HomeMy WebLinkAboutFinancial Statements 2015 THE CORPORATION OF THE
MUNICIPALITY OF BAYHAM
Consolidated Financial Statements
December 31, 2015
THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Consolidated Financial Statements
Year Ended December 31, 2015
Table of Contents PAGE
Independent Auditors' Report 1
Consolidated Statement of Financial Position 2
Consolidated Statement of Operations and Accumulated Surplus 3
Consolidated Statement of Change in Net Financial Assets 4
Consolidated Statement of Cash Flows 5
Notes to the Consolidated Financial Statements 6 - 19
Consolidated Schedule of Segment Disclosure 20 - 21
Schedule of Segment Disclosure 22
FtGRAHAM SCOTT ENNS 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
To the Members of Council,Inhabitants and Ratepayers of
The Corporation of the Municipality of Bayham:
Report on the Financial Statements
We have audited the accompanying consolidated financial statements of The Corporation of the Municipality of Bayham,
which comprise the consolidated statement of financial position as at December 31, 2015, and the statements of consolidated
operations and accumulated surplus, changes in net assets, and cash flow for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian
accounting standards for public sector entities and for such internal control as management determines is necessary to enable
the preparation of financial statements that are free from material misstatement,whether due to fraud or error.
Auditors'Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in
accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free of material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on the auditor's judgment,including the assessment of the risks of material misstatement of the
financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal
control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting
estimates made by management,as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion,the consolidated financial statements present fairly,in all material respects,the statement of financial position of
The Corporation of the Municipality of Bayham as at December 31,2015,and the statements of operations and accumulated
surplus, changes in net assets, and cash flow for the year then ended in accordance with Canadian accounting standards for
public sector entities.
St. Thomas, Ontario91Z4/4402Scott Sett4 4,a,
May 19, 2016 CHARTERED PROFESSIONAL ACCOUNTANTS
Licensed Public Accountants
- 1 -
THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Consolidated Statement of Financial Position
As At December 31, 2015
2015 2014
$ $
ASSETS
FINANCIAL ASSETS
Cash 1,020,314 2,085,005
Investments (Note 2) 3,257,030 3,175,840
Taxes receivable (Note 3) 776,225 584,459
Accounts receivable (Note 4) 1,807,414 1,404,314
6,860,983 7.249.618
LIABILITIES
Deferred revenue - obligatory reserve funds (Note 9) 248,672 221,650
Accounts payable and accrued liabilities 1,184,869 929,207
Accrued liabilities arising from loan guarantee (Note 13) - 6,000,000
Net long-term liabilities (Note 6) 6,569,992 1,014,459
8,003,533 8.165.316
NET FINANCIAL ASSETS (1,142,550) (915.698)
NON-FINANCIAL ASSETS
Tangible capital assets (Note 5) 53,911,686 53,757,546
Prepaid expenses and inventory 100,646 58,914
54,012,332 53.816.460
ACCUMULATED SURPLUS (NOTE 7) 52,869,782 52.900.762
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, 2015
Budget Actual Actual
(Note 11) 2015 2014
$ $ $
REVENUES
Property taxation 3,477,851 3,486,317 3,242,775
Taxation from other governments 119,138 119,138 88,120
User charges 1,732,543 1,968,304 2,163,188
Transfer payments
Federal 239,398 192,930 170,949
Provincial 2,767,981 1,692,770 1,242,989
Other municipalities 496,268 453,486 494,010
Investment income 60,235 121,645 110,537
Penalties and interest on taxes 107,000 94,697 108,790
Recoveries from benefiting landowners 132,215 141,275 132,215
Other 50.700 192,187 46,091
Total Revenues 9.183.329 8,462,749 7.799.664
EXPENSES
General government 1,100,517 1,360,873 1,014,217
Protection to persons and property 1,711,967 1,566,270 1,669,396
Transportation services 2,411,764 2,436,488 2,541,085
Environmental services 2,103,751 2,075,578 2,069,679
Health services 19,257 41,848 34,140
Social and family services 10,000 10,721 10,141
Recreation and cultural services 287,640 276,281 382,553
Planning and development 692,551 732,478 295,037
Loss (gain) on disposal of tangible capital assets - (6,808) (43,877)
Total Expenses (Note 15) 8,337,447 8,493,729 7,972,371
ANNUAL SURPLUS (DEFICIT) BEFORE
CONTINGENCY PROVISION 845,882 (30,980) (172,707)
PROVISION FOR ACCRUED LIABILITY-
LOAN GUARANTEE (NOTE 13) - - (6,000,000)
ANNUAL SURPLUS (DEFICIT) 845,882 (30,980) (6,172,707)
ACCUMULATED SURPLUS, BEGINNING OF YEAR 52,900,762 52,900,762 59,073,469
ACCUMULATED SURPLUS, END OF YEAR(NOTE 7) 53,746,644 52,869,782 52,900,762
See accompanying notes to the consolidated financial statements.
