THE CORPORATION OF THE VILLAGE OF LUMBY

Transcription

1 THE CORPORATION OF THE VILLAGE OF LUMBY CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016

2 December 31, 2016 CONTENTS Page INDEPENDENT AUDITORS' REPORT 3 FINANCIAL STATEMENTS Consolidated Statement of Financial Position 4 Consolidated Statement of Operations and Accumulated Surplus 5 Consolidated Statement of Change in Net Financial Assets 6 Consolidated Statement of Cash Flows 7 Consolidated Statement of Equity in Tangible Capital Assets 8 Consolidated Statement of Trust Funds 9 Consolidated Statement of Operating Surplus 10 Consolidated Statement of Statutory Reserve Fund Activities 11 Consolidated Statement of Reserve Fund Activities 12 Summary of Significant Accounting Policies Notes to Financial Statements Schedule I - Consolidated Schedule of Segment Disclosures Schedule II - White Valley Parks & Recreation 29 2

3 INDEPENDENT AUDITORS' REPORT To the Mayor and Council of The Corporation of the Village of Lumby Report on the Financial Statements We have audited the accompanying financial statements of The Corporation of the Village of Lumby which comprise the consolidated statement of financial position as at December 31, 2016 and the consolidated statement of operations and accumulated surplus, consolidated statement of change in net financial assets, and consolidated statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with Canadian public sector accounting standards, and for such internal 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 auditing standards. Those standards require that we comply with ethical requirements and plan and perform an audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the consolidated 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 consolidated 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 consolidated financial statements present fairly, in all material respects, the financial position of The Corporation of the Village of Lumby as at December 31, 2016, and its operations and cash flows for the year then ended in accordance with Canadian public sector accounting standards. Lumby, BC April 18, 2017 Chartered Professional Accountants Rossworn Henderson LLP is a Limited Liability Partnership registered in British Columbia 3

4 Consolidated Statement of Financial Position As at December 31, Financial assets Cash $ 1,923,490 $ 2,919,494 Accounts receivable (Note 3) 1,382, ,202 Deposit - Municipal Finance Authority (Note 4) 13,046 16,491 Investment in Government Business Enterprise (Note 5) 232, ,718 Liabilities 3,551,752 4,074,905 Accounts payable and accrued liabilities (Note 6) 356, ,560 Deferred revenue (Note 7) 536, ,907 Reserve - Municipal Finance Authority (Note 4) 13,046 16,491 Long-term debt (Note 8) 488, ,832 1,395,509 1,496,790 Net financial assets 2,156,243 2,578,115 Non-financial assets Tangible capital assets (Note 9) 16,401,031 13,914,941 $ 18,557,274 $ 16,493,056 Accumulated surplus $ 18,557,274 $ 16,493,056 Represented by: Trust funds 33,160 32,005 Operating fund 458, ,560 Reserves 1,873,550 2,148,100 Statutory reserves 279, ,282 Equity in tangible capital assets 15,912,173 13,378,109 $ 18,557,274 $ 16,493,056 Director of Finance Mayor The accompanying summary of significant policies, notes to financial statements and schedule are an integral part of these statements. 4

5 Consolidated Statement of Operations and Accumulated Surplus Budget Actual Actual Revenue Taxation - net (Note 14) $ 976,400 $ 917,824 $ 867,053 Government grants and transfers (Note 15) 3,392,069 2,370, ,297 Sale of services (Note 16) 775, , ,391 Revenue from own sources (Note 17) 516, , ,344 Interest and penalties 42,800 70,520 72,214 Gain on sale of assets 20,277 Development cost charges 60,000 Expenditures 5,762,906 5,015,553 3,159,299 General government services 762, , ,894 Protective services 109, ,510 82,639 Transportation services 671, , ,396 Environmental health services 79,719 69,613 68,946 Public health and welfare 20,398 9,701 19,481 Community development services 133, ,722 94,154 Recreational and cultural services 187, ,963 95,508 Water supply 425, , ,699 Sewer services 426, , ,062 2,816,333 2,951,335 2,672,779 Excess revenue over expenses $ 2,946,573 $ 2,064,218 $ 486,520 Consolidated fund balance, beginning of year 16,493,056 16,493,056 16,006,536 Consolidated fund balance, end of year $ 19,439,629 $ 18,557,274 $ 16,493,056 The accompanying summary of significant policies, notes to financial statements and schedule are an integral part of these statements. 5

