Statement of Financial Information (SOFI) Town of Fort Nelson

Transcription

1 Statement of Financial Information (SOFI) as required by the Financial Information Act, British Columbia for the Town of Fort Nelson and the Northern Rockies Regional District Fiscal Year Ending December 31, 2004

2 Financial Information Regulation, Schedule 1 Checklist Statement of Financial Information (SOFI) For the Corporation: Corporate Name: Town of Fort Nelson Contact Name: Patricia Higgins Northern Rockies Regional District Fiscal Year End: December 31 Phone Number: Date Submitted: June 27, phiggins@northernrockies.org For the Ministry: Ministry Name: Reviewer: Date Received: Deficiencies: Yes No Date Reviewed: Deficiencies Addressed: Yes No Approved (SFO): Further Action Taken: Distribution: Legislative Library Ministry Retention FIR Schedule 1 Section Item Yes No N/A Comments General 1 (1) (a) Statement of assets and liabilities See Consolidated Financial Statements 1 (1) (b) Operational statement See Consolidated Financial Statements 1 (1) (c) Schedule of debts See Consolidated Financial Statements 1 (1) (d) Schedule of guarantee and indemnity agreements 1 (1) (e) Schedule of employee remuneration and expenses 1 (1) (f) Schedule of suppliers of goods and services 1 (3) Statements prepared on a consolidated basis or for each fund, as appropriate See Consolidated Financial Statements 1 (4) 1 (5) Notes to the financial statements for the statements and schedules listed See Consolidated Financial Statements 1

3 FIR Schedule 1 Section Item Yes No N/A Comments above Statement of Assets & Liabilities 2 A balance sheet prepared in accordance with GAAP or stated accounting principles / policies, and Show changes in equity and surplus or deficit due to operations See Consolidated Financial Statements Operational Statement 3 (1) Prepared in accordance with GAAP or stated accounting principles / policies and consists of: a Statement of Income or Statement of Revenue and Expenditures, and a Statement of Changes in Financial Position See Consolidated Financial Statements 3 (2) 3 (3) The Statement of Changes in Financial Position may be omitted if it provides no additional information The omission must be explained in the notes See Consolidated Financial Statements 3 (4) Community colleges, school districts, and municipalities must prepare a Statement of Changes in Financial Position for the Capital Fund See Consolidated Financial Statements Schedule of Debts 4 (1) (a) 4 (2) List each long-term debt (secured by debentures, mortgages, bonds, etc.), stating the amount outstanding, the interest rate, and the maturity date See Consolidated Financial Statements 4 (1) (b) Identify debts covered by sinking funds or reserves and amounts in these accounts N/A 4 (3) 4 (4) The schedule may be omitted if addressed under section 2 or 5 and it provides no additional information The omission must be explained 2

4 FIR Schedule 1 Section Item Yes No N/A Comments in a note to the schedule Schedule of Guarantee and Indemnity Agreements 5 (1) List financial agreements that required government approval prior to being given (see Guarantees and Indemnities Regulation in FIA Guidance Package) 5 (2) State the entities involved, and the specific amount involved if known 5 (3) 5 (4) The schedule may be omitted if addressed under section 2 or 4 and it provides no additional information The omission must be explained in a note to the schedule Schedule of Remuneration and Expenses (See Guidance Package for suggested format) 6 (2) (a) List separately, by name and position, the total remuneration and the total expenses for each elected official, member of the board of directors, and employee appointed by Cabinet 6 (2) (b) List alphabetically each employee whose total remuneration exceeds $75,000 and the total expenses for each [excluding the persons listed under 6 (2) (a)] 6 (2) (c) Include a consolidated total for employees whose remuneration is $75,000 or less [excluding the persons listed under 6 (2) (a)] 6 (2) (d) Reconcile or explain any difference between total remuneration in this schedule and related information in the operational statement The consolidated financial statements do not contain this information because they are prepared on a functional basis rather than on a by-object basis. However, the amounts reported in this schedule are included in the expenses stated in the financial statements. 6 (3) Exclude personal information other than name, position, function or remuneration and expenses of employees 3

5 FIR Schedule 1 Section Item Yes No N/A Comments Schedule of Remuneration and Expenses (See Guidance Package for suggested format) 6 (6) Report the employer portion of EI and CPP as a supplier payment to the Receiver General for Canada rather than as employee remuneration 6 (7) (a) 6 (7) (b) Include a statement of severance agreements providing: the number of severance agreements under which payment commenced in the fiscal year being reported on for non-union employees, and the range of equivalent months' compensation for them (see Guidance Package for suggested format) 6 (8) Provide the reason for omitting a statement of severance agreements in a note to the schedule of remuneration and expenses Schedule of Suppliers of Goods or Services (See Guidance Package for suggested format) 7 (1) (a) List in alphabetical order all suppliers of goods and services who received aggregate payments exceeding $25,000 7 (1) (b) Include a consolidated total of all payments to suppliers who received $25,000 or less 7 (1) (c) Reconcile or explain any difference between the consolidated total and related figures in the operational statement The consolidated financial statements do not contain this information because they are prepared on a functional basis rather than on a by-object basis. However, the amounts reported in this schedule are included in the expenses stated in the financial statements. 7 (2) (b) Include a statement of payments for the purposes of grants or contributions 4

