Bowen Island Municipality Financial Statements For the year ended December 31, 2014

Transcription

1 Financial Statements For the year ended

2 Financial Statements For the year ended Contents Management s Responsibility for the Financial Statements 2 Independent Auditor's Report 3 Financial Statements Statement of Financial Position 4 Statement of Operations 5 Statement of Change in Net Financial Assets 6 Statement of Cash Flows 7 Summary of Significant Accounting Policies Schedule 1 - Statement of Operations by Segment Schedule 2 - Statement of Operations by Segment Schedule 3 - Reserve Fund Operations 33

3 Management's Responsibility for the Financial Statements The accompanying financial statements of Bowen Island Municipality (the Municipality ) are the responsibility of management and have been prepared in accordance with Canadian public sector accounting standards as recommended by the Public Sector Accounting Board of the Chartered Professional Accountants of Canada. A summary of the significant accounting policies are described in the financial statements. The preparation of financial statements necessarily involves the use of estimates based on management s judgment, particularly when transactions affecting the current accounting period cannot be finalized with certainty until future periods. The Municipality s management maintains a system of internal controls designed to provide reasonable assurance that assets are safeguarded, transactions are properly authorized and recorded in compliance with legislative and regulatory requirements, and reliable financial information is available on a timely basis for preparation of the financial statements. These systems are monitored and evaluated by management. The Finance Advisory Committee meets with management and the external auditors to review the financial statements and discuss any significant financial reporting or internal control matters prior to their approval of the financial statements. The financial statements have been audited by BDO Canada LLP, independent external auditors appointed by the Municipality. The accompanying Independent Auditor s Report outlines their responsibilities, the scope of their examination and their opinion on the Municipality s financial statements. Chief Administrative Officer Finance Officer May 11,

4 Tel: Fax: BDO Canada LLP 600 Cathedral Place 925 West Georgia Street Vancouver BC V6C 3L2 Canada Independent Auditor's Report To the Mayor and Councilors of Bowen Island Municipality We have audited the accompanying financial statements of Bowen Island Municipality, which comprise the Statement of Financial Position as at, the Statements of Operations, 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 control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's 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 auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of Bowen Island Municipality as at and its results of operations and its cash flows for the year then ended in accordance with Canadian public sector accounting standards. Chartered Accountants Vancouver, British Columbia May 11, 2015 BDO Canada LLP, a Canadian limited liability partnership, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. 3

5 Statement of Financial Position December Financial Assets Cash $ 597,199 $ 907,642 Accounts receivable (Note 1) 907,943 1,022,447 Portfolio investments (Note 2) 7,277,596 6,006,661 8,782,738 7,936,750 Liabilities Accounts payable and accrued liabilities 484, ,167 Deferred revenue (Note 3) 702, ,645 Obligation under capital lease (Note 4) 10,172 14,702 Interim financing (Note 4) 2,000,000 2,000,000 Long-term debt (Note 4) 150, ,389 3,348,071 3,466,903 Net Financial Assets 5,434,667 4,469,847 Non-Financial Assets Tangible capital assets (Note 5) 55,258,702 53,295,245 Prepaid expenses 40,577 35,120 55,299,279 53,330,365 Accumulated Surplus (Note 6) $60,733,946 $ 57,800,212 Finance Officer Mayor The accompanying summary of significant accounting policies and notes are an integral part of these consolidated financial statements 4

6 Statement of Operations Fiscal Plan For the year ended December (Note 16) Revenue (Schedules 1 and 2) Taxation, net (Note 7) $ 3,801,751 $ 3,797,513 $ 3,718,433 Parcel taxes (Note 7) 781, , ,837 Grants in lieu of taxes 4,211 4,666 4,751 Utility connection fees and user rates (Note 13) 1,288,571 1,368,038 1,230,365 Government transfers - Federal (Note 12) 83,600 65,109 23,577 Government transfers - Provincial (Note 12) 325, , ,209 Other contributions (Note 12) ,477 Sales of services (Note 13) 168, , ,729 Other (Note 13) 377, , ,649 Contributed tangible capital assets (Note 12) - 2,449, ,400 6,832,961 9,504,090 6,657,427 Expenses (Schedules 1 and 2) General departmental expenses (Note 14) 5,323,014 5,041,429 4,744,233 Water systems operations 978, , ,640 Sewer system operations 325, , ,046 Library operations 235, , ,836 Debt interest 53,751 48,897 49,539 Loss on disposal of tangible capital assets - 22,647 52,855 6,915,497 6,570,356 6,343,149 Annual Surplus (82,536) 2,933, ,278 Accumulated Surplus, beginning of year 57,800,212 57,800,212 57,485,934 Accumulated Surplus, end of year $57,717,676 $60,733,946 $ 57,800,212 The accompanying summary of significant accounting policies and notes are an integral part of these consolidated financial statements 5

7 Statement of Change in Net Financial Assets Fiscal Plan For the year ended December (Note 16) Annual surplus (deficit) $ (82,536) $ 2,933,734 $ 314,278 Acquisition of tangible capital assets (4,732,217) (946,891) (1,473,633) Amortization of tangible capital assets 1,410,494 1,410,494 1,291,617 Loss on disposal of tangible capital assets - 22,647 54,955 Contribution of tangible capital assets - (2,449,707) (124,400) (3,321,723) (1,963,457) (251,461) Acquisition of prepaid expenses - (40,577) (35,120) Use of prepaid expenses - 35,120 38,162 Change in net financial assets for the year (3,404,259) 964,820 65,859 Net financial assets, beginning of year 4,469,847 4,469,847 4,403,988 Net financial assets, end of year $ 1,065,588 $ 5,434,667 $ 4,469,847 The accompanying summary of significant accounting policies and notes are an integral part of these consolidated financial statements 6

