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HomeMy WebLinkAboutFinancial Statements 2005 THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Financial Statements December 31, 2005 THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Financial Statements Year Ended December 31, 2005 Table of Contents PAGE Auditors' Report 1 Statement of Financial Position 2 Statement of Financial Activities 3 Statement of Changes in Financial Position 4 Notes to the Financial Statements 5 - 10 Schedule of Funds 11 - 13 % 1GRAHAM William A.Graham* John M.Scott* SCOTT Alan R.Enns* Michael S.Stover* E N N S Robert B.Foster* •CHARTERED ACCOUNTANTS Betty A.Gropp James G.Frederick Phone: (519)633-0700 Fax:(519)633-7009 450 Sunset Drive,St.Thomas,ON N5R 5V1 *Practicing through a Professional Corporation www.grahamscottenns.com AUDITORS' REPORT To the Members of Council, Inhabitants and Ratepayers of The Corporation of the Municipality of Bayham We have audited the consolidated balance sheet of The Corporation of the Municipality of Bayham as at December 31, 2005 and the consolidated statement of financial activities and changes in financial position for the year then ended. These financial statements are the responsibility of the Municipality's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of The Corporation of the Municipality of Bayham as at December 31, 2005 and the results of its operations and changes in financial position for the year then ended in accordance with Canadian generally accepted accounting principles. St. Thomas, Ontario9,14/440LSCate 5004 March 4, 2006 CHARTERED ACCOUNTANTS - 1 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Statement of Financial Position As At December 31, 2005 2005 2004 $ $ ASSETS Financial Assets Cash and short term deposits 1,761,577 1,064,879 Taxes receivable 544,773 544,115 Accounts receivable 328,272 288,743 Other current assets 27,353 13,570 TOTAL ASSETS 2,661,975 1,911,307 LIABILITIES Liabilities Deferred revenue - obligatory reserve funds (note 7) 123,211 71,994 Accounts payable and accrued liabilities 440,548 316,358 Net long-term liabilities (note 4) 1,200,164 1,363,723 1,763,923 1,752,075 MUNICIPAL POSITION FUND BALANCES (NOTE 5) Current fund(page 11) 138,627 17,694 Capital fund(page 12) 46,030 193,483 Reserves (page 13) 1,423,583 1,265,436 Reserve funds (page 13) 489,976 46,342 2,098,216 1,522,955 AMOUNTS TO BE RECOVERED From future revenues (1,200,164) (1,363,723) TOTAL MUNICIPAL POSITION 898,052 159,232 TOTAL LIABILITIES AND MUNICIPAL POSITION 2,661,975 1,911,307 See accompanying notes to the consolidated financial statements. - 2 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Statement of Financial Activities Year Ended December 31, 2005 2005 2004 $ $ REVENUES Property taxation 2,092,713 1,954,287 Taxation from other governments 45,924 43,832 User charges 1,096,727 913,592 Government grants 2,194,921 1,608,234 Contribution from developers 25,682 2,858 Investment income 53,979 39,279 Penalties and interest on taxes 77,056 73,632 Recoveries from benefiting landowners 240,788 217,095 Other 17.605 34,247 Total Revenues 5,845,395 4,887,056 EXPENDITURES Current General government 464,996 470,829 Protection to persons and property 1,016,494 1,028,254 Transportation services 1,174,188 1,035,548 Environmental services 1,040,446 922,501 Health services 39,533 33,295 Social and family services 4,495 3,525 Recreation and cultural services 220,555 244,782 Planning and development 126.926 133,140 Total current expenditures 4,087,633 3,871,874 Capital General government 32,547 13,939 Protection to persons and property 238,636 44,793 Transportation services 489,454 502,176 Environmental services 157,625 233,269 Recreation and cultural services 93,176 70,813 Planning and development 13.401 28,983 Total capital expenditures 1,024,839 893,973 Total Expenditures 5,112,472 4,765,847 NET REVENUES/(EXPENDITURES) 732,923 121,209 Decrease in amounts to be recovered (157,662) (168,917) CHANGE IN FUND BALANCES 575,261 (47,708) See accompanying notes to the consolidated financial statements. - 3 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Statement of Changes in Financial Position Year Ended December 31, 2005 2005 2004 $ $ OPERATIONS Net revenues 732,923 121,209 Uses: Increase in taxes receivable (658) (43,008) Increase in accounts receivable (39,529) (60,529) Increase in other current assets (13,783) (433) Decrease in accounts payable and accrued liabilities - (14,634) (53,970) (118,604) Sources: Increase in accounts payable and accrued liabilities 124,190 - Increase in deferred revenue - obligatory reserve funds 51,217 17,439 175,407 17,439 Net change in cash from operations 854,360 20,044 FINANCING Long-term debt repayment (157,662) (168,917) Net change in cash from financing (157,662) (168,917) NET CHANGE IN CASH AND CASH EQUIVALENTS 696,698 (148,873) OPENING CASH AND CASH EQUIVALENTS 1,064,879 1,213,752 CLOSING CASH AND CASH EQUIVALENTS 1,761,577 1,064,879 See accompanying notes to the consolidated financial statements. - 4 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2005 The Municipality of Bayham is a municipality in the Province of Ontario. It conducts its operations guided by the provisions of provincial statutes such as the Municipal Act, Municipal Affairs Act and related legislation. 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The consolidated financial statements of the Corporation of the Municipality of Bayham are prepared by management in accordance with generally accepted accounting principles for local governments as recommended by the Public Sector Accounting Board of the Canadian Institute of Chartered Accountants. Significant aspects of the accounting policies adopted by the Municipality are as follows: Reporting Entity The consolidated financial statements reflect the assets, liabilities, revenues, expenditures and fund balances of the reporting entity. The reporting entity is comprised of all organizations, committees and local boards accountable for the administration of their financial affairs and resources to the Municipality and which are owned or controlled by the Municipality. These financial statements include: - Various Community Centre Boards - Various Cemetery Boards - Museum Board Inter-departmental and inter-organizational transactions and balances between these organizations are eliminated. The following joint local board is not consolidated: (see Note 2 and 8) Elgin Area Primary Water Board Fund Accounting Funds within the consolidated financial statements consist of current, capital and reserve funds. Transfers between funds are recorded as adjustments to the appropriate municipal fund balance. Trust funds and their related operations administered by the municipality are not included in these financial statements but are reported on separately on the Trust Funds Statement of Continuity and Balance Sheet. Capital Assets Expenditures made on capital assets are reported as capital expenditures on the statement of financial activities in the period incurred. - 5 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2005 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Reserves and Reserve Funds Certain amounts, as approved by Municipal Council, are set aside in reserves and reserve funds for future operating and capital purposes. Transfers to and/or from reserves and reserve funds are an adjustment to the respective fund when approved. Government Transfers Government transfers are recognized in the financial statements as revenues in the period in which events giving rise to the transfer occur providing the transfers are authorized, any eligibility criteria have been met, and reasonable estimates of the amounts can be made. Deferred Revenue Deferred revenues represent user charges and fees which have been collected but for which the related services have yet to be performed. These amounts will be recognized as revenues in the fiscal year the services are performed. Use of Estimates The preparation of financial statements in conformity with Canadian generally accepted accounting principles require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenditures during the period. Actual results could differ from these estimates. 