CORPORATION OF THE MUNICIPALITY OF TRENT LAKES CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2015

Transcription

1 CORPORATION OF THE MUNICIPALITY OF TRENT LAKES CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2015

2 CORPORATION OF THE MUNICIPALITY OF TRENT LAKES CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2015 TABLE OF CONTENTS Page Number MANAGEMENT REPORT INDEPENDENT AUDITORS' REPORT CONSOLIDATED FINANCIAL STATEMENTS Statement of Financial Position 1 Statement of Operations and Accumulated Surplus 2 Statement of Change in Net Financial Assets 3 Statement of Cash Flows 4 Notes to the Financial Statements 5-15 Schedule of Tangible Capital Assets 16 Schedules of Segment Disclosure TRUST FUNDS Independent Auditors' Report 19 Statement of Financial Position 20 Statement of Continuity 21 Notes to the Financial Statements 22 LOCAL BOARDS Trent Lakes Public Library Board Sandy Lake Cemetery Board 32-43

3 For The Year Ended December 31, 2015 MANAGEMENT REPORT The accompanying consolidated financial statements of the Corporation of the Municipality of Trent Lakes are the responsibility of management and have been approved by Council. The consolidated financial statements have been prepared by management in accordance with Canadian Public Sector Accounting Standards. Financial statements are not precise since they include certain amounts based on estimates and judgements. When alternative accounting methods exist, management has chosen those it deems most appropriate in the circumstances, in order to ensure that the financial statements are presented fairly, in all material respects. The Municipality maintains systems of internal accounting and administrative controls of high quality, consistent with reasonable cost. Such systems are designed to provide reasonable assurance that the financial information is relevant, reliable and accurate and the Municipality's assets are appropriately accounted for and adequately safeguarded. The Municipality's Council is responsible for ensuring that management fulfills its responsibilities for financial reporting and is ultimately responsible for reviewing and approving financial statements. Council reviews and approves the Municipality's financial statements for issuance to the members of Council, inhabitants and ratepayers of the Corporation of the Municipality of Trent Lakes. Council meets periodically with management, as well as the external auditors, to discuss internal controls over the financial reporting process, auditing matters and financial reporting issues, to satisfy themselves that each party is properly discharging their responsibilities and to review the financial statements and the independent auditors' report. The consolidated financial statements have been audited by Collins Barrow Kawarthas LLP in accordance with Canadian generally accepted auditing standards on behalf of the Municipality. Collins Barrow Kawarthas LLP has full and free access to Council. Mayor Date Treasurer Date

4 INDEPENDENT AUDITORS' REPORT To the Members of Council, Inhabitants and Ratepayers of the Corporation of the Municipality of Trent Lakes Report on the Financial Statements We have audited the accompanying consolidated financial statements of the Corporation of the Municipality of Trent Lakes and its local boards, which comprise the consolidated statement of financial position as at December 31, 2015, the consolidated statements of operations and accumulated surplus, change in net financial assets and cash flows 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 consolidated financial statements in accordance with Canadian Public Sector Accounting Standards, and for such internal controls as management determines are 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 consolidated 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 about whether the financial statements are free from 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 auditors' 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 controls 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 controls. 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, these consolidated financial statements present fairly, in all material respects, the financial position of the Corporation of the Municipality of Trent Lakes and its local boards as at December 31, 2015 and the results of its operations and cash flows for the year then ended in accordance with Canadian Public Sector Accounting Standards. Chartered Professional Accountants Licensed Public Accountants Peterborough, Ontario March 15, 2016

5 CONSOLIDATED STATEMENT OF FINANCIAL POSITION At December 31, $ $ FINANCIAL ASSETS Cash 8,184,836 8,828,056 Accounts receivable 539, ,785 Taxes receivable 1,159,963 1,213,177 Other receivables 22,529 32,521 TOTAL FINANCIAL ASSETS 9,906,679 10,615,539 LIABILITIES Accounts payable and accrued liabilities 1,094, ,360 Deferred revenue - obligatory reserve funds (note 4) 1,407,473 1,647,197 Deferred revenue - other 57,374 49,416 Landfill closure and post-closure liability (note 7) 1,769,737 2,004,000 Employee future benefits payable (note 5) 195, ,095 TOTAL LIABILITIES 4,524,177 4,799,068 NET FINANCIAL ASSETS 5,382,502 5,816,471 NON-FINANCIAL ASSETS Tangible capital assets (note 9) 20,794,592 19,843,850 Prepaid expenses 103, ,953 Inventory of materials and supplies 135,000 - TOTAL NON-FINANCIAL ASSETS 21,032,772 19,945,803 ACCUMULATED SURPLUS (note 10) 26,415,274 25,762,274 The accompanying notes are an integral part of these financial statements 1

