HomeMy WebLinkAboutFinancial Statements - 2020THE CORPORATION OF THE
MUNICIPALITY OF BAYHAM
Consolidated Financial Statements
December 31, 2020
THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Consolidated Financial Statements
Year Ended December 31, 2020
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 (Debt)6
Consolidated Statement of Cash Flows 7
Notes to the Consolidated Financial Statements 8 - 22
Consolidated Schedule of Segment Disclosure 23 - 24
Schedule of Segment Disclosure 25
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, 2020, and the consolidated
statement of operations and accumulated surplus, consolidated statement of changes in net financial assets (debt)
and consolidated statement of cash flows for the year then ended, and notes to the 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, 2020, and the results of its operations and its cash flows
for the year then ended in accordance with Canadian accounting standards for public sector entities.
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 accounting standards for public sector entities, 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.
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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
May 20, 2021 CHARTERED PROFESSIONAL ACCOUNTANTS
Licensed Public Accountants
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THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Consolidated Statement of Financial Position
As At December 31, 2020
2020 2019
$ $
ASSETS
FINANCIAL ASSETS
Cash 1,582,338 1,009,290
Investments (Note 2)3,603,723 3,554,288
Taxes receivable (Note 3)1,547,323 1,016,502
Accounts receivable (Note 4)1,107,496 1,001,452
7,840,880 6,581,532
LIABILITIES
Deferred revenue - obligatory reserve funds (Note 9)339,539 303,940
Accounts payable and accrued liabilities 1,194,197 1,216,875
Net long-term liabilities (Note 6) 5,060,840 5,674,038
6,594,576 7,194,853
NET FINANCIAL ASSETS (DEBT) 1,246,304 (613,321)
NON-FINANCIAL ASSETS
Tangible capital assets (Note 5)59,133,481 59,061,086
Prepaid expenses and inventory 50,307 78,479
59,183,788 59,139,565
ACCUMULATED SURPLUS (NOTE 7) 60,430,092 58,526,244
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, 2020
Budget Actual Actual
(Note 11)2020 2019
$ $ $
REVENUES
Property taxation 4,697,711 4,680,368 4,321,908
Taxation from other governments 168,615 168,615 158,222
User charges 2,685,072 2,884,842 2,741,196
Transfer payments
Federal 1,660,859 338,287 1,050,109
Provincial 1,145,700 1,697,768 2,041,262
Other municipalities 432,048 441,365 442,850
Contributed tangible capital assets --19,801
Investment income 141,190 131,676 119,747
Penalties and interest on taxes 115,000 105,949 129,841
Recoveries from benefiting landowners 97,000 604,215 382,773
Other 454,467 126,145 102,975
Total Revenues 11,597,662 11,179,230 11,510,684
EXPENSES
General government 1,288,987 1,248,972 1,181,375
Protection to persons and property 1,892,642 1,843,510 1,783,055
Transportation services 2,761,087 2,850,538 3,535,349
Environmental services 2,949,098 2,807,159 2,839,329
Health services 36,994 29,521 30,092
Social and family services 9,000 -7,816
Recreation and cultural services 405,562 416,644 444,843
Planning and development 242,206 261,649 259,043
Loss (gain) on disposal of tangible capital assets -(182,611)8,020
Total Expenses (Note 14) 9,585,576 9,275,382 10,088,922
ANNUAL SURPLUS 2,012,086 1,903,848 1,421,762
ACCUMULATED SURPLUS, BEGINNING OF
YEAR 58,526,244 58,526,244 57,104,482
ACCUMULATED SURPLUS, END OF
YEAR (NOTE 7)60,538,330 60,430,092 58,526,244
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 (Debt)
Year Ended December 31, 2020
Budget Actual Actual
(Note 11)2020 2019
$ $ $
ANNUAL SURPLUS 2,012,086 1,903,848 1,421,762
Acquisition of tangible capital assets (2,015,121)(2,015,121)(3,363,920)
Amortization of tangible capital assets 1,909,258 1,909,258 1,885,382
Proceeds on disposal of tangible capital assets -216,079 65,332
Change in prepaid expenses and inventory -28,172 2,475
Loss (gain) on disposal of tangible capital assets -(182,611)8,020
Contributed tangible capital assets --(19,801)
CHANGE IN NET FINANCIAL ASSETS (DEBT)1,906,223 1,859,625 (750)
