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HomeMy WebLinkAboutFinancial Statements - 2024THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Financial Statements December 31, 2024 THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Financial Statements Year Ended December 31, 2024 Table of Contents PAGE Management Responsibility for Financial Reporting 1 Independent Auditors' Report 2 - 3 Consolidated Statement of Financial Position 4 Consolidated Statement of Operations and Accumulated Surplus 5 Consolidated Statement of Changes in Net Financial Assets 6 Consolidated Statement of Remeasurement Gains and Losses 7 Consolidated Statement of Cash Flows 8 Notes to the Consolidated Financial Statements 9 - 25 Consolidated Schedule of Segment Disclosure 26 - 27 MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING The accompanying consolidated financial statements are the responsibility of the management of The Corporation of the Municipality of Bayham and have been prepared in accordance with Canadian public sector accounting standards. These consolidated financial statements include: Independent Auditors' report Consolidated Statement of Financial Position Consolidated Statement of Operations and Accumulated Surplus Consolidated Statement of Change in Net Financial Assets Consolidated Statement of Remeasurement Gains and Losses Consolidated Statement of Cash Flows Notes to the Consolidated Financial Statements Consolidated Schedule of Segment Disclosure The Chief Administrative Officer and the Treasurer are responsible for ensuring that management fulfills its responsibility for financial reporting and is ultimately responsible for reviewing the consolidated financial statements before they are submitted to Council for approval. The integrity and reliability of The Corporation of the Municipality of Bayham reporting systems are achieved through the use of formal policies and procedures, the careful selection of employees and an appropriate division of responsibilities. These systems are designed to provide reasonable assurance that the financial information is reliable and accurate. The consolidated financial statements have been audited on behalf of the Members of Council, Inhabitants and Ratepayers of The Corporation of the Municipality of Bayham by Graham Scott Enns LLP in accordance with Canadian generally accepted auditing standards. ______________________________________________________________ Mr. Thomas Thayer Mr. Lorne James Chief Administrative Officer Treasurer Straffordville, Ontario June 5, 2025 - 1 - INDEPENDENT AUDITORS' REPORT To the Members of Council, Inhabitants and Ratepayers of The Corporation of the Municipality of Bayham: Opinion We have audited the consolidated financial statements of The Corporation of the Municipality of Bayham, which comprise the consolidated statement of financial position as at December 31, 2024, and the consolidated statement of operations and accumulated surplus, consolidated statement of changes in net financial assets, consolidated statement of remeasurement gains and losses, and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies. In our opinion, the Municipality's consolidated financial statements present fairly, in all material respects, the financial position of the Municipality as at December 31, 2024, and the results of its operations and its cash flows for the year then ended in accordance with Canadian public sector accounting standards. Basis for Opinion We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Municipality in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of the 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. In preparing the consolidated financial statements, management is responsible for assessing the Municipality's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Municipality or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Municipality's financial reporting process. Auditors' Responsibilities for the Audit of the Consolidated Financial Statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. - 2 - INDEPENDENT AUDITORS' REPORT (CONTINUED) Auditors' Responsibilities for the Audit of the Consolidated Financial Statements (Continued) As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit 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 Municipality's internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Municipality's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Municipality to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. St. Thomas, Ontario Graham Scott Enns LLP June 5, 2025 CHARTERED PROFESSIONAL ACCOUNTANTS Licensed Public Accountants - 3 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Statement of Financial Position As At December 31, 2024 2024 2023 $ $ ASSETS FINANCIAL ASSETS Cash 4,643,942 2,509,920 Investments (Note 3)8,453,961 