THE CITY OF MISSISSAUGA FINANCIAL REPORT2007

Transcription

1 THE CITY OF MISSISSAUGA FINANCIAL REPORT2007 for the fiscal year ended December 31, 2007

2 Mayor Hazel McCallion and Members of Council Hazel McCallion Mayor Carmen Corbasson Ward 1 Councillor Patricia Mullin Ward 2 Councillor Maja L.A. Prentice Ward 3 Councillor Frank Dale Ward 4 Councillor Eve Adams Ward 5 Councillor Carolyn Parrish Ward 6 Councillor Nando Iannicca Ward 7 Councillor Katie Mahoney Ward 8 Councillor Patricia Saito Ward 9 Councillor Sue McFadden Ward 10 Councillor George Carlson Ward 11 Councillor City of Mississauga Councillors Ward 1 Carmen Corbasson Ward 2 Patricia Mullin Ward 3 Maja L.A. Prentice Ward 4 Frank Dale Ward 5 Eve Adams Ward 6 Carolyn Parrish Ward 7 Nando Iannicca Ward 8 Katie Mahoney Ward 9 Patricia Saito Ward 10 Sue McFadden Ward 11 George Carlson Town of Milton Town of Oakville Town of Halton Hills Hwy. 407 ETR Hwy. 403 Ninth Line 10 Winston Churchill Blvd. Derry Rd. 8 Southdown Rd Erin Mills Pkwy. Mississauga Rd. Q.E.W. Lakeshore Rd. 2 Credit River 6 Hwy. 403 Mavis Rd. Eglinton Ave. Burnhamthorpe Rd. 7 Hwy. 401 Britannia Rd. W. City of Brampton Hurontario St. 4 Hwy. 410 Cawthra Rd. Hwy. 403 Q.E.W. 1 3 Dundas St. Queensway Lake Ontario Britannia Rd. E. Dixie Rd. Eto icoke Creek Hwy. 407 Derry Rd. 5 LESTER B. PEARSON NTERNAT ONAL A RPORT City of Toronto Hwy. 427 Finch Ave.

3 INTRODUCTORY SECTION THE CITY OF MISSISSAUGA FINANCIAL REPORT 2007 for the fiscal year ended December 31, 2007 Mississauga, Ontario, Canada Produced by the Finance Division, Corporate Services Department of the City of Mississauga in co-operation with all civic departments, offices and agencies. FINANCIAL REPORT

4 INTRODUCTORY SECTION Table of Contents Introductory Section: Our Values 3 GFOA Award: Canadian Award for Financial Reporting 4 Mayor s Message 5 About Mississauga Quick Facts 6 Message from the City Manager 7 Message from the Commissioner of Corporate Services and Treasurer 8 Corporate Organizational Structure 10 Financial Highlights in Financial Management Processes 14 Financial Statement Section: Financial Year in Review Consolidated Financial Performance 16 Consolidated Statement of Financial Position 16 Consolidated Statement of Financial Activities 16 Operating Fund Overview 17 Capital Fund Overview 18 Reserves and Reserve Funds Overview 20 Financial Graphs 21 Introduction to the Financial Statements 24 City of Mississauga Financial Statements and Related Schedules 26 Trust Fund Financial Statements 41 Statistical Section: Five-Year Financial Review Largest Corporate Property Taxpayers 47 Contact Information: Reaching out to all our Community Successes Report Insert 2 CITY OF MISSISSAUGA

5 INTRODUCTORY SECTION Our Values TRUST We commit to upholding public trust and to promoting a climate of trust between employees, management, Council and residents. We strive to be open and responsive in managing the City. QUALITY We deliver services and programs which enhance the quality of life of residents and employees. EXCELLENCE We serve as a model of excellent public administration and deliver the right services in a superior way, at a reasonable cost. FINANCIAL REPORT

6 INTRODUCTORY SECTION GFOA Award Canadian Award for Financial Reporting For the 10th consecutive year, the Government Finance Officers Association of the United States and Canada presented the City of Mississauga with the Canadian Award for Financial Reporting for its 2006 Annual Financial Report in recognition of the City s ability to present financial information in a clear, concise and informative manner. This award program encourages innovative financial reporting and maintains a high quality standard that is recognized amongst peers. The City of Mississauga is continuing this standard of high quality reporting for the submission and evaluation for the 2007 award program. 4 CITY OF MISSISSAUGA

7 INTRODUCTORY SECTION Hazel McCallion, C.M. Mayor City of Mississauga MAYOR S MESSAGE The City of Mississauga is realizing our vision for making our city a prosperous, livable and exciting urban centre. Through Our Future Mississauga Be Part of the Conversation the largest public consultation process in our history we received valuable input from citizens. Over 80,000 residents and stakeholders shared their creative thoughts and ideas through our website, community events, speakers series and visioning symposium which will help us establish our priorities and direction for the future of our city. Today, more than 40,000 people live, and 20,000 employees work, in the City Centre and surrounding area. Our City Centre has undergone a remarkable transformation. New commercial and residential construction projects have reshaped our city skyline. When fully developed, downtown Mississauga will be home to more than 100,000 people and will be a work destination for more than 60,000 employees. Investment in higher-order transit such as Bus Rapid Transit (BRT) and Light Rail Transit (LRT) is a priority to provide links to our City Centre from urban centres throughout the Greater Toronto Area (GTA). As we continue to invest in public spaces, parks, transportation and transit to meet the community and service needs of people who live and work in our city, we are also continuing to practice sound financial management and prudent stewardship of our resources. Through extensive public engagement we are working with residents and stakeholders to build a great, new Strategic Plan for our future. Together we will build an even better Mississauga! Hazel McCallion, C.M. Mayor City of Mississauga FINANCIAL REPORT

8 INTRODUCTORY SECTION ABOUT MISSISSAUGA Quick Facts Location Located within the Greater Toronto Area Adjoining City of Toronto on the west side and on the north shores of Lake Ontario Area: 111 square miles (288 km2); 71,040 acres (28,750 ha) Population 709,250; Canada s 6th largest city Projected Population in 2041: 788,100 Employment Employees in Mississauga: 416,300 Employees in GTA: 3.1 million Transportation Airport Toronto Pearson International Airport is located in Mississauga - Canada s busiest airport, among the top 30 in the world Highways The only city in the GTA serviced by 7 major highways Excellent highway connections, less than 2 hours from the U.S.A. border Railways Served by 2 national railways, Canadian National (CN) and Canadian Pacific (CP) Intercity and long distance rail passenger service is provided by VIA Rail Canada and AMTRAK Public Transit Third largest municipal transit system in Ontario servicing approximately 30 million riders annually 96 routes throughout the City connect with the Toronto Transit Commission, Brampton Transit, Oakville Transit and all GO Transit stations 6 CITY OF MISSISSAUGA GO Transit operates 3 train lines and several GO Bus routes through Mississauga providing frequent service throughout the day with connections to Toronto and surrounding areas Higher Education In Mississauga The University of Toronto Mississauga Within Commuting Distance 10 major universities and 11 technical colleges Businesses More than 56,100 in total (June 2007) Top employers include: Accenture Inc., Atomic Energy of Canada Limited/AECL, Air Canada, Bell Canada, Bell Mobility, CFM Vermont Castings Majestic Products, Cara Operations, Citi, Federal Express Canada Ltd., G4S Security Services (Canada) Ltd., GlaxoSmithKline Inc., Greater Toronto Airports Authority, Hewlett-Packard (Canada) Ltd., Honeywell, Loblaw Companies East, Maple Leaf Consumer Foods, RBC Financial Group, RBC Insurance Services Inc., Servisair/GlobeGround, Symcor, TD Bank Financial Group, Wal-Mart Canada Inc., and Winners Merchants Inc. Major head offices: 40 of Canada s top 500 companies and 59 Fortune 500 corporations Tax Rates (2007) Industrial: % Commercial: % Residential: % Multi-Residential: %

9 INTRODUCTORY SECTION Janice M. Baker CA City Manager and Chief Administrative Officer Message from the City Manager We are entering into exciting times. As the sixth largest city in the country, we are forging a bold new vision for Mississauga. We have a plan for the City s future that ensures our fiscal house is in order. Our commitment is to maintain services and service standards for our existing communities, as well as expanding services to meet the needs of new neighbourhoods and employment areas. Our plans deal with aging infrastructure, address traffic congestion and work to build a sustainable plan that will carry the City of Mississauga through the 21st century. We are working hard to ensure that we keep our buses, buildings and roads in good condition and operating efficiently. That s not to deny that we have challenges on the horizon. The reality is that our existing tax-based reserve funds will be expended over the next few years on capital projects that have been planned and approved. By 2012, we will need to issue external debt in order to fund our infrastructure needs, and continue to provide the excellent services and programs that our residents have come to expect. Council and the City s Leadership Team have taken a proactive approach to informing the community of the funding needs for infrastructure. To support its position, in April 2008, Council approved a special Infrastructure Levy of one per cent on the City s share of the tax bill in response to the federal government s failure to provide permanent infrastructure funding for cities. Without additional sustainable funding from senior levels of government, the condition of our roads, bridges, transit, parks, community centres and other facilities will deteriorate significantly. We will continue to work with other municipalities to ensure the federal and provincial governments take action to provide funding to address the $123 billion infrastructure deficit facing cities across the country. Our City alone is looking at a $1.5 billion shortfall to keep our roads, bridges and buildings in a good state of repair over the next 20 years. We need stable, permanent funding streams to support long-term infrastructure planning and investment. We are in need of a new deal with the provincial and federal governments to ensure Mississauga continues to be the dynamic, vibrant economic centre that over 700,000 people have chosen to call home. Janice M. Baker, CA City Manager and Chief Administrative Officer FINANCIAL REPORT

10 INTRODUCTORY SECTION Brenda R. Breault CMA, MBA Commissioner of Corporate Services and Treasurer Message from the Commissioner of Corporate Services and Treasurer The City of Mississauga s well-known reputation for prudent and stringent financial management continues to be reflected in the City s 2007 Annual Financial Report and accompanying financial statements. The City of Mississauga is proud to present its Financial Report for the year ended December 31, This report has been prepared in accordance with the Municipal Act and based on the reporting standards set by the Public Sector Accounting Board of the Canadian Institute of Chartered Accountants. Council and staff carefully reviewed every service for efficiency and value for our taxpayers before approving a property tax increase of 4.7 per cent for This increase was recommended after an in-depth review of all service areas and capital needs in an effort to find cost savings and minimize tax increases without compromising services or service levels today or in the future. Mississauga has maintained its debt-free status and continues to hold its AAA credit rating which affords us some flexibility in addressing our financial challenges. Times are changing and resources are tight for all municipalities. Municipalities are struggling to maintain services and deal with increasing transportation problems due to increased traffic congestion and/or deteriorating infrastructure while at the same time limiting tax increases. Fortunately, due to strong financial management and planning, Mississauga has been better able to respond to, mitigate, and deal with these issues. Most Ontario municipalities are finding it increasingly difficult to balance their budgets and the City of Mississauga is no different. As revenue growth slows and the city evolves, we cannot continue to rely on property tax as the only permanent source of funding for local public services and capital infrastructure. Mississauga is currently dealing with aging infrastructure, increasing labour and commodity cost pressures, and declining development growth. The City is facing some very difficult decisions for the future given that property taxes are our only source of tax revenue. Strategies to deal with these pressures are limited to increases in property taxes, user fees, modifying our service standards, lowering costs, or some combination of these measures. Senior levels of government have taken preliminary steps to help municipalities with our funding shortfalls but more support is needed. There are still large and costly gaps in overall infrastructure funding. Not only is additional predictable funding needed from senior levels of government but greater flexibility needs to be offered in the use of these funds. One of the City s key strategic strategies is Building a City for the 21st Century. Within this strategy, there are a number of objectives and initiatives to steer this direction. 8 CITY OF MISSISSAUGA