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THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Consolidated Statement of Changes in Net Financial Assets
Year Ended December 31, 2015
Budget Actual Actual
(Note 11) 2015 2014
$ $ $
ANNUAL SURPLUS (DEFICIT) 845,882 (30,980) (6,172,707)
Acquisition of tangible capital assets (1,753,079) (1,753,079) (691,642)
Amortization of tangible capital assets 1,529,348 1,529,348 1,504,346
Proceeds on disposal of tangible capital assets - 76,400 48,039
Change in prepaid expenses and inventory - (41,733) (36,418)
Loss (gain) on sale of tangible capital assets - (6,808) (43,877)
INCREASE (DECREASE) IN NET
FINANCIAL ASSETS 622,151 (226,852) (5,392,259)
NET FINANCIAL ASSETS, BEGINNING OF YEAR (915,698) (915,698) 4,476,561
NET FINANCIAL ASSETS,END OF YEAR (293,547) (1,142,550) (915,698)
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, 2015
2015 2014
$ $
OPERATING ACTIVITIES
Annual surplus (deficit) (30,980) (6,172,707)
Add (deduct) items not involving cash:
Amortization of tangible capital assets 1,529,348 1,504,346
Accrued liability arising from loan guarantee - 6,000,000
Loss (gain) on disposal of and transfer of assets (6,808) (43,877)
1,491,560 1,287,762
Change in non-cash items related to operations (Note 15[b]) (353,917) (406,675)
Net change in cash from operating activities 1,137,643 881,087
CAPITAL
Acquisition of tangible capital assets (1,753,079) (691,642)
Proceeds on disposal of tangible capital assets 76,400 48,039
Net change in cash from capital (1,676,679) (643,603)
INVESTING
Investment income reinvested (81,190) (86,025)
Net change in cash from investing (81,190) (86,025)
FINANCING
Long-term debt repayment (444,465) (91,396)
Net change in cash from financing (444,465) (91,396)
NET CHANGE IN CASH AND CASH EQUIVALENTS (1,064,691) 60,063
OPENING CASH AND CASH EQUIVALENTS 2,085,005 2,024,942
CLOSING CASH AND CASH EQUIVALENTS 1,020,314 2,085,005
SUPPLEMENTARY INFORMATION:
Cash paid for interest on debt 156,719 39,976
Cash received for interest on investments 121,645 1 10,537
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, 2015
The Corporation of the Municipality of Bayham (the "Municipality") is a municipality in the Province of
Ontario. It conducts its operations guided by the provisions of provincial statutes such as the Municipal
Act, Municipal Affairs Act and related legislation.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial statements of the Municipality are prepared by management in accordance
with Canadian accounting standards for public sector entities, as recommended by the Public Sector
Accounting Board of the Canadian Institute of Chartered Professional Accountants. Significant
aspects of the accounting policies adopted by the Municipality are as follows:
Reporting Entity
The consolidated financial statements include the assets, liabilities, revenues and expenses of the
reporting entity. The reporting entity is comprised of all organizations, committees and local boards
accountable for the administration of their financial affairs and resources to the Municipality and
which are 100% owned or controlled by the Municipality.
Consolidated Entities
The following local boards are consolidated:
-Various Cemetery Boards
Inter-departmental and inter-organizational transactions and balances between these organizations
are eliminated.
Proportionate Consolidation
The Elgin Area Primary Water Board and Port Burwell Water Board have been consolidated on a
proportionate basis. The Water Boards are proportionately consolidated based upon the water flow
used by our Municipality in proportion to the entire flows provided by the joint boards.
