For The Year Ended December 31, 2011

Transcription

1 Annual Financial Statements And Supporting Schedules For the CITY OF NORTH BATTLEFORD For The Year Ended December 31, 2011

2 Holm Clements /(wong Svenkeson Raiche Chartered Accountants Street North Battleford, Saskatchewan S9A OZ9 Telephone: (306) Facsimile: (306) To Mayor and Council of the City of North Battleford: Report o11 the consolidated Fina11cial Statements INDEPENDENT AUDITOR'S REPORT We have audited the accompanying consolidated financial statements of City of North Battleford, which comprise the statement of financial position as at December 31, 20 II, and the statements of operations, change in net financial (debt) assets and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory informat ion. Ma11ageme11 t's Responsibility for the col/so/idated Fillallcial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with Canadian public sector accounting standards, 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 clue to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with Canad ian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free f rom material misstatement. An aud it invol ves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the consolidated 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 consolidated 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 consolidated financial statements. W e believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our aud it opinion. Opinion In our opinion, the consolidated f inancial statements present fairly, in all material respects, the financial position of the City of North Bauleford as at December 31, 2011, and the results of its operations, change in net financial (debt) assets and its cash flows for the year then ended in accordance with Canadian public sector accounting standards. ~~~:,~g~~ord, Saskatchewan #tim (!dill!,j, /(VJ&Jj{f j~:.~~: :: 0 ~; ~ G.I<. Holm, CA* W.J. Clements, CA* G.D. Kwong. CMA, CA* B.W. Svenkeson, CA* L.A. Raiche, CA, CFP* "Denotes a Professional Corporation CA

3 Management's Responsibility To the Ratepayers of the City of North Battleford. Management is responsible for the preparation and presentation of the accompanying financial statements, including responsibility for signifi cant accounting judgments and estimates in accordance with Canadian generally accepted accounting principles and ensuring that a ll information in the annual report is consistent w ith the statements. This responsibili ty inc ludes selecting appropriate accounting principles and methods, and making decisions affecting the measurement of transactions in w hich objective judgment is required. In discharging its responsibilities for the integri ty and fairness of the financial statements, management designs and maintains the necessary accounting systems and related internal controls to provide reasonable assurance that transactions are authorized, assets are safeguarded and fi nancial records are properly mainta ined to provide reliable information for the preparation of financial statements. The Council is composed of elected officials who are not employees of the Municipality. The Counc il is responsible for overseeing management in the performance of its financial reporting responsibilities. The Council fulfils these responsibilities by reviewing the financial information prepared by the administration and discussing relevant matters with external auditors. The Council is also responsible for recommending the appointment of the Municipality's external auditors. Holm Clements Kwong Svenkeson Raiche, an independent firm of Chartered Accountants, is appointed by the Council to audit the financial state ments and report directly to them; their report follows. The external auditors have full and free access to, and meet periodically and separately with, both the Council and administration to discuss their audit findings.

4 Consolidated Statement of Financial Position Statement 1 As at December 31, 2011 Assets Financial Assets Cash and temporary investments (Note 2) $ 12,469,161 $ 28,563,686 Taxes receivable - municipal (Note 3) 1,078, ,618 Other accounts receivable (Note 4) 3,651,257 4,232,803 Other - accrued interest receivable 145,604 Land for resale (Note 5) 2,230,061 2,370,950 Long-term service agreements (Note 6) 4,442,299 4,439,988 Other 13,508 17,468 Total Financial Assets 23,884,858 40,535,117 Liabilities Accounts payable 10,266,505 6,062,830 Accrued liabilities payable 340, ,793 Utility deposits 134, ,006 Deferred revenue 1,362,919 1,344,717 Accrued landfill costs 540, ,219 Long-term debt (Note 7) 26,667,190 22,780,701 Total Liabilities 39,312,048 30,988,266 Net Financial (Debt) Assets (15,427,190) 9,546,851 Non-Financial Assets Tangible capital assets (Schedules 6, 7) 133,816,767 94,469,742 Prepayments and deferred charges 158, ,948 Stock and supplies 412, ,585 Total Non - Financial Assets 134,388,293 95,296,275 Accumulated Surplus - Schedule 8 $ 118,961,103 $ 104,843,126 Page 2 of 33

5 Consolidated Statement of Operations Statement 2 Revenue 2011 Budget 2011 Actual 2010 Actual Taxes and other unconditional revenue (Schedule 1) $ 16,566,400 $ 16,607,089 $ 14,961,523 Fees and charges (Schedule 4, 5) 12,439,360 11,824,567 11,515,470 Conditional grants (Schedule 4, 5) 957, , ,689 Tangible capital asset sales - gain (loss) (Schedule 4, 5) 50,000 (6,287) 16,879 Land sales - gain (Schedule 4, 5) 1,505,000 1,299,936 1,276,567 Investment income and commissions (Schedule 4, 5) 669, , ,651 Other revenue (Schedule 4, 5) 6,000 3,450 2,335 Total Revenue 32,193,721 31,481,203 29,509,114 Expenses General government services (Schedule 3) 2,469,184 2,440,057 2,345,596 Protective services (Schedule 3) 5,643,317 6,054,911 5,641,622 Transportation services (Schedule 3) 3,182,244 4,911,410 4,866,571 Environmental and public health services (Schedule 3) 1,371,173 1,503,693 1,403,781 Planning and development services (Schedule 3) 1,615,809 1,326,960 1,390,363 Recreation cultural & park services (Schedule 3) 4,401,921 4,902,763 4,927,023 Water services (Schedule 3) 2,434,623 2,888,685 2,489,343 Sanitary sewer services (Schedule 3) 2,308,564 2,934,295 2,929,374 Total Expenses 23,426,835 26,962,774 25,993,673 Surplus of Revenue over Expenses before Other Capital Contribution 8,766,886 4,518,429 3,515,441 Provincial/Federal Capital Grants and Contributions (Schedule 4, 5) 13,596,113 9,599,548 15,281,210 Surplus/Deficit of Revenue over Expenses $ 22,362,999 14,117,977 18,796,651 Accumulated Surplus, Beginning of Year 104,843,126 86,046,475 Accumulated Surplus, End of Year $ 118,961,103 $ 104,843,126 Page 3 of 33