7,742,341 Taxes receivable (Note 4)1,043,138 777,390 Accounts receivable (Note 5)940,460 921,149 15,081,501 11,950,800 LIABILITIES Deferred revenue - obligatory reserve funds (Note 10)1,006,773 589,358 Accounts payable and accrued liabilities 721,419 833,040 Security and grading deposits 1,248,546 790,347 Net long-term liabilities (Note 7) 4,159,831 4,387,672 7,136,569 6,600,417 NET FINANCIAL ASSETS 7,944,932 5,350,383 NON-FINANCIAL ASSETS Tangible capital assets (Note 6)59,861,381 59,796,812 Prepaid expenses and inventory 85,926 94,576 59,947,307 59,891,388 ACCUMULATED SURPLUS (NOTE 8)67,892,239 65,241,771 ACCUMULATED REMEASUREMENT GAINS AND LOSSES (PAGE 7)-- 67,892,239 65,241,771 See accompanying notes to the consolidated financial statements. - 4 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Statement of Operations and Accumulated Surplus Year Ended December 31, 2024 Budget Actual Actual (Note 12)2024 2023 $ $ $ REVENUES Property taxation 6,127,609 6,283,948 5,559,083 Taxation from other governments 208,746 208,746 189,263 User charges 3,174,314 3,507,817 2,994,791 Transfer payments Federal 1,854,600 216,258 1,320,761 Provincial 1,492,120 1,723,156 1,712,301 Other municipalities 525,196 534,852 524,688 Investment income 307,806 719,080 469,283 Penalties and interest on taxes 80,000 87,558 81,977 Recoveries from benefiting landowners 195,242 172,802 89,185 Other 70,789 86,148 78,203 Gain (loss) on disposal of investments --(460,283) Total Revenues 14,036,422 13,540,365 12,559,252 EXPENSES General government 1,327,666 1,394,763 1,357,818 Protection to persons and property 2,038,597 2,124,777 1,981,182 Transportation services 3,157,680 3,373,746 3,494,155 Environmental services 3,214,344 3,160,526 3,074,329 Health services 51,711 40,010 56,465 Social and family services 7,000 6,999 5,300 Recreation and cultural services 412,914 393,369 384,626 Planning and development 322,252 399,373 292,218 Loss (gain) on disposal of tangible capital assets -(3,666)3,877 Total Expenses (Note 16)10,532,164 10,889,897 10,649,970 ANNUAL SURPLUS 3,504,258 2,650,468 1,909,282 ACCUMULATED SURPLUS, BEGINNING OF YEAR 65,241,771 65,241,771 63,332,489 ACCUMULATED SURPLUS, END OF YEAR (NOTE 8)68,746,029 67,892,239 65,241,771 See accompanying notes to the consolidated financial statements. - 5 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Statement of Changes in Net Financial Assets Year Ended December 31, 2024 Budget Actual Actual (Note 12)2024 2023 $ $ $ ANNUAL SURPLUS 3,504,258 2,650,468 1,909,282 Acquisition of tangible capital assets (2,133,065)(2,133,065)(3,109,018) Amortization of tangible capital assets 2,068,162 2,068,162 1,986,559 Proceeds on disposal of tangible capital assets -4,000 11,963 Change in prepaid expenses and inventory -8,650 49,036 Loss (gain) on disposal of tangible capital assets -(3,666)3,877 CHANGE IN NET FINANCIAL ASSETS 3,439,355 2,594,549 851,699 NET FINANCIAL ASSETS, BEGINNING OF YEAR 5,350,383 5,350,383 4,498,684 NET FINANCIAL ASSETS, END OF YEAR 8,789,738 7,944,932 5,350,383 See accompanying notes to the consolidated financial statements. - 6 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Statement of Remeasurement Gains and Losses Year Ended December 31, 2024 2024 2023 $ $ ACCUMULATED REMEASUREMENT GAINS AND (LOSSES), BEGINNING OF YEAR -(482,154) Unrealized gains attributable to investments -21,871 Amounts reclassified to statement of operations through realization of (gain) loss on sale -460,283 Change in accumulated remeasurement gains -482,154 ACCUMULATED REMEASUREMENT GAINS AND (LOSSES), END OF YEAR -- See accompanying notes to the consolidated financial statements. - 7 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Statement of Cash Flows Year Ended December 31, 2024 2024 2023 $ $ OPERATING ACTIVITIES Annual surplus 2,650,468 1,909,282 Add (deduct) items not involving cash: Amortization of tangible capital assets 2,068,162 1,986,559 Loss on disposal of investments -460,283 Loss (gain) on disposal of tangible capital assets (3,666)3,877 4,714,964 4,360,001 Change in non-cash items related to operations (Note 16[b]) 487,584 223,298 5,202,548 4,583,299 CAPITAL Acquisition of tangible capital assets (2,133,065)(3,109,018) Proceeds on disposal of tangible capital assets 4,000 11,963 (2,129,065)(3,097,055) INVESTING Purchase of investments (1,000,000)(7,029,928) Redemption of investments 818,327 5,349,929 Investment income reinvested (529,947)(256,253) (711,620)(1,936,252) FINANCING Long-term debt repayment (227,841)(222,144) NET CHANGE IN CASH 2,134,022 (672,152) CASH, BEGINNING OF THE YEAR 2,509,920 3,182,072 CASH, END OF THE YEAR 4,643,942 2,509,920 See accompanying notes to the consolidated financial statements. - 8 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2024 The Corporation of the Municipality of Bayham (the "Municipality") 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.CHANGE IN ACCOUNTING POLICIES On January 1, 2024 Municipality adopted accounting policies to conform to new standards issued under Canadian public sector accounting standards. The Municipality adopted the following standards which had the following impact: PS 3400 - Revenue - These standard may impact the timing of the revenue reported by the Municipality. There is no impact on the Municipality's financial reporting as a result of the adoption of this standard.  