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HomeMy WebLinkAboutFinancial Statements - 2022THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Financial Statements December 31, 2022 THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Financial Statements Year Ended December 31, 2022 Table of Contents PAGE Management Responsibility for Financial Reporting Independent Auditors' Report 2-3 Consolidated Statement of Financial Position Consolidated Statement of Operations and Accumulated Surplus Consolidated Statement of Changes in Net Financial Assets 6 Consolidated Statement of Cash Flows Notes to the Consolidated Financial Statements 8 - 22 Consolidated Schedule of Segment Disclosure 23 - 24 MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING The accompanying consolidated financial statements are the responsibility of the management of The Corporation of the Municipality of Bayham and have been prepared in accordance with Canadian accounting standards for public sector entities. These consolidated financial statements include: * Independent Auditors' report * Consolidated Statement of Financial Position * Consolidated Statement of Operations and Accumulated Surplus ■ Consolidated Statement of Change in Net Financial Assets 0 Consolidated Statement of Cash Flows * Notes to the Consolidated Financial Statements * Consolidated Schedule of Segment Disclosure The Chief Administrative Officer and the Treasurer are responsible for ensuring that management fulfills its responsibility for financial reporting and is ultimately responsible for reviewing the consolidated financial statements before they are submitted to Council for approval. The integrity and reliability of The Corporation of the Municipality of Bayham reporting systems are achieved through the use of formal policies and procedures, the careful selection of employees and an appropriate division of responsibilities. These systems are designed to provide reasonable assurance that the financial information is reliable and accurate. The consolidated financial statements have been audited on behalf of the Members of Council, Inhabitants and Ratepayers of The Corporation of the Municipality of Bayham by Graham Scott Enns LLP in accordance with Canadian generally accepted auditing standards. M h hayer ChieM dministrative Officer Straffordville, Ontario May 18, 2023 Mr. Lor es "Treasurer 198� I GRAHAM SCOTTENNs LLP CHARTERED PROFESSIONAL ACCOUNTANTS P.519-633-0700 • F.519-633-7009 P.519-773-9265 • F.519-773-9683 450 Sunset Drive, St. Thomas, ON N5R 5V1 25 John Street South, Aylmer, ON N51-1 20 www.grahamscottenns.com 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, 2022, and the consolidated statement of operations and accumulated surplus, consolidated statement of changes in net financial assets 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, 2022, 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. GRAHAM SCOTTENNs LLP CHARTERED PROFESSIONAL ACCOUNTANTS P. 519-633-0700 • F. 519-633-7009 P. 519-773-9265 • F. 519-773-9683 450 Sunset Drive, St. Thomas, ON N5R 5V1 25 John Street South, Aylmer, ON N5H 2C1 www.grahamscottenns.com 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 May 18, 2023 571� See& 5444 .,!Z;v CHARTERED PROFESSIONAL ACCOUNTANTS Licensed Public Accountants - 5 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Statement of Financial Position As At December 31, 2022 ARCF.TC FINANCIAL ASSETS Cash Investments (Note 2) Taxes receivable (Note 3) Accounts receivable (Mote 4) LIABILITIES Deferred revenue - obligatory reserve funds (Note 9) Accounts payable and accrued liabilities Net long-term liabilities (Vote 6) NET FINANCIAL ASSETS NON -FINANCIAL ASSETS Tangible capital assets (Note 5) Prepaid expenses and inventory ACCUMULATED SURPLUS (NOTE 7) 2022 2021 S 3,182,072 4,090,351 6,266,372 3,662,849 594,691 901,928 1,244,366 1334,118 11,287,501 9,789,246 805,318 694,326 1,373,683 1,462,605 4,609 816 4,838,322 6,788,817 6,995,253 4,498,684 2,793,993 58,690,193 58,830,243 143,612 81.507 58,833,805 63,332,489 See accompanying notes to the consolidated financial statements. -4- 58,911,750 61 705 THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Statement