6 CONSOLIDATED STATEMENT OF OPERATIONS AND ACCUMULATED SURPLUS Budget Actual Actual $ $ $ (Unaudited) REVENUES Property taxation 7,936,795 7,940,041 7,653,308 User charges 563, , ,719 Province of Ontario 1,338,349 1,320,393 1,686,886 Penalties and interest on taxes 150, , ,312 Investment income 100,000 97,529 96,886 Donations 14,000 27,413 72,504 Development charges earned 125, ,934 - Parkland revenue earned 4, Federal gas tax earned 230, ,000 10,176 Sale of shoreline allowances 40,000 21,240 43,720 Other grants 76,500 91,004 26,134 TOTAL REVENUES 10,578,106 10,783,666 10,372,645 EXPENSES General government 1,211,565 1,130,823 1,273,099 Protection services 2,615,421 2,507,442 2,195,771 Transportation services 5,474,360 4,846,949 5,057,225 Environmental services 1,239, ,769 1,174,593 Health services 137, , ,469 Recreation and cultural services 431, , ,724 Planning and development 188, , ,252 TOTAL EXPENSES 11,298,876 10,130,666 10,525,133 ANNUAL SURPLUS/(DEFICIT) (720,770) 653,000 (152,488) ACCUMULATED SURPLUS - beginning of year 25,762,274 25,762,274 25,914,762 ACCUMULATED SURPLUS - end of year 25,041,504 26,415,274 25,762,274 The accompanying notes are an integral part of these financial statements 2

7 CONSOLIDATED STATEMENT OF CHANGE IN NET FINANCIAL ASSETS Budget Actual Actual $ $ $ (Unaudited) ANNUAL SURPLUS/(DEFICIT) (720,770) 653,000 (152,488) Amortization of tangible capital assets 2,798,130 2,842,222 2,798,131 Acquisition of tangible capital assets (5,216,198) (3,905,979) (2,894,244) Loss on disposal of tangible capital assets - 6, ,703 Proceeds on sale of tangible capital assets - 106, ,493 (Increase)/decrease in prepaid expenses - (1,227) 17,025 Increase in inventory of materials and supplies - (135,000) - INCREASE/(DECREASE) IN NET FINANCIAL ASSETS (3,138,838) (433,969) 245,620 NET FINANCIAL ASSETS - beginning of year 5,816,471 5,816,471 5,570,851 NET FINANCIAL ASSETS - end of year 2,677,633 5,382,502 5,816,471 The accompanying notes are an integral part of these financial statements 3

8 CONSOLIDATED STATEMENT OF CASH FLOWS NET INFLOW (OUTFLOW) OF CASH RELATED TO THE FOLLOWING ACTIVITIES: $ $ OPERATING Annual surplus/(deficit) 653,000 (152,488) (Increase)/decrease in accounts receivable 2,434 (109,607) (Increase)/decrease in taxes receivable 53,214 (28,995) Decrease in other receivables 9,992 10,978 (Increase)/decrease in prepaid expenses (1,227) 17,025 Increase in inventory of materials and supplies (135,000) - Increase/(decrease) in accounts payable and accrued liabilities 185,749 (31,519) Increase/(decrease) in deferred revenue - obligatory reserve funds (239,724) 243,202 Increase in deferred revenue - other 7,958 49,416 Non-cash charges to operations Amortization of tangible capital assets 2,842,222 2,798,131 Loss on disposal of tangible capital assets 6, ,703 Decrease in landfill closure and post-closure liability (234,263) (13,000) Increase/(decrease) in employee future benefits payable 5,389 (4,407) Net increase in cash from operating transactions 3,156,564 2,883,439 CAPITAL Acquisition of tangible capital assets (3,905,979) (2,894,244) Proceeds on sale of tangible capital assets 106, ,493 Net decrease in cash from capital transactions (3,799,784) (2,521,751) INCREASE/(DECREASE) IN CASH (643,220) 361,688 CASH - beginning of year 8,828,056 8,466,368 CASH - end of year 8,184,836 8,828,056 The accompanying notes are an integral part of these financial statements 4

9 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS The Municipality of Trent Lakes is a lower tier municipality in the Province of Ontario, Canada. It conducts its operations guided by the provisions of provincial statutes such as the Municipal Act, Municipal Affairs Act and related legislation. 1. SIGNIFICANT ACCOUNTING POLICIES These consolidated financial statements have been prepared in accordance with the standards in the Chartered Professional Accountants Canada Public Sector Accounting (PSA) Handbook. Significant aspects of the accounting policies are as follows: (a) (b) (c) Reporting Entity These consolidated financial statements reflect the assets, liabilities, revenues and expenses and accumulated surplus of the reporting entity. The reporting entity is comprised of all organizations, committees and local boards accountable for the administration of their financial affairs and resources to the Municipality and which are owned and controlled by the Municipality. These financial statements include: Trent Lakes Public Library Board Sandy Lake Cemetery Board All interfund assets and liabilities and revenues and expenses are eliminated. Trust Funds Trust funds and their related operations administered by the Municipality are not included in these Consolidated financial statements but are reported on separately on the Trust Funds Statement of Continuity and Statement of Financial Position. 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, if any, of tangible capital assets is amortized on a straight-line basis, over the expected useful life of the asset, as follows: Land improvements 25 years Buildings 40 years Roadways 4-60 years Water systems years Vehicles 5-15 years Machinery, equipment and fixtures 5-20 years Books 7 years Tangible capital assets received as contributions are recorded at their fair value at the date of receipt and are also recorded as revenue. Tangible capital assets categorized as assets under construction are not amortized until they are put into service. 5

