NORTHERN SUNRISE COUNTY FINANCIALSTATEMENTS For the Year Ended December 31, 2013

Transcription

1 NORTHERN SUNRISE COUNTY FINANCIALSTATEMENTS For the Year Ended December 31, 2013

2 NORTHERN SUNRISE COUNTY CONSOLIDATEDFINANCIALSTATEMENTS FOR THEYEARENDED DECEMBER31, 2013 Table of Contents: Management Responsibility for Financial Statements independent Auditors Report Consolidated Statement of Financial Position... Consolidated Statement of Operations Consolidated Statement of Change in Net Financial Assets... Consolidated Statement of Cash Flows Schedule of Changes in Accumulated Surplus... Schedule of Tangible Capital Assets... 8 Schedule of Government Transfers... Schedule of Property Taxes Levied Consolidated Schedule of Expenses by Object Consolidated Schedule of Segment Disclosure Notes to the Consolidated Financial Statements , IA 1

3 NORTHERN SUNRISE c Bag1300 PeaceRiverẠB T8S1Y9 Office: ~O013 Fax: MANAGEMENTRESPONSIBILITYFOR FINANCIALSTATEMENTS To the Reeve and Council of Northern Sunrise County: Management is responsible for the preparation and presentation of the accompanying consolidated financial statements, including responsibility for significant accounting judgments and estimates in accordance with Canadian generally accepted accounting principles. This responsibility includes selecting appropriate accounting principles and methods and making decisions affecting the measurement of transactions in which objective judgment is required. In discharging its responsibilities for the integrity and fairness of the consolidated financial statements, management designs and maintains the necessary accounting systems and related internal controls to provide reasonable assurance that transactions are authorized, assets are safeguarded and?nancial records are properly maintained to provide reliable information for the preparation of financial statements. The Council is composed entirely of Councilors who are neither management nor employees of the County. The Council is responsible for overseeing management in the performance of its financial reporting responsibilities and for approving the financial information included in the financial statements. The council fulfils these responsibilities by reviewing the financial information prepared by management and discussing relevant matters with management and external auditors. Council is responsible for the appointment of the County's external auditors. MNP LLP, an independent firm of Chartered Accountants, is appointed by the Council to audit the consolidated financial statements and report directly to them; their report follows. The external auditors have full and free access to, and meet periodically and separately with, both the Council and management to discuss their audit findings. June 24, 2014 [ 9 Q Chief AdministrativeOfficer A vibram dyizaiiiiccomzty, reflecting strong values and progressive attitude.s',wl1ilc+balancing mzturc 1 and economic growth in at global environment

4 98TH LLP Auditors Report To the Reeve and Council of Northern Sunrise County We have audited the accompanying consolidated financial statements of Northern Sunrise County, which comprise the statement of?nancial position as at December 31, 2013, and the statements of financial activities, change in net financial assets and cash flows for the year then ended, and a summary of signi?cant accounting policies and other explanatory information. Management's Responsibility for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with Canadian public sector accounting standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditors' Responsibility Our responsibility is to express an opinion on these consolidated?nancial 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 consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated?nancial statements. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the consolidated?nancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated?nancial statements. We believe that the audit evidence we have obtained is suf?cient and appropriate our audit opinion. to provide a basis for Basis for Quali?ed Opinion As outlined in Note 22, Northern Sunrise County is not reporting their proportionate share of their investment in an Other Government Organization they hold. Failure to record this investment using the consolidation method is not in accordance with Canadian generally accepted accounting principles. Due to the financial information not being available, we are unable to determine the?nancial statement impact. Quali?ed Opinion In our opinion, except for the effects of the County's failure to record the investment referred to in the preceding paragraph, the consolidated?nancial statements present fairly, in all material respects, the financial position of Northern Sunrise County as at December 31, 2013, the results of its operations, change in net financial assets and its cash flows for the year then ended in accordance with Canadian public sector accounting standards. Peace River, Alberta June 24, 2014 MM Chartered Accountants Pl a)$eimq w : G W Ml C lndepemdemt FIRMS % E.... ioym ACCOUNTING > CONSULTING > TAX AVENUE, PEACERIVERAB, T P: F: MNP.ca

