HomeMy WebLinkAboutFinancial Statements 2014 THE CORPORATION OF THE
MUNICIPALITY OF BAYHAM
Consolidated Financial Statements
December 31, 2014
THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Consolidated Financial Statements
Year Ended December 31, 2014
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 - 19
Consolidated Schedule of Segment Disclosure 20 - 21
Schedule of Segment Disclosure 22
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GRAHAM SCOTT ENNS LLP
CHARTERED PROFESSIONAL ACCOUNTANTS
P.519-633-0700 • F.519-633-7009 P.519-773-9265 • E 519-773-9683
450 Sunset Drive,St.Thomas,ON N5R 5V1 25 John Street South,Aylmer,ON N5H 2C1
www.gra ha mscotten ns.cam
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, 2014, 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, 2014, 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, Ontario9)Z4/1404Scott Egad 44P
June 18, 2015 CHARTERED PROFESSIONAL ACCOUNTANTS
Licensed Public Accountants
- 1 -
THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Consolidated Statement of Financial Position
As At December 31, 2014
2014 2013
$ $
ASSETS
FINANCIAL ASSETS
Cash 2,085,005 2,024,942
Investments (Note 2) 3,175,840 3,089,815
Taxes receivable (Note 3) 584,459 821,585
Accounts receivable (Note 4) 1,404,314 789,573
7,249,618 6,725,915
LIABILITIES
Deferred revenue - obligatory reserve funds (Note 10) 221,650 147,662
Accounts payable and accrued liabilities 929,207 995,837
Accrued liabilities arising from loan guarantee (Note 13) 6,000,000
Net long-term liabilities (Note 6) 1,014,459 1,105,855
8,165,316 2,249,354
NET FINANCIAL ASSETS (915,698) 4,476,561
NON-FINANCIAL ASSETS
Tangible capital assets (Note 5) 53,757,546 54,574,414
Prepaid expenses and inventory 58,914 22,494
53,816,460 54,596,908
ACCUMULATED SURPLUS (NOTE 8) 52,900,762 5959 073 469
See accompanying notes to the consolidated financial statements.
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THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Consolidated Statement of Operations and Accumulated Surplus
Year Ended December 31, 2014
Budget Actual Actual
(Note 12) 2014 2013
$ $ $
REVENUES
Property taxation 3,216,039 3,242,775 3,162,127
Taxation from other governments 88,120 88,120 63,588
User charges 1,755,426 2,163,188 1,757,529
Transfer payments
Federal 32,803 170,949 251,914
Provincial 1,222,012 1,242,989 1,468,194
Other municipalities 435,000 494,010 481,106
Investment income 68,980 110,537 116,693
Penalties and interest on taxes 106,000 108,790 109,848
Recoveries from benefiting landowners 126,660 132,215 178,118
Other 14,900 46,091 141,280
Total Revenues 7.065,940 7,799,664 7.730.397
EXPENSES
General government 769,443 1,014,217 787,321
Protection to persons and property 1,582,243 1,669,396 1,490,362
Transportation services 2,445,274 2,541,085 2,613,653
Environmental services 2,423,916 2,069,679 1,994,476
Health services 30,895 34,140 33,100
Social and family services 11,500 10,141 15,459
Recreation and cultural services 379,789 382,553 317,294
Planning and development 221,146 295,037 306,003
Loss (gain) on disposal of tangible capital assets - (43,877) (8,485)
Total Expenses (Note 15) 7,864,206 7,972,371 7,549,183
ANNUAL SURPLUS (DEFICIT) BEFORE
CONTINGENCY PROVISION (798,266) (172,707) 181,214
PROVISION FOR ACCRUED LIABILITY-
LOAN GUARANTEE (NOTE 13) - (6,000,000) -
ANNUAL SURPLUS (DEFICIT) (798,266) (6,172,707) 181,214
ACCUMULATED SURPLUS, BEGINNING OF YEAR 59,073,469 59,073,469 58,892,255
ACCUMULATED SURPLUS,END OF YEAR(NOTE 8) 58,275.203 52,900,762 59,073,469
See accompanying notes to the consolidated financial statements.