2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The consolidated financial statements of the Municipality are prepared by management in accordance with Canadian public sector accounting standards. 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 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. - 9 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2024 2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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. 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. Investments Investment income consists of interest, dividends and realized gains or losses on sale of investments is recognized as revenue in the period when it is earned. Unrealized gains and losses on investments are recognized in the accumulated remeasurement gains and losses until settlement. Once realized, these gains and losses are recognized as revenue or expenses in the consolidated statement of operations. 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. Financial Instruments The Municipality, upon initial recognition, classifies it's financial instruments into two categories: i.fair value or; ii.cost or amortized cost; Long-term debt is initially recorded at fair value and subsequently measured at amortized cost using the effective interest rate method. Transaction costs related to the issuance of long-term debt are capitalized and amortized over the term of the debt. - 10 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2024 2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Financial Instruments (continued) Other financial instruments including cash, accounts receivable, accounts payable and accrued liabilities are initially measured at fair value and subsequently measured at cost. Investments are initially recorded at fair value and subsequently measured at fair value with the fair value determined as follows: i.Level 1 - Fair value measurements are those derived from quoted prices (in active markets); ii.Level 2 - Fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the assets, either directly (i.e. as prices) or indirectly (i.e. derived from prices); iii.Level 3 - Fair value measurements are those derived from valuation techniques that include inputs for the asset that are not based on observable data (unobservable inputs). Unrealized gains and losses from changes in the fair value of financial instruments are recognized in the statement of remeasurement gains and losses. All financial assets are tested annually for impairment. When financial assets are impaired, impairment losses are recorded in the statement of operations. Use of Estimates The preparation of consolidated 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 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 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 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. - 11 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2024 2.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 consolidated financial statements. iv) Interest capitalization The Municipality does not capitalize interest costs associated with the acquisition or construction of a tangible capital asset. vi) Inventories of supplies Inventories of supplies held for consumption are recorded at the lower of cost and replacement cost. - 12 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2024 2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Tax Revenues In 2024, the Municipality received $6,492,694 (2023 - $5,748,346) 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. The fund is a contributory defined benefit pension plan. As this is a multi- employer plan, no liability is recorded in the Municipality's consolidated financial statements. The employers contribution to a multi-employer defined benefit plan are expensed as the obligations arise. Environmental Provisions and Contaminated Sites The Municipality may be exposed to litigation or other costs of remediation due to contaminated properties in it's jurisdiction. A liability for remediation is recognized in the financial statements when an environmental standard exists, contamination exceeds the standard, the government is responsible for the remediation and a reasonable estimate of the liability can be made. As at December 31, 2024 there were no properties that the Municipality