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HomeMy WebLinkAbout2011 Financial Statements THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Financial Statements December 31, 2011 THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Financial Statements Year Ended December 31, 2011 Table of Contents PAGE Independent Auditors' Report 1 Consolidated Statement of Financial Position 2 Consolidated Statement of Operations and Accumulated Surplus 3 Consolidated Statement of Change in Net Financial Assets 4 Consolidated Statement of Cash Flows 5 Notes to the Consolidated Financial Statements 6 - 16 Consolidated Schedule of Segment Disclosure 17 - 18 Schedule of Segment Disclosure 19 Consolidated Schedule of Tangible Capital Assets 20 - 21 GRAHAM William A.Graham* Alan R.Enns* John M.Scott* Michael S.Stover* awe SCOTT Robert B. Foster* William J. Luyks* S. James G. Frederick* Betty A.Gropp 1ENNS N S LLP Michael J.MacKinnon* Garth G.Howes* • CHARTERED ACCOUNTANTS 'Practicing through a Professional Corporation 450 Sunset Drive,St.Thomas,ON N5R 5V1 25 John St.S.,Suite 208,Aylmer,ON N5H 2C1 Phone:(519)633-0700 Fax:(519)633-7009 Phone:(519)773-9265 Fax:(519)773-9683 INDEPENDENT AUDITORS'REPORT To the Members of Council,Inhabitants and Ratepayers of The Corporation of the Municipality of Bayham: Report on the Financial Statements We have audited the accompanying consolidated financial statements of The Corporation of the Municipality of Bayham, which comprise the consolidated statement of financial position as at December 31, 2011, and the statements of consolidated operations and accumulated surplus,changes in net assets,and cash flow for the year then ended, and a summary of significant accounting policies and other explanatory information. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian accounting standards for public sector entities and for such internal control as management determines is necessary to enable the preparation of 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 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 whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements,whether due to fraud or error. In making those risk assessments,the auditor considers internal control relevant to the entity's preparation and fair presentation of the 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 financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the consolidated financial statements present fairly, in all material respects, the statement of financial position of The Corporation of the Municipality of Bayham as at December 31, 2011, and the statements of operations and accumulated surplus, changes in net assets, and cash flow for the year then ended in accordance with Canadian accounting standards for public sector entities. St.Thomas,Ontario 91411404scot Eaf2Q, a) June 21,2012 CHARTERED ACCOUNTANTS Licensed Public Accountants - 1 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Statement of Financial Position As At December 31, 2011 2011 2010 $ $ ASSETS FINANCIAL ASSETS Cash 791,742 662,001 Investments (Note 2) 2,904,651 2,805,383 Taxes receivable (Note 3) 807,143 794,470 Accounts receivable 853,638 727.594 5,357,174 4,989,448 LIABILITIES Temporary bank advances - 995,000 Deferred revenue - obligatory reserve funds (Note 9) 364,029 312,865 Accounts payable and accrued liabilities 939,064 567,166 Net long-term liabilities (Note 4) 515,234 378.945 1,818,327 2.253.976 NET FINANCIAL ASSETS 3,538,847 2.735.472 NON-FINANCIAL ASSETS Tangible capital assets (Note 6,pages 20, 21) 54,782,472 54,783,297 Inventories and prepaid expenses 22,791 24.143 54,805,263 54.807.440 ACCUMULATED SURPLUS (NOTE 7) 58,344,110 5757 542912 See accompanying notes to the consolidated financial statements. - 2 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Statement of Operations and Accumulated Surplus Year Ended December 31, 2011 Unaudited Budget Actual Actual 2011 2011 2010 $ $ $ REVENUES Property taxation 3,007,904 3,076,981 2,815,073 Taxation from other governments 21,700 44,231 53,723 User charges 1,673,987 1,681,911 1,479,441 Transfer payments Federal 259,890 423,349 1,328,849 Provincial 1,452,496 1,524,656 1,247,295 Other municipalities 409,613 457,817 457,458 Donated tangible capital assets - 349,442 - Investment income 80,000 107,902 103,100 Penalties and interest on taxes 86,000 106,178 96,299 Recoveries from benefiting landowners 206,397 579,332 240,397 Other 12,542 7,738 40,165 Total Revenues 7,210,529 8,359,537 7,861,800 EXPENSES General government 705,085 711,173 698,596 Protection to