5 NORTHERN SUNRISE COUNTY CONSOLIDATED STATEMENT OF FINANCIALPOSITION Forthe year ended December 31, 2013 Financial Assets Cash and term deposits Accountsreceivable Taxes Trade and other Due from associated companies Recoverable DebentureDebt Land held for resale Investments Total Financial Assets Note 2 Note 3 Note4 Note5 Note 12 Note 8 $ 7,223,529 $ 4,883, , ,151 7,170,074 7,566,422 2,406, ,734 2,070,688 2,000,000 23,550 23,550 34,063,308 28,840,502 53,957,241 44,987,916 Liabilities Accountspayable and accrued liabilities Deposits payable Deferred revenue Note11 Post-closureliability Long-Term debt Note 12 Total Liabilities Net Financial Assets Non-FinancialAssets Engineeringstructures Accum. amort. eng. structures - Buildings Accum.amort. buildings Machinery&equipment Accum.amort. machinery & equipment Land Accum. - amort. land Vehicles Accum.amort. vehicles Landimprovements Accum. amort. land improvements Tangible capital assets Note 10 Tangible capital assets of Peace RegionalWaste Management Company Note7 Inventories Note 9 Prepaid expenses Note 6 $ 123,172,836 (50,386,572) 12,348,421 (1,140,791) 5,950,330 (3,029,513) 3,031,235 (152,921) 3,657,746 (1,756,145) 3,381,791 (625,775) $ 2,951,765 $ 3,178,123 19,621 20, , ,497 1,469,704 1,111,544 16,667,246 17,789,485 21,360,815 22,351,049 32,596,426 22,636,867 $ 117,054,171 (47,383,623) 8,780,988 (962,600) 5,339,402 (3,011,293) 3,031,234 (149,124) 3,324,398 (1,375,365) 1,455, ,589) 94,450,642 85,596,541 2,829,728 3,016,681 1,322,029 1,099, , ,749 98,844,650 89,833,203 Accumulated Surplus Note 15 $ 131,441,076 $ 112,470,070 Chief Administrative Officer

6 217,648 NORTHERN SUNRISE COUNTY CONSOLIDATEDSTATEMENT OF OPERATIONS For the year ended December 31, Budget Revenues Property taxation Less: school requisitions Less: housing requisitions Net municipal taxation User fees and sale of goods Peace Regional Waste Management Company Government transfers for operating investment income Fines penalties and costs of taxes Development levies, licenses and permits Gain on sale of tangible capital assets Total Revenues Expenses Operating Legislative and administration Peace Regional Waste Management Company Protective services Transportation services Water and wastewater Waste management Family and community support services Planning and development services Agricultural service board Recreation and culture Total Operating Expenses Excess of Revenues over Expenses, Before Other Other Donated assets Government transfers for capital Excess of Revenues over Expenses Accumulated Surplus at Beginning of Year Accumulated Surplus at End of Year $ 33,367,590 $ 34,134,384 $ 29,559,048 (5,800,108) (5,794,257) (4,758,859) (444,303) (444,303) (413,631) 27,123,179 27,895,824 24,386,558 1,682,108 1,702,692 4,083,037 2,887,179 2,282,331 3,130, , , , ,000 1,190,435 1,337, , , ,504 27,800 39,863 59,089 33,077,938 34,041,914 33,869,404 5,202,781 3,896,925 3,764,180 2,000,662 2,432,541 2,588, , , ,298 7,743,498 11,088,734 9,182,494 1,238,709 1,226,928 1,742,548 86,015 52,568 55, , , , , , , , ,560 1,213,306 1,257, , ,003 19,801,548 21,715,177 20,149,021 13,276,390 12,326,737 13,720, (53,944,484) 7,135,888 6,644,269 4,055,737 20,412,258 18,971,008 (38,168,344) 112,470, ,470, ,638,414 $132,882,328 $131,441,076 $112,470,070 See accompanying notes to the financial statements

7 413, ,749 (344,300) NORTHERN SUNRISE COUNTY CONSOLIDATED STATEMENT OF CHANGE IN NET FINANCIALASSETS For the year ended December 31, Budget Excess of Revenues over Expenses (Expenses over Revenues) $ 20,412,258 $ 18,971,006 $ (36,168,344) Acquisition of tangible capital assets (26,871,505) (13,618,966) (16,641,336) Transfer of tangible capital assets to NEW Water 53,944,464 Proceeds on disposal of tangible capital assets 345, , ,670 Amortization of tangible capital assets 468,909 4,820,317 4,675,781 Gain on disposal of tangible capital assets (213,498) (59,089) (26,057,596) (8,667,147) 42,134,490 Acquisition of supplies inventories - Acquisition of prepaid assets - Use of supplies inventories Use of prepaid assets (636,335) (242,251) (679,538) (120,749) 297, ,412 (49,898) (Decrease) Increase in Net Financial Assets (5,645,338) 9,959,559 5,916,248 Net Financial Assets, Beginning of Year 22,836,867 22,636,867 16,720,619 Net Financial Assets, End of Year $ 16,991,528 $ 32,596,426 $ 22,636,867 See accompanying notes to the financial statements