was responsible to remedy and as such no liability has been accrued. - 13 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2024 2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Related Party Transactions Related parties exist when one party has the ability to control or has shared control over another party. Individuals that are key management personnel or close family members may also be related parties. Disclosure is made when the transaction or events between related parties occur at a value different from what would have been recorded if they were not related and the transaction could have a material financial impact on the consolidated financial statements. Inter-Entity Transactions Transactions between related parties are recorded at carrying amounts with the exception of the following: i.Transactions in the normal course of business or with fair consideration are recorded at exchange amount; ii.Transfer of an asset or liability at nominal amounts or no consideration are recorded by the provider at carrying amounts and the recipient has the choice of either carrying amount or fair value; iii.Cost allocations are reported using the exchange amounts and revenues and expenses are reported on a gross basis; iv.Unallocated costs for the provision of goods or services maybe recorded by the provider at cost, fair value or another amount dictated by policy, accountability structure or budget practice. Asset Retirement Obligations The Municipality may be exposed to obligations of remediation associated with their tangible capital assets. If a legal obligation exists of remediation for a tangible capital asset then the Municipality would be required to set up an estimated future cost and liability associated with these obligations. As at December 31, 2024 there were no tangible capital assets that Municipality has controlled, constructed, owned or used that would have a legal obligation of remediation. - 14 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2024 3.INVESTMENTS 2024 2023 $ $ $ $ Cost Market Cost Market Guaranteed investment certificates 8,453,961 8,453,961 7,742,341 7,742,341 The investments consist of guaranteed investment certificates and cash which are recorded at their fair market value. The certificates mature between February 2025 and February 2026 and yi eld interest rates from 3.00% to 5.20%. Total interest earned on these investments was $529,547 (2023 - $375,793). All of the above investments are valued as Level 1 investments. 4.TAXES RECEIVABLE 2024 2023 $ $ Current taxes receivable 789,705 570,617 Arrears taxes receivable 166,845 135,417 Penalties and interest 86,588 71,356 1,043,138 777,390 5.ACCOUNTS RECEIVABLE 2024 2023 $ $ Accounts receivable 514,449 469,531 Government grants and funding 126,263 91,105 Debentures, interest at 2.97%, due 2034 170,941 189,349 Government remittances receivable 128,807 171,164 940,460 921,149 - 15 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2024 6.TANGIBLE CAPITAL ASSETS December 31, 2024 Disposals and Cost Opening Additions Adjustments Ending Infrastructure Linear - Roadways 47,013,882 1,280,378 -48,294,260 Linear - Water Services 11,599,565 155,468 (11,975)11,743,058 Linear - Waste Water Services 16,546,027 --16,546,027 Infrastructure Total 75,159,474 1,435,846 (11,975)76,583,345 General Land 1,063,805 --1,063,805 Land Improvements 2,066,098 15,356 -2,081,454 Buildings 11,885,433 154,695 -12,040,128 Machinery and Equipment 4,574,784 29,734 -4,604,518 Vehicles 2,810,280 588,283 (175,104)3,223,459 General Total 22,400,400 788,068 (175,104)23,013,364 Work in Progress 656,336 151,178 (242,027)565,487 Total Cost 98,216,210 2,375,092 (429,106)100,162,196 Accumulated Amortization Disposals and Opening Amortization Adjustments Ending Infrastructure Linear - Roadways 18,989,588 901,786 -19,891,374 Linear - Water Services 3,790,296 320,133 (11,641)4,098,788 Linear - Waste Water Services 4,124,683 202,279 -4,326,962 Infrastructure Total 26,904,567 1,424,198 (11,641)28,317,124 General Land Improvements 1,108,067 77,989 -1,186,056 Buildings 5,900,790 231,308 -6,132,098 Machinery and Equipment 2,381,270 123,490 -2,504,760 Vehicles 2,124,704 211,177 (175,104)2,160,777 General Total 11,514,831 643,964 (175,104)11,983,691 Total Accumulated Amortization 38,419,398 2,068,162 (186,745)40,300,815 Net Book Value Opening Ending Infrastructure Linear - Roadways 28,024,294 28,402,886 Linear - Water Services 7,809,269 7,644,270 Linear - Waste Water Services 12,421,344 12,219,065 48,254,907 48,266,221 General Land 1,063,805 1,063,805 Land Improvements 958,031 895,398 Buildings 5,984,643 5,908,030 Machinery and Equipment 2,193,514 2,099,758 Vehicles 685,576 1,062,682 10,885,569 11,029,673 Work in Progress 656,336 565,487 Total Net Book Value 59,796,812 59,861,381 - 16 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2024 6.TANGIBLE