of Operations and Accumulated Surplus Year Ended December 31, 2022 REVENUES Property taxation Taxation from other governments User charges Transfer payments Federal Provincial Other municipalities Investment income Penalties and interest on taxes Recoveries from benefiting landowners Other Total Revenues EXPENSES General government Protection to persons and property Transportation services Environmental services Health services Social and family services Recreation and cultural services Planning and development Loss (gain) on disposal of tangible capital assets Total Expenses (Note 14) ANNUAL SURPLUS ACCUMULATED SURPLUS, BEGINNING OF YEAR ACCUMULATED SURPLUS, END OF YEAR (NOTE 7) Budget Actual Actual (Note 11) 2022 2021 _S 5,044,357 5,139,135 4,754,473 175,049 175,049 175,049 3,026,458 3,155,337 2,957,219 4,667,600 543,153 335,302 1,653,179 1,634,805 1,302,207 471,879 466,379 444,594 111,975 182,117 77,688 91,000 91,422 (33,831) 107,000 100,369 362,584 99.292 147,165 106.020 15,447,789 11,634,931 10.481,305 1,201,717 1,256,610 1,151,707 1,934,511 1,870,154 1,888,860 3,201,397 3,375,512 2,725,065 3,078,522 3,151,198 2,846,211 42,582 41,594 30,289 7,000 2,000 - 357,876 401,588 307,365 266,210 276,792 239,522 1367,2631 16,635 10.08E815 10,008,185 9,205,654 5,357,974 1,626,746 1,275,651 61,705,743 61,705,743 60.430,092 67,063.717 63,332,489 61,705,743 See accompanying notes to the consolidated financial statements. - 5 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Statement of Changes in Net Financial Assets Year Ended December 31, 2022 ANNUAL SURPLUS Budget Actual Actual (Note 11) 2022 2021 -L- S 5,357,974 1,626,746 1,275,651 Acquisition of tangible capital assets (2,253,110) (2,253,110) (1,628,712) Amortization of tangible capital assets 2,243,700 2,243,700 1,915,323 Proceeds on disposal of tangible capital assets - 516,723 - Change in prepaid expenses and inventory - (62,105) (31,200) Loss (gain) on disposal of tangible capital assets j367,263) 16.627 CHANGE IN NET FINANCIAL ASSETS 5,348,564 1,704,691 1,547,689 NET FINANCIAL ASSETS, BEGINNING OF YEAR 2,793.993 2,793,993 1.246.304 NET FINANCIAL ASSETS, END OF YEAR 8.142.557 4,498,684 2.793.993 See accompanying notes to the consolidated financial statements. -6- THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Statement of Cash Flows Year Ended December 31, 2022 2022 2021 OPERATING ACTIVITIES Annual surplus 1,626,746 1,275,651 Add (deduct) items not involving cash: Amortization of tangible capital assets 2,243,700 1,915,323 Loss (gain) on disposal of tangible capital assets (367,263) 16,627 3,503,183 3,207,601 Change in non -cash items related to operations (Note 14[b]) 156,954 1,210368 3,660,137 4,418,369 CAPITAL Acquisition of tangible capital assets (2,253,110) (1,628,712) Proceeds on disposal of tangible capital assets 516,723 (1,736,387) (1,628,712) INVESTING Purchase of investments (2,500,000) Investment income reinvested (103,523) (59,126) (2,603,523) (59,126) FINANCING Long-term debt repayment (228,506) (222,518) NET CHANGE IN CASH (908,279) 2,508,013 CASH, BEGINNING OF THE YEAR 4,090,351 1,582,338 CASH, END OF THE YEAR 3,182,072 4,090,351 See accompanying notes to the consolidated financial statements. -7- THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2022 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. -8- THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2022 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 finding 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. -9- THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2022 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. -10- THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31 2022 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 2022, the Municipality received $5,314,184 (2021 - $4,929,522) 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. THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2022 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, 2022 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: 2022 S Cost Market One fiznd pooled bond securities 3,720,211 3,238,058 Guaranteed investment certificates 2,546,161 2,546 161 6.266J72 5,784,21{) 2021 