NET FINANCIAL DEBT, BEGINNING OF YEAR (613,321)(613,321)(612,571)
NET FINANCIAL ASSETS (DEBT), END OF YEAR 1,292,902 1,246,304 (613,321)
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, 2020
2020 2019
$ $
OPERATING ACTIVITIES
Annual surplus 1,903,848 1,421,762
Add (deduct) items not involving cash:
Amortization of tangible capital assets 1,909,258 1,885,382
Contributed tangible capital assets -(19,801)
Loss (gain) on disposal of tangible capital assets (182,611)8,020
3,630,495 3,295,363
Change in non-cash items related to operations (Note 14[b]) (595,772)153,144
3,034,723 3,448,507
CAPITAL
Acquisition of tangible capital assets (2,015,121)(3,363,920)
Proceeds on disposal of tangible capital assets 216,079 65,332
(1,799,042)(3,298,588)
INVESTING
Investment income reinvested (49,435)(74,307)
FINANCING
Long-term debt repayment (613,198)(264,044)
NET CHANGE IN CASH 573,048 (188,432)
OPENING CASH 1,009,290 1,197,722
ENDING CASH 1,582,338 1,009,290
SUPPLEMENTARY INFORMATION:
Cash paid for interest on debt 156,871 157,882
Cash received for interest on investments 131,676 119,747
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, 2020
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. 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, 2020
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, 2020
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, 2020
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.
Tax Revenues
In 2020, the Municipality received $4,848,983 (2019 - $4,480,130) 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.).
Investments
Investments, consisting of one fund pooled bond securities, are recorded at cost plus accrued interest.
Investment income earned on available funds 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.
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.
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THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Notes to the Consolidated Financial Statements
Year Ended December 31, 2020
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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, 2020 there were no properties that the Municipality was responsible to remedy and as
such no liability has been accrued.
Recent Accounting Pronouncements
PSAB released a standard related to Financial Instruments (PS 3450). The standard applies to all
local governments for fiscal years beginning on or after April 1, 2022. The standard requires that all
financial instruments, which include the One Fund Investments, be reported at fair market value in a
statement of remeasurement gains/losses and to disclose any risks associated with it's financial
instruments.
2. INVESTMENTS
Investments are comprised of the following:
2020 2019
$ $ $ $
Cost Market Cost Market
One fund pooled bond securities 3,603,723 3,423,662 3,554,288 3,299,644
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THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Notes to the Consolidated Financial Statements
Year Ended December 31, 2020
3. TAXES RECEIVABLE
2020 2019
$ $
Current taxes receivable 711,283 400,042
Arrears taxes receivable 604,023 426,716
Penalties and interest 232,017 189,744
1,547,323 1,016,502
The Municipality makes annual estimates and allowances for potential exposure to property tax
appeals, reassessments, environmental and collection issues. Included in the taxes receivable is
$695,932 (2019 - $578,576) of taxes, penalties and interest that is due from one specific gas pipeline
property that is under going various appeals and financial restructuring. The Municipality's exposure
to loss on these balances is estimated to be between 25% to 30% if it is determined that nothing is
recoverable from this property. At year end, the Municipality made an assessment of the exposure
based on current information and didn't make any significant allowances for these amounts in the
taxes receivable presented on the statement of financial position, but has set aside $341,000 in the
contingency reserve for any losses should they occur on this property. The Municipality is vigorously
attempting various forms of collection to mitigate the Municipality's exposure to loss.
