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HomeMy WebLinkAboutFinancial Statements 2002THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Financial Statements December 31, 2002 THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Financial Statements Year Ended December 31, 2002 INDEX Consolidated Financial Statements Unconsolidated Trust Funds SECTION THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Financial Statements December 31, 2002 THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Financial Statements Year Ended December 31, 2002 Table of Contents PAGE Auditors' Report Statement of Financial Position 2 Statement of Financial Activities 3 Statement of Changes in Financial Position 4 Notes to the Financial Statements 5-10 Schedule of Funds 11 - 13 GRAHAM • SCOTT • ENNS LLP Chartered Accountants 25 John Street South Telephone: (519) 773-9265 Aylmer, Ontario Facsimile: (519) 773-9683 N51-1 2C 1 www.grahamscottenns.com AUDITORS' REPORT To the Members of Council, Inhabitants and Ratepayers of The Corporation of the Municipality of Bayham We have audited the consolidated balance sheet of The Corporation of the Municipality of Bayham as at December 31, 2002 and the consolidated statement of financial activities and changes in financial position for the year then ended. These financial statements are the responsibility of the Municipality's management. 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 Corporation of the Municipality of Bayham as at December 31, 2002 and the results of its operations and changes in financial position for the year then ended in accordance with Canadian generally accepted accounting principles. Aylmer, Ontario March 19, 2003 -1- sea, 5fmd, zd;n CHARTERED ACCOUNTANTS THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Statement of Financial Position As At December 31, 2002 Financial Assets Cash and short term deposits Taxes receivable Accounts receivable Other current assets TOTAL ASSETS ASSETS LIABILITIES Liabilities Temporary bank advances (note 4) Deferred revenue - obligatory reserve funds (note 7) Accounts payable and accrued liabilities Net long-term liabilities (note 4) MUNICIPAL POSITION FUND BALANCES (NOTE 5) Current fund (page 11) Capital fund (page 12) Reserves (page 13) Reserve funds (page 13) AMOUNTS TO BE RECOVERED From future revenues TOTAL MUNICIPAL POSITION TOTAL LIABILITIES AND MUNICIPAL POSITION 2002 1,481,827 441,826 300,378 10,786 2001 1,218,065 407,955 344,686 6.858 2,2� 34,$17 1,977J64 2,000,000 55,876 60,821 218,944 357,974 1,680,853 173,290 1,9� 2.592,085 36,915 366,914 1,544,723 11,445 1,959,997 39,550 (1,749,677) 1,247,650 X22 3-00 (440,177) (1,680,853) (174,344) 279,144 (614,521 2 1977564 See accompanying notes to the consolidated financial statements. 2 THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Statement of Financial Activities Year Ended December 31, 2002 EXPENDITURES 2002 2001 Current REVENUES 431,629 425,531 Property taxation 1,653,321 1,541,826 Taxation from other governments 41,025 40,143 User charges 685,334 529,476 Government grants 1,752,797 4,188,653 Contribution from developers 11,600 - Investment income 63,989 140,127 Penalties and interest on taxes 57,636 54,105 Recoveries from benefiting landowners 1,655,149 - Other 12,029 18,847 Total Revenues 5,932,880 6,511177 EXPENDITURES Current General government 431,629 425,531 Protection to persons and property 933,508 758,281 Transportation services 884,011 816,017 Environmental services 738,098 575,822 Health services 58,001 33,366 Social and family services 7,784 1,889 Recreation and cultural services 210,502 192,174 Planning and development 141,906 107,150 Total current expenditures 3,405,439 2,910,230 Capital General government 28,088 - Protection to persons and property 39,665 29,429 Transportation services 571,454 355,394 Environmental services 860,692 7,098,307 Health services 24,297 18,943 Recreation and cultural services 102,906 50,525 Planning and development 7,728 24,040 Total capital expenditures 1,634,830 7,576,638 Total Expenditures _ 5,040,269 10,486,868 NET REVENUESI(EXPENDITURES) 892,611 (3,973,691) Increase (decrease) in amounts to be recovered 1 5� 0� (31,961) CHANGE IN FUND BALANCES _.2,400,174 (4,005,652) See accompanying notes to the consolidated financial statements. -3- THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Statement of Changes in Financial Position Year Ended December 31, 2002 (2180,720) _CL,040,422) Sources: Decrease in accounts receivable 44,308 225,743 Decrease in other current assets - 5,983 Increase in temporary bank advances - 2,000,000 Increase in deferred revenue - obligatory reserve funds - 5,073 44,308 2,236,799 Net change in cash from operations (1,243,801) (2,777,314) FINANCING Long-term debt advances (repayment) 1,507,563 (31,961) Net change in cash from financing 1,507,563 (31,961) NET CHANGE IN CASH AND CASH EQUIVALENTS 263,762 (2,809,275) OPENING CASH AND CASH EQUIVALENTS 1,218,065, 4,027,340 CLOSING CASH AND CASH EQUIVALENTS 1,4$1,827 1 2� 18 065 See accompanying notes to the consolidated financial statements. -4- 2002 2001 OPERATIONS Net revenues 892,611 (3,973,691) Uses: Increase in taxes receivable (33,871) (29,904) Increase in other current assets (2,874) - Decrease in temporary bank advances (2,000,000) - Decrease in accounts payable and accrued liabilities (139,030) (1,010,518) Decrease in deferred revenue - obligatory reserve funds (4,945) - (2180,720) _CL,040,422) Sources: Decrease in accounts receivable 44,308 225,743 Decrease in other current assets - 5,983 Increase in temporary bank advances - 2,000,000 Increase in deferred revenue - obligatory reserve funds - 5,073 44,308 2,236,799 Net change in cash from operations (1,243,801) (2,777,314) FINANCING Long-term debt advances (repayment) 1,507,563 (31,961) Net change in cash from financing 1,507,563 (31,961) NET CHANGE IN CASH AND CASH EQUIVALENTS 263,762 (2,809,275) OPENING CASH AND CASH EQUIVALENTS 1,218,065, 4,027,340 CLOSING CASH AND CASH EQUIVALENTS 1,4$1,827 1 2� 18 065 See accompanying notes to the consolidated financial statements. -4- THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2002 The Municipality of Bayham is a municipality in the Province of Ontario. It conducts its operations guided by the provisions of provincial statutes such as the Municipal Act, Municipal Affairs Act and related legislation. 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The consolidated financial statements of the Corporation of the Municipality of Bayham are prepared by management in accordance with generally accepted accounting principles for local governments as recommended by the Public Sector Accounting Board of the Canadian Institute of Chartered Accountants. Significant aspects of the accounting policies adopted by the Municipality are as follows: Reporting Entity The consolidated financial statements reflect the assets, liabilities, revenues, expenditures and fund balances of the reporting entity. The reporting entity is comprised of all organizations, committees and local boards accountable for the administration of their financial affairs and resources to the Municipality and which are owned or controlled by the Municipality. These financial statements include: - Various Community Centre Boards - Various Cemetery Boards - Museum Board Inter -departmental and inter -organizational transactions and balances between these organizations are eliminated. The following joint local board is not consolidated: (see Note 2 and 8) Elgin Area Primary Water Board Fund Accounting Funds within the consolidated financial statements consist of current, capital and reserve funds. Transfers between funds are recorded as adjustments to the appropriate municipal fund balance. Trust funds and their related operations administered by the municipality are not included in these financial statements but are reported on separately on the Trust Funds Statement of Continuity and Balance Sheet. Capital Assets Expenditures made on capital assets are reported as capital expenditures on the statement of financial activities in the period incurred. - 5 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2002 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Reserves and Reserve Funds Certain amounts, as approved by Municipal Council, are set aside in reserves and reserve funds for future operating and capital purposes. Transfers to and/or from reserves and reserve funds are an adjustment to the respective fund when approved. Government Transfers Government transfers are recognized in the financial statements as revenues in the period in which events giving rise to the transfer occur providing the transfers are authorized, any eligibility criteria have been met, and reasonable estimates of the amounts can be made. Deferred Revenue Deferred revenues represent user charges and fees which have been collected but for which the related services have yet to be performed. These amounts will be recognized as revenues in the fiscal year the services are performed. Use of Estimates The preparation of financial statements in conformity with Canadian generally accepted accounting principles require 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 expenditures during the period. Actual results could differ from these estimates. 