6 Consolidated Statement of Change in Net Financial Assets Annual surplus $ 2,064,218 $ 486,520 Acquisition of tangible capital assets (3,101,813) (376,524) Amortization of tangible capital assets 615, ,098 Increase (decrease) in net financial assets (421,872) 714,094 Net financial assets, beginning of year 2,578,115 1,864,021 Net financial assets, end of year $ 2,156,243 $ 2,578,115 The accompanying summary of significant policies, notes to financial statements and schedule are an integral part of these statements. 6

7 Consolidated Statement of Cash Flows Cash flows from operating activities Cash receipts $ 4,522,000 $ 3,673,863 Cash payments to suppliers and employees (2,455,621) (1,867,504) Interest received 70,520 72,214 Interest paid (3,393) (11,434) Financing activities 2,133,506 1,867,139 Debt repayment (47,974) (49,954) Investing activities (47,974) (49,954) Purchase of tangible capital assets (3,101,813) (376,524) Proceeds of disposition of tangible capital assets 20,277 (3,081,536) (376,524) Increase (decrease) in cash (996,004) 1,440,661 Cash, beginning of year 2,919,494 1,478,833 Cash, end of year $ 1,923,490 $ 2,919,494 The accompanying summary of significant policies, notes to financial statements and schedule are an integral part of these statements. 7

8 Consolidated Statement of Equity in Tangible Capital Assets Balance beginning of year $ 13,378,109 $ 13,555,731 Contributions from revenue for: Acquisition of tangible capital assets 3,101, ,524 Debt payments 47,974 49,952 Amortization (615,723) (604,098) Balance end of year $ 15,912,173 $ 13,378,109 Represented by: General $ 6,443,374 $ 5,894,224 Water 5,442,572 4,718,067 Sewer 4,026,227 2,765,818 Balance end of year $ 15,912,173 $ 13,378,109 The accompanying summary of significant policies, notes to financial statements and schedule are an integral part of these statements. 8

9 Consolidated Statement of Trust Funds Protestant Catholic Cash $ 21,619 $ 10,386 $ 32,005 $ 30,963 Interest earned Perpetual care contributions Surplus $ 22,522 $ 10,638 $ 33,160 $ 32,005 The accompanying summary of significant policies, notes to financial statements and schedule are an integral part of these statements. 9

10 Consolidated Statement of Operating Surplus General Water Sewer Opening surplus $ 496,584 $ 129,549 $ 39,427 $ 665,560 $ 661,554 Annual surplus 368, , ,793 2,064, ,520 Transfers to non-statutory reserves (282,504) (119,131) (93,549) (495,184) (752,319) Transfers to operating surplus 18,244 19, ,251 38,625 Transfers from reserves 350,345 8, , , ,901 Transfers from statutory reserves (62,100) 51,983 (10,117) (78,302) Amortization 331, ,298 74, , ,098 Capital expenditures (862,175) (912,539) (1,327,099) (3,101,813) (376,524) Transfer to cemetery trust (1,155) (1,155) (1,039) Debt principal payments (18,276) (22,267) (7,432) (47,975) (49,954) Balance end of year $ 339,143 $ 79,794 $ 40,054 $ 458,991 $ 665,560 The accompanying summary of significant policies, notes to financial statements and schedule are an integral part of these statements. 10

11 Consolidated Statement of Statutory Reserve Fund Activities Federal Gas Tax Agreement Funds Balance beginning of year $ 269,282 $ 222,976 Add: Amounts received during year 125, ,433 Interest earned 2,453 2,318 Less: Amount spent of projects (117,857) (77,445) Balance end of year $ 279,400 $ 269,282 The accompanying summary of significant policies, notes to financial statements and schedule are an integral part of these statements. 11