Accounting for School Board Transactions
Although the Municipality collects taxation on behalf of the School Boards, the taxation, other
revenues, expenses, assets and liabilities with respect to the operations of the school boards are not
reflected in these statements.
Trust Funds
Trust funds and their related operations administered by the Municipality are not included in these
consolidated financial statements.
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THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Notes to the Consolidated Financial Statements
Year Ended December 31, 2015
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.
Investments
Investments, consisting of one fund pooled bond securities, are recorded at the lower of cost plus
accrued interest and fair market value. Investment income earned on available funds is reported as
revenue in the period earned.
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, 2015
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, 2015
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
vi) Inventories of supplies
Inventories of supplies held for consumption are recorded at the lower of cost and replacement cost.
Investment Income
Investment income is reported as revenue in the period earned. When required by funding
government or related Act, investment income earned on deferred revenue is added to the investment
and forms part of the deferred revenue balance.
Tax Revenues
In 2015, the Municipality received $3,605,455 (2014 - $3,330,895) in property tax revenues for
municipal purposes. The authority to levy and collect property taxes is established under the
Municipal Act 2001, the Assessment Act, the Education Act, and other legislation.
The amount of the total annual property tax levy is determined each year through Council's approval
of the annual budget. Municipal tax rates are set annually by Council for each class or type of
property, in accordance with legislation and Council-approved policies, in order to raise the revenue
required to meet operating budget requirements. Education tax rates are established by the Province
each year in order to fund costs of education on a Province-wide basis.
Taxation revenues are recorded at the time billings are issued. Additional property tax revenue can be
added throughout the year, related to new properties that become occupied, or that become subject to
property tax, after the return of the annual assessment roll used for billing purposes. The Municipality
may receive supplementary assessment rolls over the course of the year from MPAC that identify
new or omitted assessments. Property taxes for these supplementary/omitted amounts are then billed
according to the approved tax rate for the property class.
Taxation revenues in any year may also be reduced as a result of reductions in assessment value
rising from assessment and/or tax appeals. Each year, an amount is identified to cover the estimated
amount of revenue loss attributable to assessment appeals, tax appeals or other deficiencies in tax
revenue (e.g. uncollectible amounts, write-offs, etc.).
Employee Benefit Plans
The Municipality accounts for its participation in the Ontario Municipal Employees Retirement
System (OMERS), a multi-employer public sector pension fund, as a defined contribution plan. The
OMERS plan specifies the retirement benefits to be received by the employees based on the length of
service and pay rates. Employee benefits include post employment benefits. Post employment
benefits are subject to actuarial valuations and are accrued in accordance with the projected benefit
method, prorated on service and management's best estimate of salary escalation and retirement ages
of employees. Any actuarial gains and losses related to past service of employees are amortized over
the expected average remaining service period.
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THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Notes to the Consolidated Financial Statements
Year Ended December 31, 2015
1, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Financial Instruments
The Municipality's financial instruments consist of cash and cash equivalents, accounts receivable,
taxes receivable, accounts payable and accrued liabilities and long-term liabilities. Unless otherwise
noted, it is management's opinion that the Municipality is not exposed to significant interest,
currency, or credit risk arising from these financial instruments.
Environmental Provisions and Contaminated Sites
The Municipality's 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, 2015 there were no properties that the Municipality was responsible to remedy and as
such no liability has been accrued.