8 Statement of Cash Flows For the year ended December Cash provided by (used in) Operating transactions Annual surplus $ 2,933,734 $ 314,278 Items not involving cash Amortization of tangible capital assets 1,410,494 1,291,617 Loss on disposal of tangible capital assets 22,647 54,955 Contribution of tangible capital assets (2,449,707) (124,400) 1,917,168 1,536,450 Changes in non-cash operating balances Accounts receivable 114,504 (36,367) Accounts payable and accrued liabilities (71,223) (35,276) Deferred revenue (16,835) 46,642 Prepaid expenses (5,457) 3,042 1,938,157 1,514,491 Capital transaction Acquisition of tangible capital assets (946,891) (1,473,633) Investing transaction Acquisition of portfolio investments, net (1,270,935) (394,622) Financing transactions Repayment of long-term debt (26,244) (25,107) Capital lease repayments (4,530) (4,440) (30,774) (29,547) Decrease in cash during the year (310,443) (383,311) Cash, beginning of year 907,642 1,290,953 Cash, end of year $ 597,199 $ 907,642 Supplemental information: Interest paid $ 48,897 $ 49,539 The accompanying summary of significant accounting policies and notes are an integral part of these consolidated financial statements 7

9 Summary of Significant Accounting Policies Bowen Island Municipality (the "Municipality") is an Island municipality in the province of British Columbia. The Municipality was established pursuant to an Order of the Lieutenant Governor in Council effective December 4, 1999 and operates under the provisions of the Community Charter. The Municipality provides municipal services such as fire, public works, planning, parks, recreation, library and other general government services. The Municipality owns and operates seven Local Area Services for Water and one Local Area Service for Sewer, each of which provide service to properties within a discrete geographic area, and which are funded by the properties within those boundaries. The Municipality prepares its financial statements in accordance with Canadian public sector accounting standards using guidelines developed by the Public Sector Accounting Board ("PSAB") of the Chartered Professional Accountants of Canada. Services, assets, liabilities, fund balances and reserves were transferred to the Municipality pursuant to the Letters Patent from the aforementioned Order-in-Council that incorporated the Municipality. The Municipality is a member municipality of the Greater Vancouver Regional District and of the Islands Trust and has various responsibilities to both entities. Cash and Cash Equivalents Portfolio Investments Financial Instruments Non-Financial Assets Management considered all highly liquid investments with maturity of three months or less at acquisition to be cash equivalents. Portfolio investments other than derivatives or equity instruments quoted in active markets are recorded at amortized cost unless there has been a decline in the market value which is other than temporary in nature in which case the investments are written down to market value. The Municipality manages and records its pooled funds at market values, which approximate cost. The Municipality's financial instruments consist of cash, accounts receivable, portfolio investments, accounts payable and accrued liabilities and long-term debt. Unless otherwise indicated, it is management's opinion that the Municipality is not exposed to any significant interest, credit or currency risks arising from these financial instruments. Non-financial assets are not available to discharge existing liabilities and are held for use in the provision of services. They have useful lives extending beyond the current year and are not intended for sale in the ordinary course of operations. 8

10 Summary of Significant Accounting Policies Tangible Capital Assets Tangible capital assets are recorded at cost less accumulated amortization and are classified according to their functional use. Cost includes all costs directly attributable to acquisition or construction of the tangible capital asset including transportation costs, installation costs, design and engineering fees, legal fees and site preparation costs. Amortization is recorded on a straight-line basis over the estimated life of the tangible capital asset commencing once the asset is put into use. Contributed tangible capital assets are recorded at fair value at the time of the contribution. Estimated useful lives of tangible capital assets are as follows: Land improvements Buildings Sewer treatment plant Equipment, furniture and vehicles Infrastructure - water Infrastructure - sewer Roads Other 15 to 30 years 20 to 50 years 15 to 56 years 8 to 20 years 5 to 100 years 5 to 100 years 10 to 75 years 10 to 60 years Leased Assets Leases entered into that transfer substantially all the benefits and risks associated with ownership are recorded as the acquisition of a tangible capital asset and the incurrence of an obligation. The asset is amortized in a manner consistent with tangible capital assets owned by the Municipality and the obligation, including interest thereon, is repaid over the term of the lease. All other leases are accounted for as operating leases and the rental costs are expensed as incurred. Deferred Revenue Collection of Taxes on Behalf of Other Taxation Authorities Government transfers and other funds received for specific purposes which are externally restricted by legislation, regulation or agreement and are not available for general municipal purposes are accounted for as deferred revenue on the statement of financial position. The revenue is recognized in the statement of operations in the year in which it is used for the specified purpose or the stipulation liability is settled. The Municipality collects taxation revenue on behalf of other entities. Such levies, other revenues, expenses, assets and liabilities with respect to the operations of other entities are not reflected in these financial statements. 9

