2015 Financial Report Corporation of the City of Peterborough

Transcription

1 2015 Financial Report Corporation of the City of Peterborough Trent University Baseball Diamond, Peterborough

2 City of Peterborough 2015 Financial Report TABLE OF CONTENTS Treasurer's Report... 1 Five Year Review Consolidated Financial Report Financial Information Return Local Boards Financial Statements Peterborough Public Library Board Peterborough Downtown Business Improvement Area Village Business Improvement Area Peterborough Housing Corporation Fairhaven Peterborough County-City Health Unit Greater Peterborough Area Economic Development Corporation City of Peterborough Holdings Inc Peterborough Utilities Commission The Art Gallery of Peterborough

3 THE CORPORATION OF THE CITY OF PETERBOROUGH Treasurer s Report December 31, Financial Report - Page 1

4 500 George Street North, Peterborough, ON K9H 3R9 June 20, 2016 To: The Mayor and Members of Council Inhabitants and Ratepayers of the City of Peterborough Treasurer s Report on the 2015 Financial Statements for the Corporation of the City of Peterborough Introduction I am pleased to present the Financial Statements for the Corporation of the City of Peterborough (the City) for the period ending December 31, This report provides taxpayers, residents and other stakeholders the opportunity to evaluate the annual financial health of the City and confirm its ability to meet its obligations. The Budget Process The development of the budget is an accountability process, two key documents are prepared an operating budget and a capital budget. The budget documents show what the City plans to do with its financial resources over the coming fiscal year. Council approved the 2015 Capital and Operating Budget on February 2, The Operating Budget is prepared on a modified cash basis and provides for the day-today expenses of the City for items such as salaries, wages, benefits, utilities, building maintenance and supplies. The Capital Budget is a multi-year plan for the acquisition and rehabilitation of capital assets. Once complete, the capital plan specifies the future financial resources required to finance the project, references any commitments made, the effect it will have on any future operating budgets, provides project details, justification and any other information necessary to make informed decisions. Both budgets are closely linked and impact each other. As part of the Budget process, the Operating Budget is re-stated into a format that conforms to Public Sector Accounting Standards. Those standards require that all Interfund transfers be eliminated, debt principal be removed and the effects of unfunded liabilities such as employee future benefits and landfill closure and post closure costs be included Financial Report - Page 2

5 Treasurer's Report on the 2015 Financial Report for the City of Peterborough Page 2 Financial Statements The accompanying consolidated financial statements are the responsibility of the management of the City. As with all Ontario municipalities, they have been prepared in accordance with the accounting principles and guidelines of the Public Sector Accounting Board (PSAB) of the Chartered Professional Accountants of Canada. The statements include all organizations that are accountable for the administration of their financial affairs and resources to Council, and are owned or controlled by the City. These organizations make up what is known as the reporting entity. Some organizations are fully consolidated whereas others are proportionately consolidated meaning only a percentage of the organization is accounted for. The partially consolidated boards are a result of partnership agreements with the County of Peterborough whereby the City s pro rata share of each of the assets (including tangible capital assets); liabilities, revenues and expenditures are combined on a line-by-line basis in the financial statements. As a government business enterprise, the City of Peterborough Holdings Inc. is accounted for on a Modified Equity basis, which means that the accounting principles of the organization are not adjusted to conform to those of the City, and inter-organizational transactions and balances are not eliminated. Chart 1 provides a summary of the organizations included in the reporting entity. Chart 1 - The Reporting Entity Full Consolidation City of Peterborough Peterborough Public Library Peterborough Downtown Business Improvement Area The Village Business Improvement Area Peterborough Housing Corporation Peterborough Utilities Commission Proportionate Consolidation Fairhaven (66%) Peterborough County-City Health Unit (57%) Peterborough Economic Development (60%) Peterborough County-City Waste Management Facility (50%) Modified Equity Basis City of Peterborough Holdings Inc. External Audit The financial statements have been audited by the City s external auditors, Collins Barrow Kawarthas LLP in accordance with Generally Accepted Auditing Standards Financial Report - Page 3