2. CONTRIBUTIONS TO UNCONSOLIDATED JOINT BOARDS Further to Note 1, the Municipality contributed $61,561 in the current year (2001 - $42,802) to the Elgin Area Primary Water Board. The Municipality is contingently Iiable or has contingent gains for its share of any deficit/surplus, reserves/reserve funds and long-term liabilities which may arise or be incurred by the Elgin Area Primary Water Board. See Note 8 for further disclosure on the Elgin Area Water Board. M THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2002 3. OPERATION OF SCHOOL BOARDS AND THE COUNTY OF ELGIN During 2002, requisitions were made by the school boards and the County of Elgin requiring the municipality to collect property taxes and payments in lieu of property taxes on their behalf. The amounts collected and remitted are summarized below: Taxation and user charges Share of payments in lieu of taxes Amounts requisitioned 4. NET LONGTERM LIABILITIES School Boards County —5— $ 1,296,762 1,424,717 - ___ __ 14,767 1 26 762 1,439,484 a) The balance of net long-term liabilities reported on the Consolidated Statement of Financial Position is made up of the following: 2002 2001 Total long-term liabilities incurred by the municipality, including those incurred on behalf of benefiting landowner 1.6 .2.173 290 Principal repayments are summarized as follows: 2003 2004 2005 2006 2007 Beyond Total Recoverable From $ $ 3 General tax revenue 36,177 21,917 - - - - 58,094 Benefitting landowners 140,035 145,240 154,737 153,311 163,104 866,332 1,622,759 176,212 167,157 15 1531311 163� 866 332 1.680.853 -7- THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2002 4. NET LONGTERM LIABILITIES (CONTINUED) b) All long-term liabilities issued on or before December 31, 1992 have received approval of the Ontario Municipal Board. Long-term liabilities issued after January 31, 1993 have been approved by by-law. The annual principal and interest payments required to service these liabilities are within the annual debt repayment limit prescribed by the Ministry of Municipal Affairs and Housing c) Interest expense on long-term liabilities in 2002 amounted to $63,170 (2001 - $13,086) 5. MUNICIPAL FUND BALANCES AT THE END OF THE YEAR The Municipality's fund balances are comprised of the following: For general reduction of taxation: Municipality Cemetery boards Benefiting landowners For acquisition of fixed assets Reserves Reserve funds 6. TRUST FUNDS 2002 2001 - 506 64,422 60,773 (27,507) (21.729) 36,915 39,550 366,914 (1,749,677) 1,544,723 1,247,650 11.445 22.300 1,959,997 (440,177) Trust funds administered by the municipality amounting to $195,913 (2001 - $208,099) have not been included in the Consolidated Balance Sheet nor have their operations been included in the Consolidated Statement of Operations. M THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2002 7. DEFERRED REVENUE - OBLIGATORY RESERVE FUNDS A requirement of the public sector accounting principles of the Canadian Institute of Chartered Accountants is that obligatory reserve funds be reported as deferred revenue. This requirement is in place as provincial legislation restricts how these funds may be used and under certain circumstances these funds may be refunded. The balances in the obligatory reserve funds of the Municipality are summarized below: Development Charges Parkland 2002 2001 8,533 11,089 47,342 49,733 55,875 60,822 8. CONTRACTUAL OBLIGATION -CITY OF LONDON/ONTARIO CLEAN WATER In accordance with a service agreement entered into by the Municipality with the Ontario Clean Water Agency (OCWA) the existing Elgin Area Primary Water Supply System is owned and operated by the Agency. The municipality is obligated to meet its share of the operating costs and deficits and repay its share of the long-term liabilities related to these projects. The municipality's share is based on its water consumption relative to that of the other participating municipalities. As of September 1, 1998, the municipality has authorized the City of London to take over the administrative functions of the Primary Water Supply System including the issuance of debt to pay out the balance of debt and accumulated deficit of the participating municipalities. Charges related to operating costs and debt servicing are recovered through the water rates levied by the Municipality. Information received from the City of London as at December 31, 2002 indicates the following: Outstanding Contractual Accumulated 2002 Debt Long-term Obligation Surplus Charges Liabilities Primary Water Supply System City of London 47,112 11,892 83,775 The operating