8 Note NORTHERN SUNRISE COUNTY CONSOLIDATED STATEMENT OF CASH FLOWS For the year ended December 31, 2013 Operating activities Excess of Revenues over Expenses $ 18,971,006 $(36,168,344) Noncashchanges to operations: Donation of tangible capital assets to NEW Water Ltd. - 53,944,464 Amortization of tangible capital assets 4,820,316 4,675,781 Gain on disposal of tangible capital assets (213,498) (24,803) Noncashcharges to operations (net change) Increase in taxes receivable (162,163) (85,181) Decrease in trade and other receivables 325,767 3,275,865 Increase in due from associated companies (1,570,044) (291,610) Increase in inventories (222,798) (381,559) (Increase) decrease in prepaids (121,502) 331,662 Decrease in accounts payable and accrued liabilities (226,466) (2,393,855) (Decrease) increase in deposit liabilities (779) 1,250 increase in postclosure liability 358, ,512 increase (decrease) in deferred revenue 983 (520,427) Change in cash and cash equivalents from operating activities 21,958,982 22,541,755 Capital Acquisitions of tangible capital assets (13,618,964) (16,641,334) Sale of tangible capital assets 345, ,670 Cash used in capital transactions (13,273,964) (16,426,664) Investing Activities (Increase) decrease in restricted cash and temporary investments (983) 520,427 Increase in investments (5,222,806) (6,837,713) Cash used in investing activities (5,223,789) (6,317,286) Financing Debenture proceeds - 2,000,000 Principal repayment on long-term debt (1,122,239) (1,035,653) Cash (used in) provided by financing (1,122,239) 964,347 Increase in Cash and Cash Equivalents 2,338, ,152 Cash and Cash Equivalents, Opening Balance 4,632,404 3,870,252 Cash and Cash Equivalents, Closing Balance $ 6,971,394 $ 4,632,404 Cash and cash equivalents are comprised of: Cash and temporary investments 2 $ 7,223,529 $ 4,883,557 Less: restricted portion of cash and temporary investments (252,135) (251,153) Cash and Cash Equivalents $ 6,971,394 $ 4,632,404 See accompanying notes to the financial statements

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11 - - NORTHERN SUNRISE COUNTY SCHEDULEOF GOVERNMENT TRANSFERS For the year ended December 31,2013 Budget TRANSFERS FOR OPERATING Provincial Government $ 372,674 $ 523,048 $ 714, , , ,881 TRANSFERS FOR CAPITAL Provincial Government 7,135,868 6,644,269 4,055,737 Federal Government Other Local Governments 7,135,868 6,644,269 4,055,737 TOTAL GOVERNMENT TRANSFERS $ 7,508,542 $ 7,167,317 $ 4,770,618 See accompanying notes to the financial statements

12 NORTHERN SUNRISE COUNTY SCHEDULEOF PROPERTY TAXES LEVIED For the year ended December 31, 2013 Budget Taxation Real property taxes 3% 10,872,245 $ 11,576,462 $ 9,817,594 Linear property taxes 22,460,331 22,528,087 19,706,765 Grants in place of property taxes 35,014 29,836 31,629 Local improvement taxes - 3,059 Total taxes and grants in place 33,367,590 34,134,384 29,559,048 Requisitions Schools 5,800,108 5,794,257 4,758,859 Seniors Foundation 444, , ,631 6,244,411 6,238,560 5,172,490 Net taxes available for general municipal operations $ 27,123,179 $ 27,895,824 $ 24,386,558 SCHEDULEOF EXPENDITURESBYOBJECT For the year ended December 31,2013 : Budget Expenditures by Object Salaries, wages and benefits $ 5,362,606 $ 5,301,969 $ 4,904,572 Contracted and general sen/ices 8,861,022 7,372,215 5,584,023 Purchases from other governments 162, , ,430 Materials, goods, supplies and utilities 3,758,534 2,442,747 2,950,296 Transfers to individuals and organizations 334, ,293 1,013,351 Interest on long term debt 638, , ,944 Provision for reclamation 214, , ,623 Amortization of tangiblecapital assets 468,909 4,820,316 4,675,782 Totalexpenditures $ 19,801,548 $ 21,715,177 $ 20,149,021 5 See accompanying notes to the financial statements