10 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1. SIGNIFICANT ACCOUNTING POLICIES, continued (d) (e) (f) (g) (h) (i) Inventories of Materials and Supplies Inventories of materials and supplies held for consumption are recorded at the lower of cost and replacement cost. Recognition of Revenues and Expenses Revenues and expenses are reported on the accrual basis of accounting. The accrual basis of accounting recognizes revenues in the period in which the transactions or events occurred that give rise to the revenue; expenses are recognized in the period the goods or services are acquired and a legal liability is incurred or transfers are due. Non-financial Assets Tangible capital and other non-financial assets are accounted for as assets by the Municipality because they can be used to provide services in future periods. These assets do not normally provide resources to discharge the liabilities of the Municipality unless they are sold. Deferred Revenue Deferred revenue represents grants, user charges and fees which have been collected but for which the related services have yet to be performed. These amounts will be recognized as revenues in the fiscal year the services are performed. Taxation Property tax billings are prepared by the Municipality based on assessment rolls issued by the Municipal Property Assessment Corporation (MPAC) and in accordance with the provisions of the Municipal Act, The Municipality's Council establishes the tax rates annually, incorporating amounts to be raised for local services, and amounts the Municipality is required to collect on behalf of the County and School Boards. From time to time property assessments are adjusted by MPAC through the reconsideration process or by the Assessment Review Board through the appeal process. Additional assessments, referred to as supplementary and omitted assessment can also be issued by MPAC in accordance with the Assessment Act. These adjustments and additional assessments are reported in the financial statements when amounts can be reasonably determined. The Municipality is entitled to collect interest and penalties on overdue taxes. These revenues are recorded in the period the interest and penalties are levied. Government Funding Government funding is recognized in the financial statements as revenues in the period in which events giving rise to the transfers occur, providing the transfers are authorized, any eligibility criteria have been met, and reasonable estimates of the amounts can be made. 6

11 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1. SIGNIFICANT ACCOUNTING POLICIES, continued (j) (k) Use of Estimates Certain items recognized in the financial statements are subject to measurement uncertainty. The recognized amounts of such items are based on the Municipality's best information and judgment. By their nature, these estimates are subject to measurement uncertainty and the effect on the financial statements of changes in such estimates in future periods could be significant. The Municipality's significant estimates include: The amounts recorded for landfill closure and post-closure care depend on estimates of annual monitoring costs and the number of years of post-closure care. The provision for future closure and post-closure costs also depends on estimates of such costs; The amounts recorded for amortization and opening costs of tangible capital assets are based on estimates of useful life, residual values and valuation rates; The amounts recorded for employee future benefits depend on certain actuarial and economic assumptions; and The amount recorded as allowance for doubtful accounts receivable is based on management's estimate of future payments on receivable account balances. Reserves and Reserve Funds Certain amounts, as approved by Council, are set aside in reserves and reserve funds for future operating and capital purposes. Transfers to and/or from reserves and reserve funds are an adjustment to the respective fund when approved. 2. CHANGE IN ACCOUNTING POLICY The Municipality has implemented PSA section 3260 Liability for Contaminated Sites. Section 3260 requires governments to record a liability in their financial statements if they have a contaminated site that meets the requirements set out in the standard. The standard defines contamination as the introduction into air, soil, water, or sediment of a chemical, organic or radioactive material or live organism that exceeds an environmental standard. The standard generally applies to sites that are not in productive use. Sites that are in productive use are only considered contaminated if there was an unexpected event that resulted in contamination. This change has been applied retroactively without restatement of prior periods. The adoption of this standard did not have an impact on the Municipality's financial statements. 3. PENSION AGREEMENTS The Municipality makes contributions to the Ontario Municipal Employees Retirement System ( OMERS ), which is a multi-employer plan, on behalf of all permanent, full-time members 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. Contributions required on account of current service in 2015 were $221,020 ( $204,602). 7

12 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 4. DEFERRED REVENUE - OBLIGATORY RESERVE FUNDS A requirement of the Chartered Professional Accountants Canada Public Sector Accounting Handbook, is that obligatory reserve funds be reported as deferred revenue. This requirement is in place as legislation and external agreements restrict how these funds may be used and under certain circumstances these funds may possibly be refunded. The balances in the obligatory reserve funds of the Municipality are summarized below: $ $ Development charges 894,517 1,060,810 Parkland 8,000 4,000 Federal gas tax 504, ,387 1,407,473 1,647,197 The continuity of deferred revenue - obligatory reserve funds is as follows: $ $ Balance - beginning of year 1,647,197 1,403,995 Add amounts received: Development charges 58,222 80,562 Parkland fees 4,000 4,000 Federal gas tax 147, ,148 Interest 13,171 16, , ,378 Less transfer to operations: Development charges earned 232,934 - Federal gas tax earned 230,000 10, ,934 10,176 Balance - end of year 1,407,473 1,647,197 8