6 Treasurer's Report on the 2015 Financial Report for the City of Peterborough Page 3 The auditors have expressed an unqualified opinion that these statements present fairly the financial position of the City. In addition, separate audit examinations have been completed for all the local boards and agencies and reports have been rendered to their oversight bodies. The auditors are also responsible for advising management and the Audit Committee of City Council of any control or operational issues that may have been identified during the audit. As such, they must be independent and communicate independence in accordance with Canadian professional requirements. Municipal Performance Measurement Program As of 2015, The Municipal Performance Measurement Program (MPMP) has been discontinued by the Province. There is no longer a requirement for the City to report internally or publically the results of these measurements. The Province will still be collecting certain data-points that were once submitted as part of the MPMP process, through the annual Financial Information Return, but the requirement to produce a report is no longer applicable. Contaminated Sites The City of Peterborough implemented Public Sector Accounting Handbook Section Liability for Contaminated Sites during the 2015 fiscal year. Section 3260 requires governments to record a liability in their financial statements if they own or have taken responsibility for a contaminated site that meets the requirements set out in the standard. This standard provides guidance on how to account for and report a liability associated with the remediation of contaminated sites, defines which activities are included in the liability for remediation, establishes when to recognize and how to measure the liability and provides guidance on financial statement presentation and disclosure. As a result of the adoption of this section, the City is not required to value any specific environmental liabilities. The City is required to include a note to the financial statements in respect of this section. Fund Accounting The City uses different funds as the basis of recording and reporting all financial transactions. Each of the funds represents a grouping of accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. Three types of funds are used: operating funds, capital funds and reserve funds. The transactions and balances of these funds have been consolidated to report the overall financial position and financial activities of the City. The Statement of Financial Position is calculated at a very specific date in time, December 31, whereas the Statement of Operations and Accumulated Surplus summarizes the transactions that have occurred throughout the fiscal year Financial Report - Page 4

7 Treasurer's Report on the 2015 Financial Report for the City of Peterborough Page 4 Results of Operations The consolidated Statement of Operations and Accumulated Surplus reports the City s changes in economic resources and accumulated surplus on a comparative basis. During 2015, the City recorded consolidated revenues of $297.2 million ( $283.0 million). A summary of the key revenue variances is shown on Chart 2: Chart 2 - Consolidated Revenues Variance Increase (decrease) $ % $ % $ Property taxation 114,699, ,084, ,614,872 Taxation from other governments 3,069, ,899, ,257 User fees and service charges 65,078, ,537, (459,303) Government grants & other municipalities 93,415, ,684, ,731,146 Development levies and contribution from developers 4,442, ,145, ,813 Licenses, permits royalties and rents 2,910, ,659, ,079 Fines and other charges 2,642, ,217, ,046 Penalties and interest on taxes 922, , (6,063) Investment income 2,504, ,276, (1,772,592) Donations and contributed capital assets 1,152, ,902, (1,750,014) Other 1,386, ,402, (16,193) Income from government business enterprise 4,956, ,221, ,735,210 Total Consolidated Revenues 297,181, ,961, ,220,258 Revenues increased $14.2 million due to several factors: The property taxation levy was $5.6 million higher than the previous year. Government grants increased by $8.7 million. Various programs within Social and Family Services accounted for $3.3 million, the Investment in Affordable Housing Program accounted for $1.2 million. There was $1.2 million received for the Riverside Drive capital project along with $0.5 million from the Eastern Ontario Development fund for the Airport Industrial Park. The City utilized almost $1.0 million more in Federal Gas Tax funds than in the previous year on various capital projects. The various Local Boards and Agencies received $1.3 million more in the form of grants in Financial Report - Page 5

8 Treasurer's Report on the 2015 Financial Report for the City of Peterborough Page 5 Investment income decreased $1.8 million mainly due to the City of Peterborough Holdings restructuring that took place in Interest bearing notes payable of $5,750,000 were converted to equity, resulting in a decrease of interest income for the City of $1.7 million and an increase in dividends. Donations and contributed capital assets decreased $1.8 million as a result of the City assuming a subdivision in 2014 with no similar comparable transaction in The income from government business enterprise figure increased $2.7 million in 2015 based on the results of operations of the City of Peterborough Holdings Inc. and its subsidiary group of companies. The City received $1.8 million more in dividends from City of Peterborough Holdings as a result of the conversion of the notes payable to equity mentioned above. Consolidated expenses totaled $275.6 million ( $262.1 million). During 2015, the City reviewed the methodology in how we allocate program support. As a result, the 2014 comparative figures have changed from the amounts previously reported, but are still the same in aggregate. A summary of the key expense variances is shown on Chart 3: Chart 3 - Consolidated Expenses Variance Increase (decrease) $ % $ % $ General government 13,096, ,016, ,079,654 Protection services 48,666, ,842, ,824,042 Transportation 36,093, ,123, (29,419) Environmental 38,893, ,981, ,912,092 Health 9,697, ,256, (1,559,377) Social and family 75,497, ,754, ,743,495 Social housing 21,386, ,578, ,478 Recreation and cultural 27,592, ,502, ,089,851 Planning and development 4,713, ,044, (330,465) Total Consolidated Expenses 275,638, ,100, ,538, Financial Report - Page 6