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14 NORTHERN SUNRISE COUNTY NOTES TO THE FINANCIALSTATEMENTS For the year ended December 31, SIGNIFICANT ACCOUNTINGPOLICIES The consolidated financial statements of Northern Sunrise County ( County ) are the representations of management prepared in accordance with Canadian public sector accounting standards as prescribed by the Public Sector Accounting Board (PSAB)of the Canadian institute of Chartered Accountants. Significant aspects of the accounting policies adopted by the County are as follows: Reporting Entity The consolidated financial statements reflect the assets, liabilities, revenues and expenditures, changes in fund balances and change in financial position of the reporting entity. This entity is comprised of the municipal operations plus all of the organizations that are owned or controlled by the municipality and are, therefore, accountable to the County Council forthe administration oftheir financial affairs and resources. The schedule of taxes levied also includes requisitions for education, health, social and other external organizations that are not part ofthe municipal reporting entity. The statements are administered for the benefit of external organizational transactions and balances are eliminated. parties. interdepartmental and The statements include the County s proportionate share in the Peace Regional Waste Management Company (see Note 20). bl Basis of Accounting Revenues are accounted for in the period in which the transactions or events occurred that gave rise to the revenues. Funds from external parties and earnings thereon restricted by agreement or legislation are accounted for as deferred revenue until used for the purpose specified. Government transfers are recognized in the financial statements as revenues in the period that the events giving rise to the transfer occurred, providing the transfers are authorized, the municipality has met any eligibility criteria, and reasonable estimates of the amounts can be made. Expenditures are recognized in the period the goods and services are acquired and a liability is incurred or transfers are due, with the exception of pension expenditures as disclosed in Note (1m) Use of Estimates The preparation of financial statements in conformity with Canadian public sector accounting standards requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date ofthe financial statements, and the reported amounts of revenue and expenditure during the period. Where measurement uncertainty exists, the financial statements have been prepared within reasonable limits of materiality. Actual results could differ from those estimates. Investments Investments are recorded at amortized cost. Investment premiums and discounts are amortized on the net present value basis over the term of the respective investments. When there has been a loss in value that is other than a temporary decline, the respective investment is written down to recognize the loss. I2

15 NORTHERN SUNRISE COUNTY NOTES TO THE FINANCIALSTATEMENTS For the year ended December 31,2013 SIGNIFICANT ACCOUNTINGPOLICIES(continued) Inventories Inventories of materials and supplies for consumption are valued at the lower of cost or net realizable value with cost determined by the average cost method. Land held for resale is recorded at the lower of cost or net realizable value. Cost includes costs for land acquisition and improvements required to prepare the land for servicing such as clearing, stripping and leveling charges. Related development costs incurred to provide infrastructure such as water and wastewater services, roads, sidewalks and street lighting are recorded as physical assets under their respective function. Tangible Capital Assets Tangible capital assets are recorded at cost which includes all amounts that are directly attributable to acquisition, construction, development or betterment of the asset. The cost, less residual value of the tangible capital assets is amortized on a straight-line basis over the estimated life as follows: YEARS Engineering structures Buildings 50 Machinery and equipment 4-20 Land (gravel pits) 20 Land improvements 15»25 Vehicles 5 Onevhalf of the annual amortization is charged in the year of acquisition and in the year of disposal. Assets under construction are not amortized until the asset is available for productive use. g) Requisition Over-Levy and Under-Levy Overleviesand under»levies arise from the difference between the actual property tax levy made to cover each requisition and the actual amount requisitioned. If the actual levy exceeds the requisition, the over»levy is accrued as a liability and property tax revenue is reduced. Where the actual levy is less than the requisition amount, the underlevy is accrued as a receivable and as property tax revenue. Requisition tax rates in the subsequent year are adjusted for any over or underleviesofthe prior year. h) Contributions of Tangible Capital Assets Tangible capital assets received as contributions are recorded at fair market value at the date of receipt and also are recorded as revenue. Non-Financial Assets Nonfinancialassets 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 fiscal year and are not intended for sale in the normal course of operations. The change in nonfinancialassets during the year, together with the excess of revenue over expenses, provides the consolidated Change in Net financial Assets (Debt) for the year. 13