Cost Market 3,662,849 3,374,230 3,662,849 3.3 44,230 THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2022 3. TAXES RECEIVABLE Current taxes receivable Arrears taxes receivable Penalties and interest 2022 2021 S $ 448,663 593,949 95,424 172,457 50.604 135.522 5® 901.928 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 approximately $157,000 (2021 - $288,000) of taxes, penalties and interest that is due from one specific gas pipeline property that was under going various appeals and financial restructuring. Although the 2022 amount is current, 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 $78,000 (2021 - $67,000) in the contingency reserve for any losses should they occur on this or other properties. 4. ACCOUNTS RECEIVABLE 2022 2021 Accounts receivable 510,993 545,679 Government grants and funding 232,884 220,495 Debentures, interest at 2.97%, due 2034 207,757 226,166 Government remittances 292,732 141,778 1 2�� _ 1,134.118 THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2022 5. TANGIBLE CAPITAL ASSETS December 31, 2022 Disposals and Cost Opening Additions Adjustments finding Infrastructure Linear -Roadways 43,938,108 2,134,483 - 46,072,591 Linear- Water Services 10,317,727 14,372 (5,564) 10,326,535 Linear - Waste Water Services 16,546,027 - 16,546,027 Infrastructure Total 70.801,862 2,148,855 I5,i(w4 72,945,153 General Land 1,063,805 - 1,063,805 Land Improvements 1,826,468 30,605 - 1,857,073 Buildings 12,053,384 30,179 (222,671) 11,860,892 Machinery and Equipment 4,345,535 150,151 4,495,686 Vehicles 2,702,516 175,666 07,1111 2,780,849 General Total 21,991,708 386,601 (320,004) 22,058,305 Work in Progress 449,601 151,980 {434,a fi) 167,255 Total Cost _ 9?,?-1 ,i71 1687.436 (759,894) 95,170,713 Accumulated Amortization Disposals and Opening Amortization Adjustments Ending Infrastructure Linear - Roadways 17,354,512 776,759 - 18,131,271 Linear - Water Services 3,292,685 259,213 (5,564) 3,546,334 Linear - Waste Water Services 3.721,231 201,726 - 3,922,957 Infrastructure Total 24,368A28 1,237.698 (5.5041 25,600,562 General Land Improvements 973,417 67,318 - 1,040,735 Buildings 5,429,838 296,485 (76,456) 5,649,867 Machinery and Equipment 2,135,108 123,748 2,258,856 Vehicles 1,506.137 518A51 (94.088) 1,930,500 General Total 10,044,500 1.006.002 (170.544) 10,879,958 Total Accumulated Amortization 34.412, 228 2 243 700 Li LL f!i, ; 36,480,520 Net Book Value Opening Ending Infrastructure Linear - Roadways 26,583,596 27,941,320 Linear - Water Services 7,025,042 6,780,201 Linear - Waste Water Services 12,824,796 12,623,070 46,433,434 47,344,591 General Land 1,063,805 1,063,805 Land Improvements 853,051 816,338 Buildings 6,623,546 6,211,025 Machinery and Equipment 2,210,427 2,236,830 Vehicles 1,196,379 850,349 11,947,208 11,178,347 Work in Progress 44901 167,255 Total Net Book Value 58,830,243 58,690,193 THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2022 5. TANGIBLE CAPITAL ASSETS (CONTINUED) December 31, 2021 Disposals and Cost Opening Additions Adjustments Ending Infrastructure Linear - Roadways 42,758,039 1,712,692 (532,623) 43,938,108 Linear - Water Services 10,312,206 11,460 (5,939) 10,317,727 Linear - Waste Water Services 16.546,027 16,546,027 Infrastructure Total 69,616,272 1 724.152 (538.562) 70,801,862 General Land 1,063,805 - - 1,063,805 Land Improvements 1,752,889 73,579 1,826,468 Buildings 11,640,255 425,505 (12,376) 12,053,384 Machinery and Equipment 4,345,535 - - 4,345,535 Vehicles 2.494 937 207,579 2,702,516 General Total 21,297,421 706,663 (12,376) 21,991,708 Work in Progress 1_,251,704 444,383 f 1.1.16.4lk61 449,601 Total Cost 91165.397 397 2,875,198 _LI 7`.)7,.1'.11 93.243.171 Accumulated Amortization Disposals and Opening Amortization Adjustments Ending Infrastructure Linear -Roadways 17,122,110 752,102 (519,700) 17,354,512 Linear - Water Services 3,038,294 260,330 (5,939) 3,292,68.5 Linear - Waste Water Services 3.519,513 201,726 (8) 3,721,231 InfrastructurcTotal 23.679,917 1,214,158 (525,647) 24,368,428 General Land Improvements 908,760 64,657 - 973,417 Buildings 5,143,899 294,603 (8,664) 5,429,838 Machinery and Equipment 2,004,049 131,059 - 2,135,108 Vehicles 1.295.291 21 U46 1,506,137 General Total 9,351,999 70L165 (9,664) 10,044,500 Total Accumulated Amortization 33.031,916 1,915.323 4 531.31 E 1 34,412,928 Net Book Value Opening Ending Infrastructure Linear - Roadways 25,635,929 26,583,596 Linear - Water Services 7,273,912 7,025,042 Linear - Waste Water Services 13,026,514 12,824,796 45,936,355 46,433,434 General Land 1,063,805 1,063,805 Land Improvements 844,129 853,051 Buildings 6,496,356 6,623,546 Machinery and Equipment 2,341,486 2,210,427 Vehicles 1,199.646 1,196,379 11,945,422 11,947,208 Work in Progress 1,251,704 449,601 Total Net Book Value 59,133. 