13 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 5. EMPLOYEE FUTURE AMOUNTS PAYABLE The Municipality provides certain employee benefits which will require payment in future periods. The Municipality provides defined benefit plans to pay costs of certain health and other insurance benefits for eligible employees after they retire. The plans are not funded and one requires a 100% contribution from employees $ $ Accrued benefit obligation 178, ,931 Unamortized actuarial gain 16,933 18,164 Employee future benefits payable 195, ,095 The actuarial valuation as at January 1, 2014 was based on a number of assumptions about future events, such as inflation rates, interest rates, medical inflation rates, wage and salary increases and employee turnover and mortality. Under this method, the benefit costs are recognized over the estimated average remaining service life of the employee group. Any actuarial gains and losses related to the past service of employees and plan improvements are amortized over the estimated average remaining service life of the employee group, which was 14 years. The assumptions used reflect management's best estimate. The main actuarial assumptions employed for the valuation are as follows: Expected inflation rate 2% Future health care premiums rates % Future health care premiums rates reducing by.33%/year to 4% Future health care premiums rates and thereafter 4% Future dental premiums rates 4% Future cost of long term borrowing 4.75% Future salary escalation 3% The post-employment benefit is reported as an expense on the Consolidated Statement of Operations and Accumulated Surplus. The details of the change in liability during the year are as follows: $ $ Employee future benefits payable at January 1 190, ,502 Current year benefit cost 8,558 8,010 Interest on post-employment benefit liability 8,131 8,051 Amortized actuarial gain (1,231) (1,231) Less: benefit payments (10,069) (19,237) Employee future benefits payable 195, ,095 9

14 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 6. OPERATIONS OF SCHOOL BOARDS AND THE COUNTY OF PETERBOROUGH During 2015, requisitions were made by the County of Peterborough and School Boards requiring the Municipality to collect property taxes and payments in lieu of property taxes on their behalf. The amounts collected and remitted are as follows: School Boards County $ $ Amounts requisitioned and remitted 4,461,686 6,947,345 These amounts have not been included in the Consolidated Statement of Operations and Accumulated Surplus. 7. LANDFILL CLOSURE AND POST-CLOSURE LIABILITY The liability for landfill closure and post-closure costs of $1,769,737 ( $2,004,000) has been estimated using discounted future cash flows associated with closure and post-closure care activities for the six sites the Municipality owns. The closure costs include final cover, vegetation and additional monitoring wells. Post-closure costs include monitoring, maintenance of control systems and consulting fees for 25 years after the site is closed. The entire liability has been recorded in these financial statements since all of the six Municipal landfill sites are closed for accepting waste. The Municipality has a landfill reserve of $742,666 ( $742,666) and the remaining landfill closure and post-closure liability will be funded from taxation. There are no specific assets designated for settling this liability. The main assumptions employed in the present value calculation of the liability are as follows: Expected inflation rate 2% Discount factor 3.33% 8. EXPENSES BY OBJECT The expenses for the year reported on the Consolidated Statement of Operations and Accumulated Surplus by object are as follows: Budget Actual Actual $ $ $ (Unaudited) Salaries and benefits 3,705,616 3,510,586 3,320,239 Materials 2,415,776 1,906,156 2,235,610 Contracted services 2,227,633 1,714,943 1,875,533 Rents and financial 5,950 6,365 3,627 External transfers 145, , ,289 Amortization 2,798,130 2,842,222 2,798,131 Loss (gain) on disposal of tangible capital assets - 6, ,704 11,298,876 10,130,666 10,525,133 10

15 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 9. TANGIBLE CAPITAL ASSETS The net book value of the Municipality's tangible capital assets are: $ $ General Land 4,159,768 4,254,910 Land improvements 962, ,630 Buildings 3,622,002 3,747,677 Vehicles 3,459,970 3,458,061 Machinery, equipment & fixtures 524, ,295 Books 47,303 34,844 Infrastructure Roads and bridges 5,269,518 5,567,643 Water systems 1,001,019 1,013,512 19,046,726 19,430,572 Assets under construction 1,747, ,278 For additional information, see the Consolidated Schedule of Tangible Capital Assets. 20,794,592 19,843,850 During the year there were no write-downs of assets ( $Nil) and no interest capitalized ( $Nil). Tangible capital assets allocated by segment are as follows: $ $ General government 892,502 1,019,179 Protection services 3,581,763 1,912,623 Transportation services 8,364,631 8,856,289 Environmental services 1,701,581 1,702,437 Health services 1,440,697 1,478,458 Recreation and cultural services 4,813,418 4,874,864 20,794,592 19,843,850 11