6 Consolidated Statement of Change in Net Financial (Debt) Assets Statement Budget 2011 Actual 2010 Actual Surplus $ 22,362,999 $ 14,117,977 $ 18,796,651 (Acquisition) of tangible capital assets (52,651,708) (43,130,714) (15,571,723) Amortization of tangible capital assets 3,489,764 3,703,589 3,489,764 Proceeds disposal of tangible capital assets 169,906 73, ,906 (Gain) loss on disposal of tangible capital assets (16,879) 6,287 (16,879) Surplus (Deficit) of Capital Expenses over Expenditures (49,008,917) (39,347,025) (11,928,932) (Acquisition) of supplies inventories (44,993) (10,460) Use of prepaid expense 300,000 Surplus (Deficit) of Expenses of Other Non - Financial Over Expenditures 255,007 (10,460) Increase (Decrease) in Net Financial Assets $ (26,645,918) (24,974,041) 6,857,259 Net Financial Assets, Beginning of Year 9,546,851 2,689,592 Net Financial (Debt) Assets, End of Year $ (15,427,190) $ 9,546,851 Page 4 of 33

7 Consolidated Statement of Cash Flow Statement 4-1 Cash provided by (used for) the following activities Operating: Surplus (Deficit) $ 14,117,977 $ 18,796,651 Amortization 3,703,589 3,489,764 (Gain) loss on disposal of tangible capital assets 6,287 (16,879) 17,827,853 22,269,536 Change in assets/liabilities Taxes receivable - municipal (313,954) (116,098) Other accounts receivable 581,546 (1,580,724) Other - accrued interest receivable 145,604 (43,264) Land for resale 140, ,704 Other Financial Assets 3,960 (2,806) Prepayments and deferred charges 300,000 Stock and supplies (44,993) (10,460) Accounts payable 4,203,675 2,281,672 Accrued liabilities payable 164,692 24,114 Utility deposits 1, Deferred revenue 18,202 2,611 Accrued landfill costs 49,378 47,305 Net cash from (used for) operations 23,078,198 23,256,822 Capital: Acquisition of tangible capital assets (43,130,714) (15,571,723) Proceeds from the disposal of tangible capital assets 73, ,906 Net cash (used for) from capital (43,056,901) (15,401,817) Investing: Long-term investments 8,980,758 Long-term service agreements (2,311) (4,090,920) Net cash from (used for) investing (2,311) 4,889,838 Page 5 of 33

8 Consolidated Statement of Cash Flow Statement Financing: Long-term debt issued 5,620,000 2,500,000 Long-term debt repaid (1,733,511) (1,488,280) Other financing Net cash from (used for) financing 3,886,489 1,011,720 Increase (Decrease) in cash resources (16,094,525) 13,756,563 Cash and Investments, Beginning of Year 28,563,686 14,807,123 Cash and Investments, End of Year $ 12,469,161 $ 28,563,686 Page 6 of 33

9 Notes to the Consolidated Financial Statements 1. Significant Accounting Policies The consolidated financial statements of the City of North Battleford (hereafter referred to as the 'City') are prepared by management in accordance with the local government accounting standards established by the Public Sector Accounting Board of the Canadian Institute of Chartered Accountants. Significant aspects of the accounting policies are as follows: a) b) c) d) Basis of Accounting: The financial statements are prepared using the accrual basis of accounting. The accrual basis of accounting recognized revenue as it becomes available and measurable; expenses are recognized as they are incurred and measurable as a result of the receipt of goods and services and the creation of a legal obligation to pay. Reporting Entity: The financial statements consolidates the assets, liabilities and flow of resources of the City. The entity is comprised of all of the organizations that are owned or controlled by the City and are, therefore, accountable to the Council for the administration of their financial affairs and resources. Entities included in these financial statements are as follows: Entity The City of North Battleford Collection of Funds for Other Authorities: Collection of funds by the City for the school boards are collected and remitted in accordance with relevant legislation. Government Transfers: Government transfers are recognized as either expenditures or revenues in the period that the events giving rise to the transfer occurred, as long as: a) the transfer is authorized; b) eligibility criteria have been met by the recipient; and c) a reasonable estimate of the amount can be made. Unearned government transfer amounts received but not earned will be recorded as deferred revenue. Earned government transfer amounts not received will be recorded as an account receivable. e) Deferred Revenue - Fees and charges: Certain user charges and fees are collected for which the related services have yet to be performed. Revenue is recognized in the period when the related expenses are incurred or services performed. Page 7 of 33

10 Notes to the Consolidated Financial Statements 1. Significant Policies (continued) f) g) h) i) j) Local Improvement Charges: Local improvement projects financed by frontage taxes recognize the prepayment charge as revenue in the period in which the related expenditures occurred. A long-term receivable is recorded for the principal portion of unpaid frontage which are to be financed through frontage levies. Net-Financial Assets: Net-financial assets at the end of an accounting period are the net amount of financial assets less liabilities outstanding. Financial assets represent items such as cash and those other assets on hand which could provide resources to discharge existing liabilities or finance future operations. These include realizable assets which are convertible to cash and not intended for consumption in the normal course of operations. Non-Financial Assets: Tangible capital and other non-financial assets are accounted for as assets by the government because they can be used to provide government services in future periods. These assets do not normally provide resources to discharge the liabilities of the government unless they are sold. Appropriated Reserves: Reserves are established at the discretion of Council to designate surplus for future operating and capital transactions. Amounts so designated are described on Schedule 8. Investments: Portfolio investments are valued at the lower of cost, less any provisions for other than temporary impairment. Investments with terms longer than one year have been classified as other long-term investments concurrent with the nature of the investment. k) Inventories: Inventories of materials and supplies expected to be used by the City are valued at the lower of cost or replacement cost. Inventories of land, materials and supplies held for resale are valued at the lower of cost or net realizable value. Cost is determined by the average cost method. Net realizable value is the estimated selling price in the ordinary course of business. Page 8 of 33