16 $1,285,263) $251,497) NORTHERN SUNRISE COUNTY NOTES TO THE FINANCIALSTATEMENTS For the year ended December 31, SIGNIFICANT ACCOUNTING POLICIES (continued) Government Transfers Government transfers are transfers of assets from senior levels of government that are not the result of an exchange transaction, are not expected to be repaid in the future, or the result of a direct financial return. Government transfers are recognized in the financial statements as revenue in the period in which events giving rise to the transfer occur, providing the transfers are authorized, any eligibility criteria have been met, and reasonable estimates of the amounts can be determined. Equity in Capital Assets Equity in capital assets represents the County's net investment in its capital assets, after deducting the portion financed by third parties through debenture, bond, and mortgage debts, long term capital borrowings, capitalized leases, and other capital liabilities which will be repaid by the County. I) Allowances for Operating and Physical Assets Allowances for asset valuations are netted against the related asset and are segregated between operating and capital purposes. Increases in allowances are recorded as expenditures while decreases in allowances are recorded as revenues in the respective operating and capital fund. Pension Expenditure The County participates in a multiemployer defined benefit pension plan. This plan is accounted for as a defined contribution plan (see Note 18). CASH AND TEMPORARY INVESTMENTS Cash $ 3,391,412 $ 1,343,203 Portionofjoint use bank account 1,117, ,000 Cash heldby Peace RegionalWaste ManagementCompany 1,152,983 1,153,938 Temporaryinvestments 1,561,153 1,536,416 $ 7,223,529 $ 4,883,557 Temporary investments include short term deposits with original maturities of three months or less. Council has designated funds of $1,309,018 (2012 replacement and capital projects. included in the above amounts for equipment Included in cash and temporary investments are restricted amounts of $252,479 (2012 received from various governments and unexpended loan proceeds. These amounts must be expended according to the terms of the agreements under which the amounts were received. The joint use bank account is held with the Town of Peace River for intermunicipal projects. Both parties have contributed equal funds and $100,000 was expended in 2013 (2012 $0). 14

17 $636,706). $37,800) $1,454,285) NORTHERN SUNRISE COUNTY NOTES TO THE FINANCIALSTATEMENTS For the year ended December 31, TAXES RECEIVABLE Currenttaxes receivable $ 193,452 $ 145,564 Non-currentaxes receivable 1,230,673 1,116,398 Less allowancefordoubtfulaccounts (424,811) (424,811) $ 999,314 $ 837, TRADEAND OTHER RECEIVABLES Goods and ServicesTax receivable $ 1,020,133 $ 370,825 Accruedinterestreceivable 939,315 1,285,804 Trade receivables 1,406,733 1,306,829 Grants receivable 2,521,078 3,288,702 Trade receivablesof Peace RegionalWaste ManagementCompany 856, ,351 Utilitiesreceivable 436, ,021 Less allowancesfordoubtfulaccounts (10,111) (10,111) $ 7,170,074 $ 7,566, DUE FROM ASSOCIATED COMPANIES During the year, Northern Sunrise County charged the Peace Regional Waste Management Company and NEW Water Ltd. administration and consulting fees in the normal course of operations at the fair market value exchange amount of $37,800 (2012 and - $39,720 (2012 $37,800) respectively. As at December 31, 2013, the net amount due from the Landfill Authority was $1,778,317 (2012 and from NEW Water Ltd. was $1,390,597 (2012 The Landfill Authority and NEW Water Ltd. operate independent of the County. The LandfillAuthority is controlled by a seven member Board of which the County has appointed three of the seven members. NEW Water Ltd. is controlled by a nine member Board of which the County has appointed three of the nine members. 6. PREPAID EXPENSES Generalprepaidexpenses ,251 $ 120,749 15

18 two $34,698,251(2012 NORTHERN SUNRISE COUNTY NOTES TO THE FINANCIALSTATEMENTS For the year ended December 31, TANGIBLE CAPITAL ASSETS OF PEACE REGIONAL WASTE MANAGEMENT COMPANY Cost Accumulated Net Book Net Book Amortization Value Value Land $ 27,857 $ 0 $ 27,857 $ 27,857 Land Improvements 171,816 71,871 99, ,353 Buildings 1,061, , , ,532 Engineeringstructures 4,197,745 3,165,373 1,032,372 1,363,870 Machinesand equipment 1,692, , , ,997 Vehicles 156,529 79,351 77,178 45,072 $ 7,307,860 $ 4,478,132 $ 2,829,728 $ 3,016, INVESTMENTS Fixedincomesecurities (market value $30,302,724» - $ 33,404,417 $ 28,200,147 Fixed income securities held by Peace Regional Waste ManagementCompany $ 658,871 $ 640,335 AlbertaMunicipalFinancialCorporationClass B common shares shares, at cost $ 34,063,308 $ 28,840,502 Securities have effective interest rates of - 1.7% to 6% ( % to 5.45%) and maturity dates from May 7, 2014 to December 1, Council has designated investments of - $33,404,437 (2012 $28,200,167) included in the above amounts for capital replacement and capital projects. 9. INVENTORIES FOR CONSUMPTION Municipalinventories consist ofthe following: Graveland road materials $ 1,209,618 $ 1,000,445 Publicworks 112,411 98,787 $ 1,322,029 $ 1,099,232 I6

