Financial Statements December 31, April 25, 2016

Transcription

1 Financial Statements December 31, 2015 April 25, 2016

2 Operating & Water Works & Waste Water Contributions to/(from) Reserves Summary General Surplus (Working Reserve $41,342) $ 666,342 (Winter Control Reserve $300,000) (Building Services Reserve $125,000) (Tax Stabilization Reserve $200,000) Water Works Deficit (Water Works Reserve) $ (80,856) Waste Water Surplus (Waste Water Works Reserve) $ 495,686 $ 1,081,172 Other Transfers to/(from) Reserves: Working Reserve (Supplementary Taxation exceeded budget) $285,220 Road Infrastructure Reserve (Capital Reserves) $116,568 Parking Reserve Fund (YE Operating Deficit) ($ 26,829) Page 2

3 Consolidated Statement of Financial Activities Taxation Variance In 2015, Council approved a levy increase of 4.26% or $2.6M. The City saw growth of $639K, and an increase of $745K in supplementary taxation Actual 2014 Actual Variance Taxation 66,611,892 62,613,128 3,998,764 Grants and Transfers 60,432,902 58,761,214 1,671,688 Fees and Services 40,417,601 40,104, ,474 Other Municipalities 7,051,956 7,013,559 38,397 Other 3,052,577 2,808, , ,566, ,300,798 6,266,130 Grants Variance The increase in Grants is related to programs in Social Services: including Income Maintenance and Child Care; Cornwall SDG Paramedic Services and the Community Para-Medicine Program; Police: Court Services upload. Fees & Services An increase in Water billings ($444K) and a decrease in Waste Water billings ($234K). Page 3

4 Consolidated Statement of Financial Activities Social and Family Services Increase costs in Social and Family Services is related programs in Social and Housing Services: including Social Housing Transfers, CHPI, Income Maintenance and Child Care Actuals 2014 Actuals Variance Social & Family Services 68,006,503 65,406,448 2,600,055 Protection & Health 42,796,541 42,427, ,339 Transportation Services 22,603,411 22,833, ,373 Environmental Services 17,627,047 14,482,972 3,144,075 Recreation & Cultural Services 15,404,472 15,184, ,700 General Government 8,133,458 8,282, ,239 Planning and Development 2,260,443 2,415, , ,831, ,032,966 5,798,909 Environmental Services Increase costs in Water and Waste Water: Amortization at the WWTP ($1.6M), Painting at the Water Tower ($548K) and change in closure costs at the Landfill site ($767) Page 4

5 2015 City Capital Fund Summary Capital Fund Jan 1, 2015 Roads Transit & Solid Protective Software Water & Infrastructure MW Garage Waste Facilities Parks Services GSDL Upgrade Sewer Total 360,866 (439,264) 214, ,064 9,666 (374,049) 310, , ,070 1,228,661 Taxation 681,937 46, , , , , ,600 80,000 2,171,718 Water Billings 3,017,683 3,017,683 Sewer Billings 2,900,993 2,900,993 Fed/Prov Gax Tax 1,502,600 35,000 95,661 1,633,261 Reserves (48,386) 357, , ,428 1,066,307 WWTP Prov. Funding - WWTP Fed. Funding - Provincial Funding 169,117 20,395 1,700,000 1,889,512 United Counties 103, ,763 Recoveries 33,147 2,670 35,817 Sale of Land (Si Miller) 280, ,000 Debt Financing 760, ,000 (5,800,000) (4,365,000) Misc 7,265 1,277 8,542 TOTAL Revenue 2,312, , ,056 1,187, ,322 1,488, ,363 80,000 1,818,676 8,742, Expenses (2,902,603) (1,139,851) (213,842) (1,045,574) (565,956) (1,113,439) (394,986) (270,558) (11,019,571) (18,666,380) Capital Fund Dec 31,2015 (229,204) (704,667) 234, ,720 (178,968) 1, ,372 70,655 (8,508,825) (8,695,123) Long-term financing for the expansion of secondary treatment at the Waste Water Treatment Plant (WWTP) will be secured in Page 5