persons and property 1,318,597 1,296,295 1,176,688 Transportation services 2,004,008 2,628,701 2,129,112 Environmental services 1,922,122 1,924,517 1,829,219 Health services 30,205 42,285 40,790 Social and family services 7,800 6,805 4,916 Recreation and cultural services 468,571 318,935 274,058 Planning and development 213,859 238,732 576,768 Loss on disposal of tangible capital assets - 390,896 - Total Expenses (Note 14) 6.670,247 7,558,339 6,730,147 ANNUAL SURPLUS 540,282 801,198 1.131,653 ACCUMULATED SURPLUS, BEGINNING OF YEAR 57,542,912 57,542,912 56,41 1,259 ACCUMULATED SURPLUS, END OF YEAR(Note 7) 58,083,194 58,344,110 57,542,912 See accompanying notes to the consolidated financial statements. - 3 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Statement of Changes in Net Financial Assets Year Ended December 31, 2011 2011 2010 $ $ ANNUAL SURPLUS 801,198 1,131,653 Acquisition of tangible capital assets (1,636,373) (1,869,289) Amortization of tangible capital assets 1,226,303 1,102,238 Proceeds on disposal of tangible capital assets 20,000 1,534 Change in inventories,prepaid expenses and deferred charges 1,351 149 Loss (gain) on sale of tangible capital assets 390,896 - INCREASE (DECREASE) IN NET FINANCIAL ASSETS 803,375 366,285 NET FINANCIAL ASSETS, BEGINNING OF YEAR 2,735,472 2,369,187 NET FINANCIAL ASSETS, END OF YEAR 3,538,847 2,735,472 See accompanying notes to the consolidated financial statements. - 4 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Statement of Cash Flows Year Ended December 31, 2011 2011 2010 $ $ OPERATING ACTIVITIES Annual surplus 801,198 1,131,653 Add (deduct) items not involving cash: Amortization of tangible capital assets 1,226,303 1,102,238 Loss on disposal of and transfer of assets 390,896 - 2,418,397 2,233,891 Change in non-cash items related to operations (Note 14[b]) (709,304) (337,635) Net change in cash from operating activities 1,709,093 1,896,256 CAPITAL Acquisition of tangible capital assets (1,636,373) (1,869,289) Proceeds on disposal of tangible capital assets 20,000 1,534 Net change in cash from capital (1,616,373) (1,867,755) INVESTING Investment income reinvested (99,268) 298,295 Net change in cash from investing (99,268) 298,295 FINANCING Long-term debt advance (repayment), net 136,289 (202,092) Net change in cash from financing 136,289 (202,092) NET CHANGE IN CASH AND CASH EQUIVALENTS 129,741 124,704 OPENING CASH AND CASH EQUIVALENTS 662,001 537,297 CLOSING CASH AND CASH EQUIVALENTS 791,742 662,001 SUPPLEMENTARY INFORMATION: Cash paid for interest on debt 24,027 33,282 Cash received for interest on investments 107,902 103,100 See accompanying notes to the consolidated financial statements. - 5 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2011 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 Canadian 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 include the assets, liabilities, revenues and expenses 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 100% owned or controlled by the Municipality. Consolidated Entities The following local boards are consolidated: -Various Cemetery Boards Inter-departmental and inter-organizational transactions and balances between these organizations are eliminated. Proportionate Consolidation The Elgin Area Primary Water Board and Port Burwell Water Board have been consolidated on a proportionate basis. The Water Boards are proportionately consolidated based upon the water flow used by our Municipality in proportion to the entire flows provided by the joint boards. Accounting for School Board Transactions Although the Municipality collects taxation on behalf of the School Boards, the taxation, other revenues, expenses, assets and liabilities with respect to the operations of the school boards are not reflected in these statements. Trust Funds Trust funds and their related operations administered by the Municipality are not included in these consolidated financial statements. - 6 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2011 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Basis of Accounting The consolidated 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 creation of a legal obligation to pay. Deferred Revenue Government transfers, contributions and other amounts are received from third parties pursuant to legislation, regulation or agreement and may only be used in the conduct of certain programs, in the completion of specific work. In addition, certain user charges and fees which have been collected but for which the related services have yet to be performed. Revenue is recognized