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HomeMy WebLinkAboutFinancial Statements 2006 THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Financial Statements December 31, 2006 THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Financial Statements Year Ended December 31, 2006 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 GRAHAM SCOTT William A.Graham* John M.Scott* Alan R.Enns* Michael S.Stover* E N N S I I P 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, 2006 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, 2006 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,ra/tamSCo�` Ewa 47, March 28, 2007 CHARTERED ACCOUNTANTS Licensed Public Accountants - 1 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Statement of Financial Position As At December 31, 2006 2006 2005 $ $ ASSETS Financial Assets Cash and short term deposits 1,915,863 1,761,577 Taxes receivable 604,982 544,774 Accounts receivable 382,668 328,272 Other current assets 27,284 27,353 TOTAL ASSETS 2,930,797 2,661,976 LIABILITIES Liabilities Deferred revenue - obligatory reserve funds (note 7) 208,492 123,211 Accounts payable and accrued liabilities 340,878 440,548 Net long-term liabilities (note 4) 1,042,835 1,200,164 1,592,205 1,763,923 MUNICIPAL POSITION FUND BALANCES (NOTE 5) Current fund(page 11) (22,500) 138,628 Capital fund(page 12) 53,583 46,030 Reserves (page 13) 1,838,922 1,423,583 Reserve funds (page 13) 511.422 489,976 2,381,427 2,098,217 AMOUNTS TO BE RECOVERED From future revenues (1,042,835) (1,200,164) TOTAL MUNICIPAL POSITION 1,338,592 898,053 TOTAL LIABILITIES AND MUNICIPAL POSITION 2,930,797 2,661,976 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, 2006 2006 2005 $ $ REVENUES Property taxation 2,304,826 2,092,713 Taxation from other governments 45,992 45,924 User charges 1,095,548 1,189,298 Government grants 1,975,134 2,143,771 Investment income 67,316 53,979 Penalties and interest on taxes 70,737 77,056 Recoveries from benefiting landowners 232,497 240,788 Other 7,629 6,725 Total Revenues 5,799,679 5,850,254 EXPENDITURES Current General government 551,651 464,996 Protection to persons and property 1,014,586 1,011,725 Transportation services 1,077,870 1,174,188 Environmental services 1,114,066 1,040,446 Health services 49,114 39,533 Social and family services 7,650 4,495 Recreation and cultural services 266,578 220,555 Planning and development 240,047 136,553 Total current expenditures 4,321,562 4,092,491 Capital General government 8,830 32,547 Protection to persons and property 62,706 238,636 Transportation services 736,618 489,454 Environmental services 81,086 157,625 Health services 7,042 - Recreation and cultural services 141,296 93,176 Planning and development - 13,401 Total capital expenditures 1,037,578 1,024,839 Total Expenditures 5,359,140 5,117,330 NET REVENUES/(EXPENDITURES) 440,539 732,924 Decrease in amounts to be recovered (157,329) (157,662) CHANGE IN FUND BALANCES 283,210 575,262 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, 2006 2006 2005 $ $ OPERATIONS Net revenues 440,539 732,924 Uses: Increase in taxes receivable (60,208) (658) Increase in accounts receivable (54,396) (39,529) Increase in other current assets - (13,783) Decrease in accounts payable and accrued liabilities (99,670) - (214,274) (53,970) Sources: Decrease in other current assets 69 - Increase in accounts payable and accrued liabilities - 124,189 Increase in deferred revenue - obligatory reserve funds 85,281 51,217 85,350 175,406 Net change in cash from operations 311.615 854,360 FINANCING Long-term debt repayment (157,329) (157,662) Net change in cash from financing (157,329) (157,662) NET CHANGE IN CASH AND CASH EQUIVALENTS 154,286 696,698 OPENING CASH AND CASH EQUIVALENTS 1,761,577 1,064,879 CLOSING CASH AND CASH EQUIVALENTS 1,915,863 1,761,577 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, 2006 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, 2006 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 $87,974 in the current year (2005 - $83,896) 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, 2006 3. OPERATION OF SCHOOL BOARDS AND THE COUNTY OF ELGIN During 2006, 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 1,299,376 1,987,446 Share of payments in lieu of taxes - 30,485 Amounts requisitioned 1,299,376 2,017,931 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: 2006 2005 $ $ Total long-term liabilities incurred by the municipality, including those incurred on behalf of benefiting landowner 1,042,835 1,200,164 Principal repayments are summarized as follows: 2007 2008 2009 2010 2011 Beyond Total Recoverable From $ $ General tax revenue - - - - - - Benefiting landowners 167,334 177,198 184,386 196,162 208.690 109,065 1,042,835 167,334 177,198 184,386 196,162 208,690 109,065 1,042,835 - 7 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2006 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 2006 amounted to $73,047 (2005 - $83,172) 5. MUNICIPAL FUND BALANCES AT THE END OF THE YEAR The Municipality's fund balances are