11 Summary of Significant Accounting Policies Revenue Recognition Taxes are recorded at estimated amounts when they meet the definition of an asset, have been authorized and the taxable event occurs. Annual levies for non-optional municipal services and general administrative services are recorded as taxes for municipal services in the year they are levied. Taxes receivable are recognized net of an allowance for anticipated uncollectable amounts, if necessary. Levies imposed by other taxing authorities are not included as taxes for municipal purposes. Through the British Columbia Assessment Authority's appeal process, taxes may be adjusted by way of supplementary roll adjustments. The effects of these adjustments on taxes are recognized at the time they are awarded. Charges for sewer and water usage are recorded as user fees. Connection fee revenues are recognized when the connection has been established. Sales of service and other revenue is recognized on an accrual basis. Government Transfers Government transfers, are recognized as revenue in the financial statements when the transfer is authorized and any eligibility criteria are met, except to the extent that transfer stipulations give rise to an obligation that meets the definition of a liability. Transfers are recognized as deferred revenue if the transfer stipulations give rise to a liability. The transfer revenue is recognized in the statement of operations as the stipulation liabilities are settled. When the Municipality is deemed the transferor, the transfer expense is recognized when the recipient is authorized and has met the eligibility criteria. Use of Estimates The preparation of the financial statements in accordance with Canadian public sector accounting standards requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from management's best estimates as additional information becomes available in the future. 10

12 1. Accounts Receivable General GST receivable $ 52,716 $ 60,654 General accounts receivable 48,124 48,462 Taxes receivable 404, ,968 Interest Receivable 18,217 35, , ,314 Water User rates receivable 295, ,827 Sewer User rates receivable 89,133 78,306 $ 907,943 $ 1,022, Portfolio Investments MFA bond fund $ 3,778,244 $ 3,873,703 MFA money market fund 709, ,193 First Credit Union term deposits 2,789,849 1,632,765 $ 7,277,596 $ 6,006,661 Short-term bonds and money market funds include bank-issued notes, bonds and Provincial bonds and debentures. The current yield of the bond fund is 3.15% ( %) with maturities ranging from 2015 to The current yield of the money market fund is 1.09% ( %) and are redeemable at any time. The interest rates of the term deposits range from 1.75% to 2.10% ( % to 2.73%) and maturities range from July 2015 to May

13 3. Deferred Revenue (a) Deferred Revenue The Municipality holds funds that have been received for a specific purpose or project that will take place in a future fiscal period. The amounts will be recognized as revenue when spent as specified or stipulation liabilities are settled. In the event that it is determined that the purpose for which the funds were received cannot be fulfilled, such funds will be returned to the contributor General Current Fund Civic facilities - Greenways donation $ 100,220 $ 100,220 Conservation initiatives - Bowen Island Conservancy 16,440 16,440 Killarney Lake/Hiker's Trail 10,000 10,000 Amenity donation - Civic Facilities - Arts - 10,000 Amenity donation - Traffic Calming Whitesails Drive 10,000 10,000 UBCM Age Friendly - 14,000 Other 25,818 25, , ,793 Development Cost Charges - Parks 215, , , ,066 Water Current Fund Capital Expenditure Charges 324, ,579 $ 702,810 $ 719,645 12

14 3. Deferred Revenue (Continued) (b) Refundable Deposits Building Permit Deposits $ 266, ,796 Subdivision Deposits 355, ,875 Miscellaneous Works Deposits 121,214 50,470 $ 742,790 $ 616,141 Bowen Island Municipality Building Bylaw No. 65, 2002 authorizes that applicants for building permits pay a deposit in the amount of 1% of the construction value. The deposit less any additional charges incurred after the permit issue date is refunded upon the conclusion of the permit process or when an occupancy permit is issued. Bowen Island Municipality Development Application Fees Bylaw 11, 2000, authorizes that applicants for various land development processes pay a deposit amount as described in the bylaw. The deposits are refundable under certain conditions as set out in the bylaw. The Municipality holds deposits under a variety of work permits that are refundable upon acceptable completion of works for which the permits were issued. Any portion of these deposits that is used for replacing damaged works or property or for the recovery of other expenses will be taken into income by the Municipality at such time as the amounts are charged. The above deposits are not included in the cash nor the liabilities of the Municipality. 4. Debt (a) Obligation under capital lease for equipment: The future minimum lease payments due under capital lease are as follows: 2015 $ 5, , ,406 Less: imputed interest (1,234) Present value of minimum lease payments $ 10,172 13

15 4. Debt (Continued) (b) Long-term debt: Purpose Maturity Interest Cove Bay Water Local Service Area (i) Bylaw 837 Queen Charlotte Hts % $ 150,145 $ 176,389 Long-term debt - future principal payments on existing debt: 2015 $ 14, , , , ,471 72,355 Estimated sinking fund earnings 77,790 $ 150,145 (c) Interim financing: Assent of the electors was obtained, through a referendum held April 30, 2005, for "Bowen Island Municipality GVRD Non-Parks Land Acquisition, Loan Authorization Bylaw No. 141, 2005". Loan Authorization Bylaw No. 141, provided the authority for the Municipality to borrow up to $2,035,623 to acquire approximately 38 acres of land from the Greater Vancouver Regional District. In the interim of processing the long-term debenture debt, the Municipality adopted a temporary borrowing bylaw (No. 171), later replaced by Bylaw 291 in December 2010, to finance the land acquisition. The proceeds from the sale of any such lands are to be used first to reduce or extinguish the principal balance of the temporary borrowing in relative portion to the amount of property sold. The temporary financing is planned to continue until such time as short-term interest rates rise significantly, or that the Municipal Finance Authority requires that the temporary loan be converted to long-term debenture debt. In the interim, interest-only payments will be made on the temporary borrowing. As at, the outstanding balance on the loan was $2,000,000 ( $2,000,000). The temporary borrowing bears interest at a floating rate. As at, the interest rate was 1.80% per annum ( %). 14