in the period when the related expense are incurred, services preformed. Use of Estimates The preparation of consolidated financial statements in conformity with Canadian generally accepted accounting principles 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 period. In addition, the Municipality's implementation of the Public Sector Accounting Handbook PS3150 has required management to make estimates of historical cost and useful lives of tangible capital assets. These estimates and assumptions are based on the Municipalities best information and judgment and may differ significantly from actual results. Government Transfers Government transfers are recognized in the consolidated financial statements as revenues in the financial period in which events giving rise to the transfer occur, providing the transfers are authorized, any eligibility criteria have been met including performance and return requirements, and reasonable estimates of the amounts can be determined. Any amount received but restricted is recorded as deferred revenue in accordance with Section 3100 of the Public Sector Accounting Handbook and recognized as revenue in the period in which the resources are used for the purpose specified. In addition, the Municipality periodically receives senior government capital funding in the form of infrastructure grants and receives ongoing funding from both senior levels of government as a result of an allocation of the gas tax funds. - 7 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2011 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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 ordinary course of operations. The change in non-financial assets during the year, together with the excess of revenues over expenses, provides the Change in Net Financial Assets for the year. 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 are amortized on a straight-line basis over their estimated useful lives as follows: Building and components 20 to 75 years Vehicles 5 to 25 years Machinery and equipment 5 to 27 years Land improvements 18 to 25 years Plants and facilities 20 to 75 years Roads 20 to 60 years Bridges and other structures 15 to 80 years Underground and other networks 17 to 100 years No amortization is charged in the year of acquisition and a full year of amortization is charged in the year of disposal. Assets under construction are not amortized until the asset is available for productive use. ii) Contributions of tangible capital assets Tangible capital assets received as contributions are recorded at their fair value at the date of receipt and also are recorded as revenue. iii) Works of art and cultural and historic assets Works of art and cultural and historic assets are not recorded as assets in these financial statements. iv) Interest capitalization The Municipality does not capitalize interest costs associated with the acquisition or construction of a tangible capital asset. v) Leased tangible capital assets Leases are classified as capital or operating leases. Leases which transfer substantially all of the benefits and risks incidental to ownership of property are accounted for as capital leases. All other leases are accounted for as operating leases and the related lease payments are charged to expenses as incurred. - 8 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2011 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) vi) Inventories of supplies Inventories of supplies held for consumption are recorded at the lower of cost and replacement cost. Investment Income Investment income is reported as revenue in the period earned. When required by funding government or related Act, investment income earned on deferred revenue is added to the investment and forms part of the deferred revenue balance. Tax Revenues In 2011, the Municipality received $ 3,121,212 (2010 - $2,868,796) in property tax revenues for municipal purposes. The authority to levy and collect property taxes is established under the Municipal Act 2001, the Assessment Act, the Education Act, and other legislation. The amount of the total annual property tax levy is determined each year through Council's approval of the annual budget. Municipal tax rates are set annually by Council for each class or type of property, in accordance with legislation and Council-approved policies, in order to raise the revenue required to meet operating budget requirements. Education tax rates are established by the Province each year in order to fund costs of education on a Province-wide basis. Taxation revenues are recorded