4. ACCOUNTS RECEIVABLE
2020 2019
$ $
Accounts receivable 507,485 414,442
Government grants and funding 193,671 39,031
Debentures, interest at 2.97%, due 2034 244,573 262,982
Government remittances 161,767 284,997
1,107,496 1,001,452
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THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Notes to the Consolidated Financial Statements
Year Ended December 31, 2020
5. TANGIBLE CAPITAL ASSETS
December 31, 2020 Disposals and
Cost Opening Additions Adjustments Ending
Infrastructure
Linear - Roadways 42,861,237 377,157 (480,355)42,758,039
Linear - Water Services 10,284,015 87,496 (59,305)10,312,206
Linear - Waste Water Services 16,546,027 --16,546,027
Infrastructure Total 69,691,279 464,653 (539,660)69,616,272
General
Land 1,096,845 -(33,040)1,063,805
Land Improvements 1,739,389 13,500 -1,752,889
Buildings 11,620,998 19,257 -11,640,255
Machinery and Equipment 4,080,368 428,767 (163,600)4,345,535
Vehicles 2,311,112 225,916 (42,091)2,494,937
General Total 20,848,712 687,440 (238,731)21,297,421
Work in Progress 388,676 872,219 (9,191)1,251,704
Total Cost 90,928,667 2,024,312 (787,582)92,165,397
Accumulated Amortization Disposals and
Opening Amortization Adjustments Ending
Infrastructure
Linear - Roadways 16,839,709 762,328 (479,927)17,122,110
Linear - Water Services 2,842,282 255,317 (59,305)3,038,294
Linear - Waste Water Services 3,314,839 204,674 -3,519,513
Infrastructure Total 22,996,830 1,222,319 (539,232)23,679,917
General
Land Improvements 840,786 67,974 -908,760
Buildings 4,847,989 295,910 -5,143,899
Machinery and Equipment 2,063,864 103,785 (163,600)2,004,049
Vehicles 1,118,112 219,270 (42,091)1,295,291
General Total 8,870,751 686,939 (205,691)9,351,999
Total Accumulated Amortization 31,867,581 1,909,258 (744,923)33,031,916
Net Book Value Opening Ending
Infrastructure
Linear - Roadways 26,021,528 25,635,929
Linear - Water Services 7,441,733 7,273,912
Linear - Waste Water Services 13,231,188 13,026,514
46,694,449 45,936,355
General
Land 1,096,845 1,063,805
Land Improvements 898,603 844,129
Buildings 6,773,009 6,496,356
Machinery and Equipment 2,016,504 2,341,486
Vehicles 1,193,000 1,199,646
11,977,961 11,945,422
Work in Progress 388,676 1,251,704
Total Net Book Value 59,061,086 59,133,481
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THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Notes to the Consolidated Financial Statements
Year Ended December 31, 2020
5. TANGIBLE CAPITAL ASSETS (CONTINUED)
December 31, 2019 Disposals and
Cost Opening Additions Adjustments Ending
Infrastructure
Linear - Roadways 42,471,866 389,371 -42,861,237
Linear - Water Services 10,276,872 26,958 (19,815)10,284,015
Linear - Waste Water Services 15,125,283 1,420,744 -16,546,027
Infrastructure Total 67,874,021 1,837,073 (19,815)69,691,279
General
Land 1,096,843 2 -1,096,845
Land Improvements 1,339,130 201,357 198,902 1,739,389
Buildings 11,340,771 280,227 -11,620,998
Machinery and Equipment 3,915,554 174,689 (9,875)4,080,368
Vehicles 2,222,582 577,019 (488,489)2,311,112
General Total 19,914,880 1,233,294 (299,462)20,848,712
Work in Progress 95,123 385,706 (92,153)388,676
Total Cost 87,884,024 3,456,073 (411,430)90,928,667
Accumulated Amortization Disposals and
Opening Amortization Adjustments Ending
Infrastructure
Linear - Roadways 16,062,392 777,317 -16,839,709
Linear - Water Services 2,594,967 255,379 (8,064)2,842,282
Linear - Waste Water Services 3,143,078 171,761 -3,314,839
Infrastructure Total 21,800,437 1,204,457 (8,064)22,996,830
General
Land Improvements 608,470 53,216 179,100 840,786
Buildings 4,557,783 290,206 -4,847,989
Machinery and Equipment 1,972,729 98,489 (7,354)2,063,864