6 Category of Reserves City Reserves & Reserve Funds 2014 Year End 2015 Year End Commentary Operating Reserves $4,820,512 $6,655,523 Recent contributions were made to the Tax Stabilization and Winter Control Reserves. Capital Reserves ($577,427) (105,018) As in the case with many municipalities, the City s Capital Reserves are currently underfunded. This is an area that is frequently underfunded due to competing budgetary challenges. Restricted Reserves (Municipal Funding) Restricted Reserves (Funded Externally) $40,749,237 $41,515,414 Reserves restricted for certain uses; such as, the Water and Waste Water Works Reserves, Downtown Investment Fund and the Progress Fund. $4,468,785 $5,635,403 These reserves have been funded by senior levels of government or third parties for specific uses. A report on the status of City Reserves is provided to Council annually at the same time that the City s Financial Statements are presented. The report will provide Council details on the status of Reserves and how they are performing to target balances. Page 6

7 Consolidated Schedule of Tangible Capital Assets (by service) Net Book Value Net Book Value Change General Government $ 445,203 $ 761,578 $ 316,375 Protection & Health 6,838,893 6,907,352 68,459 Transportation Services 97,534,903 97,387,445 (147,458) Environmental Services 178,005, ,755,044 5,749,965 Solid Waste 3,656,135 3,622,215 (33,920) Recreation & Cultural 46,428,432 44,868,801 (1,559,631) Social & Family Services 38,351,954 38,805, ,945 $ 371,260,599 $ 376,108,334 $ 4,847,735 Please note that Tangible Capital Assets (TCAs) are required to be recorded at cost, not at replacement value. The City s TCAs increased in 2015, for the most part, due to the continued construction of the WWTP Secondary Project. Page 7

8 Consolidated Schedule of Tangible Capital Assets (by category) Assets In Service Accumulated Assets Under Net Book % (original cost) Amortization Construction Value of Cost Land $ 12,073,932 $ (72,581) $ - $ 12,001, % Yard 9,073,560 (2,580,612) 168,491 6,661, % Buildings 172,143,137 (63,371,766) 156, ,927, % Infrastructure 146,276,721 (68,344,159) 116,503 78,049, % Water & Sewer 153,370,675 (39,017,304) 3,447, ,800, % Machinery/Equipment 118,080,499 (77,990,313) - 40,090, % Computer 3,748,792 (2,486,210) 36,879 1,299, % Vehicles 19,515,368 (11,228,361) - 8,287, % Office Furniture 5,272,219 (3,295,616) - 1,976, % Other 1,999,502 (984,638) - 1,014, % $ 641,554,405 $ (269,371,560) $ 3,925,489 $ 376,108, % The Net Book Value is the original cost of an asset less any accumulated amortization. Overall, the Net Book Value of City assets are 58.62% of the original asset cost. Page 8

9 NEW REPORTING REQUIREMENT FOR 2015 PS3260 LIABILITY FOR CONTAMINATED SITES The Public Sector Accounting Board (PSAB) established a new accounting standard that took effect for the fiscal year beginning January 1, This accounting standard provides guidance on the recognition, measurement, and disclosure requirements for liabilities resulting from the remediation of City-owned non-productive contaminated sites. The City identified 378 City-owned parcels of land, of which 47 parcels were deemed to be non-productive or partially productive for PS3260 purposes. On the basis of former land uses, 24 parcels were identified as having a possible environmental concern and 4 known parcels (1 site) of land being environmentally impacted (CP rail track). City Land Parcels Non-Productive (15 of 28 parcels) The estimated cost of undertaking various types of Environmental Site Assessments (ESA) and potential remediation costs of these sites is $1,266,750. Page 9 Partially Productive (13 of 19 parcels) Total Estimated Liability Phase I ESA $55,000 $60,000 $115,000 Phase II ESA $285,000 $360,000 $645,000 Phase III ESA $481,500 $25,250 $506,750 Total $821,500 $445,250 $1,266,750 A contingent liability of $1,266,750 is disclosed in the Notes to the City s Financial Statements.

10 Long Term Liabilities Consolidated long-term liabilities at December 31, 2015 includes: Bank Loans $20,219,694 Capital Leases (Computer Equipment) $111,700 Cornwall Area Housing Corporation (mortgages funded from MMAH) $5,865,141 PSAB Liabilities (Future employment benefits ($5.7M); $7,516,669 Landfill Closure/Post-Closure Costs ($1.8M); Accrued interest ($27K)) Long-term Accounts Payable (OMEX) $455,470 Internal Loan - Land in the Business Park $2,000,000 $36,168,674 Sources of future revenues to finance liabilities are as follows: General municipal revenue $17,129,400 Proceeds from the sale of land $2,000,000 Reserves and reserve funds $11,174,133 Provincial grant revenues $5,865,141 $36,168,674 Page 10