6 FIR Schedule 1 Section Item Yes No N/A Comments Inactive Corporations 8 (1) The ministry reports for the corporation if the corporation is not operating to the extent required to produce a SOFI N/A 8 (2) (a) The ministry's report contains the statements and schedules required under section 1 (1), to the extent possible N/A 8 (2) (b) The ministry's report contains a statement of the operational status of the corporation (see Guidance Package regarding what to include) N/A Approval of Financial Information 9 (1) Corporations other than municipalities the SOFI is signed as approved by the board of directors or the governing body (see Guidance Package for example) N/A 9 (2) Municipalities the SOFI is approved by its council and by the officer assigned responsibility for financial administration (see Guidance Package for example) 9 (3) A management report is included, signed by the head and chief financial officer, or by the municipal officer assigned responsibility for financial administration (see examples in annual report at 9 (4) The management report explains the roles and responsibilities of the board of directors or governing body, audit committee, management, and the auditors 9 (5) Signature approvals required in section 9 are for each of the statements and schedules of financial information, not just the financial statements 5

7 The Northern Rockies Regional District (NRRD) and the Town of Fort Nelson (TFN) Financial Information Act Statements of Financial Information Contents Consolidated Financial Statements (NRRD) Consolidated Financial Statements (TFN) Schedule of Severance, Guarantee and Indemnity agreements (NRRD) Schedule of Severance, Guarantee and Indemnity agreements (TFN) Schedule of Employee Remuneration & Expenses (NRRD & TFN) Schedule of Suppliers of Goods & Services (NRRD & TFN) The Northern Rockies Regional District and the Town of Fort Nelson STATEMENT OF FINANCIAL INFORMATION APPROVAL The undersigned, as authorized by the Financial Information Regulation, Schedule 1, subsection 9(2), approves all the statements and schedules included in this Statement of Financial Information, produced under the Financial Information Act. Patricia Higgins Acting Treasurer June 21, 2005 The undersigned represents the Council of the Town of Fort Nelson and the Board of the Northern Rockies Regional District, and approves all the statements and schedules included in this Statement of Financial Information, produced under the Financial Information Act. Chris Morey Mayor, Town of Fort Nelson Chair, Northern Rockies Regional District June 27, 2005

8 NORTHERN ROCKIES REGIONAL DISTRICT CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2004 CONTENTS 1 AUDITORS' REPORT 2 GENERAL and ACCOUNTING POLICIES STATEMENTS 4 - Consolidated Balance Sheet 5 - Consolidated Statement of Operations & Fund Balances 6 - Consolidated Statement of Cash Flows 7 - Consolidated Statement of Change in Operating Fund Balances 8 - Consolidated Statement of Changes in Capital Asset Balance 8 - Consolidated Statement of Changes in Reserve Balance 9 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Management s Responsibility for Financial Reporting The information in this Annual Report is the responsibility of management. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted for British Columbia municipalities, which principles are outlined under Significant Accounting Policies on pages 2 and 3. These include some amounts based on management s best estimates and careful judgement. Management maintains a system of internal accounting controls to provide reasonable assurance that assets are safeguarded and that transactions are authorized, recorded, and reported properly. Management also administers a program of proper business compliance. LD Wright & Co., the Regional District's independent auditors, have audited the accompanying financial statements. Their report accompanies this statement. The Regional Board carries out its responsibility for the consolidated financial statements by meeting annually with its auditors. The Board meets the auditors to review activities and to discuss auditing, internal control, accounting policy, and financial reporting matters. The auditors have unrestricted access to the Municipality, Management and the Board. The Board also reviews the recommendations of the independent auditors for improvements to controls and as well as the actions of management to implement such recommendations. Randy McLean, CGA Chief Administrative Officer/Treasurer March 22, Page 0 -

9 L. D. WRIGHT & Co. Chartered Accountants UNIT #15 LANDMARK PLAZA, BOX 748 FORT NELSON, BC V0C 1R0 Phone: Fax: AUDITORS' REPORT To the Board of Directors Northern Rockies Regional District Fort Nelson, BC We have audited the consolidated balance sheet of the Northern Rockies Regional District (the Regional District) as at December 31, 2004 and the consolidated statement of operations and fund balances, cash flows, changes in operating fund balances, changes in capital asset balance, and changes in statutory reserve balance for the year then ended. These consolidated financial statements are the responsibility of Regional District's management. Our responsibility is to express an opinion on these financial statements based on our audit. Except as described in the following paragraph, we conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We were unable to satisfy ourselves as to the extent of the liability, if any, that should have been accrued related to the matter (Solid Waste Landfill) described in Note 9 (c) of these financial statements. In our opinion, except for the effect of adjustments, if any, that we might have determined to be necessary had we been able to satisfy ourselves on the matter referred to in the previous paragraph, these consolidated financial statements present fairly, in all material respects, the financial position of the Regional District as at December 31, 2004, and the results of its operations and cash flows for the year then ended in accordance with the accounting principles disclosed in the financial statements. As required by the Municipal Act of British Columbia, we further report that, in our opinion, the said principles have been applied on a basis consistent with those of the previous year. Fort Nelson, BC March 29, 2005 L. D. WRIGHT & Co. Chartered Accountants March 22, Page 1 -