Vehicles 1,308,506 239,014 (429,408)1,118,112
General Total 8,447,488 680,925 (257,662)8,870,751
Total Accumulated Amortization 30,247,925 1,885,382 (265,726)31,867,581
Net Book Value Opening Ending
Infrastructure
Linear - Roadways 26,409,474 26,021,528
Linear - Water Services 7,681,905 7,441,733
Linear - Waste Water Services 11,982,205 13,231,188
46,073,584 46,694,449
General
Land 1,096,843 1,096,845
Land Improvements 730,660 898,603
Buildings 6,782,988 6,773,009
Machinery and Equipment 1,942,825 2,016,504
Vehicles 914,076 1,193,000
11,467,392 11,977,961
Work in Progress 95,123 388,676
Total Net Book Value 57,636,099 59,061,086
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THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Notes to the Consolidated Financial Statements
Year Ended December 31, 2020
6. LONG-TERM LIABILITIES
a) The balance of long-term liabilities reported on the Consolidated Statement of Financial Position
is made up of the following:
2020 2019
$ $
TD loan, 2.71%, repayable in blended monthly payments
of $27,557, due March 2025 (Project Ojibwa)4,956,906 5,150,036
RBC loan, 2.75%, repayable in blended semi-annual
payments of $32,500, due July 2026, repaid in year (Fire
Hall)-396,876
Consolidated water board debt, interest rates ranging from
1.5% to 3.20%, maturing September 2020 to March
2027 103,934 127,126
5,060,840 5,674,038
Principal repayments are summarized as follows:
Tax User
Revenue Charges Total
2021 198,816 23,861 222,677
2022 204,272 24,393 228,665
2023 209,877 12,349 222,226
2024 215,308 12,613 227,921
2025 4,128,633 12,880 4,141,513
Beyond -17,838 17,838
Total 4,956,906 103,934 5,060,840
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 2020 amounted to $156,871 (2019 - $157,882).
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THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Notes to the Consolidated Financial Statements
Year Ended December 31, 2020
7. ACCUMULATED SURPLUS
The accumulated surplus balance is comprised of current fund, capital fund, balances in reserves and
discretionary reserve funds, unfunded liabilities to be recovered in the future and investment in
tangible capital assets.
2020 2019
$ $
SURPLUS
Municipality - current fund --
Cemetery boards - current fund 184,196 177,680
Benefiting landowners - current fund (253,583)(706,556)
Invested in tangible capital assets - capital fund 59,133,481 59,061,086
Capital fund -(9,627)
Reserves 3,545,561 2,636,815
Reserve funds 2,881,277 3,040,884
65,490,932 64,200,282
AMOUNTS TO BE RECOVERED
Net long-term debt (Note 6)(5,060,840)(5,674,038)
ACCUMULATED SURPLUS 60,430,092 58,526,244
RESERVES AND RESERVE FUNDS CONSIST OF THE FOLLOWING:
2020 2019
$ $
Reserves set aside for specific purposes by Council:
- for working capital 86,886 70,720
- for capital purposes 455,117 408,996
- for waterworks purposes 1,869,743 1,520,382
- for rate stabilization -213,866
- for other purposes 1,133,815 422,851
Total reserves 3,545,561 2,636,815
Reserve funds set aside for specific purposes by Council:
- for water system 110,693 123,971
- for sanitary sewers 2,677,920 2,726,834
- for recreation and cultural service purposes 92,664 190,079
Total reserve funds 2,881,277 3,040,884
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THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Notes to the Consolidated Financial Statements
Year Ended December 31, 2020
8. TRUST FUNDS
Trust funds administered by the Municipality amounting to $268,837 (2019 - $261,887) have not
been included in the Consolidated Statement of Financial Position nor have their operations been
included in the Consolidated Statement of Operations.