11 Notes to the Consolidated Financial Statements 1. Significant Policies (continued) l) Tangible Capital Assets: All tangible capital asset acquisitions or betterments made throughout the year are recorded at their acquisition cost. Initial costs for tangible capital assets that were acquired and developed prior to 2009 were obtained via historical cost information or using current fair market values discounted by a relevant inflation factor back to the point of acquisition. Donated tangible capital assets received are recorded at their fair market value at the date of contribution. The tangible capital assets that are recognized at a nominal value are disclosed on Schedule 6. The cost of these tangible capital assets less any residual value are amortized over the asset's useful life using the straight-line method of amortization. The City's tangible capital asset useful lives are estimated as follows: Asset General Assets Land Land Improvements Buildings Building Improvements Vehicles & Equipment Vehicles Machinery and Equipment Infrastructure Assets Water & Sewer Road Network Assets Other Useful Life Indefinite 15 to 50 Yrs 20 to 45 Yrs 10 to 25 Yrs 10 Yrs 5 to 25 Yrs 10 to 60 Yrs 20 to 50 Yrs 15 to 60 Yrs Government Contributions: Government contributions for the acquisition of capital assets are reported as capital revenue and do not reduce the cost of the related asset. Works of Art: Assets that have a historical or cultural significance, which include works of art, monuments and other cultural artifacts are not recognized as tangible capital assets because a reasonable estimate of future benefits associated with this property cannot be made. Capitalization of Interest: The City does capitalize interest incurred while a tangible capital asset is under construction. Page 9 of 33

12 Notes to the Consolidated Financial Statements 1. Significant Policies (continued) The Battlefords Transit System Tangible Capital Assets: The City owned and insured vehicles that are used for The Battlefords Transit System and Battleford Handi-bus operations are listed as Tangible Capital Assets in the Financial Statements of The Battlefords Transit System, and therefore are not stated within the City's Tangible Capital Assets and no amortization expense is incurred. As of December 31, 2011, the Battlefords Transit System has seven vehicles for a total cost of $530,073 and a net book value of $367,277. m) n) o) Leases: All leases are recorded on the financial statement as either a capital or operating lease. Any lease that transfers the majority of benefits and risk associated with the leased asset is classified as a capital lease. At the inception of a capital lease, an asset and a payment obligation are recorded at an amount equal to the lesser of the present value of the minimum lease payments and the asset's fair market value. Assets under capital leases are amortized on a straight line basis, over their estimated useful lives. Any other lease not meeting the before mentioned criteria is classified as an operating lease and rental payments are expensed as incurred. Landfill Closure and Post Closure Liability: Landfill closure costs are based on an estimated useful life of the landfill of 100 years. Post closure costs are accrued at the rate of $2.10 per tonne unloaded into the facility's pit. Measurement Uncertainty: The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent asset and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the period. Where measurement uncertainty exists, the financial statements have been prepared within reasonable limits of materiality. Actual results could differ from those estimates. The measurement of materials and supplies are based on estimates of volume and quality. The 'Opening Asset costs' of tangible capital assets have been estimated where actual costs were not available. Amortization is based on the estimated useful lives of tangible capital assets. These estimates and assumptions are reviewed periodically and, as adjustments become necessary they are reported in operations in the periods in which they become known. Page 10 of 33

13 Notes to the Consolidated Financial Statements 1. Significant Policies (continued) p) Basis of Segmentation: The City has adopted the new Public Sector Accounting Board's recommendations requiring financial information to be provided on a segmented basis. City services have been segmented by grouping activities that have similar service objectives (by function). Revenues that are directly related to the costs of the function have been attributed to each segment. Interest is allocated to functions based on the purpose of specific borrowings. The segments (functions) are as follows: General Government: The general government segment provides for the administration of the City. Protective Services: The protective services segment is comprised of expenses for police and fire protection, bylaw enforcement and safety initiatives. Transportation Services: The transportation services segment is responsible for the delivery of public works services related to the development and maintenance of roadway systems, street lighting, airport maintenance and storm collection. Environment and Public Health: The environment segment provides for waste disposal and other environmental services. The public health segment provides for expenses related to public health services and cemeteries in the City. Planning and Development: The planning and development segment provides for neighbourhood development and sustainability. Recreation Cultural and Park: The recreation, cultural and park segment provides for community services through the provision of recreation and leisure services. Water: The water segment provides for delivery of water. Sanitary Sewer: The sanitary sewer segment provides for collecting and treating of wastewater and collection and disposal of solid waste. 2. Cash and Temporary Investments Cash $ 11,404,532 $ 17,639,000 Temporary Investments 1,064,629 10,924,686 Total Cash and Temporary Investments $ 12,469,161 $ 28,563,686 Cash and temporary investments include balances with banks, Credit Unions, term deposits, marketable securities and short-term investments with maturities of twelve months or less. Page 11 of 33

14 Notes to the Consolidated Financial Statements 3. Taxes Receivable-Municipal Municipal Current $ 697,008 $ 463,477 Arrears 516, ,322 1,213, ,799 Less Allowance for Uncollectibles (135,181) (135,181) Total Taxes Receivable-Municipal $ 1,078,572 $ 764,618 The City has special agreements with Living Sky School Division No. 202 and Light of Christ Roman Catholic Separate School Division No. 16 whereby the City prepays the school tax levies through the year levied less adjustments for discounts, abatements and tax title property acquisition. 4. Other Accounts Receivable Federal government $ 741,043 $ 344,873 Provincial government 1,726,854 2,093,087 Utility 583, ,087 Trade 318, ,598 Other 359, ,952 Total Other Accounts Receivable 3,729,325 4,327,597 Less Allowance for Uncollectibles (78,068) (94,794) Net Other Accounts Receivable $ 3,651,257 $ 4,232, Land for Resale Tax Title Property $ 747,339 $ 769,627 Allowance for market value adjustment (514,386) (519,235) Net Tax Title Property 232, ,392 Other Land 3,717,533 3,840,983 Allowance for market value adjustment (1,720,425) (1,720,425) Net Other Land 1,997,108 2,120,558 Total Land for Resale $ 2,230,061 $ 2,370,950 Page 12 of 33