16 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 10. ACCUMULATED SURPLUS Accumulated surplus consists of the following: $ $ Surplus/(Deficit) General 3,009 - Streetlight area Unfunded landfill closure and post-closure costs (1,769,737) (2,004,000) Unfunded employee future benefits (195,484) (190,095) Cemetery 28,284 31,373 (1,933,212) (2,162,668) Invested In Capital Assets Tangible capital assets - net book value 20,794,592 19,843,850 Unfunded capital - fire (628,999) - Unfunded capital - water system - (18,781) 20,165,593 19,825,069 Surplus 18,232,381 17,662,401 Reserves Working funds 1,720,369 1,705,257 Future acquisition of capital assets 5,077,486 5,327,073 Contingencies 458, ,947 Operations 778, ,177 Total Reserves 8,034,587 7,964,454 Reserve Funds Water system services 136, ,310 Library future development 11,482 5,109 Total Reserve Funds 148, ,419 26,415,274 25,762, TRUST FUNDS Trust funds administered by the Municipality amounting to $61,829 ( $60,549) have not been included in the Consolidated Statement of Financial Position nor have their operations been included in the Consolidated Statement of Operations and Accumulated Surplus. As such balances are held in trust by the Municipality for the benefit of others, they are not presented as part of the Municipality's financial position or operations. 12

17 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 12. BUDGET FIGURES The budget, approved by the Municipality, for 2015 is reflected on the Consolidated Statement of Operations and Accumulated Surplus and the Consolidated Statement of Change in Net Financial Assets. The budgets established for capital investment in tangible capital assets are on a projectoriented basis, the costs of which may be carried out over one or more years and, therefore, may not be comparable with current year s actual amounts. Budget figures have been reclassified for the purposes of these financial statements to comply with PSA reporting requirements. Budget figures are not subject to audit. The following is a reconciliation of the Council approved budget amounts to the PSA amounts: (Unaudited) (Unaudited) Revenue Expenses $ $ Council approved budget: Operating 13,631,496 9,509,999 Capital - 4,121,497 Total Council approved budget 13,631,496 13,631,496 Less: Tangible capital assets capitalized - (5,216,198) Add: Amortization of tangible capital assets - 2,798,130 Less: Long term debt proceeds (1,320,000) - Less: Transfers to reserves and reserve funds - (91,174) Less: Transfers from reserves and reserve funds (1,910,012) - Add: Library 189, ,100 Add: Water system 274, ,505 Add: Streetlights 8,629 8,629 Budgeted revenues and expenses netted for financial statement presentation (295,612) (295,612) Adjusted budget per Consolidated Statement of Operations 10,578,106 11,298, CREDIT FACILITY AGREEMENT The Municipality has a revolving credit facility agreement with its main financial institution. The amount available at any time is limited to $500,000 via an operating loan. Any balance borrowed will accrue interest at the bank s prime lending rate per annum. Council authorized the temporary borrowing limit by By-law At December 31, 2015 there was no balance outstanding. 14. CONTINGENT LIABILITIES The Municipality, in the course of its operations, has been named in several lawsuits the outcomes of which are indeterminable at this time. No amounts in connection with these items have been reflected in these financial statements. 13

18 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 15. COMMITMENT During 2015, the Municipality entered into an agreement for the construction of a new fire hall. The projected costs of the construction are $2,427,000. To December 31, 2015, $1,733,000 in costs have been incurred. The unfunded capital for the project is estimated at $1,320,000 which will be internally financed and will be funded through taxation over a period of ten years by an annual charge to operations. 16. SEGMENTED INFORMATION The Municipality of Trent Lakes is a municipal government organization that provides a range of services to its residents. Municipality services are reported by function and their activities are separately disclosed in the segmented information. 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. Certain allocation methodologies are employed in the preparation of segmented financial information. Taxation, payments-in-lieu of taxes and certain unconditional government transfers are apportioned based on each segment s net requirements. 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. General Government General government consists of the activities of Council and general financial and administrative management of the Municipality and its programs and services. Protection Services Protection services include police, fire, conservation authority and protective inspection and control. Transportation Services The activities of the transportation function include construction and maintenance of the Municipality's roads and bridges, winter control and street lighting. Environmental Services The environmental function is responsible for providing water, waste disposal and recycling services to ratepayers. Health Services The health services function consists of two health centres and the activities of the cemetery board. Recreation and Cultural Services The recreation and cultural services function provides indoor and outdoor recreational facilities and programs and library services. 14

19 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 16. SEGMENTED INFORMATION, continued Planning and Development The planning and development services function manages commercial, industrial and residential development within the Municipality. 15

20 CONSOLIDATED SCHEDULE OF TANGIBLE CAPITAL ASSETS COST General Infrastructure Land Land Improvements Buildings Vehicles Machinery, Equipment & Fixtures Books Roads and Bridges Water Systems Assets Under Construction Totals $ $ $ $ $ $ $ $ $ $ Balance, beginning of year 4,254,910 1,044,683 4,855,106 5,942,079 1,008,868 74,867 22,743,182 1,513, ,278 41,850,207 Add: additions during the year - 14, , ,589 21,670 1,549,993-1,747,866 3,905,979 Less: disposals during the year 95, ,987 10,389 2,838, ,139,329 Internal transfers - 138, ,881 - (413,278) - Balance, end of year 4,159,768 1,197,902 4,855,106 6,409, ,470 86,148 21,729,245 1,513,234 1,747,866 42,616,857 ACCUMULATED AMORTIZATION Balance, beginning of year - 196,053 1,107,429 2,484, ,573 40,023 17,175, ,722-22,006,357 Add: additions during the year - 39, , ,130 85,314 9,211 2,105,399 12,493-2,842,222 Less: disposals during the year ,714 10,389 2,821, ,026,314 Balance, end of year - 235,053 1,233,104 2,949, ,173 38,845 16,459, ,215-21,822,265 NET BOOK VALUE OF TANGIBLE CAPITAL ASSETS 4,159, ,849 3,622,002 3,459, ,297 47,303 5,269,518 1,001,019 1,747,866 20,794,592 16