9. DEFERRED REVENUE - OBLIGATORY RESERVE FUNDS
A requirement of the public sector accounting principles of the Canadian Institute of Chartered
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:
2020 2019
$ $
Development charges 30,239 29,422
Gasoline tax 261,443 254,381
Parkland 47,857 20,137
339,539 303,940
10. 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, 2020, and the results of this valuation
disclosed actuarial liabilities of $111.8 billion in respect of benefits accrued for service with actuarial
assets at that date of $108.6 billion leaving an actuarial deficit of $3.2 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 2020 was $166,264 (2019 - $151,061).
- 18 -
THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Notes to the Consolidated Financial Statements
Year Ended December 31, 2020
11. BUDGET FIGURES
The operating budget approved by the council of the Municipality for 2020 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 4,697,711 - 4,697,711
Taxation from other governments 168,615 - 168,615
User charges 2,050,246 634,826 2,685,072
Transfer payments:
Federal 1,660,859 - 1,660,859
Provincial 1,145,700 - 1,145,700
Other municipalities 432,048 - 432,048
Investment income 32,000 109,190 141,190
Penalties and interest on taxes 115,000 - 115,000
Recoveries from benefiting landowners 97,000 - 97,000
Other 439,900 14,567 454,467
Capital reserve transfers 764,573 (764,573)-
Total Revenues 11,603,652 (5,990)11,597,662
EXPENSES
General government 1,325,517 (36,530) 1,288,987
Protection to persons and property 1,802,028 90,614 1,892,642
Transportation services 1,765,002 996,085 2,761,087
Environmental services 1,868,268 1,080,830 2,949,098
Health services 16,500 20,494 36,994
Social and family services 9,000 - 9,000
Recreation and cultural services 292,826 112,736 405,562
Planning and development 213,355 28,851 242,206
Reserve transfers 496,224 (496,224) -
Capital 3,814,932 (3,814,932)-
Total Expenses 11,603,652 (2,018,076)9,585,576
BUDGETED ANNUAL SURPLUS -2,012,086 2,012,086
- 19 -
THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Notes to the Consolidated Financial Statements
Year Ended December 31, 2020
12. OPERATION OF SCHOOL BOARDS AND THE COUNTY OF ELGIN
During 2020, 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 1,478,798 4,452,474
Share of payments in lieu of taxes 7,038 160,620
Amounts requisitioned 1,485,836 4,613,094
13. CONTINGENCIES
As at December 31, 2020, 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, 2020, 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.
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THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Notes to the Consolidated Financial Statements
Year Ended December 31, 2020
14. SUPPLEMENTARY INFORMATION
2020 2019
$ $
[a] Current fund expenses by object:
Salaries, wages and employees benefits 2,193,407 2,205,949
Long-term debt interest 156,871 157,882
Materials 2,845,907 3,546,776
Contracted services 2,257,581 2,192,284
Amortization 1,909,258 1,885,382
External transfers to others 94,969 92,629
(Gain) loss on disposal and transfer of assets (182,611)8,020
9,275,382 10,088,922
[b] Cash flow information:
Taxes receivable (530,821)(254,118)
Accounts receivable (106,044)(63,944)
Inventories and prepaid expenses 28,172 2,475
Accounts payable and accrued liabilities (22,678)264,896
Deferred revenue-obligatory reserve funds 35,599 203,835
(595,772)153,144
15. SIGNIFICANT EVENT
During and subsequent to year end, the Municipality was exposed to economic risks associated with
the coronavirus pandemic. These risks are beyond the Municipality’s control. The Municipality has
experienced some operational changes, but overall the financial impact has been limited. The
Municipality's main exposure is to it's investments (Note 2). These investments may experience
reduced returns due to the market fluctuations, but to date these returns have not been significantly
impacted.
- 21 -
THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Notes to the Consolidated Financial Statements
Year Ended December 31, 2020
16. 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.