16 5. Tangible Capital Assets Land Land Improvements Buildings Sewer Treatment Plant Equipment & Furniture & Vehicle Water Infrastructure Sewer Infrastructure Roads Other 2014 Total 2013 Total Cost, beginning of year Additions Disposals Cost, end of year Accumulated amortization, beginning of year Amortization Disposals Accumulated amortization, end of year Net carrying amount, end of year $ 23,757,251 $ 567,582 $ 1,706,983 $ 2,740,601 $ 6,509,716 $ 13,119,183 $ 1,254,000 $ 17,248,951 $ 1,502,219 $68,406,486 $ 66,897,523 38, , ,028 3,752-2,923,934-3,396,598 1,598, (68,340) (93,116) - - (13,518) (174,974) (89,070) 23,757, ,339 1,868,110 2,740,601 6,710,404 13,029,819 1,254,000 20,172,885 1,488,701 71,628,110 68,406, , , ,079 3,719,378 3,142, ,766 6,211, ,934 15,111,241 13,853,739-16,482 48, , , ,121 15, ,567 71,222 1,410,494 1,291, (62,038) (80,312) - - (9,977) (152,327) (34,115) - 173, , ,857 4,029,855 3,325, ,659 6,716, ,179 16,369,408 15,111,241 $ 23,757,251 $ 432,869 $ 893,440 $ 2,232,744 $ 2,680,549 $ 9,704,693 $ 1,088,341 $ 13,456,293 $ 1,012,522 $55,258,702 $ 53,295,245 $2,449,707 of the total road capital asset additions above is comprised of the engineering value of Phase III Cape Roger Curtis contributed assets. 15

17 6. Accumulated Surplus The Municipality segregates its accumulated surplus in the following categories: Current Fund $ 3,671,833 $ 3,398,397 Reserve Fund 3,963,728 3,297,661 Investment in tangible capital assets 53,098,385 51,104,154 $60,733,946 $ 57,800,212 (a) Current Fund The current fund consists of the following: General $ 2,153,897 $ 2,159,489 Water 1,340,254 1,083,651 Sewer 177, ,257 $ 3,671,833 $ 3,398,397 (b) Reserve Fund The reserve fund represents funds set aside by bylaw for specific purposes. Details of reserve funds are shown below: Fire Protection Reserve Fund Fire Protection Reserve, Bowen Island Fire Protection District Bylaw 27, 1984 was transferred from the predecessor entity, Bowen Island Fire Protection District in the amount of $103,595. The Fire Protection Reserve Fund was created by Bowen Island Bylaw No. 12, 2000 under the authority of Section 496 of the Local Government Act. Funds in this reserve are restricted for use as to fire protection purposes Carried forward $ 211,351 $ 136,750 16

18 6. Accumulated Surplus (Continued) (b) Reserve Fund Brought forward $ 211,351 $ 136,750 Recreation and Other Community Use Reserve Fund Recreation and Other Community Use Reserve Fund, GVRD Bylaw 715, was transferred from the predecessor entity, GVRD in the amount of $117,962. The Recreation and Other Community Use Reserve Fund was created by Bowen Island Bylaw 17, 2000 under the authority of Section 496 of the Local Government Act. Funds in this reserve are restricted for use as to capital works or equipment for Recreation and Community use. 817, ,094 Community Parks Reserve Fund Community Parks Reserve Fund, GVRD Bylaw 717, was transferred from the predecessor entity, GVRD in the amount of $280,035. Community Parks Reserve Fund was created by Bowen Island Bylaw 16, 2000 under the authority of Section 496 of the Local Government Act. Funds in this reserve are restricted for use as to capital works or equipment with respect to Community Parks. 544, ,029 Cove Bay Water System Reserve Fund Cove Bay Water System Reserve Fund, GVRD Bylaw 703, was transferred from the predecessor entity, GVRD in the amount of $297,848. Cove Bay Water System Reserve Fund was created by Bowen Island Bylaw 19, 2000 under the authority of Section 496 of the Local Government Act. Funds in this reserve are restricted for use as to capital works or equipment with respect to the Cove Bay Water System. 681, ,774 Carried forward $ 2,254,565 $ 2,016,647 17

19 6. Accumulated Surplus (Continued) (b) Reserve Fund (Continued) Brought forward $ 2,254,565 $ 2,016,647 Mount Gardner Dock Reserve Fund Mount Gardner Dock Reserve Fund, GVRD Bylaw 879, was transferred from the predecessor entity, GVRD in the amount of $22,105. Mount Gardner Dock Reserve Fund was created by Bowen Island Bylaw 18, 2000 under the authority of Section 496 of the Local Government Act. Funds in this reserve are restricted for use as to capital works or equipment with respect to the Mount Gardner Dock. 39,093 38,029 Snug Cove Improvement Reserve Fund The Snug Cove Improvement Reserve Fund was created by Bowen Island Bylaw No. 347 under the authority of Section 188 of the Community Charter. Funds in this reserve are restricted for use for the purposes of funding development and general improvements to Snug Cove. 101,953 50,000 Equipment Replacement Reserve Fund The Equipment Replacement Reserve Fund was created by Bowen Island Bylaw No. 134 under the authority of Section 188 of the Community Charter. Funds in this reserve are restricted for use as to replacement of municipal mobile equipment. 116, ,185 Roads Maintenance and Renewal Reserve Fund The Roads Maintenance and Renewal Reserve Fund was created by Bowen Island Bylaw No. 135 under the authority of Section 188 of the Community Charter. Funds in this reserve are restricted for use as to maintenance, renewal or construction of municipal road works. 495, ,288 Carried forward $ 3,008,076 $ 2,696,149 18