10 Northern Rockies Regional District Consolidated Financial Statements For the Year Ended December 31, 2004 General The Northern Rockies Regional District is incorporated in the Province of British Columbia and its principal activities include the provision of legislative, administrative, utility, recreational and fiscal services to its residents. Significant Accounting Policies (a) Basis of Presentation It is the Regional District s policy to follow accounting principles generally accepted for British Columbia municipalities and to apply such principles consistently. These Consolidated Financial Statements include the operations of the funds listed below. They have been prepared using guidelines issued by the Public Sector Accounting Board of the Canadian Institute of Chartered Accountants. The operations of the Regional District have been consolidated for financial statement purposes and include the accounts of all of the funds of the Regional District totaling $11,747,253 as noted below. Operating Funds - These funds include the sewer and water utilities and report the principal operating activities of the Regional District. As at December 31, the fund balances and operating reserves totals were as follows: General Operating Fund 3,334,000 3,715,945 Water Utility Fund 8,301 8,505 Rural Water Northwest Operating Fund 122, ,264 3,464,303 3,842,714 Capital Funds - These funds are used to acquire capital assets. The fund balances (deficiencies) represent the extent to which the cost of the capital assets have been financed by the Regional District's own resources. As at December 31, the fund balances were as follows: General Capital Fund 4,475,440 4,477,563 Water Utility Capital Fund 3,307,603 3,357,230 7,783,043 7,834,793 Reserve Fund - This fund has been created to hold assets for specific future requirements. It is comprised of the following: Feasibility Reserve Fund 68,101 69,746 11,315,447 11,747,253 (b) Accrual Accounting The accrual method for reporting revenues and expenditures has been used, except as noted for Long-term liabilities as noted in (h) below. (c) Deferred Charges Payments for operating expenditures pertaining to future years are carried as deferred charges. They are recorded as expenditures when the economic benefits are realized. March 22, Page 2 -

11 Northern Rockies Regional District Consolidated Financial Statements For the Year Ended December 31, 2004 (d) Capital Assets Capital assets include general property, buildings and equipment, water and sewer systems, and are recorded on the basis of cost. The cost includes interest on short-term financing where the funds expended exceed cash provided to the project at various stages of completion. Amortization is not recorded. Expenditures on capital assets may be financed by Operating, Reserve Fund or Capital Fund receipts, and are recorded as assets in the Capital Fund when the long term financing is complete. (e) Operating Funds Operating funds include the revenues, expenditures, operating assets and liabilities of the Regional District's operations. The General Operating, Mile 292 Water Utility Operating, the Rural Water Northwest Operating, the Pristine Valley Operating Fund and Mile 292 Natural Gas System Operating Funds are responsible for general government, water utility, and natural gas operations respectively. (f) Operating Fund Reserves Transfers to Operating Fund Reserves are current budget appropriations for future expenditures on incomplete projects, certain operating expenses or other specific purpose projects. (g) Capital Funds Capital funds include property, buildings and equipment and related debt of the Regional District. Debt repayments are made by, and recorded in, the respective operating funds. (h) Long-Term Liabilities Debt charges, including principal and interest, are charged against the applicable operating funds in the periods in which they are paid. The Regional District does not accrue interest charges from the dates of the latest payments to the end of the financial year. (i) Foreign Exchange Long-term debenture debt denominated in U.S. Dollars is recorded in the accounts on the basis of $1 Canadian to $1 U.S. Gains and losses resulting from changes in the exchange rate during the year are credited or charged directly to the operation of the applicable operating fund. Interest and principal repayments are translated at the exchange rates in effect on the dates of the payments. (j) Reserve Accounts The Regional District uses reserve accounts to provide working capital and to appropriate surplus for specific budgeted objectives, the expenditures for which are expected to occur in a future period. (k) Use of Estimates The preparation of financial statements in accordance with accounting principles generally accepted for municipalities requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenditure during the reporting period. Significant areas requiring the use of management estimates relate to the determination of accrued sick benefits and severance liability, collectibility of accounts receivable, deferred charges and provisions for contingencies. Actual results could differ from those estimates. Adjustments, if any, will be reflected in operations in the period of settlement. March 22, Page 3 -

12 Northern Rockies Regional District Consolidated Balance Sheet As at December 31, 2004 Financial Assets Unrestricted Cash 2,367,577 2,502,162 Restricted Cash - Note 1 3,094,252 2,713,322 Accounts Receivable - Note 2 1,520,289 1,987,694 MFA Debt Reserve - Note 3 431, ,066 Debt Charges Recoverable from Member Municipalities 4,087,169 3,830,830 11,500,997 11,435,074 Liabilities Accounts Payable and Accrued Liabilities - Note 6 544, ,339 Deferred Revenues 11,358 18,237 Due to Other Municipal Entities - Note 1 3,026,151 2,643,576 MFA Debt Reserve - Note 3 431, ,066 Debenture Debt - Note 8 786, ,692 Due to Member Municipalities - Note 4 4,087,169 3,830,830 8,887,469 8,389,740 Commitments & Contingencies - Note 9 Net Financial Assets 2,613,528 3,045,334 Capital Assets, at cost - Note 5 8,461,041 8,461,041 Work in Progress 240, ,878 8,701,919 8,701,919 11,315,447 11,747,253 Fund Balances Capital Asset Balance 7,783,043 7,834,793 Operating Fund Surpluses 868,252 1,283,144 Operating Fund Reserves - Note 7 2,596,051 2,559,570 3,464,303 3,842,714 Reserve Fund 68,101 69,746 11,315,447 11,747,253 R.P. (Randy) McLean, CGA CAO/Treasurer March 22, Page 4 -

13 Northern Rockies Regional District Consolidated Statement of Operations & Fund Balance For the year Ended December 31, 2004 Revenue Real Property Tax Levy 6,836,178 7,309,914 MFA Payments from Town of Fort Nelson 564, ,692 Senior Government Operating Grants 1,533,252 1,558,694 Sale of Services 1,367,389 1,629,450 Investment Earnings 110,022 62,831 Debenture Refunds 87,056 3,581 Contributions from Users 5,000 5,000 Actuarial Adjustments 18, ,521,901 11,135,038 Expenditures Protective Services 259, ,940 Airport Operations 566, ,911 Recreation & Cultural 2,109,384 2,274,223 Water Operations 12,217 32,643 General Government Services 1,178,884 1,325,019 Interest & Exchange 91,329 81,814 Major Maintenance 2,543,247 2,715,830 MFA Payments for Town of Fort Nelson 564, ,692 Transfer to Member Municipalities 2,640,260 2,749,160 9,965,795 10,703,232 Increase in Consolidated Fund Balances 556, ,806 Consolidated Fund Balances - Beginning of Year 10,759,341 11,315,447 Consolidated Fund Balances - End of Year 11,315,447 11,747,253 Consolidated Fund Balances consist of the following Capital Assets 7,783,043 7,834,793 Operating Fund Surpluses and Reserves 3,464,303 3,842,714 Reserve Fund Balance 68,101 69,746 11,315,447 11,747,253 March 22, Page 5 -