11 INTRODUCTORY SECTION The City of Mississauga will need to reassess its service levels in order to respond to the changing population. The demographics for the city are shifting from a rapidly growing and young population to a more stable population of older adults. It is projected that by 2021, persons aged 55 and older will form one third of Mississauga s total projected population. The challenge will be to make service changes for senior residents while continuing to provide services to the city s younger population in a way that encourages an active, healthy lifestyle for all age groups. Transportation and traffic congestion management is also a high strategic priority for the City. A sustainable city for the 21st century requires a balanced approach to mobility where transportation choices enhance the quality of life in our communities. The City is currently working with Metrolinx, as well as other GTA municipalities, to develop a regional transportation plan; conducting an Official Plan Review; moving forward with major investments in transit to improve service levels; continuing to address gaps in the road network through the roads capital program; and conducting a right-of-way review to assist with the development of a multi-modal transportation plan, including a cycling strategy. As our city grows and matures, we will focus on ensuring that our city is well positioned for the future. We must continue to invest in infrastructure, services and programs for our new and growing communities while maintaining the infrastructure, programs and services we currently have. Increasing costs and other operational pressures makes this challenge increasingly difficult. However, we are committed to exploring options and identifying solutions to the challenges that lie ahead. All of the objectives, priorities and pressures will be assessed in concert with the City s strategic planning, business planning, and budget processes. Fiscal responsibility is, and will continue to be, one of Mississauga s many strengths. The 2007 financial results demonstrate Mississauga s commitment to prudent financial planning. With an AAA credit rating, no debt, combined with adequate reserve balances and a new strategic and business planning process that aligns service and funding decisions, the City of Mississauga is positioning itself for future service and infrastructure requirements. Brenda R. Breault, CMA, MBA Commissioner of Corporate Services and Treasurer March 7, 2008 FINANCIAL REPORT

12 INTRODUCTORY SECTION Corporate Organizational Structure Janice M. Baker CA City Manager and Chief Administrative Officer Economic Development Internal Audit Strategic Initiatives Office of Arts and Culture Paul A. Mitcham P. Eng., MBA Commissioner Community Services Brenda R. Breault CMA, MBA Commissioner Corporate Services and Treasurer Edward R. Sajecki P. Eng., M.C.I.P. Commissioner Planning and Building Martin Powell P. Eng. Commissioner Transportation and Works Planning, Development & Business Services Recreation & Parks Fire & Emergency Services Library Services Customer Service Organizational Wellness & Business Services Corporate Finance Communications Office of the City Clerk Facilities & Property Management Legal Services Corporate Human Resources Information Technology Revenue & Materiel Management Strategic Planning & Business Services Development & Design Policy Planning Building Services Business Services Transportation & Infrastructure Planning Engineering & Works Mississauga Transit Enforcement Bus Rapid Transit (BRT) Project Office 10 CITY OF MISSISSAUGA

13 INTRODUCTORY SECTION Financial HIGHLIGHTS in 2007 Balanced Budget and Property Taxes: City Council, in conjunction with staff, worked very hard to minimize the impact of cost pressures on taxpayers and maintain current service levels. However, it is becoming increasingly difficult to balance the City s budget with property taxes being the main source of funding. By introducing a variety of operational efficiencies and new revenue sources, as well as undertaking a detailed review of cost pressures, the City was able to limit its property tax rate increase to 4.7 per cent in This included a 1.3 per cent tax increase to provide funding for the capital program. Public Sector Accounting Board Tangible Capital Asset Reporting: The Public Sector Accounting Board (PSAB) has adopted new guidelines which will require all Canadian municipalities to begin reporting Tangible Capital Assets in their financial statements starting on January 1, This requires the City of Mississauga to inventory and value all of our physical assets such as roads, buildings, parks, land and major equipment, as well as determine depreciation rates and other accounting policies. A city-wide project team has been established to design and implement the new accounting rules. City Business Planning: Mississauga has designed a new City Business Planning process that will integrate our strategic, budget and work planning processes. The City Business Planning process will help align work efforts and budgets to our strategic priorities by clearly defining and measuring resource requirements, service levels, outputs and outcomes. It will also benefit decision-making by clarifying priorities and ensuring corporate alignment. Business planning set the parametres and building blocks for a two-year budget process. A business plan will enable us to measure and report on our progress in achieving our objectives. The new business planning and budgeting processes will be a two-year cycle from January 1, 2008 and will encompass both 2009 and Environmental Initiatives: An Environmental Advisory Committee (EAC) has been established to review environmental initiatives and priorities for the City. Some 2007 environmental achievements are as follows: Air: Greened our City fleet by purchasing hybrid and fuel-efficient replacement vehicles; began to use bio-diesel fuel in transit buses; and signed a Memorandum of Understanding with Clean Air Partnership to participate in air quality modelling in the GTA. Energy: Completed a city-wide Energy Feasibility Study to evaluate opportunities for energy and water conservation. Total cost of all recommended measures adds up to $5.6 million with estimated annual energy and water cost savings of over $800,000. City Council approved the recommendations and a six-year implementation plan starting in 2007; installed a solar photovoltaic power generation system at the Hershey Centre. The photovoltaic panels will generate 25 to 30 kilowatts of electricity, which is equivalent to the power required to light a typical fire station for one year. This project will reduce carbon dioxide emissions by 25,800 kilograms per year for approximately 25 years; City Council approved green power purchase for the Civic Centre as a one-year pilot project. This initiative will reduce greenhouse gas emissions by 4,400 tonnes or the equivalent of removing 975 cars from Mississauga roads; and developed innovative electricity procurement processes which provided a saving of $1.25 million in electricity cost compared to the regulated price offered to municipalities. Land: Parks and Forestry staff facilitated 50 community cleanup events and 750 regular group cleanups under the Litter-Not campaign; launched glass and plastic recycling on a pilot basis at 52 major use parks; co-ordinated 73 community planting events during the year involving 3,412 volunteers who planted 11,950 trees and shrubs; and developed a new Encroachment Management Plan concentrating on reclaiming and protecting natural areas. Planning and Policy: Completed a natural areas survey update for wards 5, 6 and 11; initiated the development of a Green Development Strategy; Council approved a Comprehensive Zoning By-law with new Greenbelt Zoning approach, as well as complementary Official Plan Amendments (OPA 25); implemented Official Plan Policies in development applications and environmental assessments; approved six developments that are LEED (Leader in Energy and Environmental Design) and implemented green development techniques such as green roofs, bioswales, FINANCIAL REPORT

14 INTRODUCTORY SECTION permeable pavement, energy and water efficient measures; based on the City s environmental objectives, provided direction for Conservation Authority natural heritage, water resources, and policy development initiatives; and signed a Memorandum of Understanding with Toronto Region Conservation for GTA Eco-Industrial Park City data collection. Water: Initiated an update of the Mississauga Storm Water Quality Strategy. Our Future Mississauga: The goal of Mississauga s largest public engagement campaign Our Future Mississauga - Be Part of the Conversation is to inspire, inform and interact with residents, businesses, students and stakeholders about the future of Mississauga. The campaign will broadly gather creative thoughts and unique ideas through an innovative website, community events, great idea puzzle pieces and a community visioning symposium, and will incorporate them into a common vision in the form of a new Strategic Plan to take Mississauga into the next 40 years. Space Planning & Accommodation Initiatives: A number of space planning and accommodation initiatives began in 2007 to accommodate City operations and administration due to growth and the introduction of new and expanded service areas. The Consolidated Call Centre Project was completed in late 2007 with the relocation of employees to the 950 Burnhamthorpe Road West building. The Public Counter Consolidation Project was initiated which, when implemented in 2008/09, will result in improved front-line service delivery as public counters are relocated to accessible areas within the Civic Centre (i.e. first three floors). In 2007, the Call Centre handled over 170,000 telephone calls and just over 4,000 public s while maintaining published service levels for telephone customer service; 80 per cent of all calls will be answered in 30 seconds or less; a call abandoned rate of 3 per cent or less; and a call blockage rate of 0 per cent. The Call Centre started using the new Customer Relationship Management (CRM) system in June 2007 to track and assess citizen inquiries. Over 81,400 calls were tracked with 1,404 of these resulting in customer service requests resolved by various sections in the City. The Transit Relocation and Renovation Project is currently underway with employee relocations scheduled in early Mississauga s Transit Ridership Growth Strategy will significantly increase the size of the City s bus fleet. In order to accommodate this growth for the next four to five years, a major expansion of the main bus storage and maintenance facility on Central Parkway is required to provide sufficient capacity to efficiently operate and maintain the fleet. A second satellite facility will also be required for growth beyond five years. Bus Rapid Transit (BRT): The Bus Rapid Transit (BRT) project is a partnership between Mississauga, GO Transit, Ontario and Canada, to create a new busway running east-west across Mississauga along Highway 403, Eastgate Parkway and Eglinton Avenue corridors. When complete in 2012, it will serve thousands of transit riders each day, making it easier to travel to, from, and through Mississauga and the GTA was a landmark year for the BRT project. The City received the federal funding commitment and opened the City s BRT Project Office. A consultant team was hired to lead the preliminary design phase and the federal environmental assessment process which are currently underway. Accessibility Initiatives: The City s Accessibility Plan has been in place since Some of the City s accessibility objectives include an enhanced communication campaign, refining and improving accessibility design guidelines, integrating accessibility into the City s Strategic and Departmental Plans; and improving accessibility of Mississauga Transit. Some accomplishments in 2007 include accessibility improvements to the Hershey Sports Complex, Churchill Meadows Library, Streetsville Kinsmen Senior Citizens Centre, and Council Chambers; assistive listening systems for Civic Fitness Aerobics Studio, Great Hall, Public Affairs Auditorium and Noel Ryan Auditorium; increased number of designated parking spaces for disabled persons; and more transit accessible buses. At the end of 2007, Mississauga Transit had approximately 281 accessible buses out of a total of 379 buses (74 per cent) of the fleet. Mississauga is also committed to replace the remainder with accessible buses by CITY OF MISSISSAUGA