20 6. Accumulated Surplus (Continued) (b) Reserve Fund (Continued) Brought forward $ 3,008,076 $ 2,696,149 Parkland Reserve Fund The Parkland Reserve Fund was created under the authority of Section 921 (12) of the Local Government Act. Funds in this reserve are restricted for the purpose of acquiring parkland. 69,233 67,846 Capital Replacement and Renewal Fund The Capital Replacement and Renewal Fund was established under the authority of Section 188 of the Community Charter. Funds in this reserve are restricted for the purpose of replacement or restoration of capital assets and infrastructure. 825, ,666 Community Works Reserve Fund The Community Works Reserve Fund was created by Bowen Island Bylaw No. 377 under the authority of Section 188 of the Community Charter. Funds in this reserve are restricted for eligible expenditures as defined by the Community Works Fund Agreement (Gas Tax). 60,890 - $ 3,963,728 $ 3,297,661 19

21 7. Taxation - Net Fiscal Plan General municipal purposes $ 3,748,357 $ 3,744,119 $ 3,666,190 Collections for other governments Province of British Columbia - school tax - 1,957,866 1,965,344 Islands Trust - 214, ,170 Greater Vancouver Regional District - 85,935 90,599 TransLink - 526, ,885 Municipal Finance Authority British Columbia Assessment Authority - 94,929 94,639 Police Tax - 298, ,161 3,748,357 6,922,590 6,854,293 Transfers Province of British Columbia - school tax - (1,957,866) (1,965,344) Islands Trust - (214,501) (225,170) Greater Vancouver Regional District - (85,935) (90,599) TransLink - (526,021) (521,885) Municipal Finance Authority - (309) (305) British Columbia Assessment Authority - (94,929) (94,639) Police Tax - (298,910) (290,161) - (3,178,471) (3,188,103) Available for general municipal purposes 3,748,357 3,744,119 3,666,190 Payments in lieu of taxes 53,394 53,394 52,243 $ 3,801,751 $ 3,797,513 $ 3,718,433 General parcel taxes Garbage $ 472,320 $ 471,710 $ 447,372 Community Parks 219, , ,300 Water parcel and other taxes 90,165 90,315 90,165 $ 781,785 $ 781,425 $ 756,837 20

22 8. Contingent Liabilities (a) (b) The Municipality is partially self-insured through the Municipal Insurance Association of British Columbia. Should the Association pay out claims in excess of premiums received, it is possible that the Municipality along with the other participants, would be required to contribute towards the deficit. The Municipality's debt instruments that originated with the Greater Vancouver Regional District are issued through the Municipal Finance Authority. A portion of the debenture proceeds is withheld by the Municipal Finance Authority as a debt reserve fund as a condition of these borrowings. These funds, which total $8,306 ( $8,006), are not reflected in these financial statements. The Municipality also executes demand notes in connection with each debenture whereby the Municipality may be required to loan amounts to the Municipal Finance Authority. The demand notes, which total $15,407 ( $15,407), are contingent in nature and are not reflected in these financial statements. (c) (d) From time to time, the Municipality may be named in lawsuits. At any given point in time, there may be a few lawsuits pending in which the Municipality is involved. It is considered that the potential claims against the Municipality resulting from litigation and not covered by insurance would not materially affect these financial statements. The Municipality is responsible as a member of the Greater Vancouver Regional District for its share of any operating deficits or long-term debt related to functions in which it participates. 9. Commitments Residential Garbage Pickup and Disposal The Municipality entered into an agreement for residential garbage pick up and disposal at an approximate annual cost of $584,000. The five-year agreement commenced on January 1, 2014 and expires on December 31,

23 10. Pension Plan The Municipality and its employees contribute to the Municipal Pension Plan (the "Plan"), a jointly-trusteed pension plan. The Plan's Board of Trustees, representing plan members and employers, is responsible for overseeing the management of the 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 182,000 active members and approximately 75,000 retired members. Active members include approximately 30 contributors from the Municipality. The most recent valuation as at December 31, 2012 indicated a $1,370 million funding deficit for basic pension benefits. The next valuation will be as at December 31, 2015 with results available in Employers participating in the Plan record their pension expense as the amount of employer contributions made during the fiscal year. This is because the Plan records accrued liabilities and accrued assets for the Plan in aggregate with the result that there is no consistent and reliable basis for allocating the obligation, assets and cost to the individual employers participating in the Plan. The Municipality paid $152,924 for employer contributions to the plan in the year ended December 31, 2013 ( $149,037) while employee contributions totaled $124,782 ( $119,459). 22