CAPITAL ASSETS (CONTINUED) December 31, 2023 Disposals and Cost Opening Additions Adjustments Ending Infrastructure Linear - Roadways 46,072,591 941,291 -47,013,882 Linear - Water Services 10,326,535 1,288,772 (15,742)11,599,565 Linear - Waste Water Services 16,546,027 --16,546,027 Infrastructure Total 72,945,153 2,230,063 (15,742)75,159,474 General Land 1,063,805 --1,063,805 Land Improvements 1,857,073 209,025 -2,066,098 Buildings 11,860,892 24,541 -11,885,433 Machinery and Equipment 4,495,686 103,463 (24,365)4,574,784 Vehicles 2,780,849 52,845 (23,414)2,810,280 General Total 22,058,305 389,874 (47,779)22,400,400 Work in Progress 167,255 490,653 (1,572)656,336 Total Cost 95,170,713 3,110,590 (65,093)98,216,210 Accumulated Amortization Disposals and Opening Amortization Adjustments Ending Infrastructure Linear - Roadways 18,131,271 858,317 -18,989,588 Linear - Water Services 3,546,334 259,704 (15,742)3,790,296 Linear - Waste Water Services 3,922,957 201,726 -4,124,683 Infrastructure Total 25,600,562 1,319,747 (15,742)26,904,567 General Land Improvements 1,040,735 67,332 -1,108,067 Buildings 5,649,867 250,923 -5,900,790 Machinery and Equipment 2,258,856 130,939 (8,525)2,381,270 Vehicles 1,930,500 217,618 (23,414)2,124,704 General Total 10,879,958 666,812 (31,939)11,514,831 Total Accumulated Amortization 36,480,520 1,986,559 (47,681)38,419,398 Net Book Value Opening Ending Infrastructure Linear - Roadways 27,941,320 28,024,294 Linear - Water Services 6,780,201 7,809,269 Linear - Waste Water Services 12,623,070 12,421,344 47,344,591 48,254,907 General Land 1,063,805 1,063,805 Land Improvements 816,338 958,031 Buildings 6,211,025 5,984,643 Machinery and Equipment 2,236,830 2,193,514 Vehicles 850,349 685,576 11,178,347 10,885,569 Work in Progress 167,255 656,336 Total Net Book Value 58,690,193 59,796,812 - 17 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2024 7.LONG-TERM LIABILITIES a)The balance of long-term liabilities reported on the Consolidated Statement of Financial Position is made up of the following: 2024 2023 $ $ TD loan, 2.71%, repayable in blended monthly payments of $27,557, due March 2025 (Project Ojibwa)4,128,631 4,343,940 Consolidated water board debt, interest rates ranging from 1.5% to 3.20%, maturing September 2020 to March 2027 31,200 43,732 4,159,831 4,387,672 Principal repayments are summarized as follows: Tax User Revenue Charges Total 2025 4,128,631 12,890 4,141,521 2026 -13,181 13,181 2027 -5,129 5,129 2028 --- Beyond --- Total 4,128,631 31,200 4,159,831 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 2024 amounted to $116,351 (2023 - $122,076). d)Subsequent to the year end, the TD loan was discharged at it's maturity date for it's remaining principal of $4,092,614. This was funded by the guarantorship reserve (debt reduction purposes), which was increased by $1,100,000 in the 2025 budget to fund the discharge of the long-term debt. - 18 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2024 8.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. 2024 2023 $ $ SURPLUS Municipality - current fund -- Cemetery boards - current fund 181,696 169,987 Benefiting landowners - current fund (121,423)(313,418) Invested in tangible capital assets - capital fund 59,861,381 59,796,812 Reserves 8,114,081 6,175,074 Reserve funds 4,016,335 3,800,988 72,052,070 69,629,443 AMOUNTS TO BE RECOVERED Net long-term debt (Note 7)(4,159,831)(4,387,672) ACCUMULATED SURPLUS 67,892,239 65,241,771 RESERVES AND RESERVE FUNDS CONSIST OF THE FOLLOWING: 2024 2023 $ $ Reserves set aside for specific purposes by Council: - for working capital 87,096 59,096 - for capital purposes 701,131 1,160,411 - for waterworks purposes 2,878,297 2,479,130 - for debt reduction purposes 2,976,532 1,400,000 - for other purposes 1,471,025 1,076,437 Total reserves 8,114,081 6,175,074 Reserve funds set aside for specific purposes by Council: - for water system - consolidated 224,020 192,095 - for sanitary sewers 3,488,426 3,305,883 - for recreation and cultural service purposes 303,889 303,010 Total reserve funds 4,016,335 3,800,988 - 19 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2024 9.TRUST FUNDS Trust funds administered by the Municipality amounting to $262,573 (2023 - $254,540) have not been included in the Consolidated Statement of Financial Position nor have their operations been included in the Consolidated Statement of Operations. 