14 Northern Rockies Regional District Consolidated Statement of Cash Flows For the Year Ended December 31, 2004 Restricted & Unrestricted Cash Provided by (Used for) Operating Activities Excess of Revenue over Expenditures 556, ,806 Decrease (Increase) in Non-Cash Financial Assets Accounts Receivable (1,240,106) (467,405) Prepaid Expenses & Deferred Charges 4,100 - (1,236,006) (467,405) Increase (Decrease) in Short-Term Liabilities Accounts Payable & Accrued Liabilities (43,561) 216,700 Deferred Revenues 10,519 6,879 Advances from (repayments to) Other Municipal Entities 803,490 (382,575) 770,448 (158,996) Financing Activities Repayment of Debenture Debt (63,328) (51,750) Increase (Decrease) in Restricted & Unrestricted Cash 27,220 (246,345) Restricted & Unrestricted Cash - Beginning of Year 5,434,609 5,461,829 Restricted & Unrestricted Cash - End of Year 5,461,829 5,215,484 March 22, Page 6 -

15 NORTHERN ROCKIES REGIONAL DISTRICT Consolidated Statement of Changes in Operating Fund Balances For the Year Ended December 31, 2004 Revenue Real Property Tax Levy 6,836,178 7,309,914 MFA Payments from Town of Fort Nelson 564, ,692 Senior Government Operating Grants 1,438,569 1,558,694 Sale of Services 1,367,389 1,629,450 Investment Earnings 108,200 61,186 Debenture Refunds 87,056 3,581 Contributions from Users 5,000 5,000 10,407,084 11,132,517 Expenditures Protective Services 259, ,940 Airport Operations 566, ,911 Recreation & Cultural 2,109,384 2,274,223 Water Operations 12,217 32,643 General Government Services 1,178,884 1,325,019 Interest & Exchange 91,329 81,814 Major Maintenance 2,543,247 2,715,830 MFA Payments for Town of Fort Nelson 564, ,692 Transfer to Member Municipalities 2,640,260 2,749,160 Transfer to Other Funds 45,016 50,874 10,010,811 10,754,106 Increase in Consolidated Operating Fund Balances 396, ,411 Operating Surpluses and Reserves - Beginning of Year 3,070,191 3,466,464 Operating Fund Surpluses and Reserves - End of Year 3,466,464 3,844,875 March 22, Page 7 -

16 NORTHERN ROCKIES REGIONAL DISTRICT Consolidated Statement of Changes in Capital Asset Balance For the Year Ended December 31, 2004 Capital Asset Balance - Beginning of Year 7,625,032 7,783,043 Contributions from Users 94,683 - Actuarial Adjustments 18, Debenture Debt Repayment 45,016 50, ,011 51,750 Capital Asset Balance - End of Year 7,783,043 7,834,793 NORTHERN ROCKIES REGIONAL DISTRICT Consolidated Statement of Changes in Statutory Reserve Balance For the Year Ended December 31, 2004 Reserve Balance - Beginning of Year 66,279 68,101 Investment Income 1,822 1,645 Reserve Balance - End of Year 68,101 69,746 March 22, Page 8 -

17 Northern Rockies Regional District Notes To The Consolidated Financial Statements For the Year Ended December 31, Restricted Cash & Funds Due to Other Governments The Northern Rockies Regional District administers consolidated cash and near cash balances on behalf of all the Capital, Reserve, Trust, and Operating funds of the Town of Fort Nelson, and the Northern Rockies Regional District. The Reserve and Trust fund cash balances are restricted in their use, in that such funds are designated for specific purposes and must be invested according to specific criteria set forth in the Municipal Act. In addition, operating funds of other governments, cash balances of the Fort Nelson General Capital Fund, the Fort Nelson Sewer Capital Fund, the Northern Rockies Regional Hospital District, and the Phoenix Theatre Construction Trust Fund held by the Regional District are classified as restricted cash by the Regional District. Town of Fort Nelson Reserve and Trust Funds Cemetery Trust Fund 14,735 15,535 Capital Works Reserve Fund 202, ,144 Machinery & Equipment Reserve Fund 818, ,355 Sewer Utility Reserve fund 140, ,831 Water Utility Reserve Fund 1,052 1,076 Tax Sale Proceeds Reserve Fund 44,094 45,102 1,220,901 1,343,043 Operating and Capital Funds of other Governments Northern Rockies Regional Hospital District 481, ,747 Town of Fort Nelson General Capital Fund 310, ,783 Town of Fort Nelson General Operating Fund 311, ,698 Town of Fort Nelson Water Operating Fund 439, ,817 Town of Fort Nelson Sewer Operating Fund 261,740 (566,512) 1,805,250 1,300,533 Due to Other Municipal Entities 3,026,151 2,643,576 Regional District Feasibility-Reserve Fund 68,101 69,746 3,094,252 2,713, Accounts Receivable General Operating Fund Senior Governments 1,339,404 1,698,553 Trade and Other 180, ,141 1,520,289 1,987,694 March 22, Page 9 -