21 CONSOLIDATED SCHEDULE OF SEGMENT DISCLOSURE General Government Protection Services Transportation Services Environmental Services Health Services Recreation and Cultural Services Planning and Development Consolidated $ $ $ $ $ $ $ $ Revenues Property taxation (288,099) 2,730,474 3,959,817 1,136,850 28, ,450 97,099 7,940,041 User charges 30, ,681 90, ,150 7,048 67,280 57, ,922 Government transfers - operating 1,231,100 18,773-8,505-37,015-1,295,393 Government transfers - capital , ,000 Penalties and interest on taxes 164, ,190 Investment income 95, , ,529 Donations ,645 9,768-27,413 Development charges earned - 175,629 55, , ,934 Federal gas tax earned , ,000 Sale of shoreline allowances ,240 21,240 Other grants ,587 13,417-91,004 Total revenues 1,233,373 3,205,557 4,360,812 1,272, , , ,061 10,783,666 Expenses Salaries and benefits 872, ,590 1,315, , ,270 84,486 3,510,586 Materials 140, ,106 1,022, ,634 66, ,441 57,957 1,906,156 Contracted services 83,304 1,265,846 38, ,893 27,395 7,205 6,147 1,714,943 Rents and financial 4, ,000-6,365 External transfers - 84, , ,574 Amortization 46, ,517 2,453,184 33,861 44,905 97,685-2,842,222 Loss (gain) on disposal of tangible capital assets (11,053) - 17, ,820 Internal transfers (4,800) - - 3,000-1, Total expenses 1,130,823 2,507,442 4,846, , , , ,590 10,130,666 Net surplus/(deficit) 102, ,115 (486,137) 344,270 (8,334) (26,935) 29, ,000 17

22 CONSOLIDATED SCHEDULE OF SEGMENT DISCLOSURE For the Year Ended December 31, 2014 General Government Protection Services Transportation Services Environmental Services Health Services Recreation and Cultural Services Planning and Development Consolidated $ $ $ $ $ $ $ $ Revenues Property taxation (120,284) 2,227,073 4,076, ,409 90, ,703 73,869 7,653,308 User charges 22, ,011 84, ,498 6,139 47,060 52, ,719 Government transfers - operating 1,198,500 6,817-6,387-29,073-1,240,777 Government transfers - capital , ,109 Penalties and interest on taxes 182, ,312 Investment income 93, , ,886 Donations ,960 61,544-72,504 Federal gas tax earned , ,176 Sale of shoreline allowances ,720 43,720 Other grants - - 7,117-18, ,134 Total revenues 1,376,922 2,498,901 4,178,306 1,538, , , ,192 10,372,645 Expenses Salaries and benefits 775, ,291 1,285, , , ,400 3,320,239 Materials 289, ,044 1,196, ,760 60, ,910 42,158 2,235,610 Contracted services 80,028 1,047, , ,960 23,523 7,235 2,694 1,875,533 Rents and financial 1, ,000-3,627 External transfers - 71, , ,289 Amortization 44, ,495 2,450,632 30,878 45,033 95,143-2,798,131 Loss (gain) on disposal of tangible capital assets 85,439 9,351 (10,037) 19, ,704 Internal transfers (4,200) - - 2,400-1, Total expenses 1,273,099 2,195,771 5,057,225 1,174, , , ,252 10,525,133 Net surplus/(deficit) 103, ,130 (878,919) 363,592 (3,791) (51,263) 10,940 (152,488) 18

23 INDEPENDENT AUDITORS' REPORT To the Members of Council, Inhabitants and Ratepayers of the Corporation of the Municipality of Trent Lakes Report on the Financial Statements We have audited the accompanying financial statements of the Trust Funds of the Corporation of the Municipality of Trent Lakes, which comprise the statement of financial position as at December 31, 2015, the statement of continuity 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 Public Sector Accounting Standards, and for such internal controls as management determines are 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 about whether the financial statements are free from 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 auditors' 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 controls 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 controls. 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, these financial statements present fairly, in all material respects, the financial position of the Trust Funds of the Corporation of the Municipality of Trent Lakes as at December 31, 2015 and the continuity of the Trust Funds for the year then ended in accordance with Canadian Public Sector Accounting Standards. Chartered Professional Accountants Licensed Public Accountants Peterborough, Ontario March 15, 2016

24 TRUST FUNDS STATEMENT OF FINANCIAL POSITION At December 31, 2015 Cemetery Perpetual Care Shearer Donation 2015 Total 2014 Total $ $ $ $ FINANCIAL ASSETS Investments (note 2) 60,785 1,193 61,978 59,087 Due from (to) Cemetery Board - (149) (149) 1,462 60,785 1,044 61,829 60,549 FUND BALANCES 60,785 1,044 61,829 60,549 The accompanying notes are an integral part of these financial statements 20