19 NORTHERN SUNRISE COUNTY NOTES TO THE FINANCIALSTATEMENTS For the year ended December 31, TANGIBLE CAPITAL ASSETS Engineering structures $ 72,786,264 $ 69,670,548 Buifdings 11,207,630 7,818,388 Machines and equipment 2,920,817 2,328,109 Land 2,878,314 2,882,110 Land Improvements 2,756, ,353 Vehicies 1,901,601 1,949,033 $ 94,450,642 $ 85,596, DEFERREDREVENUE AlbertaInfrastructureandTransportation $ 235,602 $ 235,602 DeferredrevenuesofPeace RegionalWaste ManagementCompany OtherGrants 16,533 15,551 $ 252,479 $ 251,497 The use of these funds is restricted to eligible projects, as approved under the funding agreements. These unexpended funds are supported by cash and temporary investments (Note 2) I7

20 $628,944). NORTHERN SUNRISE COUNTY NOTES TO THE FINANCIALSTATEMENTS For the year ended December 31, LONG TERM DEBT Tax supported debentures $ - $ - Self supported debentures 16,667,246 17,789,485 The current portion of the long term debt amounts to $1,160,201 ( $1,122,239) Principal and interest payments for each of the next 5 years to maturity are as follows: $ 16,667,246 $ 17,789,485 Principal Interest Total 2014 $ 1,160, ,928 $ 1,726, ,199, ,534 1,724, ,240, ,694 1,722, ,282, ,219 1,720, ,326, ,235 1,718,129 To maturity 10,457,213 1,396,342 11,853,555 $ 16,667,246 $ 3,796,952 $ 20,464,198 Debenture debt is repayable to Alberta Municipal Financing Corporation and bears interest at rates ranging from 3.488% to 4.614% per annum, before Provincial subsidy, and mature in periods 2022 through In 2012, the County received a Green Municipal Fund Loan from the Federation of Canadian Municipalities for the NEW Water Ltd., water treatment plant in the amount of $2,000,000. The Loan is repayable at a fixed principal amount of $100,000 per year plus interest equal to the higher of (A) the average GOC (10) year benchmark minus one point five percent (1.5%) and (B) two percent (2.0%) per annum, The GMF Loan represents The Village of Nampa's contribution to the project and is repayable to the County on an annual basis equal to the principal and interest payments calculated from the FCM. The Debenture debt is issued on the credit and security of the County at large. Interest expense on long term debt was 5 605,852 (2012 interest in 2013 were $ 606,392 (2012 $623,852). The County's total cash payments for 13. DEBTLIMITS Section 276(2) of the Municipal Government Act requires that debt and debt limits as defined by Alberta Regulation 255/00for the County be disclosed as follows: Total debt limit 35 50,736,399 $ 50,715,474 Total debt 16,667,246 17,789,485 Debt limit remaining 34,069,153 32,925,989 Service on debt limit 8,456,066 8,452,579 Service on debt 1,726,129 1,728,091 Service on debt limit remaining $ 6,729,937 $ 6,724,488 The debt limit is calculated at 1.5 times revenue ofthe municipality (as defined in Alberta Regulation 255/00) and the debt service limit is calculated at 0.25 times such revenue. lncurring debt beyond these limitations requires approval by the Minister of Municipal Affairs. These thresholds are guidelines used by Alberta Municipal Affairs to identify municipalities that could be at financial risk if further debt is acquired. The calculation taken alone does not represent the financial stability of the municipality. Rather, the financial statements must be interpreted as a whole. 18