24 11. Tax Exemptions Granted by Council Value of Value of Municipal Other Taxing Total Tax Authorities BC Camping and Recreation Guild for Christian Scientists $ 2,836 $ 2,180 $ 5,016 $ 4,999 BC Camping and Recreation Guild for Christian Scientists 1,216 1,979 3,195 3,202 BC Camping and Recreation Guild for Christian Scientists 2,688 4,376 7,064 7,192 BC Camping and Recreation Guild for Christian Scientists 4,900 7,979 12,879 12,932 BC Camping and Recreation Guild for Christian Scientists 2,111 1,622 3,733 3,720 Bowen Island Community Museum and Archives 1,123 1,988 3,111 3,246 Bowen Island Preschool and Community Day Care Assoc. 2,462 1,892 4,354 10,985 Seymour Bay Foundation ,205 PAC #150 Royal Canadian Legion - Bowen Island 994 1,619 2,613 3,013 Rivendell Foundation 9,157 12,405 21,562 22,377 Seymour Bay Foundation (Bowen Island Golf Assoc.) ,188 - Smooth Stones Foundation Inc. for Cates Hill Chapel 1,820 2,963 4,783 4,965 Smooth Stones Foundation Inc. for Island Pacific School 2,359 7,911 10,270 10,706 The Roman Catholic Archbishop of Vancouver 1,133 1,845 2,978 3,106 The United Church of Canada 1,052 1,713 2,765 2,589 WCD Developments Ltd. Tir-na-nOg Theatre School Society 1,842 5,478 7,320 7,861 Properties held by Bowen Island Municipality 4,154 13,931 18,085 17,827 $ 40,129 $ 70,787 $ 110,916 $ 119,925 23

25 12. Government Transfers and Other Contributions Received Fiscal Plan Government of Canada General Canada Day $ 600 $ 150 $ 150 Participaction Community Works Gas Tax - 60,659 - Human Resources Development Canada Summer Students 3,000 3,550 3,899 3,600 65,109 4,799 Capital - Innovations Fund 80,000-18,778 Government Transfers - Federal $ 83,600 $ 65,109 $ 23,577 Province of British Columbia General Small communities protection grant $ 271,162 $ 269,474 $ 271,162 UBCM Caring Circle grant 20,000 20,000 - Miscellaneous grant 10,000-4, , , ,674 Library Per-Capita provincial grant 11,148 11,331 11,148 Interlibrary loan grant 980 1,039 1,345 BC OneCard 7,400 7,400 7,400 Other miscellaneous grants 5,142 7,494 7,642 24,670 27,264 27,535 Government Transfers - Provincial $ 325,832 $ 316,738 $ 303,209 Other Contributions Sport Med BC $ - $ - $ 19,957 First Credit Union 600-2, ,477 Contributed tangible capital assets - 2,449, ,400 $ 600 $ 2,449,707 $ 146,877 24

26 13. User Fees, Sale of Services and Other Revenue Fiscal Plan User Fees Garbage decal sales and drop off fees $ 117,330 $ 134,064 $ 119,994 Fire and other service inspections 2,000 1,630 3,160 Recreation programs 155, , ,592 Turf field 5,000 6,786 6,430 Dock rentals 25,000 24,757 26,843 Library 7,400 6,395 6, , , ,802 Water 782, , ,104 Sewer 194, , ,459 $ 1,288,571 $ 1,368,038 $ 1,230,365 Sale of Services Building and development permits $ 157,500 $ 167,024 $ 108,991 Extraordinary cost recoveries 3, ,806 School tax administration fees 4,250 4,259 4,257 Driveway and fire department access permits 3,500 4,875 3,675 $ 168,850 $ 176,458 $ 120,729 Other Revenues Taxation, interest and penalties $ 66,000 $ 80,407 $ 81,348 Donations 157, ,776 50,912 Rental income 31,400 22,641 24,677 Bylaw fines 2,300 1,115 1,332 Other 26,900 32,444 37, , , ,183 Return on Investments Current Fund 50,000 87,706 74,312 Water Current Fund 20,750 33,687 23,339 Sewer Current Fund 2,560 1,073 2,548 Reserve Fund investment income - 96,586 56, ,208 $ 544,435 $ 352,649 25

27 14. General Departmental Expenses Fiscal Plan General Government Council $ 131,128 $ 122,429 $ 136,503 Corporate services 740, , ,401 Community grants (Note 15) 138, , ,599 Insurance 23,400 23,075 25,505 Municipal hall rent, utilities and maintenance 108, , ,023 Other general government 107, , ,445 1,250,615 1,257,517 1,190,476 Protective Services Fire and emergency services 326, , ,454 Bylaw services 98,639 97,519 57, , , ,874 Roads, drainage and infrastructure 694, , ,843 Solid waste management 609, , ,451 Community and strategic planning 663, , ,910 Recreation and community services 568, , ,795 Community parks 243, , ,420 Amortization 868, , ,464 3,647,577 3,332,172 3,207,883 Total General Departmental Expenses $ 5,323,014 $ 5,041,429 $ 4,744,233 26

28 15. Assistance Granted to Community Organizations Core Community Grants Bowen Island Arts Council $ 51,319 $ 55,000 Bowen Island Community Museum and Archives 29,048 30,000 West Vancouver School District #45 11,114 36,114 91, ,114 Other Grants Bowen Agricultural Alliance (Bowfeast) - 1,625 Bowen Island Children's Centre 1,500 - Bowen Island Community Fair Association 1,549 - Bowen Island Community Foundation - 2,018 Bowen Island Community Medical Clinic Association 2,764 - Bowen Island Community School Association - 1,354 Bowen Island Community School Parent Advisory Association - 2,000 Bowen Island Family Place Association 9,683 10,000 Bowen Island Golf Association 1,500 - Bowen Island Gymnastics Club 3,321 - Bowen Island Heritage Preservation Association 1,400 1,400 Bowen Island Scouts 700 1,600 Bowen Island Seniors Keeping Young - 2,000 Bowen Island Steamship Days - 1,200 Bowen Island Caring Circle 14,346 8,220 Bowen Island Preschool and Daycare 1,500 - Coast Animal Welfare and Education Society 2,168 2,000 North Shore Restorative Justice 1,500 - Snug Cove House Society 968 2,068 Steamship Days Tir-na-nOg Theatre School Society 9,683 10,000 53,487 45,485 $ 144,968 $ 166,599 27