15 INTRODUCTORY SECTION Customer Service Strategy: On March 29, 2006, Council approved the Customer Service Strategy as a framework for improving the way we serve our customers. The strategy encompasses customer service through three channels: call centres, counters and the internet. The Call Centre Consolidation Project and the review of counter services are the first major initiatives that are being undertaken as part of the strategy. Phase I of the Call Centre Consolidation Project was completed as planned with all general inquiry calls, Office of the City Clerk, Animal Services, Revenue and snow calls being handled in the new call centre. In November, the Call Centre also extended its hours of operation from 7 a.m. to 7 p.m. and moved into its new space at 950 Burnhamthorpe Road West. The Customer Service Division also implemented a City of Mississauga Knowledge Base (KB) and Customer Relationship Management (CRM) system to provide up-to-date information and services to customers through the Call Centre. In 2007, the City reviewed public access to services at counters resulting in a comprehensive plan to realign services from 17 locations in City Hall to three key service-oriented counters, as well as a new counter at the Mavis Road location for many of the Transportation and Works (T&W) counter services. Working with the Accessibility Advisory Committee, City staff has started to develop plans to implement new Accessible Customer Service Standards to improve and ensure that the delivery of counter customer service is fully accessible. ecity: The City of Mississauga s award-winning website provides City information and a growing number of online services for businesses and city residents on a 24 hour/7 day-a-week basis. ecity Portal: 17,144 users will visit 94% Canada + 6% International 63% returning customers + 37% new 95.6% Windows + 3.6% Mac 51.5% arrived via search (usually Google) % direct % followed a link 317,000 pages will be viewed 8,800 will view the ecity home page 5,500 will view the Transit home page Planning and Building Services Online Planning & Building eservices successfully used 415,110 times in 2007 Building Permit Status 75,571 (18.6%) Development Application Status 31,036 (7.6%) Digital Mapping 38,414 (11.3%) Property/Tax Query 221,113 (58.4%) Other 48,976 (4.2%) Click n Ride Transit Trip Planner 148,000 user sessions every month (5,000/day) 5.6 million page views every month 164,000 trip plans every month (5,290/day) 183,000 route stop schedules every month (5,903/day) Library Catalogue Online 650,000 use count every month (20,967/day) 270,000+ searches of library catalogue made online every month (8,709/day) 120,000+ account logins online every month (3,870/day) 85,000+ renewals online every month (2,741/day) 65,000+ holds placed online every month (2,096/day) 500+ account updates online every month (16+/day) Connect2Rec Recreation and Parks 183,547 registrations processed in 2007 IVR - 9,553 (4%) Connect2Rec - 82,545 (45%) Staff Processed (mail-in/walk-in) - 91,449 (49%) IVR and Internet (ie. self-service) channels took in over $6.7 million for recreation registrations. Parking Tickets Online Processed 42,418 tickets totalling $1,336,348 in 2007 Current pace: 42,000+ online transactions (out of 118,000 across all channels) and over $1.3M in ecommerce per year (40% adoption rate) Provincial Offence Tickets Online Processed 11,392 tickets totalling $982,272 in 2007 Current pace: 12,000+ online transactions (out of 60,000 across all channels) and over $1.1M in ecommerce per year (20% adoption rate) Talent Management: In 2007, the City s Leadership Team approved a Corporate Talent Management Strategy. This strategy is focused on building a talent ready city for the 21st century positioning the City to remain an employer of choice. It is made up of initiatives designed to ensure City leadership continuity, define the City s leadership needs for the future and proactively manage current and future key talent issues and gaps. FINANCIAL REPORT

16 INTRODUCTORY SECTION Financial Management Processes City Business Planning and E3 Program: To address significant budget, economic and political pressures in recent years, the City of Mississauga is introducing a new, corporate-wide, business planning process which builds on the lessons learned through the City Services Review project. The end result will be better integration of Mississauga s strategic priorities and programs, service levels and budgets. The City also implemented a new program called E3 - Efficiency, Economy, and Effectiveness. Under this new initiative, the City will review in a systematic and regular way, all major City services and programs on a four to six-year cycle. Financial Statement Preparation: City of Mississauga management is responsible for all information contained in the Annual Financial Report. These financial statements and accompanying notes have been prepared using reasonable limits of materiality and within the framework of the accounting principles and disclosure requirements of the Canadian Institute of Chartered Accountants guidelines included in the Public Sector Accounting and Auditing Standards Manual. Internal Control Management: Management maintains appropriate systems of internal and administrative controls designed to provide reasonable assurance that transactions are executed in accordance with proper authorization, that assets are properly accounted for and safeguarded, and that financial information produced is relevant and reliable. External Audit: The role of the external auditor, KPMG LLP, is to present an independent opinion on the fair presentation of the City s financial position and operating results as contained in the Financial Report, confirming that the statements are free from material misstatements. It is the responsibility of the auditor to advise management and the Audit Committee of any control or operational issues that may be identified during their audit procedures. Audit Committee: The Audit Committee is comprised of three members of Council, who are appointed annually by Council with the Mayor also being an ex-officio member. The Audit Committee provides a focal point for communications between Council, the external auditor, the internal auditor and management, and facilitates an impartial, objective and independent review of management practices through the internal and external audit functions. User Pay Philosophy: With the City s only major funding source being property taxation, Mississauga continues to implement its User Pay philosophy where appropriate to do so to fund service costs. Development is slowing down and as a result development charge revenues are declining while tax base growth is slowing. The City will continually need to review user fees to balance service and tax pressures. 14 CITY OF MISSISSAUGA

17 Year 2007 Financial Year in Review 2007 Consolidated Financial Performance Operating Fund Overview Capital Fund Overview Reserves and Reserve Funds Overview Financial Graphs Introduction to the Financial Statements City Financial Statements and Notes Trust Fund Financial Statement and Notes FINANCIAL REPORT

18 Financial Year in Review 2007 Consolidated Financial Performance The major funds utilized by the City of Mississauga are the Operating Fund, the Capital Fund, and the Reserves and Reserve Funds. The year-end balances for these funds have been consolidated to provide the overall financial position and the financial resources of the City. The consolidated 2007 year-end balance for these three funds is $698.5 million, compared to $692.6 million in 2006, an increase of $5.9 million. An overview of each of the funds is provided below. The City is a 90 per cent shareholder in Enersource Corporation. The City s share of net assets has increased from $188.6 million in 2006 to $191.8 million in 2007, representing a $3.2 million increase. This increase is attributed to the City s share of Enersource net income of $12.5 million less a $9.3 million dividend payment received by the City from Enersource in Consolidated Statement of Financial Position (Balance Sheet) In 2007, the City s Net Financial Resources balance (i.e. financial assets minus liabilities) closed at $743.6 million as compared to $753.4 million in 2006, a decrease of $9.8 million. The positive Net Financial Resources position indicates that there are net financial assets on hand, which can provide resources to finance future obligations. Although there was a slight decrease in 2007, the City s Net Financial Resources position remains financially healthy and strong for the future. The decrease in Net Financial Resources is attributed to a number of financial areas. - Total Financial Assets of $1,331.3 million increased by $39.6 million from 2006 mainly due to an increase in cash and investments ($60.8 million), partially offset by a decrease in receivables ($24.4 million). - Total Liabilities of $587.7 million increased by $49.4 million from 2006 primarily because deferred revenue-obligatory reserve funds (i.e. conditional grants received by senior levels of government) increased by $44.1 million and employee benefits and other liabilities increased by $17.9 million, offset by a decrease in payables of $12.1 million. Combined cash and investments total $1.0 billion at the end of 2007, an increase of $60.8 million from The majority of this increase relates to the cash inflow of federal and provincial funds (i.e. gas taxes, public transit funds, bus rapid transit grant) and development charges during the year. However, a significant portion of these funds remain unspent (i.e. held in Reserve Funds or capital projects) and have been set up as deferred revenue (approx. $350 million). These funds will be applied/earned as revenue when applicable transit, road, and other infrastructure related expenditures occur in the future. The balance of the cash and investments represents working capital (for day-to-day operations) and funds set aside within Reserves and Reserve Funds for future requirements. Consolidated Statement of Financial Activities (Income Statement) Total revenues for 2007 were $591.6 million, an increase of $21.2 million or 3.7 per cent over Property tax revenues for 2007 were up $10.1 million from 2006 to $259.2 million. Assessment growth of 1.6 per cent and a 4.7 per cent property tax rate increase accounted for the growth. Payments in lieu of taxes (i.e. taxation from other governments) for 2007 were $22.1 million, an increase of $0.2 million over User charges for 2007 were $143.7 million, an increase of $7.9 million over The increase was due to transit fare increases, increased transit ridership (1.1 million or 3.8 per cent), and other departmental fees and service charge rate increases (i.e. recreation programs, rentals, Transportation and Works permit fees, Library fees, etc.). Provincial offences fine gross revenues decreased by $141 thousand or 2 per cent in Government grants for 2007 were $11.0 million, a decrease of $8.8 million over In 2006, the City received a one-time grant of $9.3 million for bus replacements from the Ontario Government. Development contributions for 2007 were $62.9 million, an increase of $1.7 million over Increased expenditures on development-related projects resulted in additional funds being utilized in CITY OF MISSISSAUGA

19 Investment income for 2007 was $58.1 million, an increase of $6.4 million or 12.4 per cent from the prior year. Higher short-term rates and higher average daily investment balances accounted for the increase. Penalties and interest earnings for 2007 from over due tax accounts were $7.6 million, an increase of $1.8 million over Other revenues for 2007 were $14.4 million, an increase of $4.8 million over More miscellaneous one-time revenues were received in 2007 versus In addition, the Enersource Corporation dividend at $9.3 million was also $1.3 million higher than The City s share of Enersource Corporation net income for 2007 was $12.6 million, a decrease of $2.9 million or 18.7 per cent from Operating Fund Overview: The Operating Fund provides for the normal operating revenues and expenditures associated with the day-to-day provision of services. The main categories of revenue include: taxation, investment income, development-related income, transit fares, recreation fees, payments in lieu of taxes (PILTs) / supplementary taxes, and fines and tax penalties. Even though the Operating Fund had a net loss (i.e. revenues minus expenses) of $9.2 million on operations before transfers, this loss is mainly attributable to increased actuarial liability estimates for WSIB, insurance and other postemployment liabilities (approx. $17.9 million higher in 2007). The change in these actuarial liabilities from one year to the next must flow through the Consolidated Schedule of Current Fund Operations as a net increase or decrease to labour expenses. These non-cash expenses are consolidated at year-end, within the financial statements, and these expenses are considered outside of the control and scope of normal day-to-day operations. After transfers and post net revenue adjustments, the Operating Fund (i.e. the City s operating revenues and expenditures) generated a surplus of $2.6 million. This surplus will be used to help offset some of the 2008 budget pressures. Revenues: In 2007, Operating Fund revenues totalled $457.3 million as compared to $436.5 million in 2006, an increase of $20.8 million. Explanations for the revenue variances can be found in the Consolidated Statement of Financial Activities overview section above. Expenditures: Expenditures are broken down into major categories: labour and benefits, materials and supplies, contracted services, rents and financial expenses, and transfer payments. Total operating expenditures for 2007 were $466.5 million compared to $412.6 in 2006, an increase of $53.9 million. Salary, wage and benefits for 2007 were $342 million, an increase of $40.1 million from the prior year. Growth in the City s labour force (new and expanded services), performance increases, labour contract settlements/adjustments, increased benefit costs and increased OMERS costs contributed to this increase. Also recognition for increased WSIB, property and liability insurance and other post-employment liabilities resulted in an additional $17.9 million in labourrelated expenses as compared to $0.4 million in Materials and supplies for 2007 were $42.4 million, an increase of $5.1 million or 13 per cent over Winter salt requirements increased by $3.2 million over 2006 due to increased snowfall. Utility costs (electricity, gas, water) increased by $1.3 million over Contracted services for 2007 were $36.7 million, an increase of $8.0 million or 27 per cent over Winter maintenance contract services increased by approximately $4 million due to increased snowfall in Road and asphalt repair contracts accounted for approximately $2 million of the increase. Contract increases in all other service areas accounted for the balance. Rent and financial expenses for 2007 were $43.6 million, an increase of $0.9 million or 2 per cent over General increases in staff development, communication, occupancy, and finance-related costs accounted for the increase. FINANCIAL REPORT