12 Consolidated Statement of Reserve Fund Activities Balance beginning of year $ 2,148,100 $ 1,535,312 Net interfund transfers Capital fund 456, ,695 Current fund (731,482) (100,907) $ 1,873,550 $ 2,148,100 Summary of Reserve Fund Positions General reserve Building Inspection $ 64,919 $ Capital 1,049, ,557 Equipment replacement 303, ,224 Land 316,078 Salmon Trail 39,404 39,012 Sewer reserve Capital Water reserve 1,457,651 1,633,871 82, ,247 82, ,247 Capital 267, ,884 Meter replacement 66,241 55, , ,982 $ 1,873,550 $ 2,148,100 The accompanying summary of significant policies, notes to financial statements and schedule are an integral part of these statements. 12

13 Summary of Significant Accounting Policies 1. General The Corporation of the Village of Lumby (the "Village") is a municipality that was created on March 1, 1956 under the laws of British Columbia. The Village provides municipal services such as public works, sewer, water, urban planning, fire protection services, recreational and cultural services and other general government operations. 2. Significant Accounting policies The consolidated financial statements of the Village are prepared in accordance with Canadian Public Sector Accounting Standards as prescribed by the Public Sector Accounting Board ("PSAB") of the Village have been prepared by management in accordance with Canadian generally accepted accounting principles as prescribed by the Public Sector Accounting Board of the Chartered Professional Accountants of Canada. The significant polices are summarized as follows: a. Fund accounting The resources and operations of the Village are comprised of the funds listed below. Supporting schedules to the consolidated financial statements are included to show the financial activities and balance of each fund for supplementary information. General Fund: Accounts for operating and capital revenues and expenditures for the all activities of the Village except those included in the water and sewer funds and holds all property required for these purposes and related long term debt. Water Fund: Accounts for operating and capital revenues and expenditures for the water utility and holds all property required for these purposes and related long term debt. Sewer Fund: Accounts for operating and capital revenues and expenditures for the sewer utility and holds all property required for this purposes and related long term debt. b. Basis of consolidation The consolidated financial statements include the assets, liabilities, reserves, surpluses/deficits, revenue and expenses of the Village funds and governmental functions or entities which have been determined to comprise a part of the aggregate Village operations based upon control exercised by the Village. Interfund balances and transactions have been eliminated. c. Basis of accounting The consolidated financial statements are prepared using accrual basis of accounting. The accrual basis of accounting records revenue as it is earned and measurable. Expenses are recognized as they are incurred and measurable based upon receipt of goods and services and/or the creation of a legal obligation to pay. The consolidated financial statements reflect the assets, liabilities, revenues and expenses of all municipal organizations, committees and boards that are owned or controlled by the Village. d. Investments The Village has a 50% interest in Monashee Community Forest LLP (the "Partnership"), a government business enterprise, which is accounted for using the modified equity method. The Partnership prepares its financial statements in accordance with accounting standards for private enterprises. Under this method, the Partnership's accounting principles are not adjusted to conform with those of the Village. The Partnership has a fiscal year end of December 31,

14 Summary of Significant Accounting Policies e. School taxes The Village is required by The School Act to bill, collect and remit provincial education support levies in respect of residential and other properties on behalf of the Province, and school division special levies on behalf of school divisions. The Village has no jurisdiction or control over the school division's operations or their mill rate increases. Therefore, the taxation, other revenues, expenses, assets and liabilities with respect to the operations of school boards are not reflected in these consolidated financial statements. f. Deferred revenue Grants, contributions and other amounts are received from third parties pursuant to legislation, regulation or agreement and may only be used in the conduct of certain programs, in the completion of specific work, or for the purchase of tangible capital assets. In addition, certain user charges and fees are collected for which the related services have yet to be performed. Revenue is recognized in the period when the related expenses are incurred, services performed or tangible capital assets acquired. g. Development cost charges Development Cost Charge ("DCC") levies are restricted by bylaw in their use for road, drainage, sewer and water expenses and the revenue is deferred until the expenses are incurred. When DCC's are expended, a corresponding amount is recorded as "Development cost charges" in the revenues. h. Non-financial assets 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. The change in non-financial assets during the year, together with the excess of revenues over expenses provides the Change in Net Financial Assets for the year. i. Tangible capital assets Tangible capital assets consist of land, buildings, engineering structures, water and sewer infrastructure, roads, and machinery and equipment. Tangible capital assets are recorded at cost which includes all amounts that are directly attributable to the cost, construction, development or betterment of the asset. The cost less residual value, of the tangible capital assets are amortized on a straight line basis over their estimated useful life as follows: ii Buildings - Cost 40 to 75 years Straight line Drainage 10 to 100 years Straight line Machinery and equipment 7 to 15 years Straight line Other structures 15 to 65 years Straight line Roads 10 to 100 years Straight line Sewer system 10 to 100 years Straight line Water system 10 to 100 years Straight line Assets under construction, work in progress, are not amortized until the asset is available for productive use. iii. Contributions of tangible capital assets Tangible capital assets received as contributions are recorded at their fair value at the date of receipt and also are recorded as revenue. iv. Leases Leases are classified as capital or operating leases. Leases which transfer substantially all of the benefits and risks incidental to ownership of property are accounted for as capital leases. All other leases are accounted for as operating leases and the related lease payments are charged to expenses as incurred. 14