at the time billings are issued. Additional property tax revenue can be added throughout the year, related to new properties that become occupied, or that become subject to property tax, after the return of the annual assessment roll used for billing purposes. The Municipality may receive supplementary assessment rolls over the course of the year from MPAC that identify new or omitted assessments. Property taxes for these supplementary/omitted amounts are then billed according to the approved tax rate for the property class. Taxation revenues in any year may also be reduced as a result of reductions in assessment value rising from assessment and/or tax appeals. Each year, an amount is identified to cover the estimated amount of revenue loss attributable to assessment appeals, tax appeals or other deficiencies in tax revenue (e.g. uncollectible amounts, write-offs, etc.). Employee Benefit Plans The Municipality accounts for its participation in the Ontario Municipal Employees Retirement System (OMERS), a multi-employer public sector pension fund, as a defined contribution plan. The OMERS plan specifies the retirement benefits to be received by the employees based on the length of service and pay rates. Employee benefits include post employment benefits. Post employment benefits are subject to actuarial valuations and are accrued in accordance with the projected benefit method, prorated on service and management's best estimate of salary escalation and retirement ages of employees. Any actuarial gains and losses related to past service of employees are amortized over the expected average remaining service period. - 9 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2011 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Financial Instruments The Municipality's financial instruments and consist of cash and cash equivalents, accounts receivable, taxes receivable, accounts payable and accrued liabilities and long-term liabilities. Unless otherwise noted, it is management's opinion that the Corporation is not exposed to significant interest, currency, or credit risk arising from these financial instruments. 2. INVESTMENTS Investments are comprised of the following: 2011 2010 $ $ $ Cost Market Cost Market One fund pooled bond securities 2,904,651 2,924,874 2,805,383 2,807,159 3. TAXES RECEIVABLE 2011 2010 $ $ Taxes receivable 744,483 728,827 Penalties and interest 126,437 113,656 Allowance for doubtful accounts (63,777) (48,013) 807,143 794,470 - 10 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2011 4. NET LONG-TERM LIABILITIES a) The balance of net long-term liabilities reported on the Consolidated Statement of Financial Position is made up of the following: 2011 2010 $ $ Total long-term liabilities incurred by the municipality, including those incurred on behalf of benefiting landowner 515,234 378,945 Principal repayments are summarized as follows: 2011 2012 2013 2014 2015 Beyond Total Recoverable From $ $ $ $ $ $ $ General tax revenue - - - - - - - Benefiting landowners 145.823 38.371 40,056 41,918 43,778 205,288 515,234 145,823 38,371 40,056 41,918 43,778 205,288 515,234 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 2011 amounted to $24,027 (2010 - $33,282). - 11 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2011 5. OPERATION OF SCHOOL BOARDS AND THE COUNTY OF ELGIN During 2011, 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: School Boards County $ $ Taxation and user charges (1,401,996) (2,757,212) Share of payments in lieu of taxes - - Amounts requisitioned _11,401,996) (2,757,212) 6. TANGIBLE CAPITAL ASSETS Net Book Value 2011 2010 $ $ General Land 916,444 916,444 Buildings 957,655 988,181 Vehicles 836,427 898,224 Machinery and equipment 625,662 587,744 Land improvements 645,967 238,166 Infrastructure Plants and facilities 4,278,358 4,404,446 Roads 27,770,366 28,005,168 Underground and other networks 16,787,980 17,382,100 Machinery and equipment 1,301,648 1,141,185 54,120,507 54,561,658 Assets under construction 661,965 221,639 54,782,472 54,783,297 For additional information, see the Consolidated Schedule of Tangible Capital Assets (Schedule 1). During the year there were no write-downs of assets (2010 - $nil). In addition, roads and underground networks contributed to the Municipality totalled $349,442 (2010 - $nil) and were capitalized at their fair value at the time of receipt. - 12 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2011 7. ACCUMULATED SURPLUS The accumulated surplus balance is comprised of current fund, capital fund, balances in reserves and discretionary