2. INVESTMENTS
Investments are comprised of the following:
2015 2014
$ $ $
Cost Market Cost Market
One fund pooled bond securities 3,257,030 3,151,476 3,175,840 3,091,585
3. TAXES RECEIVABLE
2015 2014
$ $
Taxes receivable 735,283 542,439
Penalties and interest 40,942 42,020
776,225 584,459
4. ACCOUNTS RECEIVABLE
2015 2014
$ $
Accounts receivable 949,680 619,739
Debentures, interest at 2.97%, due 2034 338,168 359,494
Debentures, interest at 3.5% and 6%, due 2017 40,008 73,152
Government remittances 479,558 351,929
1,807,414 1,404,314
- 10 -
THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Notes to the Consolidated Financial Statements
Year Ended December 31, 2015
5. TANGIBLE CAPITAL ASSETS
December 31,2015 Disposals and
Cost Opening Additions Adjustments Ending
Infrastructure
Linear-Roadways 38,990,869 633,665 - 39,624,534
Linear-Water Services 6,761,274 113,053 (25,351) 6,848,976
Linear-Waste Water Services 14,691,859 - - 14,691,859
Infrastructure Total 60,444,002 746,718 (25,351) 61,165,369
General
Land 1,114,586 - - 1,114,586
Land Improvements 1,028,307 - - 1,028,307
Buildings 9,280,511 188,210 - 9,468,721
Machinery and Equipment 3,457,516 17,495 - 3,475,011
Vehicles 1,834,713 794,314 (191,490) 2,437,537
General Total 16,715,633 1,000,019 (191,490) 17,524,162
Work In Progress 290,547 171,978 (165,636) 296,889
Total Cost 77,450,182 1,918,715 (382,477) 78,986,420
Accumulated Amortization Disposals and
Opening Amortization Adjustments Ending
Infrastructure
Linear-Roadways 13,000,096 741,458 - 13,741,554
Linear-Water Services 1,908,181 164,272 (24,476) 2,047,977
Linear-Waste Water Services 2,212,876 149,184 - 2,362,060
Infrastructure Total 17,121,153 1,054,914 (24,476) 18,151,591
General
Land Improvements 462,484 39,553 - 502,037
Buildings 3,707,196 242,356 - 3,949,552
Machinery and Equipment 1,593,114 95,104 - 1,688,218
Vehicles 808,689 97,421 (122,774) 783,336
General Total 6,571,483 474,434 (122,774) 6,923,143
Total Accumulated Amortization 23,692,636 1,529,348 (147,250) 25,074,734
Net Book Value Opening Ending
Infrastructure
Linear-Roadways 25,990,773 25,882,980
Linear-Water Services 4,853,093 4,800,999
Linear-Waste Water Services 12,478,983 12,329,799
43,322,849 43,013,778
General
Land 1,114,586 1,114,586
Land Improvements 565,823 526,270
Buildings 5,573,315 5,519,169
Machinery and Equipment 1,864,402 1,786,793
Vehicles 1,026,024 1,654,201
10,144,150 10,601,019
Work in Progress 290,547 296,889
Total Net Book Value 53,757,546 53,911.686
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THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Notes to the Consolidated Financial Statements
Year Ended December 31, 2015
5. TANGIBLE CAPITAL ASSETS (CONTINUED)
December 31,2014 Disposals and
Cost Opening Additions Adjustments Ending
Infrastructure
Linear-Roadways 38,853,528 137,341 - 38,990,869
Linear-Water Services 5,883,718 877,556 - 6,761,274
Linear-Waste Water Services 14,691,859 - - 14,691,859
Infrastructure Total 59,429,105 1,014,897 - 60,444,002
General
Land 1,114,703 - (117) 1,114,586
Land Improvements 1,028,307 - - 1,028,307
Buildings 9,327,058 7,359 (53,906) 9,280,511
Machinery and Equipment 3,368,684 105,094 (16,262) 3,457,516
Vehicles 1,834,713 - - 1,834,713
General Total 16,673,465 112,453 (70,285) 16,715,633
Work in Progress 726,255 200,020 (635,728) 290,547
Total Cost 76,828,825 1,327,370 (706,013) 77,450,182
Accumulated Amortization Disposals and
Opening Amortization Adjustments Ending
Infrastructure
Linear-Roadways 12,261,370 738,726 - 13,000,096
Linear-Water Services 1,817,576 90,605 - 1,908,181
Linear-Waste Water Services 2,063,692 149,184 - 2,212,876
Infrastructure Total 16,142,638 978,515 - 17,121,153
General
Land Improvements 422,683 39,801 - 462,484
Buildings 3,505,124 251,931 (49,859) 3,707,196
Machinery and Equipment 1,487,845 121,531 (16,262) 1,593,114
Vehicles 696,121 112,568 - 808,689
General Total 6,111,773 525,831 (66,121) 6,571,483
Total Accumulated Amortization 22,254,411 1,504.346 (66,121) 23,692,636
Net Book Value Opening Ending
Infrastructure
Linear-Roadways 26,592,158 25,990,773
Linear-Water Services 4,066,142 4,853,093
Linear-Waste Water Services 12,628,167 12,478,983