15 Notes to the Consolidated Financial Statements 6. Long-Term Service Agreements Credit Union CUplex - private funding agreements $ 4,254,075 $ 4,172,706 Development service agreements 188, ,282 Total Long-Term Service Agreements $ 4,442,299 $ 4,439, Long-Term Debt Protective Services - RCMP Station The City has a CIBC bank loan that is repayable in yearly installments of $326,547 including principal and interest at a rate of 5.63%; due December 2, The loan is secured by a general assignment of property taxes and accounts receivable. Future principal and interest payments are as follows: Year Principal Interest Total 2012 $ 316,913 $ 9,634 $ 326,547 Transportation Services- Kinsmen Park Storm Sewer In 2008 and 2009, the City replaced the Kinsmen Park Storm Sewer in a two phase approach. The first phase occurred in 2008 with phase two being completed in To finance the work the City secured a Royal Bank interest rate swap loan that is repayable in monthly installments of approximately $18,000 including principal and interest at a rate of 4.1%; due September 1, Future principal and interest payments are as follows: Year Principal Interest Total 2012 $ 159,000 $ 54,867 $ 213, ,000 48, , ,000 40, , ,000 33, , ,000 26, , to Maturity 556,000 31, ,381 $ 1,420,000 $ 235,598 $ 1,655,598 Page 13 of 33

16 Notes to the Consolidated Financial Statements 7. Long-Term Debt (continued) The second phase was financed through Canada Mortgage & Housing Corporation, Municipal Infrastructure Lending Program. The loan is repayable in yearly installments of $226,716 including principal and interest at a rate of 3.98%; due August 1, The loan is secured by a general assignment of property taxes and accounts receivable. Future principal and interest payments are as follows: Year Principal Interest Total 2012 $ 136,500 $ 90,216 $ 226, ,933 84, , ,582 79, , ,456 73, , ,563 67, , to Maturity 1,527, ,045 1,813,726 $ 2,266,715 $ 680,591 $ 2,947,306 Planning and Development Services-Land In 2009, the City received approval from Ministry of Municipal Affairs on three land development financing applications through the Saskatchewan Infrastructure Growth Initiative. This program reimburses the City the interest costs on projects that expand land development inventory. To finance the work the City secured a Royal Bank interest rate swap loan that is repayable in monthly installments of approximately $58,000 including principal and interest at a rate of 3.2%; due September 4, Future principal and interest payments are as follows: Year Principal Interest Total 2012 $ 648,000 $ 47,593 $ 695, ,000 26, , ,000 5, ,414 $ 1,832,000 $ 79,428 $ 1,911,428 Page 14 of 33

17 Notes to the Consolidated Financial Statements 7. Long-Term Debt (continued) Recreation Cultural & Park - Credit Union CUplex The City has financed the construction of the Credit Union CUplex capital asset facilities with a Bank of Montreal interest rate swap loan agreement. The overall loan consists of three phases linked to three of the four facilities constructed. The combined annual payments of approximately $1.7 Million including principal and interest will begin as of May The rate of interest on the loan is 2.71%; due June 1, As of December 31, 2011, only the first facility A loan, $5.62 Million of $24 Million, had been received, which is interest only payments until 2016 (See Note 11 for additional loan information). The loan is secured by the four facilities. Future principal and interest payments are as follows, facility A: Year Principal Interest Total 2012 $ 180,325 $ 180, , , , , , , $ 118, , , to Maturity 5,501,058 1,368,187 6,869,245 $ 5,620,000 $ 2,270,540 $ 7,890,540 Water Services - Water Treatment Plant The City has financed the expansion of the Water Treatment Plant through Canada Mortgage & Lending Program. The loan is repayable in yearly installments of $222,188 including principal and Housing Corporation, Municipal Infrastructure interest at a rate of 3.830%; due July 1, The loan is secured by an assignment of the utility roll and accounts receivable. Future principal and interest payments are as follows: Year Principal Interest Total 2012 $ 131,281 $ 90,907 $ 222, ,309 85, , ,529 80, , ,950 75, , ,578 69, , to Maturity 1,664, ,778 1,999,693 $ 2,373,562 $ 737,071 $ 3,110,633 Page 15 of 33

18 Notes to the Consolidated Financial Statements 7. Long-Term Debt (continued) Sanitary Sewer Services - Sewage Treatment Plant The City has a Royal Bank interest rate swap loan that is repayable in monthly installments of approximately $95,000 including principal and interest at a rate of 5.70%; due October 1, The loan is secured by an assignment of the utility roll and accounts receivable. Future principal and interest payments are as follows: Year Principal Interest Total 2012 $ 415,000 $ 730,948 $ 1,145, , ,347 1,144, , ,437 1,141, , ,627 1,142, , ,632 1,159, to maturity 10,526,000 4,674,624 15,200,624 $ 12,838,000 $ 8,096,615 $ 20,934,615 Summary of long-term debt repayment schedule: Principal Interest Total 2012 $ 1,806,694 $ 1,204,490 $ 3,011, ,551,242 1,132,104 2,683, ,437,111 1,066,990 2,504, ,406 1,020,258 1,986, ,130, ,620 2,120, to maturity 19,775,654 6,695,015 26,470,669 Total long-term debt $ 26,667,190 $ 12,109,477 $ 38,776,667 In 2011, the Saskatchewan Municipal Board approved the City to have up to a maximum debt limit of $45 Million. The Saskatchewan Municipal Board stipulated that the City must submit a new request prior to December 2012 in order to maintain this debt limit. 8. Credit Facility Agreement The City has a credit facility agreement with its financial institution that covers its long-term debt facilities referred to in Note 7 and a revolving operating line of credit in the amount of $1,000,000. Interest on the line of credit is prime plus 1%. Security for the line of credit is the assignment of the City's taxes receivable. Page 16 of 33