reserve funds, unfunded liabilities to be recovered in the future and investment in tangible capital assets. Operating fund Municipality 132,971 132,971 Cemetery boards 87,779 93,839 Benefiting landowners (325,950) (461,305) (105,200) (234,495) Invested in tangible capital assets 54,782,472 54,783,297 Capital fund (694,420) (1,069,993) Reserves 3,537,762 3,348,203 Reserve funds 1,338,730 1,094,845 58,859,344 57,921,857 AMOUNTS TO BE RECOVERED Net long-term debt (515,234) (378,945) ACCUMULATED SURPLUS 58,344,110 57,542,912 RESERVES AND RESERVE FUNDS CONSIST OF THE FOLLOWING: Reserves set aside for specific purposes by Council: - for working capital 414,153 404,153 - for capital purposes 995,750 1,092,779 - for waterworks purposes 800,310 617,003 - for rate stabilization 572,090 602,670 - for other purposes 755,459 631,598 Total reserves 3,537,762 3,348,203 Reserve funds set aside for specific purposes by Council: - for water system 93,569 103,043 - for construction of sanitary sewers 1,073,253 839,047 - for recreation and cultural service purposes 164,410 145,511 - for other purposes 7,498 7,244 Total reserve funds 1,338,730 1,094,845 - 13 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2011 8. TRUST FUNDS Trust funds administered by the municipality amounting to $219,261 (2010 - $230,100) have not been included in the Consolidated Balance Sheet nor have their operations been included in the Consolidated Statement of Operations. 9. 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: 2011 2010 S $ Development charges 27,967 27,021 Gasoline tax 289,792 253,215 Parkland 46,270 32,629 364,029 312,865 10. PENSION AGREEMENTS The Municipality makes contributions to the Ontario Municipal Employees Retirement Fund (OMERS), which is a multi-employer plan, on behalf of approximately 22 members of its staff. The plan is a defined benefit plan which specifies the amount of the retirement benefit to be received by the employees based on the length of service and rates of pay. The amount contributed to OMERS for 2011 was $99,100 (2010 - $83,443). 11. BUDGET FIGURES The operating budget approved by the council of the The Corporation of the Municipality of Bayham for 2011 is reflected on the consolidated statement of operations. The budgets established for capital investment in tangible capital assets are on a project-oriented basis, the costs of which may be carried out over one or more years and, therefore, may not be comparable with current year's actual expenditure amounts. As well, the Municipality does not budget activity within Reserve and Reserve Funds, with the exception being those transactions, which affect either operations or capital investments. Budget figures have been reclassified for the purposes of these financial statements to comply with PSAB reporting requirements. - 14 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2011 12. CONTINGENT LIABILITIES As at December 31, 2011 certain legal actions are pending against the municipality. The Municipality has guaranteed the debt of the Elgin Military Museum for an amount of $6,000,000. An estimate of loss on any contingency cannot be made since the outcome of these matters is indeterminate at this time. 13. PUBLIC SECTOR SALARY DISCLOSURE In 2011, 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. 14. SUPPLEMENTARY INFORMATION: 2011 2010 $ $ [a] Current fund expenses by object: Salaries, wages and employees benefits 1,847,619 1,472,821 Long-term debt interest 24,027 33,282 Materials 2,700,913 2,772,949 Contracted services 1,321,553 1,305,338 Rents and financial expenses 2,685 301 Amortization expense 1,226,299 1,102,238 Loss on disposal and transfer of assets 390,896 - External transfers to others 44,347 43,218 7,558,339 6.730,147 [b] Cash flow information: (Increase) decrease in taxes receivable (12,673) (180,378) (Increase) decrease in accounts receivable (126,044) (153,250) (Increase) decrease in inventories and prepaid expenses 1,351 149 Increase (decrease) in temporary bank advances (995,000) 195,000 Increase (decrease) in accounts payable and accrued liabilities 371,898 (268,895) Increase (decrease) in deferred revenue - obligatory reserve funds 51,164 69,739 (709,304) (337,635) - 15 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2011 15. SEGMENTED INFORMATION The Municipality of Bayham is a diversified municipal government institution that provides a wide range of services to its citizens, including fire, roads, sewer and water. For management reporting purposes the Government's operations and activities are organized and reported by