25 TRUST FUNDS STATEMENT OF CONTINUITY Cemetery Perpetual Care Shearer Donation 2015 Total 2014 Total $ $ $ $ BALANCES - beginning of year 59,505 1,044 60,549 58,442 RECEIPTS Investment income 1, ,332 1,483 Perpetual care receipts ,600 Capital gain on investments , ,612 3,590 EXPENSES Transfer to Cemetery Board ,010 Trustee fees , ,332 1,483 BALANCES - end of year 60,785 1,044 61,829 60,549 The accompanying notes are an integral part of these financial statements 21

26 TRUST FUNDS NOTES TO THE FINANCIAL STATEMENTS 1. SIGNIFICANT ACCOUNTING POLICIES These financial statements have been prepared in accordance with the standards in the Chartered Professional Accountants Canada Public Sector Accounting (PSA) Handbook. (a) (b) Basis of Accounting Revenue and expenses are reported on the accrual basis of accounting which recognizes revenues as they become available and measurable; expenses are recognized as they are incurred and measurable as a result of receipt of goods or services and the creation of a legal obligation to pay. Use of Estimates The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions. These estimates and assumptions 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 revenue and expenses during the period and are based on the Municipality's best information and judgment. Actual results could differ from these estimates. 2. INVESTMENTS The investments held in the trust at the end of the year at cost are as follows: $ $ Scotiatrust - bond common trust fund 60,779 57,899 Scotiatrust - cash on hand 6 6 Scotiabank GIC - interest at 0.90% maturing June 6, ,193 1,182 61,978 59,087 Market Value 63,534 60, CEMETERY PERPETUAL CARE The figures reported for the cemetery perpetual care represent the trust fund activities for the Sandy Lake Cemetery. The Perpetual Care Fund administered by the Cemetery is funded by the sale of cemetery plots. These funds are invested and earnings derived there from are used to perform perpetual care maintenance to the Sandy Lake Cemetery. The operations and investments of the Fund are undertaken by the Cemetery in accordance with the regulations of the Cemeteries Act. 22

27 CORPORATION OF THE MUNICIPALITY OF TRENT LAKES TRENT LAKES PUBLIC LIBRARY BOARD FINANCIAL STATEMENTS DECEMBER 31, 2015

28 INDEPENDENT AUDITORS' REPORT To the Members of the Trent Lakes Public Library Board, the Members of Council, Inhabitants and Ratepayers of the Corporation of the Municipality of Trent Lakes Report on the Financial Statements We have audited the accompanying financial statements of the Trent Lakes Public Library Board of the Corporation of the Municipality of Trent Lakes, which comprise the statement of financial position as at December 31, 2015, the statements of operations and accumulated surplus, change in net financial assets and cash flows 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 Public Sector Accounting Standards, and for such internal controls as management determines are 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 about whether the financial statements are free from 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 auditors' 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 controls 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 controls. 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 qualified audit opinion. Basis for Qualified Opinion The Board derives revenue from user fees, donations and fundraising, the completeness of which is not susceptible of satisfactory audit verification. Accordingly, our verification of these revenues was limited to the amounts recorded in the records of the Board and we were not able to determine whether any adjustments might be necessary to user fees, donations and fundraising revenues, assets and accumulated surplus. Qualified Opinion Except as noted in the above paragraph, in our opinion, these financial statements present fairly, in all material respects, the financial position of the Trent Lakes Public Library Board as at December 31, 2015 and the results of its operations and cash flows for the year then ended in accordance with Canadian Public Sector Accounting Standards. Chartered Professional Accountants Licensed Public Accountants Peterborough, Ontario March 15, 2016

29 TRENT LAKES PUBLIC LIBRARY BOARD STATEMENT OF FINANCIAL POSITION At December 31, $ $ FINANCIAL ASSETS Due from Municipality of Trent Lakes 11,482 5,109 NET FINANCIAL ASSETS 11,482 5,109 NON-FINANCIAL ASSETS Tangible capital assets (note 2) 76,489 60,639 ACCUMULATED SURPLUS (note 3) 87,971 65,748 The accompanying notes are an integral part of these financial statements 25

30 TRENT LAKES PUBLIC LIBRARY BOARD STATEMENT OF OPERATIONS AND ACCUMULATED SURPLUS Budget Actual Actual $ $ $ (Unaudited) REVENUES Contribution from Municipality 112, , ,000 Province of Ontario 29,800 37,015 29,073 Other grants 13,500 38,529 2,400 User fees 6,200 6,626 9,242 Donations and fundraising 27,000 30,357 30,490 Investment income TOTAL REVENUES 189, , ,525 EXPENSES Salaries and benefits 118, , ,050 Materials 31,350 34,265 51,370 Periodicals and programs 1,700 1,715 1,312 Janitorial service 5,800 6,350 6,838 Rent 2,000 2,000 2,000 Accounting and audit 1,800 1,800 1,800 Insurance 2,500 3,234 2,524 Amortization 18,756 20,389 18,756 Loss on disposal of tangible capital assets TOTAL EXPENSES 181, , ,650 ANNUAL SURPLUS/(DEFICIT) 7,194 22,223 (31,125) ACCUMULATED SURPLUS - beginning of year 65,748 65,748 96,873 ACCUMULATED SURPLUS - end of year 72,942 87,971 65,748 The accompanying notes are an integral part of these financial statements 26

