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HomeMy WebLinkAboutFinancial Statements 2007 THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Financial Statements December 31, 2007 THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Financial Statements Year Ended December 31, 2007 Table of Contents PAGE Auditors' Report 1 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 G R A H A M William A.Graham* SCOTT John Scott' R. Alan R.Enns` !P- EN V N A cSL L P Michael S.Stover* Robert B.Foster* •CHARTERED ACCOUNTANTS Betty A.Gropp lames G.Frederick* Phone:(519)633-0700 Fax:(519)633-7009 450 Sunset Drive,St.Thomas,ON NSR 5V1 'Practicing through a professional corporation. 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, 2007 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, 2007 and the results of its operations and changes in financial position for the year then ended in accordance with Canadian generally accepted accounting principles. St. Thomas, Ontario 9itaitam S'e tt goad ZIP March 14, 2008 CHARTERED ACCOUNTANTS Licensed Public Accountants - 1 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Statement of Financial Position As At December 31, 2007 2007 2006 $ $ ASSETS Financial Assets Cash and short term deposits 2,847,181 1,915,863 Taxes receivable 551,228 604,982 Accounts receivable 409,813 382,668 Other current assets 24,892 27,284 TOTAL ASSETS 3,833,114 2,930,797 LIABILITIES Liabilities Deferred revenue - obligatory reserve funds (note 7) 169,410 208,492 Accounts payable and accrued liabilities 497,679 340,878 Net long-term liabilities (note 4) 875,502 1,042,835 1,542,591 1,592,205 MUNICIPAL POSITION FUND BALANCES (NOTE 5) Current fund(page 11) 52,728 (22,500) Capital fund (page 12) 550,760 53,583 Reserves (page 13) 1,957,987 1,838,922 Reserve funds (page 13) 604,550 511,422 3,166,025 2,381,427 AMOUNTS TO BE RECOVERED From future revenues (875,502) (1,042,835) TOTAL MUNICIPAL POSITION 2,290,523 1,338,592 TOTAL LIABILITIES AND MUNICIPAL POSITION 3,833,114 2,930,797 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, 2007 2007 2006 $ $ REVENUES Property taxation 2,460,937 2,304,826 Taxation from other governments 47,910 45,992 User charges 1,362,275 1,095,548 Government grants 2,380,876 1,975,134 Contribution from developers 48,038 - Investment income 98,702 67,316 Penalties and interest on taxes 69,840 70,737 Recoveries from benefiting landowners 272,171 232,497 Other 66,926 7,629 Total Revenues 6,807,675 5,799,679 EXPENDITURES Current General government 586,747 551,651 Protection to persons and property 1,085,479 1,014,586 Transportation services 1,215,040 1,077,870 Environmental services 1,194,293 1,114,066 Health services 88,146 49,114 Social and family services 6,702 7,650 Recreation and cultural services 261,534 266,578 Planning and development 180,097 240,047 Total current expenditures 4,618,038 4,321,562 Capital General government 42,312 8,830 Protection to persons and property 76,111 62,706 Transportation services 779,364 736,618 Environmental services 47,489 81,086 Health services 3,157 7,042 Recreation and cultural services 228,877 141,296 Planning and development 60,396. - Total capital expenditures 1,237,706 1,037,578 Total Expenditures 5,855,744 5,359,140 NET REVENUES/(EXPENDITURES) 951,931 440,539 Decrease in amounts to be recovered (167,333) (157,329) CHANGE IN FUND BALANCES 784,598 283,210 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, 2007 2007 2006 $ $ OPERATIONS Net revenues 951,931 440,539 Uses: Increase in taxes receivable - (60,208) Increase in accounts receivable (27,145) (54,396) Decrease in accounts payable and accrued liabilities - (99,670) Decrease in deferred revenue - obligatory reserve funds (39,082) - (66,227) (214,274) Sources: Decrease in taxes receivable 53,754 - Decrease in other current assets 2,392 69 Increase in accounts payable and accrued liabilities 156,801 - Increase in deferred revenue - obligatory reserve funds - 85,281 212,947 85,350 Net change in cash from operations 1,098,651 311,615 FINANCING Long-term debt repayment (167,333) (157.329) Net change in cash from financing (167,333) (157.329) NET CHANGE IN CASH AND CASH EQUIVALENTS 