Fund. Funds were created for the purpose of recording specific activities to attain certain objectives in accordance with special regulations, restrictions or limitations. Municipal services are provided by departments and their activities are reported in these funds. Certain departments that have been separately disclosed in the segmented information, along with the services they provided, are as follows. Public Works The Public Works department is responsible for the delivery of municipal public works services related to the planning, development and maintenance of roadway systems, the maintenance of parking and open space, and street lighting. The Water and Waste Funds The water and wastewater department provides drinking water to citizens of the municipality, as well as, collection and treatment of wastewater. This department is responsible for the operation and maintenance of both systems in accordance with government regulations under the Safe Drinking Water Act and other pieces of legislation. Other funds and Corporation This segment includes the remaining departments and activities of the Corporation. Some of the larger activities in this segment include general government, fire, police, public health services, recreation and cultural services, planning and development and solid waste collection and disposal. For each reported segment, revenues and expenses represent both amounts that are directly attributable to the segment and amounts that are allocated on a reasonable basis. Therefore, certain allocation methodologies are employed in the preparation of segmented financial information. The General Revenue Fund reports on municipal services that are funded primarily by taxation such as property and business tax revenues. Taxation and payments-in-lieu of taxes are apportioned to General Revenue Fund services based on the Fund's net surplus. Certain government transfers, transfer from other funds, and other revenues have been apportioned based on a percentage of budgeted expenses. The accounting policies used in these segments are consistent with those followed in the preparation of the consolidated financial statements as disclosed in Note 1. For additional information see the Consolidated Schedule of Segment Disclosure and Schedule of Segment Disclosure. - 16 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Schedule of Segment Disclosure Year Ended December 31, 2011 Water and Other Funds & Total Waste Funds Roads Corporation Consolidated $ $ $ $ REVENUE Taxation - 1,362,705 1,758,507 3,121,212 Sales of service and regulatory fees 1,343,089 34,298 304,524 1,681,911 Government transfer 155,418 695,517 1,554,887 2,405,822 Other 595.166 - 555,426 1,150,592 2,093.673 2,092,520 4.173,344 8,359,537 EXPENSES Salaries, wages and employee benefits 320,103 582,044 945,472 1,847,619 Long-term debt interest 23,432 - 595 24,027 Materials 690,194 1,314,939 695,780 2,700,913 Contracted services 5,049 29,425 1,289,764 1,324,238 Amortization 398,287 701,758 126,254 1,226,299 Loss on disposal and transfer of assets 374,213 16,683 - 390,896 Transfer to others - - 44,347 44,347 1.811,278 2,644,849 3.102,212 7,558,339 ANNUAL SURPLUS 282,395 (552,329) 1,071,132 801,198 - 17 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Schedule of Segment Disclosure Year Ended December 31, 2010 Water and Other Funds & Total Waste Funds Roads Corporation Consolidated $ $ $ $ REVENUE Taxation - 687,914 2,180,882 2,868,796 Sales of service and regulatory fees 1,143,198 4,699 331,544 1,479,441 Government transfer 64,636 540,325 2,428,641 3,033,602 Other 254,391 - 225,570 479,961 1,462,225 1.232,938 5,166,637 7,861,800 EXPENSES Salaries, wages and employee benefits - 547,835 924,986 1,472,821 Long-term debt interest 32,316 - 966 33,282 Materials 941,127 945,961 885,861 2,772,949 Contracted services 31,145 25,716 1,248,778 1,305,639 Amortization 376,983 609,600 115,655 1,102,238 Transfer to others - - 43,218 43,218 1,381.571 2,129.112 3,219.464 6,730,147 ANNUAL SURPLUS (DEFICIT) 80,654 (896,174) 1.947,173 1,131,653 - 18 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Schedule of Segment Disclosure Year Ended December 31, 2011 Unaudited Budget Actual Actual WATER AND WASTE WATER 2011 2011 2010 $ $ $ Revenue Sales of services and regulatory fees 1,169,248 1,343,089 1,143,198 Government transfers 155,398 155,418 64,636 Benefiting land owners 206,397 579,332 240,397 Other 27,474 15,834 13,994 Total Revenues 1,558,517 2,093,673 1,462,225 Expenses Salaries, wages and employees benefits 281,566 320,103 - Long-term debt interest 16,252 23,432 32,316 