20 Capital Fund Overview: The Capital Fund provides for expenditures on assets and infrastructure that benefit the City for a significant time period. Capital Fund expenditures provide for improvement, acquisition and construction of land, buildings, roads, bridges and machinery used in the provision of municipal services. Mississauga s capital program is funded from two primary sources. Taxes are used to fund major maintenance or enhancements/changes to existing infrastructure. Development charges are used to fund growth-related assets. Mississauga has a policy of pay-as-you-go which means that the City builds capital infrastructure without the use of debt financing. However, by 2012, debt financing will be needed to assist in funding future asset rehabilitation and replacements. The capital budget is established in a different format from the operating budget. The capital budget is based on an approved project basis (i.e. commitment) rather than an annualized cash flow basis. Fund Balance: The Capital Fund balance (i.e. unexpended capital financing) has increased from $107.8 million in 2006 to $137.2 million in 2007, representing a $29.4 million increase. This increase reflects the funding set aside in 2007 for new capital projects and the timing of spending on previously approved capital projects. All projects have been pre-approved with project funding set aside in the Capital Fund. Due to the size and scope of capital projects, the timing and rate of capital expenditures can vary over many years. As a result, Capital Fund balances may fluctuate from year-to-year. In 2007, the City received $2.6 million in government grants for capital infrastructure, a decrease of $14.9 million from In 2006, the City received $16.9 million from the Ontario Government for the bus replacement program which was directly applied against the capital program. The $16.9 million included a one-time grant payment of $9.3 million from the province. However, in 2007, the City received only $5.9 million for bus replacements and these funds were applied against the Reserve Fund for future capital obligations. In 2007, $91.8 million ($80.9 million in 2006) was transferred from Reserve Funds to the capital program to help meet the capital demands associated with a growing and maturing city. Expenditures: For fiscal year 2007, total capital expenditures were $134.9, an increase of $6.3 million over the prior year. This increase reflects the timing of capital payments and stages of development for certain capital projects. It also reflects a larger capital program which results in more spending on an annual basis. Projects: Some of the major capital project successes for 2007 include: A new accessible City Centre Shuttle was implemented in December It operates daily and is sponsored in part by Square One Shopping Centre. The cost to travel around the City Centre area is only $1 or pay full fare for transfer privileges. Creating a virtual server environment which resulted in a reduction in the number of physical servers in the computer room from 150 to 90. Consolidation of disk storage in one storage device optimized both space requirements and costs. Consolidation of phone-call taking for 14 existing business areas with extended hours of operation to better service the residents. A new Sports Complex next to the Hershey Centre opened to the public in the fall and includes an indoor sports field, gymnasium, gymnastics facility and two outdoor sports fields with artificial turf. Churchill Meadows Branch Library and Activity Centre opened to the public in March City purchase of performance staging allowed for enhanced programming of My Mississauga events at the Civic Centre. 18 CITY OF MISSISSAUGA

21 Fire and Emergency Services has taken delivery of a Special Operating Vehicle (SOV) which will transport specialized trench and technical rescue equipment. Fire and Emergency Services has taken delivery of four pumper/rescue chassis. Quenippenon Meadows Spray Pad opened for public use and includes landscape improvements, seating areas, pathway connections and lawn areas. The redeveloped Lakefront Promenade playground opened to the public and features the Evos play system which offers new physical and mental play challenges. Kariya Park reconstruction of front entrance stone steps and pathway paving completed and new custom made stone benches were installed which complement the Japanese garden style. Woodgreen Park and Marvin Heights Parks redevelopment was completed and opened to the public and features a community garden, beautiful front park entrances and gathering places. Port Credit Log Cabin relocation to Bradley Museum site was completed. The trail network grew with the completion of the Malton Greenway Trail from Etude Drive to Goreway Drive as well as bicycle lanes on South Millway from Burnhamthorpe Road to Erin Mills Parkway. The preliminary trail design was completed for Queensway Trail from Winston Churchill Blvd. to Erin Mills Parkway and from Glengarry Road to Dixie Road, Etobicoke Creek Trail for Rathburn Road and Waterfront Trail through Rhododendron Gardens. Federal and provincial funding was used to begin a $76 million expansion of Mississauga Transit s operational headquarters on Central Parkway West and complete a $2.3 million expansion of its satellite complex in Malton to increase total capacity to 470 buses. Fifteen more buses were added to the City s transit fleet, plus an additional 70,000 hours of annual service. The City s Transit fleet was upgraded with 12 smaller comfortable El Dorado buses that were placed into service on community and shuttle routes. $83 million in federal funding was committed to the BRT Project, a high-efficiency transit corridor that will run east-west across Mississauga and provide express bus service to thousands of passengers per day. 75 City streets were improved through the 2007 Roadway Resurfacing Program. The City s Green Fleet program includes 25 hybrid-electric and fuel-efficient vehicles to help reduce greenhouse gas emissions and air contaminants. A new section of Thomas Street, between 10th Line West and Winston Churchill Boulevard, was constructed and paved to improve area traffic when the roadway opens in A Southdown Road Pedestrian Bridge at the Clarkson GO Station was built to promote pedestrian safety. Construction started on the new Confederation Parkway Bridge over Hwy 403. FINANCIAL REPORT

22 Reserves and Reserve Funds Overview: Reserves and Reserve Funds are established by Council. These funds are drawn upon to finance specific purpose expenditures as designated by Council, to minimize tax rate fluctuations due to unanticipated expenditure and revenue shortfalls, and to fund multiple-year projects and programs (i.e. insurance and employee benefits). Reserves and Reserve Funds (i.e. funds set aside to help offset future obligations, pressures and costs) were drawn down from $582.2 million in 2006 to $558.6 million in 2007, representing a decrease of $23.6 million. Although Reserves and Reserve Funds remain high and very strong, capital pressures required draws from these funds to finance our growing infrastructure requirements. Despite the decline in total Reserve and Reserve Fund balances in 2007, the City of Mississauga continues to maintain adequate Reserves and Reserve Funds. The Reserve and Reserve Funds will help the City meet the projected expenditure needs in the upcoming years. However, draws on Reserve and Reserve Funds in future years to support our capital infrastructure and maintenance needs will deplete these balances unless additional funding comes through from other senior levels of government to help sustain and invest in new and replacement infrastructure. Reserves: Reserves, which are discretionary in nature, are generally used to offset major fluctuations in operating costs/revenues or to fund future contingent liabilities. Total Reserves increased to $54.5 million, an increase of $0.6 million over This increase is the result of various transfers from operations to help fund future operational pressures. Reserve Funds: Reserve Funds, on the other hand, are non-discretionary, segregated and restricted to meet a specific purpose for the municipality. Total Reserve Funds decreased to $504.1 million, a decline of $24.2 million from This decrease is the result of increased transfer payments from the Reserve Funds to the capital program and a decreased transfer of funding from the Operating Fund to the Reserve Funds. In 2007, $91.8 million was transferred from the Reserve Fund to the capital program, an increase of $10.9 million in transfer payments from In 2007, $19.0 million was transferred into the Reserve Fund from the Operating Fund, a decrease of $14.0 million. The pre-year-end close surplus (before final transfers) at the end of 2007 was significantly less than 2006, resulting in a lower transfer. 20 CITY OF MISSISSAUGA

23 Financial graphs Consolidated statement of financial position $1,331.3 FINANCIAL ASSETS SUMMARY (in $millions) $1,291.7 $1,139.1 $1,168.2 $1,125.2 FINANCIAL LIABILITIES SUMMARY (in $millions) $587.7 $538.3 $414.9 $407.7 $ $191.8 $188.6 INVESTMENT IN ENERSOURCE CORPORATION (in $millions) $181.1 $177.0 $180.7 $698.5 $692.6 $670.2 FUND BALANCES (in $millions) $707.0 $ FINANCIAL REPORT

24 Financial graphs Consolidated statement of financial activities CONSOLIDATED REVENUES BY TYPE (in $millions) Development contributions applied $62.9 (11%) Government grants $11.0 (2%) Payments in lieu of taxes $22.1 (4%) Property taxation $259.2 (44%) User charges $143.7 (24%) Investment income $58.1 (10%) Penalties and interest on taxes $7.6 (1%) Other income $14.4 (2%) Equity in income of Enersource Corporation $12.6 (2%) Total Consolidated Revenues by Type $591.6 (100%) CONSOLIDATED EXPENDITURES BY SERVICE (in $millions) Protection services 95.0 (16%) General government services (19%) Recreation and cultural services (24%) Transportation services (38%) CONSOLIDATED EXPENDITURES BY TYPE (in $millions) Salaries, wages and benefits $344.5 (57%) Contracted services $133.8 (22%) Planning & development services 13.4 (2%) Environmental services 9.3 (1%) Health/social & family services 0.6 (0%) Total Consolidated Expenditures by Service $601.4 (100%) Materials and supplies $65.6 (11%) Rents and financial expenses $55.8 (9%) Transfer payments $1.7 (1%) Total Consolidated Expenditures by Type $601.4 (100%) 22 CITY OF MISSISSAUGA