931,318 154,286 OPENING CASH AND CASH EQUIVALENTS 1,915,863 1,761,577 CLOSING CASH AND CASH EQUIVALENTS 2,847,181 1,915,863 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, 2007 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 Port Burwell Secondary Water System 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, 2007 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 $96,498 in the current year (2006 - $87,974) to the Elgin Area Primary Water Board. The Municipality is contingently liable 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. - 6 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2007 3. OPERATION OF SCHOOL BOARDS AND THE COUNTY OF ELGIN During 2007, 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 1,388,433 2,149,631 Share of payments in lieu of taxes - 20,648 Amounts requisitioned 1.388.4332,170,279 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: 2007 2006 $ $ Total long-term liabilities incurred by the municipality, including those incurred on behalf of benefiting landowner 875,502 1,042,835 Principal repayments are summarized as follows: 2008 2009 2010 2011 2012 Beyond Total Recoverable From $ $ $ $ $ $ $ General tax revenue - - - - - -Benefiting landowners 177,197 184,386 196,162 208,689 109,068 - 875,502 177,197 184,386 196,162 208,689 109,068 - 875,502 - 7 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2007 4. NET LONG-TERM 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 2007 amounted to $63,180 (2006 - $73,047) 5. MUNICIPAL FUND BALANCES AT THE END OF THE YEAR The Municipality's fund balances are comprised of the following: 2007 2006 $ $ For general reduction of taxation: Municipality 72,294 11,280 Cemetery boards 90,236 76,398 Benefiting landowners (109,802) (110,178) 52,728 (22,500) For acquisition of fixed assets 550,760 53,583 Reserves 1,957,987 1,838,922 Reserve funds 604,550 511,422 3,166,025 2,381,427 6. TRUST FUNDS Trust funds administered by the municipality amounting to $225,879 (2006 - $198,963) have not been included in the Consolidated Balance Sheet nor have their operations been included in the Consolidated Statement of Operations. - 8 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2007 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: 2007 2006 $ $ Development Charges 11,229 10,646 Gasoline tax 108,141 124,308 Parkland 50.040 73,538 169.410 208,492 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, 2007 indicates the following: Outstanding Contractual Accumulated 2007 Debt Long-term Obligation Surplus Charges Liabilities Primary Water Supply System City of London 106,983 7,022 58.015 The operating surplus and long-term liabilities indicated above are not reflected in the accompanying financial statements. - 9 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2007 9. BUDGET FIGURES The Council of the Municipality of Bayham completes separate budget reviews for its operating and capital funds each year. The approved 2007 operating and capital budgets are reflected on the respective schedules of operations. Funding for the capital projects is made by transfers from reserve and operating funds, application of associated grants, and the use of other funds available to apply to capital projects. During 2007, Council approved transfers totaling $740,573 (2006 - $138,080) from reserve and 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 for the current year only. 10. PUBLIC SECTOR SALARY DISCLOSURE In 2007, 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. 11. NEW ACCOUNTING PRONOUNCEMENTS Recent accounting pronouncements with regard to Section 3150 of the Public Sector Accounting Board Handbook which requires governments to record and amortize their tangible capital assets on their financial statements must be implemented by the Municipality for the fiscal year ending December 31, 2009. In addition, revenue from contributed assets and government grants and transfers relating to capital acquisitions will be included in income. The Municipality has currently finished compiling listings of all tangible assets. At this time approximately fifty percent of historical costs and cumulative amortization values have been established