - De Jong
25,824
1,308
27,132
28,100
Division 9 - Douglass
50,081
2,441
52,522
51,427
Division 10 - Juss
24,877
5,077
29,954
32,019
$ 298,181
$ 43,031
$ 341,212
$ 343,260
Chief Administrative Officer
$ 220,720
$ 49,115
$ 269,835
$ 265,601
1) Salary includes regular base pay, bonuses, overtime, lump sum payments, gross honoraria
and any other direct cash remuneration.
2) Benefits and allowances include the employer's share of all employee benefits and
contributions or payments made on behalf of employees including pension, health care,
dental coverage, vision coverage, group life insurance, accidental disability and
dismemberment insurance, long and short-term disability plans, professional memberships
and tuition.
Benefits and allowances figures also include the employer's share of the costs of additional
taxable benefits including special leave with pay, financial planning services, retirement
planning services, concessionary loans, travel allowances, car allowances, and club
memberships, if applicable.
17
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2017
18. 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:
2017 2016
Total debt limit $ 57,197,442 $ 54,325,790
Total debt (20,810,186) (25,952,347)
$ 36,387,256 $ 28,373,443
2017 2016
Debt servicing limit $ 9,532,907 $ 9,054,298
Debt servicing (6,367,116) (6,336,321)
$ 3,165,791 $ 2,717,977
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.
19. 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 one of
the plans covered by the Public Sector Pension Plans Act. The LAPP serves about 253,862 people
and about 417 employers. The LAPP is financed by employer and employee contributions and
investment earnings of the LAPP fund.
Contributions for current service are recorded as expenditures in the year in which they become
due. The County is required to make current service contributions to the Plan of 10.39% of
pensionable earnings up to the year's maximum pensionable earnings under the Canada Pension
Plan and 14.84% on pensionable earnings above this amount. Employees of the County are
required to make current service contributions of 9.39% of pensionable salary up to the year's
maximum pensionable salary and 13.84% on pensionable salary above this amount.
Total current service contributions by the County to the LAPP in 2017 were $619,332 (2016 -
$613,239). Total current service contributions by the employees of the County to the LAPP in 2017
were $571,265 (2016 - $565,546).
At December 31, 2016, the LAPP disclosed an actuarial deficiency of $637 million.
18
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2017
20. Contingent liabilities:
The County of Newell is a member of the Alberta Municipal Insurance Exchange (MUNIX). Under
the terms of membership, the County of Newell could become liable for its proportionate share of
any claim losses in excess of the funds held by the exchange. Any liability incurred would be
accounted for as a current transaction in the year the losses are determined.
21. Recent accounting pronouncements:
The Public Sector Accounting Board recently announced the following accounting
pronouncements:
(a) Financial instruments:
This section establishes recognition, measurement, and disclosure requirements for
derivative and non -derivative instruments. The standard requires fair value measurements of
derivative instruments and equity instruments; all other financial instruments can be measured
at either cost or fair value depending upon elections made by the government. Unrealized
gains and losses will be presented on the new statement of remeasurement gains and losses
arising from the adoption of PS 1201. There will also be a requirement to disclose the nature
and extent of risks arising from financial instruments and clarification is given for the de-
recognition of financial liabilities. As the Municipality does not invest in derivatives or equity
instruments based on its investment policy, it is anticipated that the adoption of this standard
will have a minimal impact on the Municipality. This standard is effective for fiscal years
beginning on or after April 1, 2019.
(b) Foreign currency translation:
This section establishes guidance on the recognition, measurement, presentation and
disclosure of assets and liabilities denominated in foreign currencies. The Section requires
monetary assets and liabilities, denominated in a foreign currency and non -monetary items
valued at fair value denominated in a foreign currency to be adjusted to reflect the exchange
rates in effect at the financial statement date. The resulting unrealized gains and losses are
to be presented in the new statement of remeasurement gains and losses. This standard is
effective for fiscal years beginning on or after April 1, 2019.
(c) Related party transactions:
This section provides guidance on the definition of a related party and establishes the
disclosure requirements for transactions between related parties. This standard is effective
for fiscal years beginning on or after April 1, 2017.
19
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2017
21. Recent accounting pronouncements:
(d) Financial statement presentation:
The implementation of this standard requires a new statement of re -measurement gains and
losses separate from the statement of operations. This new statement will include the
unrealized gains and losses arising from the remeasurement of financial instruments and
items denominated in a foreign currency. This standard is effective for fiscal years beginning
on or after April 1, 2019.