29 16. Fiscal Plan Fiscal plan amounts represent the Financial Plan Bylaw adopted by Council in May 2014 with estimates for amortization of tangible capital assets. The Financial Plan anticipated use of surpluses accumulated in previous years to balance against current year expenditures in excess of current year revenues. In addition, the Financial Plan anticipated capital expenditures but did not anticipate amortization expense. The following shows how these amounts were combined: Financial Plan Bylaw surplus for the year $ - $ - Add: Capital expenditures 4,732,217 2,111,432 Less: Budgeted transfers from accumulated surplus (3,404,259) (1,022,785) Amortization (1,410,494) (1,291,617) $ (82,536) $ (202,970) 17. Segmented Information The Municipality is a diversified municipal government institution that provides a wide range of services to its citizens such as fire, roads maintenance, recreation, library and garbage disposal. Distinguishable functional segments have been separately disclosed in the segmented information. The nature of the segments and the activities they encompass are as follows: General Government and Fiscal Services General government and fiscal services is comprised of Council and the related support services provided by the Administration and Finance departments, as well as all operations and maintenance costs relating to Municipal Hall and grants to community organizations. Fire and Emergency Services This service is comprised of fire protection and emergency services. The fire department is responsible to provide fire suppression service, emergency first response, fire prevention programs, training and education. The Municipality employs a chief and a part-time deputy chief. All other members are volunteers. Bylaw Services Bylaw Services provides response to bylaw infraction complaints, animal control, enforces parking regulations and oversees collection of moorage fees for Snug Cove and Mt. Gardiner Docks. 28

30 17. Segmented Information (Continued) Roads, Drainage and Infrastructure This function, managed by the Public Works Department, is responsible for road maintenance, drainage and ditches, rock scaling, public wharf maintenance and municipal building maintenance and operations. Solid Waste Management This function, managed by the Public Works Department, is responsible for all solid waste disposal, green waste pickup and recycling. The service is provided by a subcontractor to the Municipality. Community and Strategic Planning Recreation and Community Services This service area provides services meant to improve the health and well-being of the Municipality s citizens. Recreational programs include recreational sports activities, community events and operation of a youth drop-in centre. They are delivered at various facilities including the community school and teen centre. Community Parks This service consists of parks and field maintenance and operations, trail maintenance and maintenance of beach fronts and public access. Library The Municipality operates a municipal library located in Snug Cove. Water Utilities The Municipality oversees operations and administration of seven separate small water systems, ranging in size from 41 to 615 connections. Approximately 1,200 dwellings and businesses are serviced by municipality-operated water systems. Sewer Utilities The Municipality oversees operations and administration of a small sewer system. This system services approximately 90 connected dwellings and businesses in the Snug Cove area. 29

31 18. Expenditures by Object Operations Capital Acquisitions 2014 Total 2013 Total Goods and services $ 2,455,085 $ 3,346,738 $ 5,801,823 $ 3,961,269 Labour 2,510,912 27,213 2,538,125 2,419,303 Debt charges - interest 48,897-48,897 49,539 Loss on disposal of capital assets 22,647 22,647 52,855 Grants to Community 144, , ,599 Total expenditures 5,159,862 3,396,598 8,556,460 6,649,565 Amortization expense 1,410,494-1,410,494 1,291,617 Total expenditures and expenses $ 6,570,356 $ 3,396,598 $ 9,966,954 $ 7,941,182 30

32 Schedule 1 - Combined Statement of Operations by Segment For the year ended General Gov't Fire & Other Roads Community Recreation & Fiscal Emergency Protective Drainage & Solid Waste & Strategic& Community Community Water Sewer Services Services ServicesInfrastructure Management Planning Services Parks Library Unallocated Utilities Utilities Actual Fiscal Plan Revenues General taxes $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 3,797,513 $ - $ - $3,797,513 $ 3,801,751 Parcel taxes , , , , ,785 Grants in lieu of taxes , ,666 4,211 Utility connection fees and User fees - 1,630-24, , ,421 6,786 6, , ,056 1,368,038 1,288,571 Government Transfers Federal (Note 12) , , ,109 83,600 Provincial (Note 12) 269, , , , ,832 Other contributions (Note 12) Sale of services (Note 13) 4,259 1,850-3, , , ,850 Other revenue (Note 13) 16,094 1,250 3,365 8,702 47,613 25,848 26, ,200 14, ,033 48,137 1, , ,761 Contributed tangible capital assets (Note 12) ,449, ,449,707 - Total revenues 289,827 4,730 3,365 2,486, , , , ,386 47,714 4,113, , ,129 9,504,090 6,832,961 Expenses Operating Salaries & benefits 719, ,536 75, , , ,479 86, , ,659 31,666 2,510,912 2,598,644 Travel, conventions, education and training 47,518 21,399 1,271 7,704-7,828 16,514 2,000 1,802-6, , ,470 Operation goods and services 44,726 10,953 1, ,829 4,844 5,236 18,118 40,367 12,289-92,123 2, , ,888 Communication & information systems 80,201 25, , ,873-7,332-11,822 3, , ,220 Contract Services - professional 52,118-6,887 5,526 3, ,655-30, ,407 1, , ,250 Contract services - operational 6, , ,578-83,370 32, ,795 95, , ,999 Insurance and Licenses 23,075 4,640-18, ,461 1,452-17,936 1,966 78,023 90,036 Maintenance - buildings, equipment, infrastructure 21,440 37,268 4,606 24, ,886-5,877-47,592 16, , ,988 Rents 76, , , , ,400 Utilities 8,073 17,064-4, ,889-23,449 12,016 69,637 73,150 Projects and planning - 2, ,570-71,386 15, , ,080 Other operational expenses 20,865 2,904 6, ,626 2, ,504-19,039-61,242 69,159 Debt interest 35, ,751-48,897 53,751 Grants to Community (Note 15) 144, , ,968 Loss on disposal of tangible capital asset , ,803-22,647 - Amortization 42, , , ,403 56,635 26, , ,244 1,410,494 1,410,494 Total expenses 1,322, ,976 97,518 1,298, , , , , , , ,989 6,570,356 6,915,497 Excess (deficiency) of revenues over expenses $(1,032,868) $ (456,246) $ (94,153) $ 1,187,627 $ 44,392 $ (255,333) $ (358,976) $ 59,133 $ (192,511) $ 4,113,871 $ 43,658 $ (124,860) $2,933,734 $ (82,536) 31