25 Financial graphs capital fund, reserves and reserve funds CAPITAL FUND EXPENDITURES BY SERVICE (in $millions) General government services $9.8 (7%) Transportation services $67.9 (50%) Recreation and cultural, social/family services $43.1 (32%) Protection services $6.6 (5%) Environment services $7.5 (6%) Total Capital Fund Expenditures by Service $134.9 (100%) RESERVE FUNDS (in $millions) RESERVES (in $millions) Vehicle and equipment replacement $54.1 (11%) Lot levies $46.8 (9%) Contributions from developers for specific works $44.3 (9%) Transit revenue stabilization $1.1 (2%) Arts $0.8 (1%) Other $0.8 (1%) Development revenue $4.8 (9%) Capital construction $129.8 (26%) Capital revolving fund $176.6 (35%) Utilities $6.8 (13%) Winter maintenance $7.3 (13%) Labour settlement $6.0 (11%) Assessment appeals $9.0 (17%) Vacation pay $5.8 (11%) Sick leave benefits $10.0 (2%) WSIB $16.2 (3%) Group benefits $3.1 (1%) Self Insurance claims $23.2 (4%) Contingencies $3.9 (7%) Planning $4.0 (8%) Elections $1.9 (3%) Legal settlements $2.3 (4%) Total Reserve Funds $504.1 (100%) Total Reserves $54.5 (100%) FINANCIAL REPORT

26 Introduction to the Financial Statements The accompanying Consolidated Financial Statements and all other financial information included within this financial report are the responsibility of the management of the City of Mississauga. The City s Financial Statements contained in this report have been prepared in accordance with the accounting principles and disclosure requirements of the Canadian Institute of Chartered Accountants guidelines contained in the Public Sector Accounting and Auditing Standards Manual. The Commissioner of Corporate Services and Treasurer is responsible for submitting annually to the Audit Committee and Council audited financial statements. These financial statements include the consolidated results of the City of Mississauga for the fiscal year ending December 31, Finance staff are responsible for the co-ordination and completion of the annual financial statements in a timely, accurate and efficient manner, as well as providing support and related financial information to external auditors during the year-end audit. The Consolidated Financial Statements of the City of Mississauga provide important information about the overall financial condition of the City. The purpose of the Consolidated Financial Statements is to present the effects of transactions of the City taking into consideration the accounting for all City Funds and associated City business enterprises. The audited Consolidated Financial Statements for City operations and the audited Trust Fund Financial Statements include: City Financial Statements: Auditor s Report Consolidated Statement of Financial Position Consolidated Statement of Financial Activities Consolidated Statement of Changes in Financial Position Notes to the Consolidated Financial Statements Consolidated Schedule of Current Fund Operations Consolidated Schedule of Capital Fund Operations Consolidated Schedule of Reserves and Reserve Funds Trust Fund Financial Statements: Auditor s Report Statement of Financial Activities and Changes in Fund Balance Statement of Financial Position Notes to the Financial Statements 24 CITY OF MISSISSAUGA

27 Auditors Report To the Members of Council, Inhabitants and Ratepayers of the Corporation of the City of Mississauga We have examined the Consolidated Statement of Financial Position of The Corporation of the City of Mississauga as at December 31, 2007 and Statements of Financial Activities and Changes in Financial Position for the year then ended. These financial statements are the responsibility of the Corporation s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. In our opinion, these Consolidated Financial Statements present fairly, in all material respects, the financial position of the City as at December 31, 2007 and the results of its operations and the changes in its financial position for the year then ended in accordance with Canadian generally accepted accounting principles. Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The current year s supplementary information included in the schedules is presented for additional analysis and is not a required part of the basic financial statements. Such supplementary information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. KPMG LLP Chartered Accountants Toronto, Ontario March 7, 2008 FINANCIAL REPORT

28 Consolidated Statement of Financial position as at December 31, (All dollar amounts are in $000) $ $ Assets Financial Assets Cash and short-term investments $464,210 $488,051 Taxes receivable (Note 3) 51,639 59,672 Accounts receivable 32,899 49,279 Investments (Note 4) 590, ,971 Loans receivable Investment in Enersource Corporation (Note 5) 191, ,578 Total Financial Assets $1,331,322 $1,291,658 Liabilities Accounts payable and accrued liabilities 92, ,935 Deferred revenue - general 5,149 5,668 Deferred revenue obligatory reserve funds (Note 6) 350, ,945 Employee benefits and other liabilities (Note 7) 139, ,730 Total Liabilities $587,720 $538,278 Net Financial Resources $743,602 $753,380 Other Non-Financial Assets Inventory and prepaids 7,061 6,025 Total Net Assets $750,663 $759,405 Municipal Position Amounts to be recovered (Note 7) From reserves and reserve funds on hand (94,797) (87,949) From future revenues (44,860) (33,781) Total ($139,657) ($121,730) Fund Balances (Note 8) Current Fund (See Schedule) 2,623 2,545 Capital Fund (See Schedule) 137, ,785 Reserves (See Schedule) 54,488 53,898 Reserve Fund (See Schedule) 504, ,329 Enersource Corporation net equity (Note 5) 191, ,578 Total Fund Balances $890,320 $881,135 Contingencies (Note 9) - - Total Municipal Position $750,663 $759,405 The accompanying notes are an integral part of these consolidated financial statements 26 CITY OF MISSISSAUGA

29 Consolidated Statement of Financial Activities for the year ended December 31, 2007 Budget Actual Actual (All dollar amounts are in $000) Unaudited Note 1(m) $ $ $ Revenues Property taxation 260, , ,087 Taxation from other governments 22,509 22,086 21,922 User charges 144, , ,750 Government grants 10,640 11,038 19,824 Development contributions applied 49,629 62,913 61,226 Investment income 40,620 58,142 51,694 Penalties and interest on taxes 5,690 7,563 5,841 Other 15,145 14,355 9,551 Equity in income of Enersource Corporation (Note 5) - 12,573 15,504 Total Revenues $548,841 $591,608 $570,399 Expenditures General government services 128, ,332 91,485 Protection services 94,496 94,992 87,654 Transportation services 223, , ,329 Environmental services 11,600 9,301 9,318 Health services Social and family services Recreation and cultural services 135, , ,440 Planning and development services 13,944 13,364 11,552 Total Expenditures $607,614 $601,386 $541,227 Increase/(Decrease) in Net Financial Resources ($58,773) ($9,778) $29,172 Increase in amounts to be recovered 17, Increase in non-financial assets 1, Increase in Fund Balances $9,185 $30,323 The accompanying notes are an integral part of these consolidated financial statements FINANCIAL REPORT

30 Consolidated Statement of Changes in Financial Position for the year ended December 31, (All dollar amounts are in $000) $ $ Operations Increase/(decrease) in Net Financial Resources (9,778) 29,172 Equity in income of Enersource Corporation which does not involve cash (12,573) (15,504) ($22,351) $13,668 Changes in Non-Cash Working Capital: Increase in taxes receivable 8,033 (8,636) Increase in accounts receivable 16,380 (22,256) Decrease in loans receivable (1) 314 Decrease in accounts payable and accrued liabilities (12,052) 34,436 Decrease in deferred revenue general (519) (38) Increase in deferred revenue obligatory reserve funds 44,086 88,623 Increase in employee benefits and other liabilities 17, Total Changes in Non-Cash Working Capital $73,854 $92,823 Net change in cash from operations $51,503 $106,491 Investing Increase in investments (84,647) (47,635) Dividends received from Enersource Corporation 9,303 8,010 Net change in cash from investing ($75,344) ($39,625) Net change in cash and short-term investments ($23,841) $66,866 Opening cash and short-term investments 488, ,185 Closing cash and short-term investments $464,210 $488,051 The accompanying notes are an integral part of these consolidated financial statements. 28 CITY OF MISSISSAUGA

31 Notes to the Consolidated Financial Statements for the year ended December 31, 2007 (All dollar amounts are in $000) The City of Mississauga is a municipality in the Province of Ontario, Canada. It conducts its operations guided by the provisions of provincial statutes such as the Municipal Act 2001, Planning Act, Building Code Act, Provincial Offences Act and other related legislation. 1. Significant Accounting Policies The consolidated financial statements of The Corporation of the City of Mississauga (the City ) are prepared by management in accordance with generally accepted accounting principles for local governments as recommended by the Public Sector Accounting Board (PSAB) of the Canadian Institute of Chartered Accountants (CICA). Significant aspects of the accounting policies adopted by the City are as follows: a) Reporting Entity The consolidated financial statements reflect the assets, liabilities, revenues, expenditures and fund balances of the reporting entity. The reporting entity is comprised of all organizations, committees and local boards accountable for the administration of their financial affairs and resources to the City and which are owned or controlled by the City. These financial statements include: City of Mississauga Public Library Board Clarkson Business Improvement Area Port Credit Business Improvement Area Streetsville Business Improvement Area Inter-departmental and inter-organizational transactions and balances between these organizations are eliminated. Enersource Corporation is accounted for on a modified equity basis, consistent with the generally accepted accounting treatment for government business enterprises. Under the modified equity basis, the business enterprise s accounting principles are not adjusted to conform with those of the City, and inter-organizational transactions and balances are not eliminated. b) Fund Accounting Funds within the consolidated financial statements consist of current, capital and reserve funds. Transfers between funds are recorded as adjustments to the appropriate municipal fund balance. Trust funds and their related operations administered by the City are not included in these financial statements but are reported separately on the Trust Funds Financial Statements. c) Basis of Accounting Sources of financing and expenditures are reported on the accrual basis of accounting. The accrual basis of accounting recognizes revenues as they become measurable; expenditures are the cost of goods and services acquired in the period whether or not payment has been made or invoices received. d) Capital Assets Expenditures on capital assets are reported as expenditures on the statement of financial activities in the period incurred. e) Reserves and Reserve Funds Certain amounts, as approved by City Council, are set aside in reserves and reserve funds for future operating and capital purposes. Transfers to and/or from reserves and reserve funds are an adjustment to the respective fund when approved. f) Government Transfers Government transfers are recognized in the financial statements in the period in which the 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. FINANCIAL REPORT