9 Treasurer's Report on the 2015 Financial Report for the City of Peterborough Page 6 Expenses increased $13.5 million due to several factors: General government personnel costs increased $0.6 million due to increased WSIB and benefit costs along with higher OMERS contributions as a result of the City s payroll being $4.9 million higher in External transfers were $0.3 million higher due to increased annexation payments, Brownfields and Central Area community improvement plan agreements. Protection services expenditures, specifically related to Fire and Police are mostly salaries, wages and employee benefits and account for $1.4 million of the increase over Environmental Services costs were $5.9 million higher in A post closure liability was recognized for the first time in 2015 for two closed landfill sites Harper Road and the Nelson landfill amounting to $2.0 million in total. Contractual services were higher by $2.5 million as a result of the emergency digester clean out at the Treatment Plant, sewer relining and rehabilitation and non-capital expenditures incurred for the Treatment Plant capital project. Amortization increased $1.0 million over 2014 also as a result of the large capital additions undertaken at the Plant. Health services spending remain relatively comparable with the previous year. The decrease relates to the Peterborough County-City Health Unit s sale of their facility on Hospital Drive resulting in a gain on disposal of $2.0 million. Social and Family Services costs increased $3.7 million. A contributing factor was higher personnel costs due to the Pay Equity settlement with CUPE Local 126 along with higher wages and salaries at Fairhaven. Transfers related to early learning and childhood development increased over the previous year as it is a new Social Services program. This program is fully funded by 100% Provincial grants. Recreation and cultural services saw higher wages as a result of the Pay Equity settlement with both CUPE Locals 126 and The annual surplus amounts to $21.5 million ( $20.9 million). This surplus indicates that the revenues raised during the year covered the cost of services provided including the annual cost of using capital assets to provide those services Financial Report - Page 7

10 Treasurer's Report on the 2015 Financial Report for the City of Peterborough Page 7 Under current reporting standards, the City has an annual amortization charge of $29.8 million ( $28.1 million). This amortization charge represents the cost of depreciating tangible capital assets over their useful life. The amortization charge is less than the City s current level of capital spending of $65.0 million ( $62.9 million). The Statement of Operations reflects the annual amortization and the surplus that results, which is used to help finance the cost of capital acquisition. Financial Position Net financial assets of $81.9 million ( $95.7 million), the difference between the City s financial assets and its financial liabilities is a measure of the resources that the City has to finance future operations. The net financial asset position is an indicator that the revenues raised during the year were sufficient to cover both the operating and capital spending that took place during the year. The decrease of $13.8 million in the net financial asset position results primarily from revenues being in excess of operating expenses of $21.5 million and amortization of tangible capital assets of $29.8 million to finance the acquisition of tangible capital assets totaling $65.0 million. For a more detailed accounting, refer to the Statement of Net Financial Assets on Page 6 of the Consolidated Financial Report. The accumulated surplus of $764.1 million ( $742.5 million) represents the sum of the net financial assets of the City plus the City s capital assets at historic depreciated values and is shown on Chart 4. Traditionally, a municipal surplus was the operating surplus only, (shown in the first line in Chart 4) but with the current reporting model, the accumulated surplus represents the net resources (both financial and physical) that the City can use to provide future services. The accumulated surplus consists of individual fund surpluses (deficits), unfunded amounts, reserve and reserve funds and other components and is comprised of the following: 2015 Financial Report - Page 8