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THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Consolidated Statement of Changes in Net Financial Assets
Year Ended December 31, 2014
Budget Actual Actual
(Note 12) 2014 2013
$ $ $
ANNUAL SURPLUS (DEFICIT) (798,266) (6,172,707) 181,214
Acquisition of tangible capital assets (691,642) (691,642) (1,205,412)
Amortization of tangible capital assets 1,504,346 1,504,346 1,494,264
Proceeds on disposal of tangible capital assets - 48,039 35,528
Change in prepaid expenses and inventory - (36,418) (787)
Loss (gain) on sale of tangible capital assets - (43,877) (8,485)
INCREASE (DECREASE) IN NET
FINANCIAL ASSETS 14,438 (5,392,259) 496,322
NET FINANCIAL ASSETS, BEGINNING OF YEAR 4,476,561 4,476,561 3.980,239
NET FINANCIAL ASSETS, END OF YEAR 4,490,999 (915,698) 4,476,561
See accompanying notes to the consolidated financial statements.
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THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Consolidated Statement of Cash Flows
Year Ended December 31, 2014
2014 2013
$ $
OPERATING ACTIVITIES
Annual surplus (deficit) (6,172,707) 181,214
Add (deduct) items not involving cash:
Amortization of tangible capital assets 1,504,346 1,494,264
Accrued liability arising from loan guarantee 6,000,000 -
Loss (gain) on disposal of and transfer of assets (43,877) (8,485)
1,287,762 1,666,993
Change in non-cash items related to operations (Note 15[b]) (406,675) 49,415,
Net change in cash from operating activities 881,087 1,716,408
CAPITAL
Acquisition of tangible capital assets (691,642) (1,205,412)
Proceeds on disposal of tangible capital assets 48,039 35,528
Net change in cash from capital (643,603) (1,169,884)
INVESTING
Investment income reinvested (86,025) (91,843)
Net change in cash from investing (86,025) (91,843)
FINANCING
Long-term debt repayment (91,396) (88,031)
Net change in cash from financing (91,396) (88,031)
NET CHANGE IN CASH AND CASH EQUIVALENTS 60,063 366,650
OPENING CASH AND CASH EQUIVALENTS 2,024,942 1,658,292
CLOSING CASH AND CASH EQUIVALENTS 2,085,005 2,024,942
SUPPLEMENTARY INFORMATION:
Cash paid for interest on debt 39,976 43,256
Cash received for interest on investments 110,537 116,693
See accompanying notes to the consolidated financial statements.
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THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Notes to the Consolidated Financial Statements
Year Ended December 31, 2014
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. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial statements of the Municipality are prepared by management in accordance
with Canadian accounting standards for public sector entities, as recommended by the Public Sector
Accounting Board of the Canadian Institute of Chartered Professional 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.
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THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Notes to the Consolidated Financial Statements
Year Ended December 31, 2014
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 accounting
standards for public sector entities 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 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.
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THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Notes to the Consolidated Financial Statements
Year Ended December 31, 2014
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.
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THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Notes to the Consolidated Financial Statements
Year Ended December 31, 2014
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 2014, the Municipality received $3,330,895 (2013 - $3,225,715) 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, 2014
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Financial Instruments
The Municipality's financial instruments 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 Municipality is not exposed to significant interest,
currency, or credit risk arising from these financial instruments.