2. CONTRIBUTIONS TO UNCONSOLIDATED JOINT BOARDS Further to Note 1, the Municipality contributed $83,896 in the current year (2004 - $65,704) to the Elgin Area Primary Water Board. The Municipality is contingently liable or has contingent gains for its share of any deficit/surplus, reserves/reserve funds and long-term liabilities which may arise or be incurred by the Elgin Area Primary Water Board. See Note 8 for further disclosure on the Elgin Area Water Board. - 6 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2005 3. OPERATION OF SCHOOL BOARDS AND THE COUNTY OF ELGIN During 2005, 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 1,280,169 1,961,543 Share of payments in lieu of taxes - 19,060 Amounts requisitioned 1,280,169 1,980,603 4. NET LONG-TERM LIABILITIES a) The balance of net long-term liabilities reported on the Consolidated Statement of Financial Position is made up of the following: 2005 2004 $ $ Total long-term liabilities incurred by the municipality, including those incurred on behalf of benefiting landowner 1,200,164 1,363,723 Principal repayments are summarized as follows: 2006 2007 2008 2009 2010 Beyond Total Recoverable From $ $ General tax revenue - - - - - -Benefiting landowners 158,181 168,315 178,257 185,633 197,508 312,270 1,200,164 158,181 168,315 178,257 185,633 197,508 312,270 1,200,164 - 7 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2005 4. NET LONG-TERM LIABILITIES (CONTINUED) b) All long-term liabilities issued on or before December 31, 1992 have received approval of the Ontario Municipal Board. Long-term liabilities issued after January 31, 1993 have been approved by by-law. The annual principal and interest payments required to service these liabilities are within the annual debt repayment limit prescribed by the Ministry of Municipal Affairs and Housing c) Interest expense on long-term liabilities in 2005 amounted to $83,172 (2004 - $95,033) 5. MUNICIPAL FUND BALANCES AT THE END OF THE YEAR The Municipality's fund balances are comprised of the following: 2005 2004 S $ For general reduction of taxation: Municipality 81,000 - Cemetery boards 80,559 75,980 Benefiting landowners (22,932) (58,285) 138,627 17,695 For acquisition of fixed assets 46,030 193,483 Reserves 1,423,583 1,265,436 Reserve funds 489,976 46,342 2,098,216 1,522,956 6. TRUST FUNDS Trust funds administered by the municipality amounting to $215,870 (2004 - $213,830) have not been included in the Consolidated Balance Sheet nor have their operations been included in the Consolidated Statement of Operations. - 8 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2005 7. DEFERRED REVENUE - OBLIGATORY RESERVE FUNDS A requirement of the public sector accounting principles of the Canadian Institute of Chartered Accountants is that obligatory reserve funds be reported as deferred revenue. This requirement is in place as provincial legislation restricts how these funds may be used and under certain circumstances these funds may be refunded. The balances in the obligatory reserve funds of the Municipality are summarized below: 2005 2004 $ $ Development Charges 10,110 9,594 Gasoline tax 62,155 - Parkland 50.946 62,400 123,211 71,994 8. CONTRACTUAL OBLIGATION-CITY OF LONDON/ONTARIO CLEAN WATER In accordance with a service agreement entered into by the Municipality with the Ontario Clean Water Agency (OCWA) the existing Elgin Area Primary Water Supply System is owned and operated by the Agency. The municipality is obligated to meet its share of the operating costs and deficits and repay its share of the long-term liabilities related to these projects. The municipality's share is based on its water consumption relative to that of the other participating municipalities. As of September 1, 1998, the municipality has authorized the City of London to take over the administrative functions of the Primary Water Supply System including the issuance of debt to pay out the balance of debt and accumulated deficit of the participating municipalities. Charges related to operating costs and debt servicing are recovered through the water rates levied by the Municipality. Information received from the City of London as at December 31, 2005 indicates the following: Outstanding Contractual Accumulated 2005 Debt Long-term Obligation Surplus Charges Liabilities Primary Water Supply System City of London 58,442 7,404 65,805 The operating surplus and long-term liabilities indicated above are not reflected in the accompanying financial statements. - 9 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2005 9. BUDGET FIGURES The Council of the Municipality of Bayham completes separate budget reviews for its operating and capital funds each year. The approved 2005 operating and capital budgets are reflected on the respective schedules of operations. Funding for the capital projects is made by transfers from reserve and operating funds, application of associated grants, and the use of other funds available to apply to capital