but no asset category has been finished to completion. The Municipality has drafted proposed policies for capitalization and amortization and identified the software package they will be utilizing to track and amortized their tangible assets in future years. - 10 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Schedule of Current Fund Operations Year Ended December 31, 2007 Unaudited Budget 2007 2007 2006 $ $ $ REVENUES Property taxation 2,396,694 2,460,937 2,304,826 Taxation from other governments 47,910 47,910 45,992 User charges 1,308,863 1,306,545 1,033,149 Government grants 1,679,389 1,780,143 1,635,501 Investment income 31,782 85,024 64,784 Penalties and interest on taxes 67,000 69,840 70,737 Recoveries from benefiting landowners 226,380 249,314 228,571 Other 1,000 3,908 3,176 Total Revenues 5,759,018 6,003,621 5,386,736 EXPENDITURES General government 538,627 586,747 551,651 Protection to persons and property 1,101,490 1,085,479 1,014,586 Transportation services 1,208,967 1,215,040 1,077,870 Environmental services 1,198,108 1,194,293 1,114,066 Health services 67,770 88,146 49,114 Social and family services 7,700 6,702 7,650 Recreation and cultural services 294,796 261,534 266,578 Planning and development 178,948 180,097 240 047 Total Expenditures 4,596,406 4,618,038 4,321,562 NET REVENUES/(EXPENDITURES) 1,162,612 1,385,583 1,065,174 FINANCING AND TRANSFERS Transfers to reserves and reserve funds (232,206) (355,596) (344,835) Transfers to capital fund (740,573) (787,426) (724,138) Debt principal repayment (167,333) (167,333) (157,329) Net financing and transfers (1,140,112) (1,310,355) (1,226,302) CHANGE IN CURRENT FUND BALANCE 22,500 75,228 (161,128) OPENING CURRENT FUND BALANCE (22,500) (22,500) 138,628 CLOSING CURRENT FUND BALANCE - 52,728 (22,500) - 11 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Schedule of Capital Fund Operations Year Ended December 31, 2007 Unaudited Budget 2007 2007 2006 $ $ $ REVENUES Government grants 609,950 600,733 339,633 Contribution from developers 11,980 16,498 - Sale of assets 59,328 63,018 4,453 Benefiting landowners 18,219 22,857 3,926 Other 53,500 55,730 62,399 Total Revenues 752,977 758,836 410,411 EXPENDITURES General government 80,702 42,312 8,830 Protection to persons and property 145,950 76,111 62,706 Transportation services 940,546 779,364 736,618 Environmental services 629,401 47,489 81,086 Health services 5,000 3,157 7,042 Recreation and cultural services 136,700 228,877 141,296 Planning and development 307,766 60,396 - Total Expenditures 2,246,065 1,237,706 1,037,578 NET REVENUES/(EXPENDITURES) (1,493,088) (478,870) (627,167) FINANCING AND TRANSFERS Net transfers from (to) reserves and reserve funds 586,291 188,621 (89,418) Transfers from operating fund 740,573 787,426 724,138 Net financing and transfers 1,326,864 976,047 634,720 CHANGE IN CAPITAL FUND BALANCE (166,224) 497,177 7,553 OPENING CAPITAL FUND BALANCE 53,583 53,583 46,030 CLOSING CAPITAL FUND BALANCE (112,641) 550,760 53,583 - 12 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Schedule of Reserves and Reserve Funds Year Ended December 31, 2007 2007 2006 $ $ REVENUES Contribution from developers 31,540 - Investment income 13,678 2,532 Net revenues 45,218 2,532 FINANCING AND TRANSFERS Net transfers from (to) capital fund (188,621) 89,418 Net transfers from (to) current fund 355,596 344,835 Net transfers 166,975 434,253 CHANGE IN RESERVE AND RESERVE FUND BALANCES 212,193 436,785 OPENING RESERVE AND RESERVE FUND BALANCE 2,350,344 1,913,559 CLOSING RESERVE AND RESERVE FUND BALANCE 2,562,537 2,350,344 ANALYZED AS FOLLOWS: Reserves set aside for specific purposes by Council: - for working capital 374,153 364,153 - for capital purposes 551,201 545,009 - for waterworks purposes (7,256) (58,950) - for rate stabilization 611,670 611,670 - for other purposes 428,219 377,040 Total reserves 1,957,987 1,838,922 Reserve funds set aside for specific purposes by Council: - for construction of sanitary sewers 530,314 429,878 - for recreation and cultural service purposes 67,539 75,123 - for other purposes 6,697 6,421 Total reserve funds 604,550 511,422 TOTAL RESERVES AND RESERVE FUNDS 2,562,537 2,350,344 - 13 -