2. INVESTMENTS
Investments are comprised of the following:
2014 2013
$ $ $
Cost Market Cost Market
One fund pooled bond securities 3,175,840 3,091,585 3,089,815 3,004,107
3. TAXES RECEIVABLE
2014 2013
$ $
Taxes receivable 542,439 764,910
Penalties and interest 42,020 56,675
584,459 821,585
4. ACCOUNTS RECEIVABLE
2014 2013
$ —$
Accounts receivable 619,639 455,100
Debentures, interest at 2.97%, due 2034 359,594 -
Debentures, interest at 3.5% and 6%, due 2017 73,152 105,768
Government remittances 351,929 228,705
1,404,314 789,573
- 10 -
THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Notes to the Consolidated Financial Statements
Year Ended December 31, 2014
5. TANGIBLE CAPITAL ASSETS
December 31,2014 Disposals and
Cost Opening Additions Adjustments Ending
Infrastructure
Linear-Roadways 38,853,528 137,341 - 38,990,869
Linear-Water Services 5,883,718 877,556 - 6,761,274
Linear-Waste Water Services 14,691,859 - - 14,691,859
Infrastructure Total 59,429,105 1,014,897 - 60,444,002
General
Land 1,114,703 - (117) 1,114,586
Land Improvements 1,028,307 - - 1,028,307
Buildings 9,327,058 7,359 (53,906) 9,280,511
Machinery and Equipment 3,368,684 105,094 (16,262) 3,457,516
Vehicles 1,834,713 - - 1,834,713
General Total 16,673,465 112,453 (70,285) 16,715,633
Work In Progress 726,255 200,020 (635,728) 290,547
Total Cost 76,828,825 1,327,370 (706,013) 77,450,182
Accumulated Amortization Disposals and
Opening Amortization Adjustments Ending
Infrastructure
Linear-Roadways 12,261,370 738,726 - 13,000,096
Linear-Water Services 1,817,576 90,605 - 1,908,181
Linear-Waste Water Services 2,063,692 149,184 - 2,212,876
Infrastructure Total 16,142,638 978,515 - 17,121,153
General
Land Improvements 422,683 39,801 - 462,484
Buildings 3,505,124 251,931 (49,859) 3,707,196
Machinery and Equipment 1,487,845 121,531 (16,262) 1,593,114
Vehicles 696,121 112,568 - 808,689
General Total 6,111,773 525,831 (66,121) 6,571,483
Total Accumulated Amortization 22,254,411 1,504,346 (66,121) 23,692,636
Net Book Value Opening Ending
Infrastructure
Linear-Roadways 26,592,158 25,990,773
Linear-Water Services 4,066,142 4,853,093
Linear-Waste Water Services 12,628,167 12,478,983
43,286,467 43,322,849
General
Land 1,114,703 1,114,586
Land Improvements 605,624 565,823
Buildings 5,821,934 5,573,315
Machinery and Equipment 1,880,839 1,864,402
Vehicles 1,138,592 1,026,024
10,561,692 10,144,150
Work in Progress 726,255 290,547
Total Net Book Value 54,574,414 53,757,546
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THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Notes to the Consolidated Financial Statements
Year Ended December 31, 2014
5. TANGIBLE CAPITAL ASSETS (CONTINUED)
December 31,2013 Disposals and
Cost Opening Additions Adjustments Ending
Infrastructure
Linear-Roadways 38,587,396 266,132 - 38,853,528
Linear-Water Services 5,881,977 1,741 - 5,883,718
Linear-Waste Water Services 14,549,725 142,134 - 14,691,859
Infrastructure Total 59,019,098 410,007 - 59,429,105
General
Land 1,109,052 5,651 - 1,114,703
Land Improvements 1,028,307 - - 1,028,307
Buildings 9,325,956 1,102 - 9,327,058
Machinery and Equipment 3,535,054 79,719 (246,089) 3,368,684
Vehicles 1,498,106 361,287 (24,680) 1,834,713
General Total 16,496,475 447,759 (270,769) 16,673,465
Work in Progress 378,609 524,790 (177,144) 726,255
Total Cost 75,894,182 1,382,556 (447,913) 76,828,825
Accumulated Amortization Disposals and
Opening Amortization Adjustments Ending
Infrastructure
Linear-Roadways 11,532,829 728,541 - 12,261,370
Linear-Water Services 1,726,753 90,823 - 1,817,576
Linear-Waste Water Services 1,915,928 147,764 - 2,063,692
Infrastructure Total 15,175,510 967,128 - 16,142,638
General
Land Improvements 380,348 42,335 - 422,683
Buildings 3,252,434 252,690 - 3,505,124
Machinery and Equipment 1,543,177 167,306 (222,638) 1,487,845