11 Treasurer's Report on the 2015 Financial Report for the City of Peterborough Page 8 Chart 4 - Analysis of Accumulated Surplus 2015 $ 2014 $ Surplus/(Deficit) City of Peterborough Operating surplus 145, ,081 Unexpended financing 6,487,012 4,702,893 4,882,974 4,882,974 Consolidated Entities Peterborough County-City Health Unit 2,223,504 49,528 The Village Business Improvement Area 36,699 31,689 Greater Peterborough Area Economic 76,792 43,195 Development Corp. Peterborough Downtown Business Improvement 166,389 87,658 Area Peterborough Utilities Commission 4,490,915 8,461,472 Peterborough Public Library Board - 47,190 6,994,299 8,720,732 Unfunded amounts Employee benefits (28,625,999) (28,301,899) Solid waste landfill closure and post-closure (6,684,196) (4,626,208) Accrued interest on long term debt (952,597) (896,900) (36,262,792) (33,825,007) Inventory for resale 8,480,593 8,480,593 Equity in government business enterprise (below) 92,650,000 93,028,391 Invested in Tangible Capital Assets Tangible capital assets net book value 679,949, ,161,769 Unexpended capital financing 4,617, ,175 Long term debt (107,533,626) (95,490,781) 577,032, ,155,163 Reserve Funds and Reserves Discretionary reserve funds 27,381,164 32,770,728 Reserves 81,159,470 78,311, ,540, ,082,090 ACCUMULATED SURPLUS 764,067, ,524, Financial Report - Page 9

12 Treasurer's Report on the 2015 Financial Report for the City of Peterborough Page 9 The equity in government business enterprise is comprised of the following: Investment in government business enterprise 98,400,000 98,778,391 Short term cash advances converted to shares (5,750,000) (5,750,000) Equity in government business enterprise 92,650,000 93,028,391 Conclusion The City of Peterborough continues to be well positioned financially for the future. The level of capital spending throughout 2015 remained high at $65.0 million and is a direct result of the Debt Management and Capital Financing Plan approved by Council on April 23, That Plan provides additional funding for capital projects, however, the demand still outweighs available funds as the City struggles to keep up with the need to maintain and replace aging capital infrastructure as well as requests for expansion. With respect to day-to-day operations, like most Ontario municipalities, the City of Peterborough continues to struggle to provide a reasonable level of service to its rate-payers while keeping tax rate increases to a minimum. Submitted by, Sandra Clancy Director of Corporate Services 2015 Financial Report - Page 10

13 THE CORPORATION OF THE CITY OF PETERBOROUGH Five Year Review December 31, Financial Report - Page 11

14 CITY OF PETERBOROUGH FIVE YEAR REVIEW (All dollar values in thousands except per capita figures) CURRENT PROGRAM ACTIVITY Consolidated Revenues Taxation 114, , ,270 99,371 96,319 Taxation from other governments 3,070 2,900 2,714 2,752 2,666 Fees and service charges 65,078 65,538 62,397 65,448 60,515 Government grants and other Municipalities 93,415 84,684 78,557 80,512 85,434 Development levies 4,442 4,145 8,199 6,790 8,121 Investment and other revenue 16,477 16,609 22,051 20,593 18, , , , , ,710 Expenses 275, , , , ,818 Growth in accumulated surplus 21,543 20,861 24,632 26,850 26,892 NET LONG TERM LIABILITIES For general municipal activities 106,919 94,306 92,239 91,669 77,196 For municipal enterprises 615 1,185 1,715 2,347 2, ,534 95,491 93,954 94,016 80,134 General municipal activities - net long term 1.3% 1.2% 1.2% 1.2% 1.1% liabilities as % of CVA CURRENT CHARGES FOR NET LONG TERM LIABILITIES General municipal activities and for municipal enterprise 12,835 12,855 12,986 11,767 12,658 CURRENT VALUE ASSESSMENT (CVA) - TAXABLE Residential and farm 6,820,112 6,613,688 6,404,837 6,194,867 5,857,704 Commercial and industrial 1,246,702 1,215,601 1,189,123 1,155,969 1,061,768 8,066,814 7,829,289 7,593,960 7,350,836 6,919,472 Percentage increase from previous year 3.03% 3.10% 3.31% 6.23% 6.78% Commercial / industrial CVA as percentage of total 15.5% 15.5% 15.7% 15.7% 15.3% 2015 Financial Report - Page 12