projects. During 2005, Council approved transfers totaling $334,477 (2004 - $310,151) from reserve and reserve funds for capital projects. As many capital projects are carried out over one or more years, the annualized budget information on the Consolidated Schedule of Capital Operations represents the budget portion of expenditures for the current year only. 10. PUBLIC SECTOR SALARY DISCLOSURE In 2005, no employees were paid a salary, as defined in the Public Sector Salary Disclosure Act, 1996, of$100,000 or more by The Corporation of the Municipality of Bayham. - 10 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Schedule of Current Fund Operations Year Ended December 31, 2005 Unaudited Budget 2005 2005 2004 $ $ $ REVENUES Property taxation 2,029,778 2,092,713 1,954,287 Taxation from other governments 45,924 45,924 43,832 User charges 920,984 1,092,354 865,021 Government grants 1,617,213 2,078,281 1,575,741 Investment income 25,000 30,474 37,949 Penalties and interest on taxes 70,000 77,056 73,632 Recoveries from benefiting landowners 218,511 215,166 192,683 Other 21,425 17.605 33,603 Total Revenues 4,948,835 5,649,573 4,776,748 EXPENDITURES General government 455,215 464,996 470,829 Protection to persons and property 1,109,206 1,016,494 1,028,254 Transportation services 1,064,651 1,174,188 1,035,548 Environmental services 983,457 1,040,446 922,501 Health services 23,200 39,533 33,295 Social and family services 5,000 4,495 3,525 Recreation and cultural services 261,100 220,555 244,782 Planning and development 123,451 126.926 133,140 Total Expenditures 4,025,280 4,087,633 3,871,874 NET REVENUES/(EXPENDITURES) 923,555 1,561,940 904,874 FINANCING AND TRANSFERS Transfers to reserves and reserve funds (79,230) (569,172) (142,460) Transfers to capital fund (686,898) (711,142) (610,548) Debt principal repayment (157,427) (160,693) (168,917) Net financing and transfers (923,555) (1,441,007) (921,925) CHANGE IN CURRENT FUND BALANCE - 120,933 (17,051) OPENING CURRENT FUND BALANCE - 17,694 34,745 CLOSING CURRENT FUND BALANCE - 138,627 17,694 - 11 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Schedule of Capital Fund Operations Year Ended December 31, 2005 Unaudited Budget 2005 2005 2004 $ $ $ REVENUES Government grants 42,286 116,640 32,493 Contribution from developers - 25,682 2,858 Sale of assets - - 644 Benefiting landowners - 25,622 24,412 Other 21,000 4.373 48,571 Total Revenues 63,286 172.317 108,978 EXPENDITURES General government 93,000 32,547 13,939 Protection to persons and property 243,853 238,636 44,793 Transportation services 593,434 489,454 502,176 Environmental services 332,500 157,625 233,269 Health services 20,000 - - Recreation and cultural services 158,117 93,176 70,813 Planning and development 45,770 13,401 28,983 Total Expenditures 1.486.674 1,024,839 893,973 NET REVENUES/(EXPENDITURES) (1,423,388) (852,522) (784,995) FINANCING AND TRANSFERS Transfers from reserves and reserve funds 334,477 (9,104) 54,333 Transfers from operating fund 686,898 711,142 610,548 Proceeds of long term debt 20,000 3,031 Net financing and transfers 1,041,375 705.069 664,881 CHANGE IN CAPITAL FUND BALANCE (382,013) (147,453) (120,114) OPENING CAPITAL FUND BALANCE 193,483 193.483 313,597 CLOSING CAPITAL FUND BALANCE (188,530) 46,030 193,483 - 12 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Schedule of Reserves and Reserve Funds Year Ended December 31, 2005 2005 2004 $ $ REVENUES Investment income 23,505 1,330 Net revenues 23,505 1,330 FINANCING AND TRANSFERS Transfers to capital fund 9,104 (54,333) Transfer from current fund 569,172 142,460 Net transfers 578,276 88,127 CHANGE IN RESERVE AND RESERVE FUND BALANCES 601,781 89,457 OPENING RESERVE AND RESERVE FUND BALANCE 1,311,778 1,222,321 CLOSING RESERVE AND RESERVE FUND BALANCE 1,913,559 1,311,778 ANALYZED AS FOLLOWS: Reserves set aside for specific purposes by Council: - for working capital 354,153 334,307 - for capital purposes 265,819 531,730 - for waterworks purposes (3,291) 10,406 - for rate stabilization 582,002 214,513 - for other purposes 224.900 174,480 Total reserves 1,423,583 1,265,436 Reserve funds set aside for specific purposes by Council: - for construction of sanitary sewers 416,249 10,296 - for recreation and cultural service purposes 67,553 30,139 - for other purposes 6.174 5,907 Total reserve funds 489.976 46,342 TOTAL RESERVES AND RESERVE FUNDS 1,913,559 1,311,778 - 13 -