15 Summary of Significant Accounting Policies i. Revenue recognition Government grants and 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 made. Taxation revenues are recognized at the time of issuing property tax notices for the fiscal year. Sale of services and user fees are recognized when the service or product is provided by the Village. All other revenue is recognized as it is earned and is measurable. Expenses are recognized as they are incurred and measurable based upon receipt of goods and services and/or the creation of a legal obligation to pay. j. Debt charges Debt charges, including principal, interest and foreign exchange, are charged to current operations. Interest charges are accrued for the period from the date of the latest interest payment to the end of the year. k. Capitalization of interest The Village capitalizes interest on temporary borrowing until the completion of the project which is to be financed by debenture debt. l. Reserves Reserves for future expenditures represent amounts set aside for future operating and capital expenditures. m. Budget figures The budget figures are from the Financial Plan Bylaw No. 779, 2016 adopted March 21, 2016, they have been reallocated to conform to PSAB financial statement presentation. Subsequent amendments have been made by Council to reflect changes in the budget as required by law. n. Financial instruments It is management's opinion that the Village is not exposed to significant interest, currency or credit risks arising from its financial instruments, unless otherwise noted. The fair values of Village's financial instruments approximate their carrying value unless otherwise noted. o. Use of estimates The consolidated financial statements of the Village have been prepared by management in accordance with Canadian Public Sector Accounting Standards as prescribed by the Public Sector Accounting Board ("PSAB"). As such, management is required to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These estimates and assumptions are based on the Village's best information and judgment and may differ significantly from actual results. The financial statements have, in the opinion of management been prepared using careful judgment within the reasonable limits of materiality and within the framework of the accounting policies identified. 15

16 Notes to Financial Statements 3. Accounts receivable Federal government $ 169,819 $ 67,201 Trade receivables 1,118, ,740 Taxes receivable - current 65,188 85,739 - arrears 29,654 72,522 $ 1,382,882 $ 937, Reserve - Municipal Finance Authority The Village 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 Village also executes demand notes in connection with each debenture whereby the Village may be required to loan certain amounts to the Municipal Finance Authority. These demand notes are contingent in nature and are not reflected in the accounts. The details of the cash deposits and demand notes at the year end are as follows: Demand note Cash deposits General fund $ 9,568 $ 3,617 $ 13,185 $ 13,086 Sewer fund 14,866 14,866 18,666 Water fund 9,429 9,429 15,754 $ 24,434 $ 13,046 $ 37,480 $ 47,506 16

17 Notes to Financial Statements 5. Investment in Government Business Enterprise The Village has a 50% interest in Monashee Community Forest LLP (the "Partnership"). The Partnership maintains a forest license and harvests fiber within its designated timber supply area. The condensed supplementary financial information is as follows: Financial position Total assets $ 1,166,092 $ 885,190 Total liabilities 701, ,754 Total net assets $ 464,668 $ 403,436 Results of operations Revenue $ 1,985,539 $ 1,876,926 Cost of sales (1,089,987) (1,095,304) Administrative expenses (94,320) (59,556) Net income (loss) 801, ,066 Village of Lumby proportionate share 50 % 50 % Equity earnings from Monashee Community Forest (Note 17) 400, ,033 Opening partner's capital 201, ,685 Partner's contribution Partner's withdrawals (370,000) (550,000) Partner's capital $ 232,334 $ 201,718 During the year, the Village received $24,000 ( $24,000) for administration and finance contract services for Monashee Community Forest. 6. Accounts payable and accrued liabilities Trade payables $ 231,761 $ 322,935 Federal government 10,503 Wages payable 124, ,122 $ 356,710 $ 483,560 17