15 CITY OF PETERBOROUGH FIVE YEAR REVIEW (All dollar values in thousands except per capita figures) VALUE OF BUILDING PERMITS ISSUED Residential 63,305 70,322 81,996 70,043 69,805 Commercial 17,126 31,356 20,287 29,336 35,992 Industrial 4,616 56,232 4,179 4,865 9,690 Institutional 23,907 11,164 13,512 38,818 6, , , , , ,854 Percentage increase (decrease) from previous year -35.6% 40.9% -16.1% 17.4% 51.4% TAX LEVY AND ARREARS Tax levy Current year's tax levy - municipal and education combined 147, , , , ,701 Percentage increase over previous year 5.9% 3.7% 3.7% 3.3% 3.1% Tax arrears Total arrears (excluding Allowance for Doubtful Accounts) 6,020 7,479 6,834 6,158 5,725 Percentage increase (decrease) over previous year -19.5% 9.4% 11.0% 7.6% -1.6% Tax arrears as a percentage of current tax levy 4.1% 5.4% 5.1% 4.7% 4.6% POPULATION & SIZE Estimated Population (Updated for 2011 Census) 78,700 78,700 78,700 78,700 78,700 Area in acres 16,639 16,639 16,639 16,523 16,523 PER CAPITA INFORMATION CVA - Taxable 102,501 99,483 96,493 93,403 87,922 Expenses 3,502 3,330 3,209 3,159 3,111 Net long-term debt for general municipal activities and municipal enterprise 1,366 1,213 1,194 1,195 1,018 Tax arrears Financial Report - Page 13

16 CITY OF PETERBOROUGH FIVE YEAR REVIEW (All dollar values in thousands except per capita figures) RATES OF TAXATION Municipal tax rates Residential % % % % % Multi-residential % % % % % New Multi-residential % % % % % Commercial % % % % % Commercial Vacant % % % % % Industrial % % % % % Industrial Vacant % % % % % Pipeline % % % % % Farmlands % % % % % Education tax rates Residential % % % % % Multi-residential % % % % % New Multi-residential % % % % % Commercial % % % % % Commercial Vacant % % % % % Industrial % % % % % Industrial Vacant % % % % % Pipeline % % % % % Farmlands % % % % % Combined municipal and education tax rates Residential % % % % % Multi-residential % % % % % Commercial % % % % % Commercial Vacant % % % % % Industrial % % % % % Industrial Vacant % % % % % Pipeline % % % % % Farmlands % % % % % 2015 Financial Report - Page 14

17 THE CORPORATION OF THE CITY OF PETERBOROUGH Consolidated Financial Report December 31, Financial Report - Page 15

18 Corporation of the City of Peterborough Consolidated Financial Statements At December 31, Financial Report - Page 16

19 Table of Contents Management Report... 1 Independent Auditors Report for the Consolidated Financial Statements... 2 Statement of Financial Position... 4 Statement of Operations and Accumulated Surplus... 5 Statement of Change in Net Financial Assets... 6 Statement of Cash Flows... 7 Notes to the Consolidated Financial Statements... 8 Schedule of Tangible Capital Assets Schedules of Segment Disclosure Independent Auditors Report for the Trust Fund Statements Statement of Continuity and Statement of Financial Position Note to the Trust Funds Financial Statements Financial Report - Page 17

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21 2015 Financial Report - Page 19 2 of 42

22 2015 Financial Report - Page 20 3 of 42

23 CORPORATION OF THE CITY OF PETERBOROUGH CONSOLIDATED STATEMENT OF FINANCIAL POSITION At December 31, $ $ FINANCIAL ASSETS Cash and temporary investments 48,504,452 49,522,931 Taxes receivable (Note 5) 4,686,189 5,306,110 Accounts receivable (Note 6) 25,303,760 20,457,303 Inventory held for resale 8,590,409 8,595,200 Investments (Note 7) 94,488,006 91,206,343 Other receivables (Note 8) 1,426,256 1,597,697 Investment in Government Business Enterprise (Note 9) 98,400,000 98,778, ,399, ,463,975 LIABILITIES Accounts payable and accrued liabilities 35,734,928 30,222,504 Deferred revenue (Note 10) 3,402,844 2,909,363 Solid waste landfill closure and post-closure (Note 11) 6,684,196 4,626,208 Deferred revenue - obligatory reserve funds (Note 12) 15,157,533 16,035,520 Employee benefits (Note 13) 31,032,562 30,524,724 Long term debt (Note 14) 107,533,626 95,490, ,545, ,809,100 NET FINANCIAL ASSETS 81,853,383 95,654,875 NON-FINANCIAL ASSETS Tangible capital assets (Note 15) 679,949, ,161,769 Prepaid expenses 1,547, ,690 Inventory of supplies 718, , ,214, ,870,061 ACCUMULATED SURPLUS (NOTE 16) 764,067, ,524,936 The accompanying notes are an integral part of this financial statement Financial Report - Page 21 4 of 42