31 TRENT LAKES PUBLIC LIBRARY BOARD STATEMENT OF CHANGE IN NET FINANCIAL ASSETS Budget Actual Actual $ $ $ (Unaudited) ANNUAL SURPLUS/(DEFICIT) 7,194 22,223 (31,125) Amortization of tangible capital assets 18,756 20,389 18,756 Acquisition of tangible capital assets (14,000) (36,512) (19,745) Loss on disposal of tangible capital assets INCREASE/(DECREASE) IN NET FINANCIAL ASSETS 11,950 6,373 (32,114) NET FINANCIAL ASSETS - beginning of year 5,109 5,109 37,223 NET FINANCIAL ASSETS - end of year 17,059 11,482 5,109 The accompanying notes are an integral part of these financial statements 27

32 TRENT LAKES PUBLIC LIBRARY BOARD STATEMENT OF CASH FLOWS NET INFLOW (OUTFLOW) OF CASH RELATED TO THE FOLLOWING ACTIVITIES: $ $ OPERATING Annual surplus/(deficit) 22,223 (31,125) (Increase)/decrease in due from Municipality of Trent Lakes (6,373) 32,114 Non-cash charges to operations Amortization of tangible capital assets 20,389 18,756 Loss on disposal of tangible capital assets Net increase in cash from operating transactions 36,512 19,745 CAPITAL Acquisition of tangible capital assets (36,512) (19,745) INCREASE IN CASH - - CASH - beginning of year - - CASH - end of year - - The accompanying notes are an integral part of these financial statements 28

33 TRENT LAKES PUBLIC LIBRARY BOARD NOTES TO THE FINANCIAL STATEMENTS 1. SIGNIFICANT ACCOUNTING POLICIES These financial statements have been prepared in accordance with the standards in the Chartered Professional Accountants Canada Public Sector Accounting (PSA) Handbook. Significant aspects of the accounting policies adopted by the Board are as follows: (a) (b) (c) (d) (e) Recognition of Revenue and Expenses Revenue and expenses are reported on the accrual basis of accounting. The accrual basis of accounting recognizes revenue in the period in which the transactions of events occurred that give rise to the revenue; expenses are recognized in the period the goods or services are acquired and a legal liability is incurred or transfers are due. Use of Estimates Certain items recognized in the financial statements are subject to measurement uncertainty. The recognized amounts of such items are based on the Board's best information and judgment. By their nature, these estimates are subject to measurement uncertainty and the effect on the financial statements of changes in such estimates in future periods could be significant. The Board's significant estimates include: The amounts recorded for amortization and opening costs of tangible capital assets are based on estimates of useful life, residual values and valuation rates. 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, if any, of tangible capital assets is amortized on a straight-line basis, over the expected useful life of the asset, as follows: Computers 5 years Books 7 years Furniture 5 years Tangible capital assets received as contributions are recorded at their fair value at the date of receipt and are also recorded as revenue. Tangible capital assets categorized as assets under construction are not amortized until they are put into service. Non-Financial Assets Tangible capital assets and other non-financial assets are accounted for as assets by the Board because they can be used to provide services in future periods. These assets do not normally provide resources to discharge the liabilities of the Board unless they are sold. Government Funding Government funding is recognized in the financial statements as revenues in the period in which events giving rise to the transfers occur, providing the transfers are authorized, any eligibility criteria have been met, and reasonable estimates of the amounts can be made. 29

34 TRENT LAKES PUBLIC LIBRARY BOARD NOTES TO THE FINANCIAL STATEMENTS 1. SIGNIFICANT ACCOUNTING POLICIES, continued (f) Reserves and Reserve Funds Certain amounts, as approved by the Board, are set aside in reserves and reserve funds for future operating and capital purposes. Transfers to and/or from reserves and reserve funds are an adjustment to the respective fund when approved. 2. TANGIBLE CAPITAL ASSETS The net book value of the Board's tangible capital assets are: COST Computers Books Furniture Assets Under Construction 2015 Totals 2014 Totals $ $ $ $ $ $ Balance, beginning of year 40,551 74,867 36, , ,548 Add: additions during the year - 21,670-14,842 36,512 19,745 Less: disposals during the year 11,718 10,389 11,218-33,325 15,635 Balance, end of year 28,833 86,148 25,022 14, , ,658 ACCUMULATED AMORTIZATION Balance, beginning of year 27,008 40,023 23,988-91,019 87,898 Add: additions during the year 3,930 9,211 7,248-20,389 18,756 Less: disposals during the year 11,445 10,389 11,218-33,052 15,635 Balance, end of year 19,493 38,845 20,018-78,356 91,019 NET BOOK VALUE OF TANGIBLE CAPITAL ASSETS 9,340 47,303 5,004 14,842 76,489 60,639 30