18 NORTHERN ROCKIES REGIONAL DISTRICT Notes To The Consolidated Financial Statements For the Year Ended December 31, Municipal Finance Authority Reserve Deposits and Demand Notes The Northern Rockies Regional District issues its debt instruments through the Municipal Finance Authority. As a condition of these borrowings, a portion of the debenture proceeds are withheld by the Municipal Finance Authority as a debt reserve fund. The Regional District also executes demand notes in connection with each debenture whereby the Regional District is required to guarantee certain amounts to the Municipal Finance Authority. Details of the cash deposits and demand notes at year end are as follows: General Operating Funds: Northern Rockies Regional District Prior year balance 10,749 5,445 Current Year Demand Notes 1,967 1,967 Cash Deposits 3,478 3,652 Current year balance 5,445 5,619 Member Municipality: Town of Fort Nelson Prior year balance 339, ,131 Current Year Demand Notes 247, ,517 Cash Deposits 95,170 84,232 Current year balance 343, ,749 Water Utility Funds: Mile 292 Water Utility Operating Fund Prior year balance 22,407 22,978 Current Year Demand Notes 9,086 6,556 Cash Deposits 13,892 12,174 Current year balance 22,978 18,730 Rural Water Northwest Water Utility Fund Prior year balance 59,488 60,156 Current Year Demand Notes 43,871 43,871 Cash Deposits 16,285 17,097 Current year balance 60,156 60,968 Total Consolidated Balance 431, ,066 March 22, Page 10 -

19 NORTHERN ROCKIES REGIONAL DISTRICT Notes To The Consolidated Financial Statements For the Year Ended December 31, Due to Member Municipalities The following debentures are reported in the financial statements of the Town of Fort Nelson. The Town and the Regional District use the same accounting policies for long term liabilities and foreign exchange. Year of Bylaw Maturity WATER UTILITY CAPITAL FUND 406/397/ ,936 42, /438/60 & 409/ ,311 56, /431/ ,711,892 1,651, /573/' ,548,930 1,443,319 3,418,069 3,192,880 SEWER UTILITY CAPITAL FUND 407/396/ ,899 41, /573/ , , , ,950 4,087,169 3,830,830 March 22, Page 11 -

20 NORTHERN ROCKIES REGIONAL DISTRICT Notes To The Consolidated Financial Statements For the Year Ended December 31, Capital Assets General Capital Fund Land 1,019,560 1,019,560 Building & Engineering Structures 3,009,678 3,009,678 Machinery & Equipment 453, ,509 4,482,747 4,482,747 Water Utility Capital Fund Engineering Structures 3,978,294 3,978,294 8,461,041 8,461, Accounts Payable & Accrued Liabilities General Operating Fund Wages & Accrued Benefits 187, ,933 Trade Accounts Payable 357, , , ,339 Water Utility Operating Fund Trade Accounts Payable , ,339 March 22, Page 12 -

21 NORTHERN ROCKIES REGIONAL DISTRICT Notes To The Consolidated Financial Statements For the Year Ended December 31, Operating Fund Reserves General Operating Fund 1. Legislative & Administration 5,000 35, Administration Electoral Areas 4,400 4, Recreation Facilities Grant-in-Aid 69,480 8, Grants to Community Organizations 66,600 66, Weed Control 2,870 2, Solid Waste Disposal 160, , RD Development Services 44,000 44, Economic Development & Tourism 50,896 27, Airport 1,033,400 1,048, Regional Parks 198, , Recreation Programs 21,132 28, Community Services 12,800 14, Museum 10,000 76, Building Inspection 108, , Mosquito Control Cemetery 30,000 35, Aquatic Centre 338, , Recreation Complex & Community Centre 118,250 19, Neighborhood Parks & Ball Diamonds 53,500 53, Golf Course 78,239 34, Library 31,740 43, General Government Services Grant-In-Aid 28,500 28, Theatre 26,470 34, Cemetery (Toad River) 24,950 28, Fire Protection - Specified Area 15,000 15,000 2,532,310 2,509,350 Water Utility Operating Fund 1,891 1,891 Rural Water Northwest Operating Fund 61,850 48,329 2,596,051 2,559,570 March 22, Page 13 -

22 NORTHERN ROCKIES REGIONAL DISTRICT Notes To The Consolidated Financial Statements For the Year Ended December 31, Long-Term Liabilities Year of Bylaw Maturity Rate General Capital Fund 249/259/28 * % 7,542 5,419 Water Utility Capital Fund 248/259/28 * % 25,136 18,063 78/59/ % 753, , , ,273 Consolidated Debenture Debt 786, ,692 * Denominated In US Dollars at a fixed exchange rate of 1.35 Denominated in US dollars 32,678 23,482 Canadian Equivalent 44,115 31,701 March 22, Page 14 -

23 NORTHERN ROCKIES REGIONAL DISTRICT Notes To The Consolidated Financial Statements For the Year Ended December 31, Commitments & Contingencies (a) (b) Contract for Services: The Northern Rockies Regional District (the Regional District) and the Town of Fort Nelson (the Town) have a "contract for services" (the contract). The contract establishes the Regional District as an administrative body over the Town and the Regional District, allowing the two separate legal entities to act as one in all matters except those matters specifically legislated for separate handling. The contract provides for the Regional District to be the "employer" for all of the Town and the Regional District officers and employees. In addition, the Regional District undertakes the works and services of the Town on mutually agreed terms, as the works and services are within the powers of the Town and the entire cost is borne by the Town. The contract expires December 31, Pension Liability: The Northern Rockies Regional District and its employees contribute to the Municipal Pension Plan (the plan), a jointly trusted pension plan. The Board of Trustees, representing plan members and employers, is responsible for overseeing the management of the pension plan, including investment of the assets and administration of the benefits. The pension plan is a multi-employer contributory pension plan. Basic pension benefits provided are defined. The plan has about 130,000 active contributors, including approximately 29,000 contributors from local governments. Every three years an actuarial valuation is performed to assess the financial position of the plan and the adequacy of plan funding. The most recent valuation as at December 31, 2003 indicated an unfunded liability of $789 million for basic pension benefits. The next valuation will be as at December 31, 2006 with results available in The actuary does not attribute portions of the unfunded liability to individual employers. The Northern Rockies Regional District paid $184,747 for employer contributions to the plan in fiscal (c) The Regional District is committed to landfill closure and post closure costs at the Regional District's Old Landfill Site. As of the date of issue of these financial statements, management has been unable to reasonably estimate the total cost of this undertaking, which may range from $75,000 to $500,000 over a five to ten year period. The Regional District has applied for infrastructure funding from senior governments to assist with these costs. March 22, Page 15 -