43,286,467 43,322,849
General
Land 1,114,703 1,114,586
Land improvements 605,624 565,823
Buildings 5,821,934 5,573,315
Machinery and Equipment 1,880,839 1,864,402
Vehicles 1,13 8,592 1,026,024
10,561,692 10,144,150
Work in Progress 726,255 290,547
Total Net Book Value 54,574,414 53,757,546
- 12 -
THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Notes to the Consolidated Financial Statements
Year Ended December 31, 2015
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:
2015 2014
$ $
TD loan, 2.71%,repayable in blended monthly payments of
$27,557, due March 2025 (Project Ojibwa) 5,873,351 -
RBC loan, 3.56%, repayable in blended semi-annual
payments of$32,500, due July 2026 (Fire Hall) 590,956 633,770
RBC loan, 4.1%, repayable in blended quarterly payments
of$11,012, due June 2020,repaid in year(water
infrastructure) - 256,909
Consolidated water board debt, interest rates ranging from
1.5%to 5.75%,maturing August 2018 to September 2022 105,685 123,779
6,569,992 1,014,458
Principal repayments are summarized as follows:
Tax Benefiting
Revenue Landowers Total
2016 217,579 18,977 236,556
2017 224,368 19,714 244,082
2018 230,914 20,489 251,403
2019 237,654 11,412 249,066
2020 244,206 11,698 255,904
Beyond 5.309,586 23,395 5.332,981
Total 6,464,307 105,685 6,569,992
b)Interest expense on long-term liabilities in 2015 amounted to $156,719 (2014 - $39,976).
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THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Notes to the Consolidated Financial Statements
Year Ended December 31, 2015
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.
2015 2014
$ $
Operating fund:
Municipality - -
Cemetery boards 188,553 186,244
Benefiting landowners (613,923) (115,427)
(425,370) 70,817
Invested in tangible capital assets 53,911,686 53,757,546
Capital fund (141,022) (140,316)
Reserves 3,644,962 4,124,411
Reserve funds 2,449,518 2,102,763
59,439,774 59,915,221
AMOUNTS TO BE RECOVERED
Accrued liability- loan guarantee (Note 13) - (6,000,000)
Net long-term debt(Note 6) (6,569,992) (1,014,459)
(6,569,992) (7,014,459)
ACCUMULATED SURPLUS 52,869,782 52,900,762
RESERVES AND RESERVE FUNDS CONSIST OF THE FOLLOWING:
2015 2014
$ $
Reserves set aside for specific purposes by Council:
- for working capital 245,656 316,142
- for capital purposes 355,507 1,219,354
- for waterworks purposes 1,624,771 1,220,383
- for rate stabilization 213,866 425,000
- for other purposes 1,205,162 943,532
Total reserves 3,644,962 4,124,411
Reserve funds set aside for specific purposes by Council:
- for water system 80,272 79,499
- for construction of sanitary sewers 2,112,015 1,764,489
- for recreation and cultural service purposes 257,231 258,775
Total reserve funds 2,449,518 2.102.763
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THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Notes to the Consolidated Financial Statements
Year Ended December 31, 2015
8. TRUST FUNDS
Trust funds administered by the Municipality amounting to $246,537 (2014 - $243,458) have not
been included in the Consolidated Balance Sheet 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:
2015 2014
$ $
Development charges 26,928 26,257
Gasoline tax 148,971 129,798
Parkland 72,773 65,595
248,672 221,650
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, 2015, and the results of this valuation
disclosed actuarial liabilities of$81.9 billion in respect of benefits accrued for service with actuarial
assets at that date of$74.9 billion leaving an actuarial deficit of$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 2015 was $129,652 (2014 - $129,155).
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THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Notes to the Consolidated Financial Statements
Year Ended December 31, 2015
11. BUDGET FIGURES
The operating budget approved by the council of the Municipality for 2015 is reflected on the
consolidated statement of operations. Budget figures have been reclassified for the purposes of these
financial statements to comply with PSAB reporting requirements. These adjustments include
reserve transfers, capital expenditures, amortization and debt financing and repayment.