21 $4,101,038) NORTHERN SUNRISE COUNTY NOTES TO THE FINANCIALSTATEMENTS For the year ended December 31, EQUITYIN TANGIBLE CAPITAL ASSETS Tangiblecapital assets (Schedule 1) $ 151,542,359 $ 138,986,135 Tangiblecapitalassets of Peace RegionalWaste ManagementCompany (Note 7) 7,307,860 6,891,267 Accumulatedamortization(Schedule 1) (57,091,717) (53,389,594) Accumulatedamortizationof Peace RegionalWaste ManagementCompany (Note 7) (4,478,132) (3,874,586) Long~ term debt (12,839,902) (13,688,446) $ 84,440,468 $ 74,924,776 ~ Debt totaling $3,827,344 (2012 related to the Sunrise Gateway Business Park and the Federation of Canadian Municipalities is not included in the Equity in Tangible Capital Assets as the funds were not used for the acquisition of tangible capital assets owned by the County. 15. ACCUMULATED SURPLUS Unrestrictedsurplus $ 10,776,705 $ 2,077,652 Restrictedsurplus General capital 1,656,968 1,656,968 Administration 1,002, ,770 AgriculturalServiceBoard 591, ,226 Communityservices 73,273 73,272 Communityhall 3,311,211 3,482,211 Peace RegionalWaste ManagementCompany 254, ,213 Fire protection 488, ,096 Recreation 381, ,329 Roads constructionprojects - 14,673,393 13,684,118 Roads equipment - 2,628,393 2,150,393 Waste management 361, ,001 Water and wastewater 10,801,639 11,462,044 36,223,903 35,467,642 Equityintangiblecapitalassets 84,440,468 74,924,776 Total accumulated surplus $ 131,441,076$ 112,470,070 19

22 NORTHERN SUNRISE COUNTY NOTES TO THE FINANCIALSTATEMENTS For the year ended December 31, SALARYAND BENEFITS DISCLOSURE Disclosures of salaries and benefits for municipal officials, the chief administrative officer and designated officers as required by Alberta Regulation 313/2000is as followsz. Salary Benelits Total Total CarolynKolebaba - Reeve $ 45,115 $ 14, ,268 $ 56,241 MarieDycl<- DeputyReeve 60,400 26,863 87,063 73,823 - Darlene Cardinal DeputyReeve 35,727 18,374 54,101 60,324 Daniel Boisvert 3,530 1, RichardBovcher 6,149 1,452 7, DougDallyn 49,528 20,114 69,642 67,371 Normand Duval 3, ,799 - EvensLavoie 27,030 8,740 35,770 43,961 Garret Tomlinson 2,581 1,481 4, ,474 $ 92, ,442 $ 324,874 ChiefAdmin,Oi?cerBobMiles $ - - $ ChiefAdmin,Of?cer - PeterThomas 160,977 - $ - $ 78,997 32, , ,399 Designatedof?cers(3) 3 255,946 $ 46,952 $ 302,898 $ 156,059 Salary includes regular base pay, bonuses, overtime, lump sum payments, gross honoraria and any other direct cash remuneration. Benefits include employer s share of all employee benefits and contributions or payments made on behalf of employees including pension, health care, dental coverage, vision coverage, group life insurance, accidental disability and dismemberment insurance, long and short term disability plans, professional memberships and tuition. Benefits figures also include the Employer's share of the costs of additional taxable benefits including special leave with pay, financial planning services, retirement planning services, concessionary loans, travel allowances, car allowances and club memberships. 20

23 $368,523). NORTHERN SUNRISE COUNTY NOTES TO THE FINANCIALSTATEMENTS For the year ended December 31, CONTINGENTLIABILITY Northern Sunrise County is a member of a reciprocal insurance exchange (GENESIS)to cover its liability insurance needs. GENESIS was previously referred to as Jubilee Reciprocal insurance Exchange (JRIE). A Statement of Claim was filed in 2004 by some of the previous subscribers of JRIE. The statement of claim requests the return of surplus funds in the amount of $3,820,516. Under the terms of the membership, the County could become liable for its proportionate share of any claim losses in excess of the funds held by the exchange. Any liability incurred would be accounted for as a current transaction in the year the losses are determined. 18. LOCALAUTHORITIESPENSION PLAN Employees of the County participate in the Local Authorities Pension Plan (LAPP),which is one of the plans covered by the Public Sector Pension Plans Act. The Plan serves about 223,000 people and 428 employers. The LAPPis financed by employer and employee contributions and investment earnings of the LAPPfund. Contributions for current service are recorded as expenditures in the year in which become due. The County is required to make current service contributions to the LAPP of 11.39% of pensionable earnings up to the year's maximum pensionable earnings under the Canada Pension Plan and 15.84% on the pensionable earnings above this amount. Employees of the County are required to make service contributions of 10.39% of pensionable salary up to the year's maximum pensionable salary and 14.84% on pensionable salary above this amount. Total current service contributions by the County to the LAPPin 2013 were $458,374 (2012 Total current service contributions by the employees of the County to the LAPP in 2013 were $419,935 (2012» $335,830). At December 31, 2012, the LAPPdisclosed an actuarial deficiency of $4.977 billion. 19. FINANCIAL INSTRUMENTS The County's financial instruments consist of cash and term deposits, accounts receivable, accounts payable, accrued liabilities and long term debt. it is management's opinion that the County is not exposed to significant interest or currency risks arising from these financial instruments. The County is subject to credit risk with respect to taxes and grants in place of taxes receivables and trade and other receivables. Credit risk arises from the possibility that taxpayers and entities to which the County provides services may experience financial difficulty and be unable to fulfill their obligations. The large number and diversity of taxpayers and customers minimizes the credit risk. Unless otherwise noted, the carrying value of the financial instrument approximates fair value. 21