24 TOWN OF FORT NELSON CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2004 CONTENTS 1 AUDITORS' REPORT 2 GENERAL and ACCOUNTING POLICIES STATEMENTS 4 - Consolidated Balance Sheet 5 - Consolidated Statement of Operations 6 - Consolidated Statement of Cash Flows 7 - Consolidated Statement of Change in Operating Fund Balances 8 - Consolidated Statement of Changes in Capital Asset Balance 8 - Consolidated Statement of Changes in Reserve Balance 9 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Management s Responsibility for Financial Reporting The information in this Annual Report is the responsibility of management. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted for British Columbia municipalities, which principles are outlined under Significant Accounting Policies on pages 2 and 3. These include some amounts based on management s best estimates and careful judgement. Management maintains a system of internal accounting controls to provide reasonable assurance that assets are safeguarded and that transactions are authorized, recorded, and reported properly. Management also administers a program of proper business compliance. LD Wright & Co., the Municipality s independent auditors, have audited the accompanying financial statements. Their report accompanies this statement. Council carries out its responsibility for the consolidated financial statements by meeting annually with its auditors. The Council meets the auditors to review activities and to discuss auditing, internal control, accounting policy, and financial reporting matters. The auditors have unrestricted access to the Municipality, Management and Council. Council also reviews the recommendations of the independent auditors for improvements to controls and as well as the actions of management to implement such recommendations. Randy McLean, CGA Administrator/Treasurer March 29, Page 0 -

25 L. D. WRIGHT & Co. Chartered Accountants UNIT # 15, LANDMARK PLAZA, BOX 748 FORT NELSON, BC V0C 1R0 Phone: Fax: AUDITORS' REPORT To the Mayor and Council Town of Fort Nelson Fort Nelson, B.C. We have audited the consolidated balance sheet of the Town of Fort Nelson as at December 31, 2004 and the consolidated statement of operations and fund balances, cash flows, changes in operating fund balances, changes in capital asset balance, and changes in statutory reserve and trust fund balances for the year then ended. These consolidated financial statements are the responsibility of Town's management. 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 plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Town of Fort Nelson as at December 31, 2004, and the results of its operations and cash flows for the year then ended in accordance with the accounting principles disclosed in the financial statements. As required by the Municipal Act of British Columbia, we further report that, in our opinion, the said principles have been applied on a basis consistent with those of the previous year. Fort Nelson, BC March 29, 2005 L. D. WRIGHT & Co. Chartered Accountants March 29, Page 1 -

26 Town of Fort Nelson Consolidated Financial Statements For the year Ended December 31, 2004 General The Town of Fort Nelson is incorporated in the Province of British Columbia and its principal activities include the provision of legislative, administrative, utility, recreational and fiscal services to its residents. Significant Accounting Policies (a) Basis of Presentation It is the Town's policy to follow accounting principles generally accepted for British Columbia municipalities and to apply such principles consistently. These Consolidated Financial Statements include the operations of the funds listed below. They have been prepared using guidelines issued by the Public Sector Accounting Board of the Canadian Institute of Chartered Accountants. The operations of the Town have been consolidated for financial statement purposes and include the accounts of all of the funds of the Town totaling $36,405,117 as noted below. Operating Funds - These funds include the sewer and water utilities and report the principal operating activities of the Town. As at December 31, the fund balances and operating fund reserve totals were as follows: General Operating Fund 1,982,336 2,183,460 Sewer Utility Operating Fund 527, ,663 Water Utility Operating Fund 1,828,644 1,943,194 4,338,287 4,675,317 Capital Funds - These funds are used to acquire capital assets. The fund balances (deficiencies) represent the extent to which the cost of the capital assets have been financed by the Town's own resources. As at December 31, the fund balances were as follows: General Capital Fund 11,401,010 11,764,362 Sewer Utility Capital Fund 6,078,654 6,109,803 Water Utility Capital Fund 12,349,772 12,574,961 29,829,436 30,449,126 Reserve Funds - These funds have been created to hold assets for specific future requirements. They are comprised of the following: Capital Works Reserve Fund 202, ,775 Machinery & Equipment Depreciation Reserve Fund 818, ,355 Sewer Utility Reserve Fund 140, ,831 Water Utility Reserve Fund 1,052 1,076 Tax Sale Reserve Fund 44,094 45,102 Cemetery Care Trust Fund 14,735 15,535 1,220,901 1,280,674 35,388,624 36,405,117 (b) Accrual Accounting The accrual method for reporting revenues and expenditures has been used, except as noted for Long-term liabilities as noted in (h) below. March 29, Page 2 -