Approved PSAB
Budget Adjustments Budget
$ $ $
REVENUES
Property taxation 3,477,851 - 3,477,851
Taxation from other governments 119,138 - 119,138
User charges 1,566,160 166,383 1,732,543
Transfer payments:
Federal 217,120 22,278 239,398
Provincial 2,219,838 548,143 2,767,981
Other municipalities 496,268 - 496,268
Investment income 45,000 15,235 60,235
Penalties and interest on taxes 107,000 - 107,000
Recoveries from benefiting landowners 132,215 - 132,215
Other 50,700 - 50,700
Reserve transfers 1,861,035 (1,861,035) -
Total Revenues 10,292,325 (1,108,996) 9,183,329
EXPENSES
General government 1,335,776 (235,259) 1,100,517
Protection to persons and property 1,622,179 89,788 1,711,967
Transportation services 1,607,906 803,858 2,411,764
Environmental services 2,121,117 (17,366) 2,103,751
Health services 19,000 257 19,257
Social and family services 10,000 - 10,000
Recreation and cultural services 282,198 5,442 287,640
Planning and development 167,026 525,525 692,551
Capital 3,127,123 (3,127,123) -
Total Expenses 10,292,325 (1,954,878) 8,337,447
BUDGETED ANNUAL SURPLUS - 845,882 845,882
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THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Notes to the Consolidated Financial Statements
Year Ended December 31, 2015
12. OPERATION OF SCHOOL BOARDS AND THE COUNTY OF ELGIN
During 2015, 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 1,415,314 3,418,453
Share of payments in lieu of taxes 283 117.089
Amounts requisitioned 1,415,597 3,535,542
13. ACCRUED LIABILITY ARISING FROM LOAN GUARANTEES
The Municipality had guaranteed the debt of the Elgin Military Museum for an amount of
$6,000,000. In 2014, management had determined that a contingent liability in the amount of
$6,000,000 should be recognized in the financial statements for that fiscal year-end. The Elgin
Military Museum defaulted on its loan in March 2015 and the Municipality was required to cover the
full $6,000,000 loan guarantee. The guarantee has been funded by long-term debt with an interest
rate at 2.71%, in blended monthly payments of$27,557, and is due in March, 2025 (Note 6).
The Municipality had approximately $100,000 set up in accounts receivable for fees paid by the
Municipality for this letter of guarantee. No funds have been collected for these guarantee fees and
management has written these advances off in the year.
In relation to this loan guarantee and the long-term debt the Municipality has been named in a
statement of claim for approximately $1,200,000 from a specific vendor of the Elgin Military
Museum. The Municipality has then made a statement of claim of approximately$6,700,000 against
the Elgin Military Museum in an attempt to recover some of these fees and long-term debt
repayments.
14. CONTINGENT LIABILITIES
As at December 31, 2015 certain legal actions are pending against the Municipality. The final
outcome of the outstanding claims cannot be determined at this time. However, management
believes that ultimate disposition of these matters will not materially exceed the amounts recorded in
these consolidated financial statements.
Estimated costs to settle claims are based on available information and projections of estimated
future expenses developed based on the Municipality's historical experience. Claims are reported as
an operating expense in the year of the loss, where the costs are deemed to be likely and can be
reasonable determined. Claim provisions are reported as a liability in the consolidated statement of
financial position.
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THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Notes to the Consolidated Financial Statements
Year Ended December 31, 2015
15. SUPPLEMENTARY INFORMATION:
2015 2014
$ $
[a] Current fund expenses by object:
Salaries, wages and employees benefits 2,003,110 1,998,826
Long-term debt interest 156,719 39,976
Materials 2,690,336 2,395,692
Contracted services 2,062,223 2,023,468
Amortization expense 1,529,347 1,504,343
Loss (gain) on disposal and transfer of assets (6,808) (43,877)
External transfers to others 58,802 53,943
8,493,729 7,972,371
[b] Cash flow information:
(Increase) decrease in taxes receivable (191,766) 237,126
(Increase) decrease in accounts receivable (403,100) (614,741)
(Increase) decrease in inventories and prepaid expenses (41,733) (36,418)
Increase (decrease) in accounts payable and accrued liabilities 255,660 (66,630)
Increase (decrease) in deferred revenue-obligatory reserve funds 27,022 73,988
(353,917) (406,675)
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THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Notes to the Consolidated Financial Statements
Year Ended December 31, 2015
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.