19 Notes to the Consolidated Financial Statements 9. Contingent Liabilities The City has agreed to guarantee the North Battleford Golf & Country Club a loan of $1.2 Million to finance an irrigation project that was completed in The outstanding loan balance as of December 31, 2011 is $327, Budget Figures Budget figures are reported for information purposes only and are not included in the scope of the external audit. 11. Subsequent Events Subsequent to the year end, the City received loan advances of $18.38 Million from Bank of Montreal which completes the long-term financing of the Credit Union CUplex. The following table represents the principal and interest repayment schedule of the two facility loans (B and C) that relate to the construction of the Credit Union CUplex. Future principal and interest payments will be as follows, facilities B and C: Year Principal Interest Total 2012 $ 827,750 $ 336,448 $ 1,164, ,419, ,997 1,780, ,419, ,479 1,735, ,419, ,278 1,691, ,419, ,629 1,644, to Maturity 11,876,250 2,986,249 14,862,499 $ 18,380,000 $ 4,499,080 $ 22,879,080 Page 17 of 33

20 Schedule of Taxes and Other Unconditional Revenue Schedule Budget 2011 Actual 2010 Actual Taxes General Municipal Tax levy $ 10,873,230 $ 10,864,054 $ 9,984,329 Abatements and Adjustments (233,008) (255,170) (288,321) Discount on Current Year Taxes (14,000) (9,732) (10,284) Net Municipal Taxes 10,626,222 10,599,152 9,685,724 Penalties on Tax Arrears 164, , ,558 Trailer Park Levies 30,681 27,622 27,405 Total Taxes 10,820,903 10,838,848 9,876,687 Unconditional Grants Municipal Operating Grants 2,468,001 2,468,001 1,905,643 Total Unconditional Grants 2,468,001 2,468,001 1,905,643 Grant In Lieu of Taxes Sask Power Surcharge Fees 1,990,000 2,038,667 1,966,170 Sask Energy Surcharge Fees 2,000 1,245 1,899 Sask Energy Grant in Lieu 469, , ,485 Sask Property Management Corp. 132, , ,098 Sask Tel Grant in Lieu 83,052 76,133 70,465 Provincial Other Grant in Lieu 51,592 54,444 49,301 North Battleford Housing Authority 548, , ,775 Total Grants In Lieu of Taxes 3,277,496 3,300,240 3,179,193 Total Taxes and Other Unconditional Revenue $ 16,566,400 $ 16,607,089 $ 14,961,523 Page 18 of 33

21 Schedule of Operating and Capital Revenue by Function Schedule Budget 2011 Actual 2010 Actual General Government Services Operating Other Segmented Revenue Fees and Charges - Sale of Supplies $ 48,400 $ 64,188 $ 49,688 - Taxation Services 18,000 15,362 15,676 - Expense Recoveries 13,000 16,195 16,058 Total Fees and Charges 79,400 95,745 81,422 - Tangible Capital Assets-Gain (loss) on Sale 50,000 (6,287) 16,879 - Investment & Interest 297, , ,437 Total Other Segmented Revenue 426, , ,738 Conditional Grants - Grants 7,405 12,684 4,048 Total Operating 433, , ,786 Capital - Capital Grants 494,038 97,019 Total General Government Services 433,805 1,001, ,805 Protective Services Operating Other Segmented Revenue Fees and Charges - Policing and Fire Fees 806, , ,674 - Property Maintenance - Custom Work 6,000 3,450 2,335 Total Other Segmented Revenue 812, , ,009 Conditional Grants - Grants 539, , ,567 Total Protective Services 1,351,000 1,415,035 1,239,576 Page 19 of 33

22 Schedule of Operating and Capital Revenue by Function Schedule Budget 2011 Actual 2010 Actual Transportation Services Operating Other Segmented Revenue Fees and Charges - Airport Revenue 96, , ,510 - Expense Recoveries 720, , ,981 Total Other Segmented Revenue 816, , ,491 Conditional Grants - Grants 112,500 56,026 27,025 Total Operating 928, , ,516 Capital - Capital Grants 652, ,558 Total Transportation Services 1,580, , ,074 Environmental and Public Health Services Operating Other Segmented Revenue Fees and Charges - Waste Disposal Fees 1,486,970 1,438,458 1,817,345 - Cemetery Fees 130, , ,672 Total Other Segmented Revenue 1,616,970 1,573,755 1,942,017 Conditional Grants - Grants 35,000 40,334 54,086 Total Environmental and Public Health Services 1,651,970 1,614,089 1,996,103 Page 20 of 33

23 Schedule of Operating and Capital Revenue by Function Schedule Budget 2011 Actual 2010 Actual Planning and Development Services Operating Other Segmented Revenue Fees and Charges - Business Licenses 160, , ,802 - Building & Development Permits 227, , ,833 - Development Agreements 822, ,275 34,278 - Land Rent 90,000 95,765 92,823 Total Fees and Charges 1,299, , ,736 - Land Sale - Gain 1,505,000 1,299,936 1,276,567 - Investment & Interest 10,000 9,317 12,636 Total Other Segmented Revenue 2,814,900 1,937,831 1,803,939 Conditional Grants - Grants 87, , ,194 Total Planning and Development Services 2,901,916 2,081,960 1,909,133 Recreation Cultural & Park Services Operating Other Segmented Revenue Fees and Charges - Recreation Fees & Services 356, , ,245 - Recreation Facilities Rental 677, , ,784 Total Fees and Charges 1,033,500 1,071,182 1,046,029 - Parks Expense Recovery 343, , ,131 Total Other Segmented Revenue 1,377,000 1,385,640 1,384,160 Conditional Grants - Grants 147, , ,430 Total Operating 1,524,735 1,509,275 1,552,590 Capital - Capital Grants 10,543,652 6,814,786 12,932,037 Total Recreation Cultural & Park Services 12,068,387 8,324,061 14,484,627 Page 21 of 33