33 Schedule 2 - Combined Statement of Operations by Segment For the year ended December 31, 2013 General Gov't Fire & Other Roads Community Recreation & Fiscal Emergency Protective Drainage & Solid Waste & Strategic& Community Community Water Sewer Services Services ServicesInfrastructure Management Planning Services Parks Library Unallocated Utilities Utilities Actual Fiscal Plan Revenues General taxes $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 3,718,433 $ - $ - $ 3,718,433 $ 3,717,453 Parcel taxes , , , , ,965 Grants in lieu of taxes , ,751 4,174 Utility connection fees and User fees - 3,160-26, , ,592 6,430 6, , ,459 1,230,365 1,244,545 Government Transfers Federal (Note 12) ,778 4, , ,600 Provincial (Note 12) 271, , , , ,179 Other contributions (Note 12) , , ,601 26,093 Sale of services (Note 13) 4, , , , ,800 Other revenue (Note 13) 10,614 1,660 2,432 17, ,501 37,534 17,760 6, ,018 50,169 2, , ,033 Contributed tangible capital assets (Note 12) , ,400 - Total revenues 286,033 5,745 2, , , , , ,490 41,281 3,919, , ,007 6,730,551 6,739,842 Expenses Operating Salaries & benefits 652, ,099 49, , , ,010 77, , ,216 19,183 2,392,090 2,787,750 Travel, conventions, education and training 33,955 12, , ,454 15, ,382-4,635-82, ,443 Operation goods and services 24,758 9, ,495 3,982 9,921 17,408 18,150 13, ,301 2, , ,036 Communication & information systems 69,998 12, ,154-1,296 6,800-8,382-9,088 2, , ,860 Contract Services - professional 61,171-4,967 1, , ,018 26, , ,700 Contract services - operational 10, , ,929-74,947 40, ,811 78, , ,253 Insurance and Licenses 25,505 10,574-44, ,344-12,932 1,729 96,960 57,481 Maintenance - buildings, equipment, infrastructure 22,720 30,503 1,861 30, ,862 48,630 5,791-58,072 11, , ,152 Rents 73, , , ,847 Utilities 8,297 11,873-6, ,550-26,671 12,171 72,495 65,400 Projects and planning - 5, , ,512 15, , ,512 Other operational expenses 21,294 2, , ,433 3, ,859-12,493-57,987 79,700 Debt interest 35, ,751-49,539 59,093 Grants to Community (Note 15) 166, , ,968 Loss on disposal of tangible capital asset , ,880-52,855 - Amortization 33,763 89, , ,839 74,030 26, , ,420 1,291,617 1,291,617 Total expenses 1,240, ,261 59,847 1,169, , , , , , , ,046 6,343,149 6,942,812 Excess (deficiency) of revenues over expenses $ (953,970) $ (369,516) $ (57,415) $(1,044,221) $ 167,773 $ (438,728) $ (343,361) $ (15,959) $ (194,556) $ 3,919,202 $ (70,833) $ (161,039) $ 387,402 $ (202,970) 32

34 Schedule 3 - Reserve Fund Operations For the year ended Fire Recreation Mount Snug Cove Capital Community Department and Other Community Cove Bay Gardner Improvement Equipment Roads and Parkland Renewal and Works Reserve Equipment Comm. Use Parks Water Dock Fund Replacement Infrastructure Investments Replacement Fund Balance, beginning of year $ 136,750 $ 795,094 $ 509,029 $ 575,774 $ 38,029 $ 50,000 $ 125,185 $ 466,288 $ 67,846 $ 533,666 $ - $ 3,297,661 $ 3,496,607 Interest 4,601 22,236 13,475 14,200 1,064 1,953 3,363 16,613 1,387 17, ,586 56,267 Transfers from (to): Current Fund 70,000-37, ,840-50,000 68, , ,564 60,659 1,186, ,468 Capital Fund - - (16,051) (11,010) - - (80,000) (487,106) - (23,164) - (617,331) (1,211,681) Balance, end of year $ 211,351 $ 817,330 $ 544,080 $ 681,804 $ 39,093 $ 101,953 $ 116,670 $ 495,795 $ 69,233 $ 825,529 $ 60,890 $ 3,963,728 $ 3,297,661 33