surplus and long-term liabilities indicated above are not reflected in the accompanying financial statements. W THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2002 9. BUDGET FIGURES The Council of the Municipality of Bayham completes separate budget reviews for its operating and capital funds each year. The approved operating budget for 2002 is reflected on the Schedule of Current Fund Activities. The capital budget is set for individual projects and funding for these activities is determined annually and made by transfers from reserve funds, operating funds and by the application of applicable grants or other funds available to apply to capital projects. During 2002, Council approved transfers totalling $216,900 (2001 - $212,700) from reserve funds for capital projects. As many capital projects are carried out over one or more years, the annualized budget information on the Consolidated Schedule of Capital Operations represents the budget portion of expenditures in the current year only. 10. PUBLIC SECTOR SALARY DISCLOSURE In 2002, no employees were paid a salary, as defined in the Public Sector Salary Disclosure Act, 1996, of $100,000 or more by The Corporation of the Municipality of Bayham. - 10- THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Schedule of Current Fund Operations Year Ended December 31, 2002 REVENUES Property taxation Taxation from other governments User charges Government grants Contribution from developers Investment income Penalties and interest on taxes Recoveries from benefiting landowners Other Total Revenues EXPENDITURES General government Protection to persons and property Transportation services Environmental services Health services Social and family services Recreation and cultural services Planning and development Total Expenditures NET REVENUESI(EXPENDITURES) FINANCING AND TRANSFERS Transfers to reserves and reserve funds Transfers to capital fund Debt principal repayment Net financing and transfers CHANGE IN CURRENT FUND BALANCE OPENING CURRENT FUND BALANCE CLOSING CURRENT FUND BALANCE -11- Unaudited Budget _ 1.051.919 _ 812,518 2002 2002 2001 (500,430) (575,258) (452,051) 1,621,105 1,653,321 1,541,826 41,025 41,025 40,143 657,659 673,843 522,054 1,384,029 1,714,966 1,466,197 - 3,000 - 60,000 42,319 79,576 50,000 57,636 54,105 19,579 259,219 38,850 12,029 18,847 3,872,247 4,457,358 3,722,748 440,690 431,629 425,531 920,905 933,508 758,281 944,429 884,011 816,017 669,300 738,098 575,822 54,969 58,001 33,366 7,000 7,784 1,889 241,663 210,502 192,174 119.304 141.906 107.150 3.398,260 3.405.439 2.910,230 473,987 _ 1.051.919 _ 812,518 (39,158) (369,512) (557,010) (500,430) (575,258) (452,051) (34,004) (109,784) (31,961) (573,592)(1,054,554) 1,041 022) (99,605) (2,635) (228,504) 39,550 39,550 268,054 _ (60 U55) 36,915 39,550 THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Schedule of Capital Fund Operations Year Ended December 31, 2002 REVENUES Government grants Contribution from developers Investment income Benefiting landowners Other Total Revenues EXPENDITURES General government Protection to persons and property Transportation services Environmental services Health services Recreation and cultural services Planning and development Total Expenditures NET REVENUESI(EXPENDITURES) FINANCING AND TRANSFERS Transfers from reserves and reserve funds Transfers from operating fund Proceeds of long term debt Net financing and transfers CHANGE IN CAPITAL FUND BALANCE OPENING CAPITAL FUND BALANCE CLOSING CAPITAL FUND BALANCE 12- Unaudited Budget 2002 2002 2001 27,200 37,831 2,722,456 - 8,600 - - - 57,221 - 1,395,930 26.500 11.491 7.422 53.700 1,453,852 2 7x8.7 500,430 54,200 28,088 - 240,130 39,665 29,429 318,000 571,454 355,394 1,394,483 860,692 7,098,307 38,200 24,297 18,943 130,850 102,906 50,525 12.000 7.728 24.040 2,187,863 1.634.830 7.576.638 (2,134,163) (180,978) (4,789,539) 216,900 104,964 136,665 500,430 575,258 452,051 3,166,510 1,617,347 - 3 883,840 2,297,569 588,716 1,749,677 2,116,591 (4,200,823) (1.749.677) 11,749,677) 2,451,146 3669141,749,677) THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Schedule of Reserves and Reserve Funds Year Ended December 31, 2002 2002 2001 AL $ REVENUES Investment income 21.670 3.330 Net revenues 21,_670 3,330 FINANCING AND TRANSFERS Transfers to capital fund (104,964) (136,665) Transfer from current fund 369,512 557,010 Net transfers 264,548 420,345 _ CHANGE IN RESERVE AND RESERVE FUND BALANCES 286,218 423,675 OPENING RESERVE AND RESERVE FUND BALANCE 1,269,950 846,275 CLOSING RESERVE AND RESERVE FUND BALANCE 1,5� 11 26999950 ANALYZED AS FOLLOWS: Reserves set aside for specific