Vehicles 652,402 64,805 (21,086) 696,121
General Total 5,828,361 527,136 (243,724) 6,111,773
Total Accumulated Amortization 21,003,871 1,494,264 (243,724) 22,254,411
Net Book Value Opening Ending
Infrastructure
Linear-Roadways 27,054,567 26,592,158
Linear-Water Services 4,155,224 4,066,142
Linear-Waste Water Services 12,633,797 12,628,167
43,843,588 43,286,467
General
Land 1,109,052 1,114,703
Land improvements 647,959 605,624
Buildings 6,073,522 5,821,934
Machinery and Equipment 1,991,877 1,880,839
Vehicles 845,704 1,138,592
10,668,114 10,561,692
Work in Progress 378,609 726,255
Total Net Book Value 54,890,311 54,574,414
- 12 -
THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Notes to the Consolidated Financial Statements
Year Ended December 31, 2014
6. 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:
2014 2013
$ $
Total long-term liabilities incurred by the municipality,
including those incurred on behalf of benefiting landowner 1.014,459 1,105,855
Principal repayments are summarized as follows:
2015 2016 2017 2018 2019 Beyond Total
Recoverable From $ $ $ $ $ $ $
General tax revenue 42,816 44,353 45,946 47,956 49,306 403,394 633,771
Benefiting landowners 52,340 54,473 56,681 58,987 51,505 106,702 380,688
95.156 98,826 102.627 106.943 100,811 510,096 1,014.459
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 2014 amounted to $39,976 (2013 - $43,256).
7. OPERATION OF SCHOOL BOARDS AND THE COUNTY OF ELGIN
During 2014, 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 1,407,892 3,203,891
Share of payments in lieu of taxes 162 87,991
Amounts requisitioned 1,408,054 3,291,882
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THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Notes to the Consolidated Financial Statements
Year Ended December 31, 2014
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.
2014 2013
$ $
Operating fund:
Municipality - -
Cemetery boards 186,244 180,248
Benefiting landowners (115,427) (79,723)
70,817 100,525
Invested in tangible capital assets 53,757,546 54,574,414
Capital fund (140,316) (437,522)
Reserves 4,124,411 4,179,291
Reserve funds 2,102,763 1,762,616
59,915,221 60,179,324
AMOUNTS TO BE RECOVERED
Accrued liability- loan guarantee (Note 13) (6,000,000)
Net long-term debt (1,014,459) _ (1,105,855)
ACCUMULATED SURPLUS 52,900,762 59,073,469
RESERVES AND RESERVE FUNDS CONSIST OF THE FOLLOWING:
2014 2013
$ $
Reserves set aside for specific purposes by Council:
- for working capital 316,142 435,000
- for capital purposes 1,219,354 1,112,706
- for waterworks purposes 1,220,383 1,152,232
- for rate stabilization 425,000 560,000
- for other purposes 943,532 919,353
Total reserves 4,124,411 4,179,291
Reserve funds set aside for specific purposes by Council:
- for water system 79,499 96,160
- for construction of sanitary sewers 1,764,489 1,430,803
- for recreation and cultural service purposes 258,775 235,653
Total reserve funds 2,102,763 1,762,616
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THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Notes to the Consolidated Financial Statements
Year Ended December 31, 2014
9. TRUST FUNDS
Trust funds administered by the Municipality amounting to $243,458 (2013 - $233,729) have not
been included in the Consolidated Balance Sheet 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:
2014 2013
S $
Development charges 26,257 25,545
Gasoline tax 129,798 57,783
Parkland 65,595 64,334
221,650 147,662
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, 2014, and the results of this valuation
disclosed actuarial liabilities of$76.9 billion in respect of benefits accrued for service with actuarial
assets at that date of$69.8 billion leaving an actuarial deficit of$7.1 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 2014 was $129,155 (2013 - $133,257).