10. DEFERRED REVENUE - OBLIGATORY RESERVE FUNDS A requirement of the public sector accounting principles of the Canadian Institute of Chartered Professional 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: 2024 2023 $ $ Development charges - water and waste water 551,577 107,189 Canada Community Building Fund 281,503 252,406 OCIF -135,456 Parkland 173,693 94,307 1,006,773 589,358 11.PENSION AGREEMENTS The Municipality makes contributions to the Ontario Municipal Employees Retirement Fund (OMERS), which is a multi-employer plan, on behalf 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. Each year, an independent actuary determines the funding status of OMERS Primary Pension Plan (the Plan) by comparing the actuarial value of invested assets to the estimated present value of all pension benefits the members have earned to date. The most recent actuarial valuation of the Plan was conducted December 31, 2024, and the results of this valuation disclosed actuarial liabilities of $142.5 billion in respect of benefits accrued for service with actuarial assets at that date of $139.6 billion leaving an actuarial deficit of $2.9 billion. Since any surpluses or deficits are a joint responsibility of all Ontario municipalities and their employees, the Municipality does not recognize any share of the OMERS Pension surplus or deficit in these consolidated financial statements. The amount contributed to OMERS for 2024 was approximately $206,000 (2023 - $183,000). - 20 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2024 12.BUDGET FIGURES The operating budget approved by the council of the Municipality for 2024 is reflected on the consolidated statement of operations. Budget figures have been reclassified for the purposes of these financial statements to comply with PSAB reporting requirements. These adjustments include reserve transfers, capital expenditures, amortization and debt financing and repayment. Approved PSAB Budget Adjustments Budget $ $ $ REVENUES Property taxation 6,127,609 -6,127,609 Taxation from other governments 208,746 -208,746 User charges 2,344,697 829,617 3,174,314 Transfer payments: Federal 1,854,600 -1,854,600 Provincial 1,492,120 -1,492,120 Other municipalities 525,196 -525,196 Investment income 54,002 253,804 307,806 Penalties and interest on taxes 80,000 -80,000 Recoveries from benefiting landowners 50,255 144,987 195,242 Other 41,000 29,789 70,789 Capital reserve transfers 787,933 (787,933)- Total Revenues 13,566,158 470,264 14,036,422 EXPENSES General government 1,518,594 (190,928)1,327,666 Protection to persons and property 1,916,522 122,075 2,038,597 Transportation services 2,016,272 1,141,408 3,157,680 Environmental services 1,908,884 1,305,460 3,214,344 Health services 22,500 29,211 51,711 Social and family services 7,000 -7,000 Recreation and cultural services 290,530 122,384 412,914 Planning and development 290,298 31,954 322,252 Reserve transfers 363,558 (363,558)- Capital 5,232,000 (5,232,000)- Total Expenses 13,566,158 (3,033,994)10,532,164 BUDGETED ANNUAL SURPLUS -3,504,258 3,504,258 - 21 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2024 13.OPERATION OF SCHOOL BOARDS AND THE COUNTY OF ELGIN During 2024, 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 1,603,889 5,608,399 Share of payments in lieu of taxes 6,379 180,978 Amounts requisitioned 1,610,268 5,789,377 14. CONTINGENCIES As at December 31, 2024, certain legal actions are pending against the Municipality. The final outcome of the outstanding claims cannot be determined at this time. However, management believes that ultimate disposition of these matters will not materially exceed the amounts recorded in these consolidated financial statements. As at December 31, 2024, the Municipality also has a Writ of Seizure and Sale registered against the assets of the Elgin Military Museum. Although the Municipality expects no further recoveries from the assets of the Elgin Military Museum, the Municipality will ensure the Writ of Seizure and Sale is registered on title indefinitely. Estimated costs to settle claims are based on available information and projections of estimated future expenses developed based on the Municipality's historical experience. Claims are reported as an operating expense in the year of the loss, where the costs are deemed to be likely and can be reasonable determined. Claim provisions are reported as a liability in the consolidated statement of financial position. 15.FINANCIAL INSTRUMENTS .Risks and Concentrations The Municipality is exposed to various risks through its financial instruments. The following analysis provides a measure of the Municipality’s risk exposure and concentrations at the balance sheet date. Market Risk Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk. The Municipality is mainly exposed to interest and price risk. - 22 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2024 15.FINANCIAL INSTRUMENT RISKS (CONTINUED) Interest Rate Risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Municipality is exposed to interest rate risk on its fixed rate long-term debt. As the interest rates are fixed the Municipality doesn't believe that interest rate risk is a significant risk. Price Risk Price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market. The Municipality is exposed to price risk