18 Notes to Financial Statements 7. Deferred revenue Development cost charges $ 190,305 $ 236,142 Prepaid taxes 90,232 71,894 Refundable deposits 179,418 61,439 Prepaid receivables 76,940 90,432 $ 536,895 $ 459, Long-term debt Bylaw number Purpose Term remaining % rate General fund 1316 Vernon Street $ 95,894 $ 114,173 95, ,173 Water fund 1317 System upgrade , ,227 Sewer fund 1167 Sewage construction ,432 Total long term debt - all funds $ 488,858 $ 536,832 The village is committed to principal requirements, including sinking fund additions, over the next 5 years as follows: General fund Water fund Sewer fund 2017 $ 12,485 $ 12,571 $ ,485 12, ,485 12, ,485 12, ,485 12, and subsequent periods 33, ,109 $ 95,894 $ 392,964 $ 18

19 Notes to Financial Statements 9. Tangible capital assets Cost Additions Disposals Accumulated amortization General fund Land $ 213,048 $ 770,653 $ $ $ 983,701 $ 213,048 Buildings 356,123 (172,893) 183, ,623 Engineering structures 9,983,516 25,835 (4,962,525) 5,046,826 5,554,843 Machinery & equipment 880,379 65,687 (620,554) 325,512 41,882 11,433, ,175 (5,755,972) 6,539,269 6,008,396 Water fund Land 95,733 95,733 95,733 Buildings 179,904 (49,099) 130,805 (64,794) Engineering structures 8,125, ,539 (3,429,427) 5,608,997 5,102,355 8,401, ,539 (3,478,526) 5,835,535 5,133,294 Sewer fund Land 170, , ,800 Engineering structures 4,344,145 1,327,099 (1,815,817) 3,855,427 2,602,451 4,514,945 1,327,099 (1,815,817) 4,026,227 2,773,251 $ 24,349,533 $ 3,101,813 $ $ (11,050,315) $ 16,401,031 $ 13,914, Financial instruments The Village's financial instruments consist of cash, investments in government business enterprises, accounts receivable, accounts payable and accrued liabilities, deferred revenue, deposits and long-term debt. The fair values of these financial instruments approximate their carrying values. It is management's opinion that the Village is not exposed to significant interest, currency or credit risks arising from these financial instruments. 19

20 Notes to Financial Statements 11. Commitments and subsequent events (a) (b) (c) The Village entered into an operating and management agreement for White Valley Parks and Recreation Services with the Regional District of North Okanagan, The term of the agreement is from January 1, 2017 to December 31, The Village entered into a collective agreement with the International Union of Operating Engineers, Local 115 in The term of the agreement is from April 1, 2016 to March 31, The amount of vacation, banked time and sick pay that has been accrued and is included in accounts payable and accrued liabilities for the current year is based upon managements' best estimate based upon past performance. The estimated total liability for wages and benefits at December 31, 2016 is $246,451 ( $287,725). Of this amount, $102,309 ( $131,865) has been accrued and included in accounts payable and accrued liabilities. 12. Related party transactions During the year, the Village received $24,000 ( $24,000) for administration and finance contract services from The Monashee Community Forest LLP. These transactions are in the normal course of operations and are measured at the exchange amount being the amount of consideration established and agreed to by the related parties, which approximates the arm's length equivalent value. 20