24 Schedule of Operating and Capital Revenue by Function Schedule Budget 2011 Actual 2010 Actual Water Services Operating Other Segmented Revenue Fees and Charges - Water Fees 3,363,833 3,367,909 3,161,188 - Water Works Expense Recovery 113, , ,055 Total Fees and Charges 3,476,887 3,512,615 3,274,243 Interest & Account Recovery 19,400 27,941 21,447 Total Other Segmented Revenue 3,496,287 3,540,556 3,295,690 Conditional Grants - Grants 7,080 9,543 Total Operating 3,496,287 3,547,636 3,305,233 Capital - Capital Grants 2,250,000 2,140,720 2,063,596 Total Water Services 5,746,287 5,688,356 5,368,829 Sanitary Sewer Services Operating Other Segmented Revenue Fees and Charges - Sanitary Sewage Fees 3,306,703 3,236,835 3,123,550 - Sanitary Sewage Expense Recovery 4,000 19,597 5,308 Total Fees and Charges 3,310,703 3,256,432 3,128,858 Conditional Grants - Grants 28,405 29,830 36,796 Total Operating 3,339,108 3,286,262 3,165,654 Capital - Capital Grants 150, , ,000 Total Sanitary Sewer Services 3,489,108 3,436,262 3,315,654 Total Operating and Capital Revenue by Function $ 29,223,434 $ 24,473,662 $ 29,828,801 Total Other Segmented Revenue $ 14,670,260 $ 13,878,761 $ 13,636,902 Total Conditional 957, , ,689 Total Capital Grants & Contributions 13,596,113 9,599,548 15,281,210 Total Operating and Capital Revenue by Function $ 29,223,434 $ 24,473,662 $ 29,828,801 Page 22 of 33

25 Total Expenses by Function Schedule Budget 2011 Actual 2010 Actual General Government Services Council Remuneration and Travel $ 208,320 $ 205,420 $ 203,559 Wages and Benefits 1,012, , ,224 Contractual Services - Assessment 117, , ,927 Contractual Services - Other 859, , ,148 Utilities 121,410 98, ,018 Maintenance, Materials & Supplies 94,026 72, ,177 Amortization 39,097 26,616 Grants & Contributions - Operating 47,500 54,943 42,316 Other 7,928 6,604 (389) Total General Government Services 2,469,184 2,440,057 2,345,596 Protective Services Police Protection Wages & Benefits 568, , ,279 Contractual Services 2,860,474 2,938,718 2,755,482 Utilities 96,650 92,116 95,439 Maintenance, Materials & Supplies 15,000 23,419 16,372 Amortization 96,198 96,198 Interest/Loss on Capital 26,750 26,750 42,942 Total Police Protection 3,567,111 3,764,917 3,545,712 Fire Protection Wages & Benefits 1,360,632 1,439,128 1,266,974 Contractual Services 129, , ,409 Utilities 127, , ,610 Maintenance, Materials & Supplies 90, , ,275 Amortization 106, ,383 Total Fire Protection 1,707,290 1,940,690 1,733,651 Page 23 of 33

26 Total Expenses by Function Schedule Budget 2011 Actual 2010 Actual Bylaw Wages & Benefits 187, , ,723 Contractual Services 64,918 60,310 59,138 Utilities 8,600 11,870 8,007 Maintenance, Materials & Supplies 18,800 22,059 17,202 Amortization 13,204 10,605 Total Bylaw 280, , ,675 Safety Wages & Benefits 73,748 32,217 68,746 Contractual Services 11,100 5,721 12,002 Utilities Maintenance, Materials & Supplies 3,350 3,077 5,357 Total Safety 88,698 41,461 86,584 Total Protective Services 5,643,317 6,054,911 5,641,622 Transportation Services Wages & Benefits 1,005, , ,779 Contractual Services 793, , ,087 Utilities 427, , ,987 Maintenance, Material & Supplies 799,255 1,013, ,121 Amortization 1,818,559 1,756,888 Interest 156, , ,709 Total Transportation Services 3,182,244 4,911,410 4,866,571 Environmental & Public Health Services Wages & Benefits 305, , ,241 Contractual Services 920,710 1,013, ,673 Utilities 14,400 12,288 13,779 Maintenance, Materials & Supplies 81,200 89,348 84,008 Amortization 51,546 52,411 Grants and Contributions - Operating 48,300 49,378 47,305 Other 1,500 2,202 2,364 Total Environmental & Public Health Services 1,371,173 1,503,693 1,403,781 Page 24 of 33

27 Total Expenses by Function Schedule Budget 2011 Actual 2010 Actual Planning & Development Services Wages & Benefits 405, , ,288 Contractual Services 897, , ,830 Maintenance, Materials & Supplies 7, ,848 21,745 Grants and Contributions - Operating 273, , ,104 Interest 32,016 37,990 41,396 Total Planning & Development Services 1,615,809 1,326,960 1,390,363 Recreation Cultural & Park Services Wages & Benefits 2,321,145 2,149,584 2,143,499 Contractual Services 253, , ,034 Utilities 745, , ,715 Maintenance, Material & Supplies 616, , ,389 Amortization 433, ,233 Grants and Contributions - Operating 464, , ,153 Total Recreation Cultural & Park Services 4,401,921 4,902,763 4,927,023 Water Services Wages & Benefits 999, , ,074 Contractual Services 284, , ,033 Utilities 279, , ,178 Maintenance, Materials & Supplies 650, , ,952 Amortization 334, ,713 Interest 205, ,782 62,376 Other 15,000 11,524 4,017 Total Water Services 2,434,623 2,888,685 2,489,343 Page 25 of 33