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THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Consolidated Schedule of Segment Disclosure
Year Ended December 31, 2015
Water and Public Other Total
Waste Funds Works Segments Consolidated
$ $ $ $
REVENUE
Taxation - 1,153,228 2,452,227 3,605,455
Sales of service and regulatory fees 1,497,879 50,948 419,477 1,968,304
Government transfer 575,421 448,486 1,315,279 2,339,186
Other 148,856 - 400,948 549,804
2,222,156 1,652,662 4,587,931 8,462,749
EXPENSES
Salaries,wages and employee benefits 252,555 631,082 1,119,473 2,003,110
Long-term debt interest 13,168 - 143,551 156,719
Materials 604,689 965,509 1,120,138 2,690,336
Contracted services 191,948 36,039 1,834,236 2,062,223
Amortization 498,007 803,858 227,482 1,529,347
Loss (gain) on disposal and transfer of assets - - (6,808) (6,808)
Transfer to others - - 58,802 58,802
1,560.367 2,436,488 4,496,874 8,493,729
ANNUAL SURPLUS (DEFICIT) 661,789 (783,826) 91,057 (30,980)
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THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Consolidated Schedule of Segment Disclosure
Year Ended December 31, 2014
Water and Public Other Total
Waste Funds Works Segments Consolidated
$ $ $ $
REVENUE
Taxation - 1,098,721 2,232,174 3,330,895
Sales of service and regulatory fees 1,447,769 5,790 709,629 2,163,188
Government transfer 104,612 438,313 1,365,023 1,907,948
Other 137.955 - 259.678 397,633
1,690.336 1,542,824 4,566.504 7,799,664
EXPENSES
Salaries,wages and employee benefits 273,991 654,295 1,070,540 1,998,826
Long-term debt interest 16,307 - 23,669 39,976
Materials 595,027 1,023,403 777,262 2,395,692
Contracted services 198,027 50,431 1,775,010 2,023,468
Amortization 467,434 812,953 223,956 1,504,343
Loss on transfer and disposal of assets - - (43,877) (43,877)
Transfer to others - - 53,943 53,943
1,550,786 2,541,082 3,880,503 7,972,371
ANNUAL SURPLUS (DEFICIT) 139,550 (998,258) 686,001 (172,707)
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THE CORPORATION OF THE MUNICIPALITY OF BAYHAM
Schedule of Segment Disclosure
Year Ended December 31, 2015
Budget Actual Actual
WATER AND WASTE WATER 2015 2015 2014
$ $ $
Revenue
Sales of services and regulatory fees 1,489,300 1,497,879 1,447,769
Government transfers 570,421 575,421 104,612
Benefiting land owners 132,215 141,275 132,215
Other 6,955 7,581 5,740
Total Revenues 2,198,891 2,222,156 1,690,336
Expenses
Salaries, wages and employees benefits 326,207 252,555 273,991
Long-term debt interest 9,289 13,168 16,307
Materials 635,760 604,689 595,027
Contracted services, rents and financial expenses 323,217 191,948 198,027
Amortization 498.007 498,007 467.434
Total Expenditures 1,792,480 1,560,367 1,550,786
Annual Surplus 406,411 661,789 139,550
Budget Actual Actual
PUBLIC WORKS 2015 2015 2014
$ $ $
Revenue
Taxation 1,153,228 1,153,228 1,098,721
Sales of services and regulatory fees 8,600 50,948 5,790
Government transfers 446.078 448,486 438.313
Total Revenues 1,607,906 1,652,662 1,542,824
Expenses
Salaries, wages and employees benefits 683,672 631,082 654,295
Materials 742,234 965,509 1,023,403
Contracted services and rents 37,000 36,039 50,431
Amortization 803.858 803,858 812.953
Total Expenditures 2,266,764 2,436,488 2,541,082
Annual (Deficit) (658,858) (783,826) (998,258)
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