- 22 -
THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Consolidated Schedule of Segment Disclosure
Year Ended December 31, 2020
Water and Public Other Total
Waste Funds Works Segments Consolidated
$ $ $ $
REVENUE
Taxation - 1,286,754 3,562,229 4,848,983
Sales of service and regulatory fees 2,323,194 56,331 505,317 2,884,842
Government transfer - 448,257 2,029,163 2,477,420
Other 117,980 -850,005 967,985
2,441,174 1,791,342 6,946,714 11,179,230
EXPENSES
Salaries, wages and employee benefits 409,014 552,381 1,232,012 2,193,407
Long-term debt interest 3,058 - 153,813 156,871
Materials 718,666 1,278,570 848,671 2,845,907
Contracted services 517,523 23,500 1,716,558 2,257,581
Amortization 605,729 996,085 307,444 1,909,258
Gain on disposal of tangible capital
assets - (1,296) (181,315)(182,611)
Transfer to others --94,969 94,969
2,253,990 2,849,240 4,172,152 9,275,382
ANNUAL SURPLUS (DEFICIT)187,184 (1,057,898)2,774,562 1,903,848
- 23 -
THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Consolidated Schedule of Segment Disclosure
Year Ended December 31, 2019
Water and Public Other Total
Waste Funds Works Segments Consolidated
$ $ $ $
REVENUE
Taxation - 1,549,273 2,930,857 4,480,130
Sales of service and regulatory fees 2,179,570 75,717 485,909 2,741,196
Government transfer 16,413 442,850 3,074,958 3,534,221
Other 119,768 -635,369 755,137
2,315,751 2,067,840 7,127,093 11,510,684
EXPENSES
Salaries, wages and employee benefits 403,588 576,989 1,225,372 2,205,949
Long-term debt interest 3,536 - 154,346 157,882
Materials 774,221 1,927,076 845,479 3,546,776
Contracted services 499,967 40,908 1,651,409 2,192,284
Amortization 598,129 990,376 296,877 1,885,382
Loss on disposal of tangible capital
assets - - 8,020 8,020
Transfer to others --92,629 92,629
2,279,441 3,535,349 4,274,132 10,088,922
ANNUAL SURPLUS (DEFICIT)36,310 (1,467,509)2,852,961 1,421,762
- 24 -
THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Schedule of Segment Disclosure
Year Ended December 31, 2020
Budget Actual Actual
WATER AND WASTE WATER 2020 2020 2019
$ $ $
Revenue
Sales of services and regulatory fees 1,640,999 2,323,194 2,179,570
Government transfers --16,413
Benefiting land owners 97,000 96,601 93,897
Other 9,520 21,379 25,871
Total Revenues 1,747,519 2,441,174 2,315,751
Expenses
Salaries, wages and employees benefits 423,982 409,014 403,588
Long-term debt interest -3,058 3,536
Materials 402,436 718,666 774,221
Contracted services, rents and financial expenses 519,350 517,523 499,967
Amortization 605,729 605,729 598,129
Total Expenditures 1,951,497 2,253,990 2,279,441
Annual Surplus (Deficit)(203,978)187,184 36,310
Budget Actual Actual
PUBLIC WORKS 2020 2020 2019
$ $ $
Revenue
Taxation 1,286,754 1,286,754 1,549,273
Sales of services and regulatory fees 42,000 56,331 75,717
Government transfers 432,048 448,257 442,850
Total Revenues 1,760,802 1,791,342 2,067,840
Expenses
Salaries, wages and employees benefits 709,793 552,381 576,989
Materials 1,008,909 1,278,570 1,927,076
Contracted services and rents 46,300 23,500 40,908
Amortization 996,085 996,085 990,376
Loss (gain) on transfer and disposal of assets -(1,296)-
Total Expenditures 2,761,087 2,849,240 3,535,349
Annual Surplus (Deficit)(1,000,285)(1,057,898)(1,467,509)
- 25 -