32 g) Deferred Revenue - General The City defers recognition of user charges and fees which have been collected but for which the related services have yet to be performed. These amounts will be recognized as revenues in the fiscal year the services are performed. h) Deferred Revenue Obligatory Reserve Funds The City receives funding from various agreements under the authority of provincial legislation, federal legislation and City by-laws. These funds include: development charge contributions, payments in lieu of parkland, public transit funds, and gasoline tax. By their very nature, these funds are restricted in their use, and until applied to qualifying capital projects are recorded as deferred revenue. i) Taxation and related revenues Property tax billings are prepared by the City based on assessment rolls issued by the Municipal Property Assessment Corporation (MPAC) based upon Current Value Assessment (CVA). Tax rates are established annually by City Council, incorporating amounts to be raised for local services and the requisition made by the Region of Peel in respect of regional services. The City is required to collect education taxes on behalf of the Province of Ontario. A mandatory property tax mitigation process exists in Ontario whereby Commercial, Industrial and Multi-Residential property tax increases are capped at the greater of 10 per cent of the previous year s actual taxes and 5 per cent of the previous year s actual CVA taxes. The cap is funded through a clawback of reassessment related tax decreases in these property classes. A normal part of the assessment process is the issue of supplementary assessment rolls which provide updated information with respect to changes in property assessment. Once a supplementary assessment roll is received, the City determines the taxes applicable and renders supplementary tax billings. Taxation revenues are recorded at the time tax billings are issued. Assessments and the related property taxes are subject to appeal. Tax adjustments as a result of appeals are recorded when the result of the appeal process is known. The City is entitled to collect interest and penalties on overdue taxes. These revenues are recorded in the period the interest and penalties are levied. j) Investments Investments are reported at the lesser of cost or market value. Any premium or discount at purchase of an investment is amortized over the life of the investment. k) Investment Income Investment income earned on surplus current funds, capital funds, reserves and reserve funds (other than obligatory reserve funds) are reported as revenue in the period earned. Investment income earned on obligatory reserve funds is added to the fund balance and forms part of respective deferred revenue balances. l) Pensions and Employee Benefits The City accounts for its participation in the Ontario Municipal Employee Retirement System (OMERS), a multi-employer public sector pension fund, as a defined benefit plan. Vacation entitlements are accrued for as entitlements are earned. Sick leave benefits are accrued where they are vested and subject to pay out when an employee leaves the City s employment. Other post-employment benefits and compensated absences are accrued in accordance with the projected benefit method prorated on service and management s best estimate of salary escalation and retirement ages of employees. Actuarial valuations, where necessary for accounting purposes, are performed triennially. The discount rate used to determine the accrued benefit obligation was determined by reference to market interest rates at the measurement date on high-quality debt instruments with cash flows that match the timing and amount of expected benefit payments. Unamortized actuarial gains or losses are amortized on a straight line basis over the expected average remaining service life of the related employee groups. Unamortized actuarial gains/losses for event-triggered liabilities, such as those determined as claims related to Workplace Safety and Insurance Board (WSIB) are amortized over the average expected period during which the benefits will be paid. Costs related to prior period employee services arising out of plan amendments are recognized in the period in which the plan is amended. Where applicable, the City has set aside Reserve Funds intended to fund these obligations, either in full or in part. These Reserve Funds were created under municipal by-law and do not meet the definition of a plan asset under CICA PS 3250 Retirement Benefits. Therefore, for the purposes of these financial statements, the plans are considered unfunded. 30 CITY OF MISSISSAUGA

33 m) Budget Figures Mississauga City Council reviews and approves its capital and operating budgets each year. Both budgets are reflected in the Consolidated Statement of Financial Activities. The operating budget is based on projected operating expenditures to be incurred during the current year. The capital budget is established in a different format from the operating budget. The capital budget is based on an annualized capital cash flow. The Reserves and Reserve Fund budget is not formally prepared and approved by Council. To comply with financial reporting requirements for consolidation purposes, a budget is based on an annualized reserve cash flow. n) Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenditures during the period. Actual results could differ from these estimates. 2. Operations of the Region of Peel and School Boards During 2007, the City has made property tax transfers to the Region of Peel and school boards. The amounts collected and remitted are summarized below: School Boards Region $ $ Property taxes 481, ,037 Taxation from other governments 126 7,904 Amounts transferred $481,452 $438, Taxes Receivable Taxes receivable of $51,639 (2006 $59,672) reported on the Consolidated Statement of Financial Position includes $4,105 (2006 $26,463) of supplementary taxes recorded in 2007 but not collectable until Investments The investments have a market value of $622,684 (2006 $538,721) at the end of the year. FINANCIAL REPORT

34 5. Investment in Enersource Corporation The City has a 90 per cent interest in Enersource Corporation. The following table provides condensed financial information in respect of Enersource Corporation for its 2007 fiscal year together with comparative figures for year Financial Position: $ $ Current assets 183, ,624 Capital assets 413, ,465 Assets held for sale - - Deferred charges and other assets 30,693 35,700 Total assets $628,092 $613,789 Current liabilities 100,944 91,546 Long-term liabilities 313, ,518 Total liabilities $414,452 $404,064 Non-controlling interest Shareholders Equity $213,165 $209,531 City share of net assets (90 per cent ownership) $191,848 $188,578 Results of operations: Revenues 700, ,482 Expenses 676, ,234 Income before the undernoted $23,194 $23,248 Amounts in lieu of income taxes 10,188 9,938 Income from discontinued operations 964 3,916 Net income $13,970 $17,226 City share of net income (90 per cent ownership) $12,573 $15,504 During the year, the City of Mississauga received a dividend of $9,303 (2006 $8,010) issued by Enersource Corporation. The City has an option it may exercise between July 1, 2008 and December 31, 2008 to sell its interest to the minority shareholder. The City s investment in Enersource Corporation is reflected in the following table for its 2007 fiscal year together with comparative figures for Investment in Enersource Corporation: $ $ Opening balance, beginning of year 188, ,084 City s share of net income 12,573 15,504 City s share of dividend issued (9,303) (8,010) Closing balance, end of year $191,848 $188, CITY OF MISSISSAUGA

35 6. Deferred Revenue Obligatory Reserve Funds A requirement of the public sector accounting principles of the CICA is that obligatory reserve funds be reported as deferred revenue. This requirement is in place as provincial legislation restricts how these funds may be used. The balances in the obligatory reserve funds of the City are summarized below: $ $ Development charges 162, ,516 Parkland 48,946 38,800 Sub-total $211,442 $196,316 Provincial public transit funds 71,506 68,187 Federal public transit funds 20,967 6,012 Sub-total $92,473 $74,199 Provincial gasoline tax 18,608 11,346 Federal gasoline tax 27,508 24,084 Sub-total $46,116 $35,430 Total Obligatory Reserve Funds $350,031 $305, Employee Benefits and Other Liabilities The City provides certain employee benefits and other liabilities which will require funding in future periods. Please refer to the summary below: $ $ Future payments required to WSIB 12,971 8,973 Accumulated Sick Leave Benefit Plan entitlements 9,450 9,713 Early retirement benefits 27,208 25,316 Post employment benefits 4,864 - Vacation pay 16,120 14,785 Developer contribution credits 41,187 40,860 Other liabilities 27,857 22,083 Total Employee Benefits and Other Liabilities $139,657 $121,730 Less: Recoverable from Reserves and Reserve Funds on hand 94,797 87,949 Amount to be funded from future revenues $44,860 $33,781 (i) WSIB: The City has elected to be a Schedule 2 employer under the provisions of the Workplace Safety and Insurance Board Act, and as such remits payments to the WSIB only as required to fund disability payments. A full actuarial study of this obligation was completed in January 2008, in accordance with the financial reporting guidelines established by the Public Sector Accounting Board of the CICA (section PS 3255). (ii) Accumulated sick leave benefits accrue to certain employees of the City and are paid out either on approved retirement, or upon termination or death. The accrued benefit obligation and the net periodic benefit cost were determined by an actuarial valuation completed in January 2008, in accordance with the financial reporting guidelines established by the Public Sector Accounting Board of the CICA (section PS 3250). FINANCIAL REPORT

36 (iii) Early retirement benefits are representative of the City s share of the cost to provide certain employees with extended benefits upon early retirement. The accrued benefit obligation and the net periodic benefit cost were determined by an actuarial valuation completed in January 2008, in accordance with the financial reporting guidelines established by the Public Sector Accounting Board of the CICA (section PS 3250). (iv) Post employment benefits are paid on behalf on any employee on long-term disability. The accrued benefit obligation and the net periodic cost were determined by an actuarial valuation completed in January 2008, in accordance with the financial reporting guidelines established by the Public Sector Accounting Board of the CICA (section PS3250). Information about liabilities for defined benefit plans is as follows: Accrued benefit obligation, beginning of year WSIB Sick Leave Early Retirement Post Employment Total Total $ $ $ $ $ $ $8,973 $9,713 $25,316 - $44,002 $41,798 Increase due to plan amendment 2, ,714 7,464 - Service cost 1, , ,685 2,891 Interest cost , ,037 2,514 Amortization of actuarial (gain)/loss (114) Benefit payments (1,398) (1,604) (1,048) (716) (4,766) (3,272) Accrued benefit obligation, end of year $12,971 $9,450 $27,208 $4,864 $54,493 $44,002 Unamortized actuarial (gain)/loss 449 3,345 3,301-7, Actuarial valuation, end of year $13,420 $12,795 $30,509 $4,864 $61,588 $44,228 Expected average remaining service life 8 yrs 14 yrs 11 yrs n/a n/a n/a The actuarial valuations of the plans were based upon a number of assumptions about future events, which reflect management s best estimates. The following represents the more significant assumptions made: WSIB Sick Leave Post Employment Early Retirement Expected inflation rate 2.50% 2.50% 2.50% 2.50% Expected level of salary increases n/a 3.50% 3.50% 3.50% Interest discount rate 6.00% 6.00% 4.65% 5.00% (v) Developer charge credits are liabilities and obligations that arise through the Development Charges Act. The year 2007 developer charge credit liability is $41,187 (2006 $40,860). 8. Municipal Fund Balances at the End of the Year The City s fund balances are comprised of the following: $ $ For general reduction of taxation: City 2,557 2,168 Library Board (15) 301 Sub-total $2,542 $2,469 For specific reduction of taxation: Business Improvement Areas Total $2,623 $2,545 Other Fund Balances: Capital Fund 137, ,785 Reserves 54,488 53,898 Reserve Funds 504, ,329 Enersource Corporation net equity 191, ,578 Total $890,320 $881, CITY OF MISSISSAUGA

37 9. Contingencies As at December 31, 2007, the City has been named as defendant or co-defendant in a number of outstanding legal actions. No provision has been made for any claims that are expected to be covered by insurance or where the consequences are undeterminable. Where the claims are not expected to be covered by insurance and where management has assessed the likelihood of exposure as being more likely than not and is able to reasonably assess the exposure, an amount is provided for in these financial statements. 10. Expenditures by Object The following is a summary of the expenditures reported on the Consolidated Statement of Financial Activities by object: Budget Actual Actual Unaudited $ $ $ Salaries, wages and fringe benefits 349, , ,052 Materials and supplies 76,913 65,558 72,263 Contracted services 121, , ,375 Rents and financial expenses 56,917 55,761 54,427 Transfer payments 2,562 1,757 2,110 Total Expenditures $607,614 $601,386 $541, Pension Agreements The City makes contributions to the Ontario Municipal Employees Retirement System (OMERS), which is a multi-employer plan, on behalf of all permanent, full-time members of its staff. The plan is a defined benefit plan which specifies the amount of the retirement benefit to be received by the employees based on the length of service and rates of pay. In 2007, City contributions totalled $18,011 (2006 $17,019) and employee contributions totalled $18,012 (2006 $17,021). 12. Trust Funds Trust funds administered by the City amounting to $555 (2006 $414) are presented in a separate financial statement of trust fund balances and operations. As such balances are held in trust by the City for the benefit of others, they are not presented as part of the City s financial position or financial activities. 13. Provincial Offences Administration The Ministry of the Attorney General requires all municipal partners administering Provincial Offences Administration to disclose in the year-end audited financial statements a note on the gross and net provincial offence revenues earned. The following table provides condensed financial information required by the terms in the Memorandum of Understanding for its 2007 fiscal year with comparative figures for the year 2006: Revenues $ $ Gross revenues 6,807 6,948 Less refunds Net revenues $6,724 $6,874 Expenditures Provincial charges City operating expenses 3,044 3,205 Total Expenditures $3,567 $3,689 Net Revenue 3,157 3,185 Repayment to Capital Revolving Fund Net Contribution $2,679 $2,586 FINANCIAL REPORT