28 Total Expenses by Function Schedule Budget 2011 Actual 2010 Actual Sanitary Sewer Services Wages & Benefits 624, , ,412 Contractual Services 248, , ,253 Utilities 268, , ,542 Maintenance, Materials & Supplies 226, , ,045 Amortization 810, ,717 Interest 941, , ,976 Other 11,282 17,429 Total Sanitary Sewer Services 2,308,564 2,934,295 2,929,374 Total Utilities Services 4,743,187 5,822,980 5,418,717 Total Expenses by Function $ 23,426,835 $ 26,962,774 $ 25,993,673 Page 26 of 33

29 Consolidated Schedule of Segment Disclosure by Function Schedule 4 General Environmental & Planning & Recreation Sanitary Government Protective Transportation Public Health Development Cultural & Park Sewer Services Services Services Services Services Services Water Services Services Total Revenue - Schedule 2 Fees and Charges $ 95,745 $ 829,950 $ 856,310 $ 1,573,755 $ 628,578 $ 1,071,182 $ 3,512,615 $ 3,256,432 $ 11,824,567 Tangible Capital Asset Sales - Loss (6,287) (6,287) Land Sales - Gain 1,299,936 1,299,936 Investment Income and Commissions 405,379 9, ,458 27, ,095 Grants - Conditional 12, ,635 56,026 40, , ,635 7,080 29, ,353 Grant - Capital 494, ,814,786 2,140, ,000 9,599,548 Other 3,450 3,450 Total Revenue 1,001,559 1,415, ,340 1,614,089 2,081,960 8,324,061 5,688,356 3,436,262 24,473,662 Expenses - Schedule 3 Wages and Benefits 1,169,788 2,259, , , ,835 2,149, , ,084 8,644,372 Contractual Services 998,564 3,135, ,985 1,013, , , , ,944 7,437,617 Utilities 98, , ,228 12, , , ,393 2,059,972 Maintenance, Materials & Supplies 72, ,121 1,013,069 89, , , , ,610 3,171,674 Interest 26, ,895 37, , ,112 1,080,529 Grants and Contributions - Operating 54,943 49, , , ,409 Amortization 39, ,808 1,818,559 51, , , ,870 3,703,589 Other 6,604 2,202 11,524 11,282 31,612 Total Expenses 2,440,057 6,054,911 4,911,410 1,503,693 1,326,960 4,902,763 2,888,685 2,934,295 26,962,774 Surplus (Deficit) by Function $ (1,438,498) $ (4,639,876) $ (3,999,070) $ 110,396 $ 755,000 $ 3,421,298 $ 2,799,671 $ 501,967 $ (2,489,112) Taxation & Other Unconditional Revenue (Schedule 1) 16,607,089 Net Surplus or Deficit $ 14,117,977 Page 27 of 33

30 Consolidated Schedule of Segment Disclosure by Function Schedule 5 For the year ended December 31, 2010 General Government Services Protective Services Transportation Services Environmental & Public Health Services Planning & Development Services Recreation Cultural & Park Services Water Services Sanitary Sewer Services Total Revenue - Schedule 2 Fees and Charges $ 81,422 $ 731,674 $ 796,491 $ 1,942,017 $ 514,736 $ 1,046,029 $ 3,274,243 $ 3,128,858 $ 11,515,470 Tangible Capital Asset Sales - Gain 16,879 16,879 Land Sales - Gain 1,276,567 1,276,567 Investment Income and Commissions 453,437 12, ,131 21, ,651 Grants - Conditional 4, ,567 27,025 54, , ,430 9,543 36, ,689 Grant - Capital 97,019 38,558 12,932,037 2,063, ,000 15,281,210 Other 2,335 2,335 Total Revenue 652,805 1,239, ,074 1,996,103 1,909,133 14,484,627 5,368,829 3,315,654 29,828,801 Expenses - Schedule 3 Wages and Benefits 1,094,783 2,055, , , ,288 2,143, , ,412 8,167,798 Contractual Services 897,075 2,934, , , , , , ,253 7,412,016 Utilities 121, , ,987 13, , , ,542 2,149,754 Maintenance, Materials & Supplies 164, , ,121 84,008 21, , , ,045 2,738,643 Interest 42, ,709 41,396 62, ,976 1,232,399 Grants and Contributions - Operating 42,316 47, , , ,878 Amortization 26, ,186 1,756,888 52, , , ,717 3,489,764 Other (389) 2,364 4,017 17,429 23,421 Total Expenses 2,345,596 5,641,622 4,866,571 1,403,781 1,390,363 4,927,023 2,489,343 2,929,374 25,993,673 Surplus (Deficit) by Function $ (1,692,791) $ (4,402,046) $ (4,004,497) $ 592,322 $ 518,770 $ 9,557,604 $ 2,879,486 $ 386,280 3,835,128 Taxation & Other Unconditional Revenue (Schedule 1) 14,961,523 Net Surplus or Deficit $ 18,796,651 Page 28 of 33

31 Consolidated Schedule of Tangible Capital Assets by Object Schedule General Assets Infrastructure Assets General/ Infrastructure Asset Cost Land Land Improvements Buildings Vehicles Machinery & Equipment Linear Assets Assets Under Construction Total Total Opening Asset Costs $ 6,200,079 $ 4,426,301 $ 28,077,598 $ 1,268,856 $ 6,599,389 $ 110,463,517 $ 9,528,437 $ 166,564,177 $ 151,491,483 Additions during the year 1,849,784 1,459, ,987 5,083,594 33,915,105 43,130,714 15,571,723 Assets Disposals and writedowns during the year (83,959) (95,723) (179,682) (499,028) Transfers (from) assets under construction 25,932 3,580,763 (3,606,695) Closing Asset Costs 8,049,862 4,426,301 29,562,774 1,184,898 7,326, ,127,873 39,836, ,515, ,564,177 Accumulated Amortization Cost Amortization Opening Accumulated Amortization Costs 3,358,028 9,391, ,518 3,404,131 55,217,690 72,094,435 68,950,673 Add: Amortization taken 80, , , ,348 2,431,880 3,703,589 3,489,764 Less: Accumulated amortization on disposals (81,062) (18,520) (99,582) (346,003) Closing Accumulated Amortization Costs 3,438,284 10,133, ,511 3,733,960 57,649,569 75,698,442 72,094,435 Net Book Value $ 8,049,862 $ 988,017 $ 19,429,657 $ 441,387 $ 3,592,693 $ 61,478,304 $ 39,836,847 $ 133,816,767 $ 94,469, Total contributed/donated assets received in 2011: - 2. List of assets recognized at nominal value in 2011 are: - Infrastructure Assets - - Vehicles - - Machinery and Equipment - 3. Amount of interest capitalized in 2011 $ 44,949 Page 29 of 33