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THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Notes to the Consolidated Financial Statements
Year Ended December 31, 2014
12. BUDGET FIGURES
The operating budget approved by the council of the Municipality for 2014 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 3,216,039 - 3,216,039
Taxation from other governments 88,120 - 88,120
User charges 1,526,881 228,545 1,755,426
Transfer payments:
Federal 13,000 19,803 32,803
Provincial 1,117,400 104,612 1,222,012
Other municipalities 435,000 - 435,000
Investment income 60,000 8,980 68,980
Penalties and interest on taxes 106,000 - 106,000
Recoveries from benefiting landowners 126,660 - 126,660
Other 14,900 - 14,900
Reserve transfers 329,100 (329,100) -
Capital 1,578,700 (1,578,700) -
Total Revenues 8,611,800 (1,545,860) 7,065,940
EXPENSES
General government 757,660 11,783 769,443
Protection to persons and property 1,447,464 134,779 1,582,243
Transportation services 1,632,321 812,953 2,445,274
Environmental services 1,824,357 599,559 2,423,916
Health services 11,000 19,895 30,895
Social and family services 11,500 - 11,500
Recreation and cultural services 329,929 49,860 379,789
Planning and development 193,869 27,277 221,146
Capital 2,403,700, (2.403.700) -
Total Expenses 8.611.800 (747.594) 7.864.206
BUDGETED ANNUAL SURPLUS - (798,266) (798,266)
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THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Notes to the Consolidated Financial Statements
Year Ended December 31, 2014
13. ACCRUED LIABILITY ARISING FROM LOAN GUARANTEES
The Municipality has guaranteed the debt of the Elgin Military Museum for an amount of
$6,000,000. Management has determined that a contingent liability in the amount of $6,000,000
should be recognized in the financial statements for this fiscal year-end. The Elgin Military Museum
defaulted on its loan in March 2015 subsequent to year end, and the Municipality was required to
cover the full $6,000,000 loan guarantee. The guarantee will be funded by long-term debt with an
interest rate at 2.71%, in blended monthly payments of$27,557, and due in March, 2025.
The Municipality has set up approximately $88,000 (2013 - $26,000) in accounts receivable for fees
paid by the Municipality for this letter of guarantee. No funds have been collected for these
guarantee fees subsequent to the year end but management has not set up an allowance for any
portion of these fees at year-end. Management is pursuing a number of avenues to recover these fees
and will assess their collectability again in 2015. The Municipality is also reviewing options
available to offset the loan guarantee costs and should any monies be recovered, these amounts will
be recognized in the financial statements at the time of collection.
14. CONTINGENT LIABILITIES
As at December 31, 2014 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.
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.
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THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Notes to the Consolidated Financial Statements
Year Ended December 31, 2014
15. SUPPLEMENTARY INFORMATION:
2014 2013
$ $
[a] Current fund expenses by object:
Salaries, wages and employees benefits 1,998,826 1,958,740
Long-term debt interest 39,976 43,256
Materials 2,395,692 2,116,922
Contracted services 2,023,468 1,895,060
Rents and financial expenses - 2,685
Amortization expense 1,504,343 1,494,263
Loss (gain) on disposal and transfer of assets (43,877) (8,485)
External transfers to others 53,943 46,742
7,972,371 7,549,183
[b] Cash flow information:
(Increase) decrease in taxes receivable 237,126 (35,744)
(Increase) decrease in accounts receivable (614,741) 162,140
(Increase) decrease in inventories and prepaid expenses (36,418) (789)
Increase (decrease) in accounts payable and accrued liabilities (66,630) (61,254)
Increase (decrease) in deferred revenue-obligatory reserve funds 73,988 (14,938)
(406,675) 49,415
16. COMPARATIVE FIGURES
Certain comparative figures presented in the financial statements have been reclassified to conform
to the presentation adopted in the current year.