38 14. Tangible Capital Assets Tangible capital assets are non-financial (i.e. real) assets that are generally not available to the City for use in discharging its existing liabilities and are held for use in the provision of services. These assets are significant economic resources that are not intended for sale in the ordinary course of business and have an estimated useful life that extends beyond the current year. Examples include roads, sidewalks, sewers, buildings, libraries, parks, land, etc. Transitional Provisions Effective January 1, 2007, the City of Mississauga adopted Public Sector Guideline 7 (PSG-7) of the Public Sector Accounting Handbook of the Canadian Institute of Chartered Accountants with respect to the disclosure of tangible capital assets of local governments. PSG-7 provides transitional guidance on presenting information related to tangible capital assets by way of a note to the financial statements until Section 3150 Tangible Capital Assets comes into effect on January 1, These provisions require local governments to report and capitalize tangible capital assets at historical cost and amortize these assets over their estimated useful life. During 2007, the City of Mississauga has worked towards compliance with the new legislation. As at December 31, 2007, the municipality has obtained a complete listing of all land, building, vehicle and furniture inventories with valuation of these assets in progress. Work has also begun on establishing policies relating to Tangible Capital Asset reporting, including asset classifications, useful life and depreciation methods. The asset categories, estimated useful lives and future significant accounting policies are as follows: Asset Classification Useful Life (Years) Land Infinite Land Improvements 15 Buildings Vehicles Equipment 3-40 Roads, Bridges and Sidewalks Storm Drainage Amortization Tangible capital assets are recorded at historic cost which includes all amounts that are directly attributable to acquisition, construction, development or betterment of the asset. Where historic cost is not available, the City has developed estimation techniques to determine cost. The cost, less residual value, of the tangible capital assets is amortized on a straight-line basis over the above noted useful lives. The only exception, per the above, is for land, which is considered to have an infinite life. Assets under construction are not amortized until the asset is available for productive use. Gains and/ or losses on the disposal of an asset will be recorded on the Statement of Operations as Gain/Loss on Disposal of Assets. Contributions of Tangible Capital Assets Tangible capital assets received as contributions are recorded at their fair market value at the date of receipt and are also recorded as revenue. Leased Assets Leases are classified as either operating or capital leases. Lease agreements which substantially transfer all the risks and rewards of ownership to the City are accounted for as a capital lease. All other leases are considered operating leases and the related payments are charged to operating expenses as incurred. Works of Art and Historical Treasures The City of Mississauga owns both works of art and historical treasures at various Mississauga-owned facilities such as Benares/Bradley Museums and the Mississauga Art Gallery. These assets are deemed worthy of preservation because of the social rather than financial benefits they provide to the community. The historic cost of the art and treasures is neither determinable nor relevant in its significance; hence, a valuation is neither assigned to these assets nor disclosed in the consolidated financial statements 15. Comparative Figures Certain 2006 comparative figures have been reclassified to conform with the financial statement presentation adopted in the current year. 36 CITY OF MISSISSAUGA

39 Consolidated Schedule of Current Fund Operations for the year ended December 31, 2007 (All dollar amounts are in $000) Budget Actual Actual Unaudited $ $ $ Revenues Property taxation 260, , ,087 Taxation from other governments 22,509 22,086 21,922 User charges 144, , ,750 Government grants 2,083 2,481 2,351 Investment income 11,203 14,806 14,066 Penalties and interest on taxes 5,690 7,563 5,841 Other 7,465 7,432 7,437 Total Revenues $453,558 $457,306 $436,454 Expenditures General government services 123, ,516 81,195 Protection services 89,472 88,423 85,106 Transportation services 158, , ,239 Environmental services 1,419 1,823 2,347 Health services Social and family services Recreation and cultural services 91,269 98,489 92,787 Planning and development services 13,944 13,364 11,552 Total Expenditures $478,107 $466,479 $412,613 Net Revenue/(Expense) ($24,549) ($9,173) $23,841 Financing and Transfers Dividends received from Enersource 8,000 9,303 8,010 Transfers to reserves and reserve funds (4,914) (19,015) (33,036) Net Financing and Transfers ($3,086) ($9,712) ($25,026) Increase in amounts to be recovered 17,927 17, Increase in inventory/prepaids 1,036 1, Change in Current Fund Balance ($2,500) $78 ($34) Opening Current Fund Balance 2,500 2,545 2,579 Closing Current Fund Balance - $2,623 $2,545 FINANCIAL REPORT

40 Consolidated Schedule of Capital Fund Operations for the year ended December 31, 2007 (All dollar amounts are in $000) Budget Actual Actual Unaudited $ $ $ Revenues Development contributions applied 49,629 62,913 61,226 Other 7,680 6,985 4,970 Government grants 2,625 2,625 17,473 Total Revenues $59,934 $72,523 $83,669 Expenditures General government services 4,953 9,816 10,290 Protection services 5,024 6,569 2,548 Transportation services 65,281 67,948 73,090 Environmental services 10,181 7,478 6,971 Social and family services Recreation and cultural services 44,010 43,044 35,653 Total Expenditures $129,507 $134,907 $128,614 Net Expenditures ($69,573) ($62,384) ($44,945) Financing and Transfers Transfers from reserve funds 108,815 91,820 80,904 Change in Capital Fund Balance $39,242 $29,436 $35,959 Opening Capital Fund Balance 107, ,785 71,826 Closing Capital Fund Balance $147,027 $137,221 $107, CITY OF MISSISSAUGA

41 Consolidated Schedule of Reserves and Reserve Funds for the year ended December 31, 2007 (All dollar amounts are in $000) Budget Actual Actual Unaudited Net Revenues $ $ $ Government grants 5,932 5,932 - Investment income 29,417 43,336 37,628 Other revenue/(expense) - (62) (2,856) Total Net Revenues $35,349 $49,206 $34,772 Net Transfers from/(to) other funds Transfers from Current Fund 4,914 19,015 33,036 Transfers to Capital Fund (108,815) (91,820) (80,904) Total Net Transfers ($103,901) ($72,805) ($47,868) Change in Reserves and Reserve Fund Balances ($68,552) ($23,599) ($13,096) Opening Balance 582, , ,323 Ending Balance $513,675 $558,628 $582,227 Analyzed as follows: Reserves set aside for specific purposes: Development revenue 4,781 5,130 Assessment appeals 8,968 9,337 Vacation pay 5,820 5,820 Contingencies 3,869 4,139 Labour settlements 5,956 5,956 Planning process update 4,048 3,072 Transit revenue stabilization 1,078 1,079 Legal settlements 2,304 2,784 Winter maintenance 7,313 7,313 Elections 1,914 1,464 Commitments Early retirement benefits Arts Other Utilities 6,778 6,777 Total Reserves $54,488 $53,898 Reserve Funds set aside for specific purposes by Council: Lot levies 46,816 46,334 Contributions from developers for specific works 44,348 41,658 Vehicle and equipment replacement 54,123 46,516 Capital construction 129, ,356 Capital revolving fund 176, ,714 Self insurance 23,194 21,449 Group benefits 3,111 2,932 WSIB 16,166 14,240 Sick-leave benefits 10,007 10,130 Total Reserve Funds $504,140 $528,329 Total Reserves and Reserve Funds $558,628 $582,227 FINANCIAL REPORT

42 Auditors Report To the Members of Council, Inhabitants and Ratepayers of The Corporation of the City of Mississauga We have audited the statement of financial position of the Trust Funds of The Corporation of the City of Mississauga as at December 31, 2007 and the statement of financial activities and changes in fund balances for the year then ended. These financial statements are the responsibility of the Corporation s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. In our opinion, these financial statements present fairly, in all material respects, the financial position of the trust funds of the City as at December 31, 2007 and the continuity of trust funds for the year then ended in accordance with Canadian generally accepted accounting principles. KPMG LLP Chartered Accountants Toronto, Ontario March 7, CITY OF MISSISSAUGA

43 Trust Funds Statement of Financial Activities and Changes in Fund Balances as at December 31, 2007 (All dollar amounts are in $000) Perpetual Election Care Surplus Total Total $ $ $ $ Revenues Interest Perpetual Care receipts Surplus election proceeds Total Revenues $26 $132 $158 $24 Expenditures Repayments to candidates Cemetery maintenance Total Expenditures $17 - $17 $87 Increase/(decrease) in financial assets $9 $132 $141 ($63) Opening Fund Balance Closing Fund Balance $422 $133 $555 $414 Trust Funds Statement of Financial Position as at December 31, 2007 (All dollar amounts are in $000) Perpetual Election Care Surplus Total Total $ $ $ $ Financial Assets Cash Investments (Note 2) Fund Balance $422 $133 $555 $414 The accompanying notes are an integral part of these financial statements. FINANCIAL REPORT

44 Trust Funds Notes to the Financial Statements for the year ended December 31, 2007 (All dollar amounts are in $000) 1. Significant Accounting Policies Basis of Accounting Perpetual Care receipts are reported on the cash basis of accounting and interest income is reported on the accrual basis of accounting. Expenditures are reported on the cash basis of accounting with the exception of administrative expenses which are reported on the accrual basis of accounting, which recognizes expenditures as they are incurred and measurable as a result of the receipt of goods or services and the creation of a legal obligation to pay. 2. Investments The total investments by the Trust Fund of $325 (2006 $385) reported on the Statement of Financial Position at cost, have a market value of $325 (2006 $383) at the end of the year. 3. Perpetual Care Fund The Perpetual Care Fund administered by the City is funded by the sale of cemetery plots. These funds are invested and earnings derived therefrom are used to perform perpetual care maintenance to the municipality s cemeteries. The operations and investments of the Fund are undertaken by the City in accordance with the regulations of the Cemeteries Act. 4. Election Surplus Fund The Election Surplus Fund, as per S.79(8) of the 1996 Municipal Elections Act, states that if in the next regular election or in an earlier by-election, the candidate is nominated for an office on the same council, the Clerk shall pay the amount held in trust to the candidate, with interest. In 2007, $127 (2006 $0) was added to the fund. As per S.79(9), if subsection (8) does not apply, the amount becomes the property of the municipality. 42 CITY OF MISSISSAUGA

45 statistical SECTION Year 2007 STATISTICS Five Year Financial Review 10 Largest Corporate Property Taxpayers FINANCIAL FINANCIAL REPORT REPORT