11 Long Term Liabilities Bank Loans Bank Loans at December 31, 2015 includes: Vehicles and Equipment Municipal Works $2,327,167 Fire Services $1,495,784 Police Services $438,538 Transit Services $360,000 EMS (Defibs) $184,921 Recreation Services $94,566 $4,900,976 Municipal Facilities Benson Centre $9,237,720 EMS Facility $1,285,485 $10,523,205 Police Post-Employment Loan $1,692,487 Flood Reduction Initiative $3,103,026 Total $20,219,694 In 2015, annual repayment on principal for long-term debt is approximately $1.7M. Annual interest for bank loans is estimated to be $600K, of which $195K is funded from the tax base. Page 11

12 Annual Principal and Interest Payments The City is known for its financial stability which in large part is due to its reserves and reserve fund balances. Currently, municipalities are benefiting from low interest rates Est. YE Department 2014 Principal Interest 2015 Total 2016 Fire Services (Vehicles) 297, ,335 49, , ,149 Police Services (Veh. & Sick Benefit) 410, ,499 63, , ,278 Municipal Works (Veh. & Equip.) 494, ,226 80, , ,779 Civic Complex Equipment 14,981 11,519 3,462 14,981 14,981 Infrastructure Planning (LED Project, Marleau) ,200 1,217,487 1,065, ,875 1,261,454 1,631,387 Debt Repayment is funded by: Tax base Transit Services (Buses) ,276 EMS (facility & Defibs) 224, ,132 46, , ,415 Benson Centre 719, , , , ,384 Provincial Gas Tax 50% MoH, 30% County, 20% City (Tax base) Progress Fund interest Secondary WWTP ,000 Brookdale (North Channel Bridge) ,800 Cornwall Blue Print Initiatives 0 96,974 27, , , ,974 27, ,913 1,377,727 Waste Water Billings Total 2,161,286 1,738, ,605 2,330,166 4,062,189 Page 12

13 Annual Repayment Limit (ARL) (Under Ontario Regulation 403/02) Each year the City of Cornwall receives a notice from the Ministry of Municipal Affairs and Housing summarizing the City s Annual Repayment Limit (ARL). The City s ARL effective January 1, 2016 is $23,815,365 This notice also lists the following examples of borrowing for illustration purposes only: 5.0% Interest Rate: Principal a) % $296,792,084 b) % 247,195,341 c) % 183,895,933 d) 5 5.0% 103,108,066 Although the City has no intention to take on borrowing at these levels this demonstrates the financial strength of the Corporation. Page 13

14 2015 Summary The City had an operating surplus of $666,342. This surplus was contributed to the Working Reserve ($41,342), Winter Control Reserve ($300,000), Building Services Reserve ($125,000), and the Tax Stabilization Reserve ($200,000). The City had a deficit in Water Services of $80,856. This deficit was funded from the Water Works Reserve. The City had a surplus in Waste Water Services of $495,686. This surplus was transferred to the Waste Water Works Reserve. The Secondary WWTP major capital project continued as a result of $37M in funding from senior levels of government. The City plans to fund (borrow) its share during the summer of The City entered into Financing Agreements (long-term debt) for the sum of $4,635,000 for Equipment and Vehicles for MW, Police, Fire, Transit and borrowed for the Cornwall Blue Print Initiatives. City Reserves and Reserve Funds total $53.7M. The City s financial position continues to be very strong and well positioned to finance the major infrastructure projects. Page 14

15 2016 Initiatives Federal Gas Tax Agreement requires municipalities to complete an Asset Management Plan (AMP) for City assets; such as, buildings, machinery, equipment, and vehicles by December 31, The Province will require AMPs to be submitted with infrastructure funding applications. AMPs assist municipalities in making the best possible decisions regarding building, operating, maintaining, renewing, replacing and disposing of assets. Financial Services is looking to develop a 5-year Financial Plan relating to forecasted operating and capital requirements that would identify sources of available funding (such as: tax base, water and waste water billings, debt financing, government grants, use of reserves, etc.). Further analysis on targeted balances for the Reserve Policy: - The Social Housing Reserves targeted balances are to be determined. An analysis will be undertaken to understand capital requirements to determine appropriate target balances. - An analysis of the WSIB estimated liability will be completed to better understand the liability. Page 15