Management is assessing the impact of the adoption of these standards which is not known or
reasonably estimable at this time.
22. Segmented Disclosures:
Segmented disclosures (Schedule 1) are intended to enable users to better understand the
government reporting entity and the major expense and revenue activities of the County.
The segments have been selected based upon functional activities provided by the County. For
each reported segment, revenues and expenses represent both amounts directly attributable to
the segment and amounts that are allocated on a reasonable basis. The functional areas that
have been separately disclosed, along with the services they provide are as follows:
(a) General government is comprised of Council, Legislative, Corporate Administration,
Finance, Information and Computer Services, Planning, Economic Development,
Corporate Safety, Agricultural Services, Fire and Disaster Services, Bylaw Enforcement,
Community Services, Recreation, Parks and Programs and Library.
(b) Public Works and Transportation is comprised of Roads and Engineering Services.
(c) Public Utilities is comprised of Water, Wastewater and Solid Waste.
20
COUNTY OF NEWELL
Notes to Consolidated Financial Statements
Year ended December 31, 2017
23. Budget information:
The budget information presented in these consolidated financial statements is based upon the
2017 budget approved by Council on April 6, 2017.
24. Approval of financial statements:
These financial statements were approved by Council and Management.
21
COUNTY OF NEWELL
Schedule of Segmented Disclosures
Year ended December 31, 2017, with comparative information for 2016
Public Works
General and
Government Transportation Public Utilities
Revenue
Net taxes for municipal purposes
Special levies
User fees and sale of goods
Government transfers - operating
Penalties and costs of taxes
Investment income
License and permits
Other
Gain (loss) on disposal of capital assets
Expenses
Salaries, wages and benefits
Contracted and general services
Materials, goods, supplies and utilities
Transfer to organization
Bank charges and short term interest
Interest on long-term debt
Other expenditures
Amortization
Annual surplus (deficit)
before the undernoted
Other
Insurance proceeds
Transfer of assets to NRSC
Government transfers - capital
Other
Annual surplus (deficit)
Schedule 1
Public Works
Total General and Total
2017 Government Transportation Public Utilities 2016
$ 32,278,376 $
$
- $
32,278,376
$ 29,792,314 $
- $
- $
29,792,314
-
117,189
117,189
311,243
-
803,465
1,114,708
868,422
256,573
1,493,843
2,618,838
530,515
257,732
1,289,933
2,078,180
533,510
-
105,000
638,510
530,998
-
105,000
635,998
210,582
-
210,582
184,855
-
-
184,855
1,234,488
-
1,234,488
1,642,224
-
-
1,642,224
255,278
-
-
255,278
153,032
-
-
153,032
414,858
46,167
173,680
634,705
496,641
97,925
174,195
768,761
12,217
131,445
-
143,662
10,301
(163,180)
-
(152,879)
35,807,731
434,185
1,889,712
38,131,628
33,652,123
192,477
2,372,593
36,217,193
5,061,846
2,833,371
-
7,895,217
4,890,664
2,539,515
-
7,430,179
1,656,052
1,118,991
680,756
3,455,799
1,481,460
1,560,180
684,111
3,725,751
1,392,641
2,087,032
1,316,968
4,796,641
1,243,977
1,991,618
750,333
3,985,928
2,898,032
-
22,614
2,920,646
4,241,371
-
22,679
4,264,050
6,014
-
6,014
5,370
-
5,370
74,296
476,748
551,044
113,847
-
556,235
670,082
810,394
-
-
810,394
1,158,712
-
-
1,158,712
1,073,278
4,363,956
1,091,586
6,528,820
990,695
4,336,601
899,786
6,227,082
12,972,553
10,403,350
3,588,672
26,964,575
14,126,096
10,427,914
2,913,144
27,467,154
22,835,178
(9,969,165)
(1,698,960)
11,167,053
19,526,027
(10,235,437)
(540,551)
8,750,039
- (30,338,627) (30,338,627)
173,520 - 173,520
$ 22,835,178 $ (9,795,645) $ (32,037,587) $ (18,998,054)
904,423 - - 904,423
- - 3,868,559 3,868,559
$ 20,430,450 $ (10,235,437) $ 3,328,008 $ 13,523,021