comprised of the following: 2006 2005 $ $ For general reduction of taxation: Municipality 11,280 81,000 Cemetery boards 76,398 80,560 Benefiting landowners (110,178) (22,932) (22,500) 138,628 For acquisition of fixed assets 53,583 46,030 Reserves 1,838,922 1,423,583 Reserve funds 511.422 489,976 2,381,427 2,098,217 6. TRUST FUNDS Trust funds administered by the municipality amounting to $198,963 (2005 - $196,036) 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, 2006 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: 2006 2005 $ $ Development Charges 10,646 10,110 Gasoline tax 124,308 62,155 Parkland 73,538 50,946 208,492 123,211 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, 2006 indicates the following: Outstanding Contractual Accumulated 2006 Debt Long-term Obligation Surplus Charges Liabilities Primary Water Supply System City of London 88,426 7,405 62,238 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, 2006 9. BUDGET FIGURES The Council of the Municipality of Bayham completes separate budget reviews for its operating and capital funds each year. The approved 2006 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 2006, Council approved transfers totaling $138,080 (2005 - $334,477) 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 2006, 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, 2006 Unaudited Budget 2006 2006 2005 $ $ $ REVENUES Property taxation 2,265,212 2,304,826 2,092,713 Taxation from other governments 45,992 45,992 45,924 User charges 1,016,811 1,033,149 1,159,243 Government grants 1,808,785 1,635,501 2,027,131 Investment income 40,467 64,784 30,474 Penalties and interest on taxes 69,000 70,737 77,056 Recoveries from benefiting landowners 228,571 228,571 215,166 Other 2,000 3.176 6,725 Total Revenues 5,476,838 5,386,736 5,654,432 EXPENDITURES General government 523,329 551,651 464,996 Protection to persons and property 1,184,418 1,014,586 1,011,725 Transportation services 1,213,045 1,077,870 1,174,188 Environmental services 1,077,758 1,114,066 1,040,446 Health services 26,824 49,114 39,533 Social and family services 7,500 7,650 4,495 Recreation and cultural services 288,528 266,578 220,555 Planning and development 155,723 240.047 136,553 Total Expenditures 4,477,125 4,321,562 4,092,491 NET REVENUES/(EXPENDITURES) 999,713 1,065,174 1,561,941 FINANCING AND TRANSFERS Transfers to reserves and reserve funds (140,748) (344,835) (569,172) Transfers to capital fund (704,120) (724,138) (711,142) Debt principal repayment (154,845) (157,329) (160,693) Net financing and transfers (999,713) (1,226,302) (1,441,007) CHANGE IN CURRENT FUND BALANCE - (161,128) 120,934 OPENING CURRENT FUND BALANCE - 138,628 17,694 CLOSING CURRENT FUND BALANCE - (22,500) 138,628 - 11 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Schedule of Capital Fund Operations Year Ended December 31, 2006 Unaudited Budget 2006 2006 2005 $ $ $ REVENUES Government grants 305,919 339,633 116,640 Sale of assets - 4,453 - Benefiting landowners - 3,926 25,622 Other 95,575 62,399 30,055 Total Revenues 401,494 410,411 172,317 EXPENDITURES General government 12,608 8,830 32,547 Protection to persons and property 71,056 62,706 238,636 Transportation services 878,557 736,618 489,454 Environmental services 162,501 81,086 157,625 Health services 20,000 7,042 - Recreation and cultural services 143,802 141,296 93,176 Planning and development 1,200 - 13,401 Total Expenditures 1,289,724 1,037,578 1,024,839 NET REVENUES/(EXPENDITURES) (888,230) (627,167) (852,522) FINANCING AND TRANSFERS Net transfers from (to) reserves and reserve funds 138,080 (89,418) (9,104) Transfers from operating fund 704,120 724,138 711,142 Proceeds of long term debt - - 3,031 Net financing and transfers 842,200 634,720 705,069 CHANGE IN CAPITAL FUND BALANCE (46,030) 7,553 (147,453) OPENING CAPITAL FUND BALANCE 46,030 46,030 193,483 CLOSING CAPITAL FUND BALANCE - 53,583 46,030 - 12 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Schedule of Reserves and Reserve Funds Year Ended December 31, 2006 2006 2005 $ $ REVENUES Investment income 2,532 23,505 Net revenues 2,532 23,505 FINANCING AND TRANSFERS Net transfers from (to) capital fund 89,418 9,104 Net transfers from (to) current fund 344,835 569,172 Net transfers 434,253 578,276 CHANGE IN RESERVE AND RESERVE FUND BALANCES 436,785 601,781 OPENING RESERVE AND RESERVE FUND BALANCE 1,913,559 1,311,778 CLOSING RESERVE AND RESERVE FUND BALANCE 2,350,344 1,913,559 ANALYZED AS FOLLOWS: Reserves set aside for specific purposes by Council: - for working capital 364,153 354,153 - for capital purposes 545,009 265,819 - for waterworks purposes (58,950) (3,291) - for rate stabilization 611,670 582,002 - for other purposes 377,040 224,900 Total reserves 1,838,922 1,423,583 Reserve funds set aside for specific purposes by Council: - for construction of sanitary sewers 429,878 416,249 - for recreation and cultural service purposes 75,123 67,553 - for other purposes 6.421 6,174 Total reserve funds 511.422 489,976 TOTAL RESERVES AND RESERVE FUNDS 2,350,344 1,913,559 - 13 -