881 58 830,243 - I. THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2022 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: TD loan, 2.71 %, repayable in blended monthly payments of $27,557, due March 2025 (Project Ojibwa) Consolidated water board debt, interest rates ranging from 1.5% to 3.20%, maturing September 2020 to March 2027 Principal repayments are summarized as follows: 2022 2021 S � 4,553,818 4,758,090 55,998 80.232 .6�409.8�U 4,838.322 Tax User Revenue Charges Total 2023 209,877 12,349 222,226 2024 215,309 12,613 227,922 2025 4,128,632 12,890 4,141,522 2026 - 13,181 13,181 2027 - 4,965 4,965 Beyond - - Total 4.5� 55.9981 4.609.816 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 2022 amounted to $128,313 (2021 - $134,375). - If- THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2022 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. SURPLUS Municipality - current fund Cemetery boards - current fund Benefiting landowners - current fund Invested in tangible capital assets - capital fund Reserves Reserve funds AMOUNTS TO BE RECOVERED Net long-term debt (Note 6) ACCUMULATED SURPLUS 2022 S 181,752 (103,001) 58,690,193 5,151,453 4,021,908 2021 182,175 (128,805) 58,830,243 4,411,081 3,24,9,,371 67,942,305 66,544,065 (4,604),X% t4.838.322) 63,332,489 61.705,743 RESERVES AND RESERVE FUNDS CONSIST OF THE FOLLOWING: Reserves set aside for specific purposes by Council: for working capital - for capital purposes - for waterworks purposes y for other purposes Total reserves Reserve funds set aside for specific purposes by Council: for water system - consolidated - for sanitary sewers - for recreation and cultural service purposes Total reserve fiends - l7- 2022 2021 79,528 96,886 923,700 634,527 2,586,474 2,277,698 _1,561,751 1,401.970 5,151,453 4,411,081 166,472 142,446 3,366,957 3,062,226 488.479 44.699 4,021,908 3,249.371 THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2022 8. TRUST FUNDS Trust funds administered by the Municipality amounting to $279,084 (2021 - $273,166) 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 hlstitute 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 finds may be refunded. The balances in the obligatory reserve funds of the Municipality are summarized below: Development charges Canada Community Building Fund OCIF Parkland 10. PENSION AGREEMENTS 2022 2021 S AL 31,217 30,735 481,021 448,657 226,658 154,293 66.422 60.641 805,318 6 The Municipality makes contributions to the Ontario Municipal Employees Retirement Find (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 Decenber 31, 2022, and the results of this valuation disclosed actuarial liabilities of $128.8 billion in respect of benefits accrued for service with actuarial assets at that date of $122.1 billion leaving an actuarial deficit of $6.7 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 2022 was approximately $185,000 (2021 - $166,000). THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2022 11. BUDGET FIGURES The operating budget approved by the council of the Municipality for 2022 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. REVENUES Property taxation Taxation from other governments User charges Transfer payments: Federal Provincial Other municipalities Investment income Penalties and interest on taxes Recoveries from benefiting landowners Other Capital reserve transfers Total Revenues EXPENSES General government Protection to persons and property Transportation services Environmental services Health services Social and family services Recreation and cultural services Planning and development Reserve transfers Capital Total Expenses