through its investments in quoted One Fund investments. These investments were redeemed in the prior year and price risk is no longer considered a significant risk. It is management's opinion that the Municipality is not exposed to significant currency risk. Liquidity Risk Liquidity risk is the risk that a Municipality will encounter difficulty in meeting obligations associated with financial liabilities. The Municipality is exposed to this risk mainly in respect of its accounts payable, accrued liabilities and long-term debt. The Municipality doesn't believe that liquidity risk is a significant risk. Credit Risk Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Municipality’s main credit risks relate to its accounts receivable and taxes receivable. The Municipality manages this risk by monitoring active receivable balances and forces tax sale on properties considered unrecoverable. At year end, the Municipality had approximately $188,173 (2023 - $200,967) in accounts receivable over 90 days of which the Municipality has deemed no allowance is necessary. The balances of taxes and utility receivables (water and sewer) are normally collectible from the property owner and the Municipality is able to force tax sale on properties to recover. In some instances the property owner may challenge property values which will in impact future recovery of taxes and potential repayments to the property owners. The Municipality actively monitors these assessment challenges and provides provisions when reasonable estimates can be made. At year end, the Municipality has provided an allowance of $nil (2023 - $nil) for these assessment challenges and $nil (2023 - $nil) in potential uncollectible tax assessments. - 23 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2024 16.SUPPLEMENTARY INFORMATION 2024 2023 $ $ [a] Current fund expenses by object: Salaries, wages and employees benefits 2,929,679 2,617,774 Long-term debt interest 116,351 122,076 Materials 3,321,396 3,491,877 Contracted services 2,352,228 2,322,739 Amortization 2,068,162 1,986,559 External transfers to others 105,747 105,068 Loss (gain) on disposal of tangible capital assets (3,666)3,877 10,889,897 10,649,970 [b] Cash flow information: Taxes receivable (265,748)(182,699) Accounts receivable (19,311)323,217 Inventories and prepaid expenses 8,650 49,036 Accounts payable and accrued liabilities (111,621)(43,451) Security and grading deposits 458,199 293,155 Deferred revenue-obligatory reserve funds 417,415 (215,960) 487,584 223,298 - 24 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2024 17.SEGMENTED INFORMATION The Municipality 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 sys tems, 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 segments This segment includes the remaining departments and activities of the Municipality. 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 2. For additional information see the Consolidated Schedule of Segment Disclosure and Schedule of Segment Disclosure. - 25 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Schedule of Segment Disclosure Year Ended December 31, 2024 Water and Public Other Total Waste Funds Works Segments Consolidated $ $ $ $ REVENUE Taxation -1,254,550 5,238,144 6,492,694 Sales of service and regulatory fees 2,672,275 115,591 719,951 3,507,817 Government transfer 76,320 523,592 1,874,354 2,474,266 Other 31,623 -1,033,965 1,065,588 2,780,218 1,893,733 8,866,414 13,540,365 EXPENSES Salaries, wages and employee benefits 538,726 850,770 1,540,183 2,929,679 Long-term debt interest 974 -115,377 116,351 Materials 911,190 1,356,957 1,053,249 3,321,396 Contracted services 589,789 24,612 1,737,827 2,352,228 Amortization 640,039 1,141,408 286,715 2,068,162 Loss (gain) on disposal of tangible capital assets 334 -(4,000)(3,666) Transfer to others --105,747 105,747 2,681,052 3,373,747 4,835,098 10,889,897 ANNUAL SURPLUS (DEFICIT)99,166 (1,480,014)4,031,316 2,650,468 - 26 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Schedule of Segment Disclosure Year Ended December 31, 2023 Water and Public Other Total Waste Funds Works Segments Consolidated $ $ $ $ REVENUE Taxation -1,413,084 4,335,261 5,748,345 Sales of service and regulatory fees 2,468,972 110,890 414,929 2,994,791 Government transfer -503,857 3,053,893 3,557,750 Other 52,168 -206,198 258,366 2,521,140 2,027,831 8,010,281 12,559,252 EXPENSES Salaries, wages and employee benefits 487,269 776,919 1,353,586 2,617,774 Long-term debt interest 1,267 -120,809 122,076 Materials 825,519 1,591,983 1,074,375 3,491,877 Contracted services 586,631 27,548 1,708,560 2,322,739 Amortization 597,996 1,097,705 290,858 1,986,559 Loss on disposal of tangible capital assets --3,877 3,877 Transfer to others --105,068 105,068 2,498,682 3,494,155 4,657,133 10,649,970 ANNUAL SURPLUS (DEFICIT)22,458 (1,466,324)3,353,148 1,909,282 - 27 -