46 statistical SECTION Five-Year Financial Review (All dollar amounts are in $000 except per capita figures.) Unaudited Fiscal Year Municipality Statistics Population 709, , , , ,000 Area in acres 70,500 70,500 70,500 70,500 70,500 Households 224, , , , ,000 Employees: full time 3,872 3,763 3,452 3,380 3,294 per 1000 people part time 2,783 3,168 3,180 2,971 2,767 Construction Activity $1,199,184 $1,052,760 $1,104,789 $1,385,657 $1,506,898 Tax Assessment Information Assessment Valuation Year Taxable Assessment upon which the year s rates of taxation were set: Residential, farm, multi-residential $61,568,791 $60,579,487 $53,557,080 $52,048,099 $44,264,794 Commercial, industrial and other 20,099,979 19,759,296 17,246,701 16,977,633 15,804,946 Total Taxable Assessment $81,668,770 $80,338,783 $70,803,781 $69,025,732 $60,069,740 Commercial, industrial, and business as a percentage of taxable assessment 24.6% 24.6% 24.4% 24.6% 26.3% Tax Rate Information: (per $ of assessed value) Residential and farm for City purposes % % % % % for Region purposes % % % % % for School purposes % % % % % Total Tax Rate - Residential and farm % % % % % Commercial for City purposes % % % % % for Region purposes % % % % % for School purposes % % % % % Total Tax Rate - Commercial % % % % % Industrial for City purposes % % % % % for Region purposes % % % % % for School purposes % % % % % Total Tax Rate - Industrial % % % % % 44 CITY OF MISSISSAUGA

47 statistical SECTION Five-Year Financial Review (All dollar amounts are in $000 except per capita figures.) Unaudited Fiscal Year Property Tax Information: Tax Levies: City portion $259,238 $249,087 $229,195 $211,760 $202,125 Region portion 431, , , , ,201 School Board portion 481, , , , ,660 Total Tax Levies $1,171,601 $1,158,648 $1,092,987 $1,040,640 $1,019,986 Taxes collected: City collection $255,320 $218,248 $189,955 $209,110 $172,034 Taxes transferred to the Region 431, , , , ,201 Taxes transferred to the School Boards 481, , , , ,660 Total Taxes collected $1,167,683 $1,127,809 $1,053,747 $1,037,990 $989,895 Tax arrears: Taxes receivable $51,639 $59,672 $51,036 $60,191 $91,059 Taxes receivable per capita $73 $84 $73 $87 $134 Percentage of current levy 4.4% 5.1% 4.7% 5.8% 8.9% Consolidated Revenues: Property taxation $259,239 $249,087 $229,195 $211,760 $202,125 Taxation from other governments 22,086 21,922 23,068 24,097 25,370 User charges 143, , , , ,641 Government grants 11,038 19,824 6,795 10,561 2,280 Development contributions applied 62,913 61,226 31,979 24,345 33,744 Investment income 58,142 51,694 43,875 42,229 43,212 Penalties and interest on taxes 7,563 5,841 3,701 8,169 8,392 Other 14,355 9,551 15,856 13,087 22,044 Equity in income of Enersource Corporation 12,573 15,504 12,078 10,486 6,864 Total Revenues $591,608 $570,399 $495,116 $468,736 $459,672 Revenue per capita $837 $810 $710 $680 $677 Consolidated expenditures by function: Current Fund General government services $105,516 $81,195 $89,078 $91,288 $91,543 Protection services 88,423 85,106 76,857 72,864 66,116 Transportation services 158, , , , ,269 Environmental services 1,823 2,347 1,998 2,233 1,927 Health services Social and family services Recreation and cultural services 98,489 92,787 79,196 73,504 68,073 Planning and development services 13,364 11,552 10, , ,213 Total Current Fund Expenditures $466,479 $412,613 $394,741 $377,950 $352,436 Capital Fund General government services 9,816 10,290 6,824 16,539 7,947 Protection services 6,569 2,548 14,198 1,232 2,912 Transportation services 67,948 73,090 82,045 36,576 59,417 Environmental services 7,478 6,971 2,934 1,725 6,256 Social and family services Recreation and cultural services 43,044 35,653 30,719 37,560 54,148 Total Capital Fund Expenditures $134,907 $128,614 $136,721 $93,645 $130,694 Total Consolidated Expenditures $601,386 $541,227 $531,462 $471,595 $483,130 FINANCIAL REPORT

48 statistical SECTION Five-Year Financial Review (All dollar amounts are in $000 except per capita figures.) Unaudited Fiscal Year Capital Fund Information: Capital Financing Development contributions applied $62,913 $61,226 $31,979 $24,345 $33,744 Government grants 2,625 17,473 4,460 6,300 0 Other 6,985 4,970 4,705 4,551 3,112 Total Capital Financing $72,523 $83,669 $41,144 $35,196 $36,856 Capital Fund Expenditures 134, , ,721 93, ,694 Net Capital Financing/(Expenditures) ($62,384) ($44,945) ($95,577) ($58,449) ($93,838) Transfers from Reserve Funds 91,820 80,904 72,649 85,528 87,027 Previous Year Unexpended Capital Financing 107,785 71,826 94,754 67,675 74,486 Current Year Unexpended Capital Financing $137,221 $107,785 $71,826 $94,754 $67,675 Expenditures By Object: Consolidated Current Fund Salary, wages and fringe benefits $342,023 $301,853 $281,543 $265,999 $248,049 Net long-term debt charges (interest) Net long-term debt charges (principal) Materials and supplies 42,438 37,276 36,491 33,163 32,498 Contracted services 36,670 28,691 32,318 30,415 28,492 Rents and financial expenses 43,591 42,683 41,232 45,281 40,472 Transfer payments 1,757 2,110 3,157 3,092 2,916 Total Current Fund Expenditures $466,479 $412,613 $394,741 $377,950 $352,436 Capital Fund Salary, wages and fringe benefits $2,457 $2,199 $2,381 $2,188 $1,967 Materials and supplies 23,120 34,987 33,356 8,512 28,924 Contracted services 97,160 79,684 85,174 60,488 82,337 Rents and financial expenses 12,170 11,744 15,810 22,457 17,466 Transfer payments Total Capital Fund Expenditures $134,907 $128,614 $136,721 $93,645 $130,694 Total Consolidated Expenditures $601,386 $541,227 $531,462 $471,595 $483,130 Municipal Debt Information: Long-Term Liabilities General municipal activities Per capita Charges for Long-Term Liabilities General municipal activities Per capita Debt Repayment Limit $101,615 $97,089 $88,911 $81,808 $83,713 (as determined by the Province of Ontario) Fund Balances: Operating Fund $2,623 $2,545 $2,579 $2,621 $3,185 Reserves 54,488 53,898 47,933 46,470 48,987 Reserve Funds 504, , , , ,495 Capital Fund 137, ,785 71,826 94,754 67,675 Trust Funds Investment in Enersource Corporation 191, , , , , CITY OF MISSISSAUGA

49 statistical SECTION 10 Largest Corporate Property Taxpayers Owner Assessment Value $ 1 OMERS Realty Management $505,867,000 2 The Erin Mills Town Centre $178,113, Canada Inc. $160,650,000 4 Mississauga Complex $118,239,000 5 Nuance Group (Canada) Inc. $94,085,000 6 Metrus Central Properties $79,703,000 7 Ivanhoe Cambridge I Inc. $78,875,000 8 Orlando Corporation $72,401,000 9 GlaxoSmithKline Inc. $70,382, First Capital (Meadowvale) $68,507,000 Top Ten - Assessment Total $1,426,822,000 % of Total Industrial and Commercial Assessment 7.1% % of Total Taxable Assessment 1.7% Total Residential Assessment $61,568,791,015 Total Industrial and Commercial Assessment $20,099,979,079 Total Taxable Assessment $81,668,770,094 FINANCIAL REPORT

50 statistical SECTION Contact Information Reaching out to all our community City of Mississauga 300 City Centre Drive Mississauga, ON L5B 3C1 Website: Public Inquiries telephone: Fax (Finance): TTY: City of Mississauga Members of Council Mayor Hazel McCallion Carmen Corbasson Ward carmen.corbasson@mississauga.ca Patricia Mullin Ward pat.mullin@mississauga.ca Maja L.A. Prentice Ward maja.prentice@mississauga.ca Frank Dale Ward frank.dale@mississauga.ca Eve Adams Ward eve.adams@mississauga.ca Carolyn Parrish Ward carolyn.parrish@mississauga.ca Nando Iannicca Ward nando.iannicca@mississauga.ca Katie Mahoney Ward katie.mahoney@mississauga.ca Patricia Saito Ward pat.saito@mississauga.ca Sue McFadden Ward sue.mcfadden@mississauga.ca George Carlson Ward george.carlson@mississauga.ca 48 CITY OF MISSISSAUGA

51 James bay Gulf of St. Lawrence NEwfoUNdLANd MINNESoTA duluth St. Paul Thunder bay Madison IowA davenport des Moines Jefferson City MISSoUrI Springfield ArKANSAS Little rock Shreveport LoUISIANA wisconsin GTA Lake Superior Milwaukee Chicago ILLINoIS Springfield Memphis MISSISSIPPI Jackson Lake Michigan Nashville INdIANA Indianapolis Sault Ste. Marie MIChIGAN Lansing Louisville birmingham Mobile detroit KENTUCKy TENNESSEE ALAbAMA Montgomery baton rouge MUNICIPALITIES New orleans km GULf of MEXICo CANAdA ontario Lake huron windsor ohio Columbus Cincinnati frankfurt Knoxville Atlanta Columbus Sudbury Mississauga Halton Burlington hamilton Cleveland Toronto Charleston Charlotte ottawa rochester buffalo Pittsburgh Columbia SoUTh CAroLINA Augusta GEorGIA Tallahassee Halton Hills Milton Halton Lake Erie west VIrGINIA Oakville Lake ontario harrisburg Annapolis washington richmond raleigh Jacksonville orlando Tampa Caledon Miami Brampton QUEbEC PENNSyLVANIA VIrGINIA florida Mississauga Peel NorTh CAroLINA Peel Québec Montréal Augusta VErMoNT Montpelier NEw Portland hampshire NEw york Concord boston Albany Providence rhode ISLANd hartford New york CoNNECTICUT Trenton Philadelphia NEw JErSEy dover delaware MAryLANd Vaughan King Toronto York Toronto Lake Ontario MAINE NEw brunswick fredericton MASSAChUSETTS East Gwillimbury Newmarket Aurora Richmond Hill Markham Whitchurch- Stouffville Pickering Ajax PrINCE EdwArd ISLANd Charlottetown halifax Saint John NoVA SCoTIA ATLANTIC ocean City of Mississauga within central/ eastern north america Georgina Uxbridge Whitby Durham Scugog Oshawa Durham Brock Clarington

52 THE CITY OF MISSISSAUGA FINANCIAL REPORT2007