purposes by Council: - for working capital 334,307 334,307 - for capital purposes 758,006 472,801 for waterworks purposes 58,578 82,125 - for rate stabilization 236,714 236,714 - for other purposes 157,118 121,703 Total reserves 1,544,723 1,247,650 _ Reserve funds set aside for specific purposes by Council: - for construction of sanitary and storm sewers 5,936 17,051 - for other purposes 5,509 5.249 Total reserve funds 11,445 22.300 TOTAL RESERVES AND RESERVE FUNDS 1,556,168 L269s950 13- THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Unconsolidated Trust Funds December 31, 2002 GRAHAM • SCOTT • ENNS LLP Chartered Accountants 450 Sunset Drive Telephone: (519) 633-0700 St. Thomas, Ontario Facsimile: (519) 633-7009 N5R 5V1 www.grahamscottenns.com AUDITORS' REPORT To the Members of Council, Inhabitants and Ratepayers of The Corporation of the Municipality of Bayham We have audited the trust fund balance sheet of The Corporation of the Municipality of Bayham as at December 31, 2002 and the trust fund statement of continuity for the year then ended. These financial statements are the responsibility of the Municipality's management. 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 financial statements present fairly, in all material respects, the financial position of the tryst fund of the Municipality as at December 31, 2002 and the continuity of trust fund for the year then ended in accordance with Canadian generally accepted accounting principles. Aylmer, Ontario March 19, 2003 quwlam s .5044, .U;V CHARTERED ACCOUNTANTS See accompanying notes to the financial statements THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Trust Funds Balance Sheet As At December 31, 2002 Assets Cash Accounts receivable Loans receivable Debentures Liabilities Administration fees & interest payable Accounts payable Fund Balances Capital balance Cemeteries Care and O.H.R.P. Developers' Total Maint Fund Funds Deposits 2002 115,296 13 18,938 134,247 1,165 - 13165 - 1,866 - 1,866 60,232 - 60,232 17 1,879 18,938 197,510 1,596 - 1,596 1,596 - - 1,596 _175,097 1,879 18,938 195,914 1766931,879 1 _ 197,510 See accompanying notes to the financial statements THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Trust Funds Statement of Continuity As At December 31, 2002 Balance, beginning of year Capital receipts Sale of plots/monuments Interest earned Expenditures Payments to cemetery board Repayment to Ministry of Housing Administration fees Death taxes Balance, end of year Cemeteries Care and O.H.R.P Developers' Total Maint Fund Funds Deposits 2002 --I_ —3_ _$ 171,978 1,879 18,612 192,469 2,610 - - - 9,333 - 326 9,659 11,943 - 326 9,659 8,824 - - 8,824 8,824 - - 8,824 175 097 1,879 18,938 195,914 See accompanying notes to the financial statements THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Trust Funds Notes to the Financial Statements As At December 31, 2002 1. SIGNIFICANT ACCOUNTING POLICY Basis of accounting Capital receipts and income are reported on the cash basis of accounting. Expenditures are reported on the cash basis of accounting with the exception of administrative expenses which are reported on the accrual basis of accounting, which recognizes expenditures as they are incurred and measurable as a result of the receipt of goods or services and the creation of a legal obligation to pay. 2. ONTARIO HOME RENEWAL PROGRAM The Ontario Home Renewal Program was established by the Ontario Ministry of Housing in 1973 to provide grants for municipalities to make loans to assist owner occupants to repair, rehabilitate and improve their home to local property standards. Individual loans are limited to $7,500 of which the maximum forgivable portion is $4,000. Ontario Home Renewal Program loans receivable at December 31, 2002 comprise repayable loans of $1,866 (2001- $1,866) and forgivable loans of $nil (2001 - nil). Loan forgiveness is earned and recorded at a rate of up to $600 per year of continued ownership and occupancy. In the event of the sale or lease of the home or in the event of the homeowner ceasing to occupy the home, the balances of the repayable loan and the unearned forgivable loan immediately become due and payable by the homeowner. 3. CEMETERIES CARE AND MAINTENANCE FUND The cemeteries care and maintenance fund administered by the Municipality is funded by the sale of cemetery plots. These funds are invested and earnings derived therefrom are used to perform perpetual care and maintenance to the municipality's cemeteries. The operations and investments of the Fund are undertaken by the Municipality in accordance with the regulations of the Cemeteries Act.