BUDGETED ANNUAL SURPLUS 19- Approved PSAB Budget Adjustments Budget - 5,044,357 - 5,044,357 175,049 175,049 2,290,588 735,870 3,026,458 4,667,600 - 4,667,600 1,626,100 27,079 1,653,179 471,879 - 471,879 28,000 83,975 111,975 91,000 - 91,000 107,000 - 107,000 70,500 28,792 99,292 320,500 (120,500) - 14,892,573 555.216 15,447,789 1,388,696 (186,979) 1,201,717 1,799,750 134,761 1,934,511 1,778,429 1,422,968 3,201,397 1,997,026 1,081,496 3,078,522 17,500 25,082 42,582 7,000 - 7,000 241,308 116,568 357,876 233,771 32,439 266,210 315,093 (315,093) - 7.114.000 t.7,1 1 4,000 - 14.892.573 t4.802.7. ) 10,089,815 - 5,357.974 5,357,974 THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2022 12. OPERATION OF SCHOOL BOARDS AND THE COUNTY OF ELGIN During 2022, requisitions were made by the school municipality to collect property taxes and payments amounts collected and remitted are summarized below Taxation and user charges Share of payments in lieu of taxes Amounts requisitioned 13. CONTINGENCIES boards and the County of Elgin requiring the in lieu of property taxes on their behalf. The School Boards County S 1,509,185 4,933,534 6,379 168,050 1.515.564 5.101.584 As at December 31, 2022, 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, 2022, 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. - 20 THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2022 14. SUPPLEMENTARY INFORMATION [a] Current fund expenses by object: Salaries, wages and employees benefits Long-term debt interest Materials Contracted services Amortization External transfers to others Loss (gain) on disposal of tangible capital assets [b] Cash flow information: Taxes receivable Accounts receivable Inventories and prepaid expenses Accounts payable and accrued liabilities Deferred revenue -obligatory reserve funds WE 2022 2021 - -$ 2,402,413 2,281,845 128,313 134,375 3,178,542 2,521,529 2,323,131 2,239,214 2,243,700 1,915,323 99,349 96,741 (367,263) ! 16,627 10,008,185 9,205,654 307,237 (110,248) (62,105) (88,922) 110,992 156,954 645,395 (26,622) (31,200) 268,408 354,787 1,210,768 THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Notes to the Consolidated Financial Statements Year Ended December 31, 2022 15. 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 finds. 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. THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Schedule of Segment Disclosure Year Ended December 31, 2022 Water and Public Waste Funds Works REVENUE Other Total Segments Consolidated —t— Taxation - 1,254,550 4,059,634 5,314,184 Sales of service and regulatory fees 2,523,559 55,619 576,159 3,155,337 Government transfer - 475,157 2,169,180 2,644,337 Other 106,926 414,147 521,073 EXPENSES Salaries, wages and employee benefits Long-term debt interest Materials Contracted services Amortization Loss (gain) on disposal of tangible capital assets Transfer to others ANNUAL SURPLUS (DEFICIT) 2.630,485 1,785.326 7,219,120 11,634,931 445,311 739,495 1,217,607 2,402,413 1,899 - 126,414 128,313 850,027 1,281,168 1,047,347 3,178,542 595,331 37,375 1,690,425 2,323,131 628,214 1,317,474 298,012 2,243,700 - (36,756) (330,507) (367,263) - - 99,349 99,349 2.520,782 3,338.756 4,148.647 10,008,185 109.703 (1,553,430) 3,070.473 __ 1,626,746 - 23 - THE CORPORATION OF THE MUNICIPALITY OF BAYHAM Consolidated Schedule of Segment Disclosure Year Ended December 31, 2021 Water and Public Waste Funds Works __L_ REVENUE Other Total Segments Consolidated S... Taxation - 1,413,084 3,516,438 4,929,522 Sales of service and regulatory fees 2,404,520 39,736 512,963 2,957,219 Government transfer 5,854 448,317 1,627,932 2,082,103 Other 115�080 - 397,381 512,461 2,525,454 1,901.137 6,05.4.714 481,305 _10 EXPENSES Salaries, wages and employee benefits 418,375 617,734 1,245,736 2,281,845 Long-term debt interest 2,505 - 131,870 134,375 Materials 682,463 1,107,065 732,001 2,521,529 Contracted services 534,857 23,092 1,681,265 2,239,214 Amortization 637,955 977,185 300,183 1,915,323 Loss on disposal of tangible capital assets - 12,912 3,715 16,627 Transfer to others - - _ 96,741 96,,741 2.276,155 2.737.988 4,191.511 9,205,654 ANNUAL SURPLUS (DEFICIT) 249.299 (836.851) 1.863,203 1,275,651