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THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Notes to the Consolidated Financial Statements
Year Ended December 31, 2014
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 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 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 1. For additional information see the
Consolidated Schedule of Segment Disclosure and Schedule of Segment Disclosure.
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THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Consolidated Schedule of Segment Disclosure
Year Ended December 31, 2014
Water and Public Other Total
Waste Funds Works Segments Consolidated
$ $ $ $
REVENUE
Taxation - 1,098,721 2,232,174 3,330,895
Sales of service and regulatory fees 1,447,769 5,790 709,629 2,163,188
Government transfer 104,612 438,313 1,365,023 1,907,948
Other 137,955 - 259,678 397,633
1,690,336 1,542,824 4,566,504 7,799,664
EXPENSES
Salaries, wages and employee benefits 273,991 680,282 1,044,553 1,998,826
Long-term debt interest 16,307 - 23,669 39,976
Materials 595,027 997,416 803,249 2,395,692
Contracted services 198,027 50,431 1,775,010 2,023,468
Amortization 467,434 812,953 223,956 1,504,343
Loss (gain) on disposal and transfer of assets - - (43,877) (43,877)
Transfer to others - - 53,943 53,943
1,550,786 2,541,082 3,880,503 7,972,371
ANNUAL SURPLUS (DEFICIT) 139,550 (998,258) 686,001 (172,707)
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THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Consolidated Schedule of Segment Disclosure
Year Ended December 31, 2013
Water and Public Other Total
Waste Funds Works Segments Consolidated
$ $ $ $
REVENUE
Taxation - 950,317 2,275,398 3,225,715
Sales of service and regulatory fees 1,394,651 32,221 330,657 1,757,529
Government transfer 38,843 435,405 1,932,166 2,406,414
Other 191,635 - 149,104 340,739
1,625,129 1,417,943 4,687,325 7,730,397
EXPENSES
Salaries, wages and employee benefits 268,926 682,425 1,007,389 1,958,740
Long-term debt interest 18,154 - 25,102 43,256
Materials 464,858 959,220 692,844 2,116,922
Contracted services 223,003 47,853 1,626,889 1,897,745
Amortization 463,626 803,875 226,762 1,494,263
Loss on transfer and disposal of assets - (8,485) - (8,485)
Transfer to others - - 46,742 46,742
1,438,567 2,484,888 3,625,728 7,549,183
ANNUAL SURPLUS (DEFICIT) 186,562 (1,066,945) 1,061,597 181,214
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THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Schedule of Segment Disclosure
Year Ended December 31, 2014
Budget Actual Actual
WATER AND WASTE WATER 2014 2014 2013
$ $ $
Revenue
Sales of services and regulatory fees 1,442,441 1,447,769 1,394,651
Government transfers 104,612 104,612 38,843
Benefiting land owners 126,660 132,215 178,118
Other 6.785 5,740 13,517
Total Revenues 1,680.498 1,690,336 1,625,129
Expenses
Salaries, wages and employees benefits 293,094 273,991 268,926
Long-term debt interest 16,308 16,307 18,154
Materials 661,818 595,027 464,858
Contracted services, rents and financial expenses 34,551 198,027 223,003
Amortization 467,434 467,434 463,626
Total Expenditures 1,473,205 1,550,786 1,438,567
Annual Surplus 207,293 139,550 186,562
Budget Actual Actual
PUBLIC WORKS 2014 2014 2013
$ $ $
Revenue
Taxation 1,098,721 1,098,721 950,317
Sales of services and regulatory fees 8,600 5,790 32,221
Government transfers 435,000 438,313 435,405
Total Revenues 1,542,321 1,542,824 1,417,943
Expenses
Salaries, wages and employees benefits 648,199 680,282 682,425
Materials 811,122 997,416 959,220
Contracted services and rents 28,000 50,431 47,853
Amortization - 812,953 803,875
Loss (gain) on transfer and disposal of assets - - (8.485)
Total Expenditures 1,487,321 2,541,082 2,484,888
Annual (Deficit) 55,000 (998,258) J1,066,945)
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