32 Consolidated Schedule of Tangible Capital Assets by Function Schedule Asset cost General Government Services Protective Services Transportation Services Environmental & Public Health Services Planning & Development Services Recreation Cultural & Park Services Water Services Sanitary Sewer Services Total Total Assets Opening Asset Costs $ 1,294,028 $ 7,409,945 $ 82,760,460 $ 822,029 $ 1,737,383 $ 21,877,114 $ 19,377,216 $ 31,286,002 $ 166,564,177 $ 151,491,483 Additions during the year 29,244 12, ,111 1,293,692 1,849,784 34,003,764 4,414, ,149 43,130,714 15,571,723 Disposals and write-downs during the year (28,969) (89,233) (61,480) (179,682) (499,028) Closing Asset Costs 1,323,272 7,393,381 83,620,338 2,115,721 3,587,167 55,819,398 23,791,781 31,864, ,515, ,564,177 Amortization Accumulated Amortization Cost Opening Accumulated Amortization Costs 253,036 1,784,119 46,908, ,240 7,181,235 7,698,867 7,778,720 72,094,435 68,950,673 Add: Amortization taken 39, ,808 1,818,559 51, , , ,870 3,703,589 3,489,765 Less: Accumulated amortization on disposals (23,175) (46,473) (29,934) (99,582) (346,003) Closing Accumulated Amortization Costs 292,133 1,976,752 48,680, ,786 7,584,887 8,032,990 8,589,590 75,698,442 72,094,435 Net Book Value $ 1,031,139 $ 5,416,629 $ 34,940,034 $ 1,573,935 $ 3,587,167 $ 48,234,511 $ 15,758,791 $ 23,274,561 $ 133,816,767 $ 94,469,742 Page 30 of 33

33 Consolidated Schedule of Accumulated Surplus Schedule 8 For the year end December 31, Changes 2011 Unappropriated Surplus (Deficit) Government Activities $ 3,062,888 $ 447,797 $ 3,510,685 Water (312,499) 4,229,226 3,916,727 Sanitary Sewer (1,871,507) (670,305) (2,541,812) Total Unappropriated Surplus (Deficit) 878,882 4,006,718 4,885,600 Appropriated Surplus General Government 12,784,814 (2,793,108) 9,991,706 Protective 1,539,652 (348,342) 1,191,310 Transportation 2,491,238 (648,987) 1,842,251 Environmental Health & Public Health 1,166,405 2,867 1,169,272 Planning & Development 4,946,970 (3,003,436) 1,943,534 Recreation Cultural & Park 6,294,451 (17,779,549) (11,485,098) Water 3,828,945 (1,555,994) 2,272,951 Sanitary Sewer (777,272) 777,272 Total Appropriated Surplus 32,275,203 (25,349,277) 6,925,926 Net Investment in Tangible Capital Assets Tangible Capital Assets - Schedule 6 94,469,742 39,347, ,816,767 Less: Related Debt (22,780,701) (3,886,489) (26,667,190) Net Investment in Tangible Capital Assets 71,689,041 35,460, ,149,577 Total Accumulated Surplus $ 104,843,126 $ 14,117,977 $ 118,961,103 Page 31 of 33

34 Schedule of Mill Rates and Assessments Schedule 9 For the Year Ended December 31, 2011 PROPERTY CLASS Residential Residential Commercial Multi Family Pipelines Elevators Agriculture Residential Condominium Vacant Land & Industrial Residential Total Taxable Assessment $ 227,535 $ 245,864,381 $ 16,523,640 $ 299,110 $ 109,622,565 $ 31,561,450 $ 351,750 $ 6,637,050 $ 411,087,481 Regional Park Assessment Total Assessment 411,087,481 Mill Rate Factor(s) Assessed Levy including minimum tax 12,044 2,484, ,969 25,950 3,505, ,442 11, ,877 6,946,360 Protective Services base tax 2,388, ,340 17,218 2,551,219 Recreational Capital Facility Levy 747,834 45, , ,050 1,357 25,605 1,366,475 Total Municipal Tax Levy (adjusted to reflect supplementary billings) $ 12,044 $ 5,621,210 $ 364,809 $ 43,168 $ 3,915,892 $ 649,492 $ 12,957 $ 244,482 $ 10,864,054 MILL RATES: MILLS Average Municipal* Average School* Potash Mill Rate Uniform Municipal Mill Rate * Average Mill Rates (multiply the total tax levy for each taxing authority by 1000 and divide by the total assessment for the taxing authority). Page 32 of 33

35 Schedule of Council Remuneration Schedule 10 For the Year Ended December 31, 2011 Name Remuneration Reimbursed Costs 2011 Total 2010 Total Buglas, D. $ 20,712 $ 3,766 $ 24,478 $ 21,398 Crush, R. 20,712 5,317 26,029 21,807 Fox, R. 20,712 1,858 22,570 20,720 Hamilton, I. 59,175 5,877 65,052 61,653 Houk, T. 20,712 1,919 22,631 20,859 Lang, G. 20,712 1,306 22,018 20,986 Pattinson, B. 5,610 5,610 Seidel, R. 7, ,256 20,483 TOTAL $ 176,112 $ 20,532 $ 196,644 $ 187,905 Page 33 of 33