21 Notes to Financial Statements 13. Contingent liabilities (a) Regional District of North Okanagan: The Village is a member of the Regional District of North Okanagan and is liable for its portion of any operating deficits or long-term debt related to functions in which it participates. (b) Municipal Insurance Association of BC: Commencing December 31, 1987, the Village of Lumby entered into a self insurance scheme with British Columbia municipalities and regional districts. The Village is obliged under the scheme to pay a percentage of its fellow insured's losses. The Village pays an annual premium, which is anticipated to be adequate to cover any losses incurred. (c) Pension Liabilities: The Village and its employees contribute to the Municipal Pension Plan (the "Plan"), a jointly trusteed pension plan. The board of trustees, representing Plan members and employers, is responsible for administering the plan, including investment of the assets and administration of the benefits. The Plan is a multi-employer defined benefit pension plan. Basic pension benefits provided are based on a formula. As at December 31, 2015, the Plan has about 189,000 active members and approximately 85,000 retired members. Active members include approximately 37,000 contributors from local governments. Every three years, an actuarial valuation is performed to assess the financial position of the plan and adequacy of plan funding. The actuary determines an appropriate combined employer and member contribution rate to fund the plan. The actuary's calculated contribution rate is based on the entry-age normal cost method, which produces the long-term rate of member and employer contributions sufficient to provide benefits for average future entrants to the plan. This rate is then adjusted to the extent there is amortization of any funding deficit. The most recent actuarial valuation for the Municipal Pension Plan as of December 31, 2015, indicated a $2,224 million funding surplus for basic pension benefits on a going concern basis. The Corporation of the Village of Lumby paid $81,557 ( $82,829) for employer contributions to the plan in fiscal The next valuation will be as at December 31, 2018 with results available in Employers participating in the Plan record their pension expense as the amount of employer contributions made during the fiscal year (defined contribution pension plan accounting). This is because the plan records accrued liabilities and accrued assets for the plan in aggregate, resulting in no consistent and reliable basis for allocating the obligation, assets and cost to the individual employers participating in the plan. 21

22 Notes to Financial Statements 14. Taxation As a component of the total tax levy, the Village collects funds on behalf of other taxing authorities and transmits these funds to the respective authorities as follows: Budget Taxation - net General municipal purposes $ 942,245 $ 882,116 $ 849,056 1% utility taxes 38,713 39,317 38,606 Collections for other governments School District 664, , ,557 Policing 94,204 93,183 92,931 North Okanagan Regional District 656, , ,016 Regional Hospital District 82,528 80,126 80,565 Municipal Finance Authority British Columbia Assessment Authority 18,526 16,744 17,543 Okanagan Regional Library 65,359 65,370 64,317 2,562,463 2,423,533 2,423,646 Transfers School District 665, , ,950 Policing 94,379 93,362 90,564 North Okanagan Regional District 659, , ,817 Regional Hospital District 82,759 80,294 80,808 Municipal Finance Authority British Columbia Assessment Authority 18,567 16,782 17,776 Okanagan Regional Library 65,359 65,359 64,623 1,586,063 1,505,709 1,556,593 $ 976,400 $ 917,824 $ 867,053 22

23 Notes to Financial Statements 15. Government grants and transfers Budget Operating Small communities protection $ 375,000 $ 385,134 $ 375,340 Planning grants 27,281 25,413 10,000 Emergency measures ,942 Recreation management fee 61,500 64,498 64,498 Fire department 3,800 2,650 5, , , ,080 Capital Gas tax 121, , ,433 Sewer 1,090, , ,703 Street lighting 750 1,486 1,081 Water 1,711, ,539 2,924,488 1,892, ,217 $ 3,392,069 $ 2,370,661 $ 783, Sales of Service Budget Application fees $ 9,000 $ 2,100 $ 7,000 Cemetery 6,000 6,473 7,594 Drainage connections 400 1, Searches 2,850 3,922 3,550 Garbage collection and disposal 102, , ,731 Sewer user fees 291, , ,130 Water user fees 362, , ,286 $ 775,230 $ 766,107 $ 772,391 23

24 Notes to Financial Statements 17. Revenue from own sources Budget Building permits $ 25,000 $ 113,171 $ 16,411 Business licences 23,000 24,874 15,779 Commercial vehicle licenses Commissions 155, , ,552 Equity earnings in Government Business Enterprise (Note 5) 180, , ,991 Gas franchise fees 22,500 20,402 22,787 Other revenue 33,493 45,909 51,943 Rental income 1,873 Sewer connections, penalties and septage disposal 53,173 54,498 5,843 Water connections, penalties and other charges 23,618 40,204 27,724 $ 516,407 $ 870,164 $ 664, Expenditures by object Budget Advertising and publications $ 24,400 $ 25,353 $ 19,949 Amortization 615, ,098 Contracted services 607, , ,586 Insurance 38,001 37,393 36,727 Interest and bank charges 47,460 21,775 31,792 Maintenance and supplies 657, , ,840 Professional fees 126, ,773 69,922 Salaries and benefits 1,040,179 1,074, ,083 Training, travel and conferences 64,000 65,924 64,705 Other costs 144, , ,077 $ 2,750,333 $ 2,951,335 $ 2,672,779 24