27 Town of Fort Nelson Consolidated Financial Statements For the year Ended December 31, 2003 (c) Deferred Charges Payments for operating expenditures pertaining to future years are carried as deferred charges. They are recorded as expenditures when the economic benefits are realized. (d) Capital Assets Capital assets include general property, buildings and equipment, water and sewer systems, and are recorded on the basis of cost. The cost includes interest on short-term financing where the funds expended exceed cash provided to the project at various stages of completion. Amortization is not recorded. Expenditures on capital assets may be financed by Operating, Reserve Fund or Capital Fund receipts, and are recorded as assets in the Capital Fund when the long term financing is complete. (e) Operating Funds Operating funds include the revenues, expenditures, operating assets and liabilities of the Town's operations. The General Operating, the Water Utility Operating and the Sewer Utility Operating Fund are responsible for general government, water utility, and sewer utility operations respectively. (f) Operating Fund Reserves Transfers to Operating Fund Reserves are current budget appropriations for future expenditures on incomplete projects, certain operating expenses or other specific purpose projects. (g) Capital Funds Capital funds include property, buildings and equipment and related debt of the Town. Debt repayments are made by, and recorded in, the respective operating funds. (h) Long-Term Liabilities Debt charges, including principal and interest, are charged against the applicable operating funds in the periods in which they are paid. The Town does not accrue interest charges from the dates of the latest payments to the end of the financial year. (i) Foreign Exchange Long-term debenture debt denominated in U.S. Dollars is recorded in the accounts on the basis of $1 Canadian to $1 U.S. Gains and losses resulting from changes in the exchange rate during the year are credited or charged directly to the operation of the applicable operating fund. Interest and principal repayments are translated at the exchange rates in effect on the dates of the payments. (j) Reserve Accounts The Town uses reserve accounts to provide working capital and to appropriate surplus for specific budgeted objectives, the expenditures for which are expected to occur in a future period. (k) Use of Estimates The preparation of financial statements in accordance with accounting principles generally accepted for municipalities requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenditure during the reporting period. Significant areas requiring the use of management estimates relate to the determination of accrued sick benefits and severance liability, collectibles of accounts receivable, deferred charges and provisions for contingencies. Actual results could differ from those estimates. Adjustments, if any, will be reflected in operations in the period of settlement. March 29, Page 3 -

28 Town of Fort Nelson Consolidated Balance Sheet As at December 31, 2004 Financial Assets Cash 1,149 1,149 Accounts Receivable - Note 1 316, ,820 Due from Northern Rockies Regional District - Note 2 2,544,765 1,847,829 Prepaid Deposits 8,719 - Property Acquired for taxes - Note 3 5,827 5,827 MFA Debt Reserve - Note 4 343, ,749 3,220,202 2,435,374 Liabilities Accounts Payable - Note 6 482, ,158 Unapplied capital receipts - 62,369 MFA Debt Reserve - Note 4 343, ,749 Debenture Debt - Note 8 4,087,169 3,830,830 4,913,080 4,914,106 Commitments & Contingencies - Note 9 Net Financial Assets (Deficiency) (1,692,878) (2,478,732) Capital Assets Work in Progress, at cost 4,136,845 5,575,841 Capital Assets, at cost - Note 5 32,944,657 33,308,008 37,081,502 38,883,849 35,388,624 36,405,117 Fund Balances Investment in Capital Assets 29,829,436 30,449,126 Operating Fund Surpluses 3,889,292 4,226,322 Operating Fund Reserves - Note 7 448, ,995 4,338,287 4,675,317 Statutory Reserve & Trust Fund Balances 1,220,901 1,280,674 35,388,624 36,405,117 R.P. (Randy) McLean, CGA Treasurer March 29, Page 4 -

29 Town of Fort Nelson Consolidated Statement of Operations & Fund Balances For the year Ended December 31, 2003 Revenue Real Property Tax Levy 4,152,177 4,543,111 Less: Collections for Other Governments (2,093,640) (2,280,517) 2,058,537 2,262,594 Services to Other Governments 893, ,762 Interest, Penalties, and other Recoveries 329, ,310 Block V Land Sales 1,212, ,986 Senior Government Grants - Operations 2,356,411 2,545,387 Sewer Utility User Fees 316, ,731 Water Utility User Fees 890, ,763 Interest & Investment Earnings 45,439 41,765 Debenture refund 33,994 29,332 Transfers from Northern Rockies Regional District 31,825 32,475 Actuarial Adjustments 114,695 62,699 8,282,456 7,841,804 Expenditures Protective Services 888, ,865 Maintenance of Equipment, Roads & Grounds 1,777,574 2,923,376 Sewer Utility Operations 411, ,185 Water Utility Operations 730, ,181 General Government Services 1,938,420 1,349,804 Environmental Development Services 77, ,588 Interest & Exchange 374, ,154 Transfer to Other Governments 83,833 80,158 6,282,309 6,825,311 Increase in Consolidated Fund Balances 2,000,147 1,016,493 Consolidated Fund Balances - Beginning of Year 33,388,477 35,388,624 Consolidated Fund Balances - End of Year 35,388,624 36,405,117 Consolidated Fund Balances Consist of the Following: Capital Assets 29,829,436 30,449,126 Operating Fund Balances 3,889,292 4,226,322 Operating Fund Reserves 448, ,995 4,338,287 4,675,317 Statutory Reserve Funds 1,220,901 1,280,674 35,388,624 36,405,117 March 29, Page 5 -

30 Town of Fort Nelson Consolidated Statement of Cash Flows For the year Ended December 31, 2004 Cash and Equivalents Provided by (Used for) Operating Activities Increase in Consolidated Fund Balances 2,000,147 1,016,493 Decrease (Increase) in Non-Cash Financial Assets Accounts Receivable 61,056 51,791 Prepaid Deposits - 8,719 61,056 60,510 Increase (Decrease) in Short-Term Liabilities Accounts Payable & Accrued Liabilities 47, ,378 Unapplied capital receipts - 62,369 47, ,747 Financing Activities Repayment of Debenture Debt (308,334) (256,339) Investing Activities Capital Asset Acquisitions (344,466) (363,351) (Increase) Decrease in Work-in-Progress (955,237) (1,438,996) (1,299,703) (1,802,347) Increase (Decrease) in Cash & Equivalents for the Year 500,943 (696,936) Cash & Equivalents - Beginning of Year 2,044,971 2,545,914 Cash & Equivalents - End of Year 2,545,914 1,848,978 Cash & Equivalents consist of: Cash on Hand 1,149 1,149 Cash Held by Northern Rockies Regional District 2,544,765 1,847,829 2,545,914 1,848,978 March 29, Page 6 -