24 NORTHERN SUNRISE COUNTY NOTES TO THE FINANCIALSTATEMENTS For the year ended December 31, CONSOLIDATION OF PEACE REGIONAL WASTE MANAGEMENT COMPANY Consolidated into the County's financial statements are their proportionate share of the assets, liabilities and financial activity of Peace Regional Waste Management Company. Ownership is determined by the number of shares issued to the Directors of the Company. Northern Sunrise County contributes 3 of the 7 Directors to the Board and this ratio determines the County's proportionate share. The amounts consolidated into the County s financial statements are as follows: Cash and cash equivalents $ 1,152,983 $ 1,153,938 Trade and other receivables 856, ,351 Due from other governments (762,136) (627,551) Investments 658, ,335 Total Financial Assets $ 1,906,179 $ 2,085,073 Accounts payable and accrued liabilities $ 103,198 $ 680,796 Deferred revenue Postclosureliability 1,469, ,544 Total Liabilities $ 1,573,246 $ 792,684 Tangible capital assets $ 2,829,728 $ 3,016,681 Inventoryfor consumption - Total Non-FinancialAssets $ 2,829,728 $ 3,016,681 Municipaltlppage $ 194,008 $ 209,906 Recycling 8,282 18,360 Industrialtlppage 2,024,275 2,802,333 Other 23,852 73,111 Return on investments 31,914 33,362 Total Revenues $ 2,282,331 $ 3,137,072 Salaries, wages and benefits ,974 $ 608,080 Contracted services 560, ,377 Materials, goods and utilities 216, ,067 Provisionfor reclamation 382, ,623 Amortizationof tangiblecapitalassets 603, ,352 Total Expenses $ 2,448,741 $ 2,604,499 Loss on disposal of tangible capital assets (netted against gain for Northern Sunrise Count? $ - $ 34,286 Related party transactions eliminatedon consolidation: Administration fees 3 16, ,200 County tipping fees - (6,522) 22

25 NORTHERN SUNRISE COUNTY NOTES TO THE FINANCIALSTATEMENTS For the year ended December 31,2013 Z1. COMMITMENTS In 1996, the County entered into an agreement with the East Peace Water Coopto advance funds for the construction of water lines. Under this agreement the County is committed to advance funds totaling no more than $3,931,500. As of the end of 2007, the East Peace Water Co»op has been advanced the total $3,931,500. Through the County's continuing commitment to provide residents with clean and safe drinking water, the County will provide continued funding for the expansion of the water distribution lines throughout the County. Funding will be based on connection applications submitted to the East Peace Water Coop.The amount provided in 2013 was $290,471 (2012 $189,435). 22. INVESTMENTIN NEW WATER LTD. In 2009, Northern Sunrise County, The Village of Nampa and the Woodland Cree First Nations created a new company called NEW Water LTDwhere the three partners committed to provide clean reliable drinking water to their corresponding residents, In the past the source of drinking water was not reliable and was at a point where the reliability of the current source for water could not sustain the current level of users. The parties, through grant funding from the Province of Alberta's Water For Life Program and Indian and Northern Affairs Canada, was able to secure funding to build a state of the art LEADSwater treatment plant using the Peace River as the source for drinking water. These financial statements do not include Northern Sunrise County s investments in NEW Water Ltd. The financial information for that company was not available at the time of release of the County's financial statements and it is unknown on what date they will be completed. 23. SEGMENTED DISCLOSURE Northern Sunrise County provides a range of services to its ratepayers. For each reported segment, revenues and expenses represent both amounts that are directly attributable to the segment and amounts that are allocated on a reasonable basis. The accounting policies used in these segments are consistent with those followed in preparation ofthe financial statements as disclosed in note 1. Refer to the Schedule of Segmented Disclosure (page 11). 24. APPROVAL OF FINANCIAL STATEMENTS Council and management approved these financial statements, 23