25 Notes to Financial Statements 19. Budget reconciliation The budget data presented in these consolidated financial statements was inlcuded in the Village of Lumby Financial Plan, adopted through Bylaw No. 779, 2016 on March 21, The budget was amended and adopted through Bylaw No. 791, 2016 on December 12, The following table reconciles the approved budget to the budgeted figures in these consolidated financial statements Revenues: Consolidated budget $ 5,762,906 Expenses: Consolidated budget 2,816,333 Annual surplus per approved budget 2,946,573 Less: Increase in Transportation services expenditures (13,000) Decrease in Government grants and transfer revenue (701,634) Plus: Decrease in Sewer services expenditures 237,300 Annual surplus per Statement of Operations (Amended budget) $ 2,469, Comparative figures Certain comparative figures have been reclassified to conform to the financial presentation adopted for the current year. 25

26 Notes to Financial Statements 21. Segmented information The Village is a municipal government that provides a range of services to its citizens. For management reporting purposes the Village's operations and activities are organized and reported by Fund. Funds were created for the purpose of recording specific activities to attain certain objectives in accordance with special regulations, restrictions or limitations. The Village's services are provided by departments and their activities are reported in these funds. Certain departments have been separately disclosed in the segmented information, along with the services they provide, as follows: General government services - Legislative, administration and finance The function of the legislative department includes mayor and council is to set bylaws and policies for the governance of the Village in accordance with the Community Charter. The function of the Administration Department is to coordinate the operation of the municipality in accordance with policies set by Council. The Administration Department is responsible for functions such as personnel, organizational changes, employee review and training, manpower planning, strategic planning, information systems, GIS and records management. The mandate of the Finance Department is to achieve excellence in customer service through the efficient and effective use of technology and personal service. Also, to provide operational efficiency, financial planning and accountability through the application of sound accounting practices and internal control. The Finance Department is responsible for functions such as financial records reporting and safekeeping; investment of municipal funds; advice and guidance to Council and Administration on financial matters; financial planning and budget development and analysis; property tax and utility user fee notification and collection; accounts payable and receivable; payroll, pension and benefits administration; records maintenance of tickets, fines and other municipal business. Protective services - Fire and animal control services The mandate of the Fire Department is to provide fire suppression service; fire prevention programs; training and education related to prevention, detection or extinguishment of fires. The mandate of Animal Control is to control the animal population and the issuance of dog licenses. Public works services The public works department is responsible for the delivery of municipal public works services related to the planning, development and maintenance of roadway systems, and street lighting. Environmental health services The mandate of environmental health services is to provide for the collection, disposal and recycling services; and waste minimization programs of solid waste. Community development services Community development provides services to manage urban development for business interests, environmental concerns, heritage matters, local neighbourhoods and downtown, through planning, community development, parks and riverbank planning. It ensures an acceptable quality of building construction and maintenance of properties through enforcement of construction codes, building standards and bylaws for the protection of occupants. It facilitates economic development by providing services for the approval of all land development plans, the application and enforcement of zoning bylaws, and the processing of building permit applications. Recreational and cultural services The recreational and cultural services mandate in cooperation with the Regional District of North Okanagan is to provide for the maintenance of parks and open space. 26

27 Notes to Financial Statements 20. Segmented information (continued) Water supply and services The water department provides for the delivery of safe drinking water to the citizens of the Village. Sewer services The sewer department provides for the collection and treatment of wastewater. Certain allocation methodologies are employed in the preparation of segmented financial information. The General Revenue Fund reports on municipal services that are funded primarily by taxation such as property and business tax revenues. Taxation and payments-in-lieu of taxes are apportioned to General Revenue Fund services based on the Fund's net surplus. Certain government grants, transfers from and to other funds, and other revenues have been apportioned based on a percentage of budgeted expenses. The accounting policies used in these segments are consistent with those followed in preparation of the consolidated financial statements as disclosed in Note 2. For additional information see the Consolidated Schedule of Segment Disclosure - Service (Schedule 1). 27