31 Town of Fort Nelson Consolidated Statement of Changes in Operating Fund Balances For the year Ended December 31, 2004 Revenue Real Property Tax Levy 4,152,177 4,543,111 Less: Collections for Other Governments (2,093,640) (2,280,517) 2,058,537 2,262,594 Services to Other Governments 893, ,762 Interest, Penalties, and other Recoveries 329, ,310 Senior Government Grants - Operations 2,356,411 2,545,387 Block V Land Sales 1,212, ,986 Sewer Utility User Fees 316, ,731 Water Utility User Fees 890, ,763 Interest & Investment Earnings 3,905 4,101 Debenture refund 33,994 29,332 8,094,402 7,708,966 Expenditures Protective Services 888, ,865 Maintenance of Equipment, Roads & Grounds 1,777,574 2,923,376 Sewer Utility Operations 411, ,185 Water Utility Operations 730, ,181 General Government Services 1,938,420 1,349,804 Environmental Development Services 77, ,588 Interest & Exchange 374, ,154 Transfer to Other Governments 83,833 80,158 Transfer to Own Funds, net 372, ,986 Debenture Principal Repayments 193, ,639 6,847,958 7,371,936 Increase (Decrease) in Operating Fund Balances and Reserves 1,246, ,030 Operating Fund Surpluses and Reserves - Beginning of Year 3,091,843 4,338,287 Operating Fund Surpluses and Reserves - End of Year 4,338,287 4,675,317 March 29, Page 7 -

32 Town of Fort Nelson Consolidated Statement of Changes in Capital Asset Balance For the year Ended December 31, 2004 Capital Asset Balance - Beginning of Year 29,166,340 29,829,436 Transfers from own Funds, net 344, ,508 Investment Income 10,296 8,844 Actuarial Adjustments 114,695 62,699 Debenture Debt Repayment 193, , , ,690 Capital Asset Balance - End of Year 29,829,436 30,449,126 Consolidated Statement of Changes in Statutory Reserve & Trust Fund Balances For the year Ended December 31, 2004 Consolidated Balance - Beginning of Year 1,130,294 1,220,901 Transfer from Northern Rockies Regional District 31,825 32,475 Transfer from (to) Other Funds, net 27,544 (1,522) Investment Income 31,238 28,820 90,607 59,773 Consolidated Balance - End of Year 1,220,901 1,280,674 March 29, Page 8 -

33 Town of Fort Nelson Notes To The Consolidated Financial Statements For the year Ended December 31, Accounts Receivable General Operating Fund Property Taxes Receivable 273, ,907 Trade Accounts Receivable 7,067 15, , ,072 Water Utility Operating Fund Trade Accounts Receivable 36,425 21,621 General Capital Fund Trade Accounts Receivable - 21, , , Due from the Northern Rockies Regional District The Northern Rockies Regional District (NRRD) administers consolidated cash balances and near cash balances on behalf of the Capital, Reserve, Trust and Operating Funds of the Town of Fort Nelson (the Town). The cash held by the NRRD on behalf of the Town is classified as Restricted Cash in the accounts of the NRRD. Cemetery Trust Fund 14,735 15,535 Capital Works Reserve Fund 202, ,144 Machinery & Equipment Reserve Fund 818, ,355 Sewer Utility Reserve fund 140, ,831 Water Utility Reserve Fund 1,052 1,076 Tax Sale Proceeds Reserve Fund 44,094 45,102 Town of Fort Nelson General Capital Fund 310, ,783 Town of Fort Nelson General Operating Fund 311, ,698 Town of Fort Nelson Water Operating Fund 439, ,817 Town of Fort Nelson Sewer Operating Fund 261,740 (566,512) 2,544,765 1,847,829 March 29, Page 9 -

34 Town of Fort Nelson Notes To The Consolidated Financial Statements For the year Ended December 31, Property Acquired for Taxes During the current year, no properties acquired for taxes were sold. Under the Municipal Act, the proceeds on the sale of such property must be transferred into a reserve fund. (See Tax Sale Reserve Fund) The funds received and interest earned thereon must be used for bringing the sinking fund up to requirements; and secondly for reduction of debenture debt, capital expenditures, transfer to a debt repayment reserve or local improvement fund, projects undertaken under Section 530 of the Municipal Act, or for expenditures of a special nature. 4. Municipal Finance Authority Reserve Deposits and Demand Notes The Town of Fort Nelson (the Town) issues its debt instruments through the Municipal Finance Authority. As a condition of these borrowings, a portion of the debenture proceeds are withheld by the Municipal Finance Authority as a debt reserve fund. The Town also executes demand notes in connection with each debenture whereby the Town is required to guarantee certain amounts to the Municipal Finance Authority. Details of the cash deposits and demand notes at year end are as follows: Water Utility Operating Fund Prior year balance 298, ,979 Current Year Demand Notes 218, ,567 Cash Deposits 83,967 72,470 Current year balance 301, ,037 Sewer Utility Operating Fund Prior year balance 40,692 41,152 Current Year Demand Notes 29,950 29,950 Cash Deposits 11,202 11,762 Current year balance 41,152 41,712 Total Consolidated Balance 343, ,749 March 29, Page 10 -