Materials 998,934 690,194 941,127 Contracted services, rents and financial expenses 21,516 5,049 31,145 Amortization - 398,287 376,983 Loss on transfer of asset by Secondary Water Board - 374,213 - Total Expenditures 1,318,268 1,811,278 1,381,571 Annual Surplus (Deficit) 240,249 282,395 80,654 Unaudited Budget Actual Actual ROADS 2011 2011 2010 $ $ $ Revenue Taxation 1,362,705 1,362,705 687,914 Sales of services and regulatory fees - 34,298 4,699 Government transfers 641,303 695,517 540,325 Total Revenues 2,004,008 2,092,520 1,232,938 Expenses Salaries, wages and employees benefits 666,235 582,044 547,835 Materials 1,305,273 1,314,939 945,961 Contracted services and rents 32,500 29,425 25,716 Amortization - 701,758 609,600 Loss on disposal - 16,683 - Total Expenditures 2,004,008 2,644,849 2,129,112 Annual(Deficit) Surplus - (552,329) (896,174) - 19 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Schedule of Tangible Capital Assets Year Ended December 31, 2011 Opening Ending Opening Ending Ending Historical Historical Accumulated Accumulated Net Cost Cost Amortization Amortization Book Balance 2011 2011 2011 Balance Balance 2011 2011 2011 Balance Value Jan 1/2011 Acquisitions Disposals Write-Offs Dec 31/2011 Jan 1/2011 Disposals Amortization Write-Offs Dec 31/2011 Dec 31/2011 ASSET TYPE Infrastructure Related Land 187,256 - - - 187,256 - - - - - 187,256 Buildings/Building Improvements 5,718,370 8,958 - - 5,727,328 1,501,180 - 135,046 - 1,636,226 4,091,102 Machinery and Equipment 2,315,613 335,634 61,196 - 2,590,051 1,174,428 24,513 138,488 - 1,288,403 1,301,648 Linear-Roadways 38,215,205 349,442 - - 38,564,647 10,210,037 - 584,244 - 10,794,281 27,770,366 Linear-Sewer and Water Services 20,778,003 - 584,513 - 20,193,490 3,395,903 210,301 219,908 - 3,405,510 16,787,980 Infrastructure Related Total 67,214,447 694,034 645,709 - 67,262,772 16,281,548 234,814 1,077,686 - 17,124,420 50,138,352 General Capital Land 916,444 - - - 916,444 - - - - - 916,444 Land Improvements 566,016 425,689 - - 991,705 327,850 - 17,888 - 345,738 645,967 Building/Building Improvements 2,344,355 - - - 2,344,355 1,356,174 - 30,526 - 1,386,700 957,655 Machinery and Equipment 750,044 76,324 - - 826,368 162,300 - 38,406 - 200,706 625,662 Vehicle 1.363,946 - - - 1,363.946 465,722 - 61,797 - 527.519 836,427 General Capital Total 5,940,805 502,013 - - 6,442,818 2,312,046 - 148,617 - 2,460,663 3,982,155 Total Capital Assets Sub-Total 73,155,252 1,196,047 645,709 - 73,705,590 18,593,594 234,814 1,226,303 - 19,585,083 54,120,507 Work In Progress 221,639 638.516 198,190 - 661,965 - - - - - 661.965 Total Tangible Capital Assets 73,376,891 1,834,563 843,899 - 74,367,555 18,593,594 234,814 1,226,303 - 19,585,083 54,782,472 -20 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Schedule of Tangible Capital Assets Year-ended December 31, 2010 Opening Ending Opening Ending Ending Historical Historical Accumulated Accumulated Net Cost Cost Amortization Amortization Book Balance 2010 2010 2010 Balance Balance 2010 2010 2010 Balance Value Jan 1/2010 Acquisitions Disposals Write-Offs Dec 31/2010 Jan 1/2010 Disposals Amortization Write-Offs Dec 31/2010 Dec 31/2010 ASSET TYPE Infrastructure Related Land 187,256 - - - 187,256 - - - - - 187,256 Buildings/Building Improvements 5,139,811 578,559 - - 5,718,370 1,358,850 - 142,330 - 1,501,180 4,217,190 Machinery and Equipment 2,221,356 102,993 8,736 - 2,315,613 1,038,969 7,202 142,661 - 1,174,428 1,141,185 Linear-Roadways 37,941,133 274,072 - - 38,215,205 9,707,723 - 502,314 - 10,210,037 28,005,168 Linear-Seward and Water Services 19,808,988 969,015 - - 20,778,003 3,196,624 - 199,279 - 3,395,903 17,382,100 Infrastructure Related Total 65,298,544 1,924,639 8,736 - 67,214,447 15,302,166 7,202 986,584 - 16,281,548 50,932,899 General Capital Land 916,444 - - - 916,444 - - - - - 916,444 Land Improvements 566,016 - - - 566,016 315,138 - 12,712 - 327,850 238,166 Buildings/Building Improvements 2,344,355 - - - 2,344,355 1,328,278 - 27,896 - 1,356,174 988,181 Machinery and Equipment 396,211 353,833 - - 750,044 137,203 - 25,097 - 162,300 587,744 Vehicle 1,276,446 87,500 - - 1,363,946 415,773 - 49,949 - 465,722 898,224 General Capital Total _5,499,472 441,333 - - 5,940,805 2,196,392 - 115,654 - 2,312,046 3,628,759 Total Capital Assets Sub-Total 70,798,016 2,365,972 8,736 - 73,155,252 17,498,558 7,202 1,102,238 - 18,593,594 54,561,658 Work lnProgress 718,322 49,928 546,611 - 221,639 - - - - - 221,639 Total Tangible Capital Assets 71,516,338 2,415,900 555,347 - 73,376,891 17,498,558 7,202 1,102,238 - 18,593,594 54,783,297 -21 -