28 Consolidated Schedule of Segment Disclosure - Service Schedule I General revenue fund General government Protective services Transportation services Environmental health services Recreation and culture Other general services Water supply Sewer services 2016 Consolidation Revenues Taxation $ 824,641 $ 93,183 $ $ $ $ $ $ $ 917,824 Grants and subsidies 602,053 3, , ,570 2,370,661 Sales of services 5, ,833 8, , , ,107 Other revenue from own sources 637, ,171 25,191 40,204 54, ,164 Interest and penalties 47,193 13,514 9,813 70,520 Gain on sale of assets 20,277 20,277 2,136, ,354 3, ,833 33,764 1,328,807 1,204,010 5,015,553 Expenses Advertising and publications 8,228 1,583 15,542 25,353 Amortization 8, , ,298 74, ,723 Contracted services 6,094 41,833 82,664 62,171 67,986 46,287 60,643 33, ,385 Insurance 28, ,183 37,393 Interest and bank charges 8,361 11,534 1,880 21,775 Maintenance and supplies 124,768 31,441 49,647 16, ,965 74, ,784 Professional fees 46,490 20, , ,773 Salaries and benefits 490,658 42, ,623 7,442 64,252 6, ,653 89,614 1,074,655 Training, travel and conferences 59,929 5,995 65,924 Other 35,810 4,063 49, , , , , ,122 69, , , , ,217 2,951,335 Annual surplus (deficit) $ 1,319,058 $ 85,844 $ (776,623) $ 33,220 $ (148,963) $ (143,659) $ 765,548 $ 929,793 $ 2,064,218 28

29 Consolidated Schedule of Segment Disclosure - Service For the year ended December 31, 2015 Schedule I (cont'd) General revenue fund General government Protective services Transportation services Environmental health services Recreation and culture Other general services Water supply Sewer services 2015 Consolidation Revenues Taxation $ 774,122 $ 92,931 $ $ $ $ $ $ $ 867,053 Grants and subsidies 572,352 27, , ,297 Sales of services 3, ,731 14, , , ,391 Other revenue from own sources 598,301 16,411 16,065 27,724 5, ,344 Interest and penalties 50,773 11,776 9,665 72,214 1,999, ,342 27, ,731 30, , ,341 3,159,299 Expenses Advertising and publications 4, ,391 19,949 Amortization 6, , ,595 74, ,098 Contracted services 6,209 22, ,905 62,955 12,184 41,332 39,512 28, ,586 Insurance 25,063 11,664 36,727 Interest and bank charges 12,895 14,397 4,500 31,792 Maintenance and supplies 101,258 20,709 68,783 14, , , ,840 Professional fees 24, ,925 40,811 69,922 Salaries and benefits 424,625 36, ,175 5,991 68,387 16, ,365 50, ,083 Training, travel and conferences 53,861 10,844 64,705 Other 30,814 2,354 45, , , ,894 82, ,396 68,946 95, , , ,062 2,672,779 Annual surplus (deficit) $ 1,308,304 $ 26,703 $ (828,154) $ 33,785 $ (95,508) $ (82,976) $ (99,913) $ 224,279 $ 486,520 29

30 White Valley Parks & Recreation Statement of Financial Activities Schedule 2 The Village manages White Valley Parks & Recreation for the Regional District of North Okanagan. During the current year, the Village of Lumby received a management fee of $64,498 ( $64,498). Revenue Budget Actual Actual Facility rentals $ 10,629 $ 21,073 $ 14,933 Library 12,800 13,499 14,480 Swimming pool 28,550 30,389 32,557 Arena 92, ,135 91,173 Playing fields 5,100 4,730 4,815 School programs 46,750 61,316 56,651 Special programs & events 15,750 22,441 16,336 Grants, donations and other revenue 45,259 Transfer from Regional District 722, , ,439 Other income 934, , ,643 Expenditures Administration 47,498 47,498 47,498 White Valley Community Centre 64,050 65,790 62,300 Swimming pool 128, , ,151 Arena 260, , ,864 Parks 127, , ,065 Curling club 55,090 55,754 53,537 Programs 120, , ,749 Contributions to capital White Valley Community Centre Swimming pool 131, ,368 54, , , ,643 Surplus (deficit) for the year $ $ $ 30