24 CORPORATION OF THE CITY OF PETERBOROUGH CONSOLIDATED STATEMENT OF OPERATIONS AND ACCUMULATED SURPLUS For The Year Ended December 31, 2015 Budget 2015 $ (Unaudited) 2015 $ 2014 $ REVENUES Property taxation 114,243, ,699, ,084,703 Taxation from other governments 3,205,879 3,069,998 2,899,741 User fees and service charges 66,256,005 64,095,404 65,537,694 Government grants and other municipalities 87,866,597 93,415,189 84,684,043 Development levies and contributions from developers 5,553,034 4,442,309 4,145,496 Licenses, permits, royalties and rents 1,743,205 2,910,916 2,659,837 Fines and other charges 2,400,000 2,642,272 2,217,226 Penalties and interest on taxes 850, , ,807 Investment income 1,893,489 2,504,151 4,276,743 Donations and contributed tangible capital assets 131,000 2,135,823 2,902,850 Other 1,175,522 1,386,598 1,402,791 Income from government business enterprise (Note 9) - 4,956,609 2,221,399 TOTAL REVENUES 285,317, ,181, ,961,330 EXPENSES General government 16,579,542 13,096,091 12,016,437 Protection services 47,845,089 48,666,755 46,842,713 Transportation services 36,126,926 36,093,892 36,123,311 Environmental services 35,707,055 38,893,791 32,981,699 Health services 11,911,087 9,697,562 11,256,939 Social and family services 77,200,587 75,497, ,754, Social housing 22,159,548 21,386,780 20,578,302 Recreation and cultural services 26,129,105 27,592,338 25,502,487 Planning and development 3,906,248 4,713,640 5,044,105 TOTAL EXPENSES 277,565, ,638, ,100,198 ANNUAL SURPLUS 7,752,786 21,543,039 20,861,132 ACCUMULATED SURPLUS, beginning of year 742,524, ,524, ,663,804 ACCUMULATED SURPLUS, end of year (Note 16) 750,277, ,067, ,524,936 The accompanying notes are an integral part of this financial statement Financial Report - Page 22 5 of 42

25 CORPORATION OF THE CITY OF PETERBOROUGH CONSOLIDATED STATEMENT OF CHANGE IN NET FINANCIAL ASSETS For The Year Ended December 31, 2015 Budget 2015 $ (Unaudited) $ $ Annual Surplus Amortization of tangible capital assets Proceeds on disposal of tangible capital assets Loss/(gain) on disposal of tangible capital assets Acquisition of tangible capital assets Change in prepaid expenses Change in inventory of supplies 7,752,786 21,543,039 20,861,132 29,115,061 29,750,948 28,091,974-2,312, ,502 - (1,883,995) 697,459 (79,452,645) (64,966,655) (62,925,203) - (571,827) (177,531) (5,000) 14,537 (7,756) (DECREASE)/INCREASE IN NET FINANCIAL ASSETS (42,589,798) (13,801,492) (13,296,423) NET FINANCIAL ASSETS, beginning of year 95,654,875 95,654, ,951,298 NET FINANCIAL ASSETS, end of year 53,065, ,853, ,654,875 The accompanying notes are an integral part of this financial statement Financial Report - Page 23 6 of 42

26 CORPORATION OF THE CITY OF PETERBOROUGH CONSOLIDATED STATEMENT OF CASH FLOWS For The Year Ended December 31, $ $ OPERATIONS Annual Surplus 21,543,039 20,861,132 Non-cash charges to/(revenue from) operations: Amortization 29,750,948 28,091,974 Loss on disposal of tangible capital assets (1,883,995) 697,459 Income from government business enterprises (4,956,609) (2,221,399) Solid waste landfill closure and post-closure 2,057,988 (23,381) Employee benefits and other liabilities 507, ,428 Donated tangible capital assets (983,019) (2,637,075) Change in non-cash working capital (Note 17) 520,324 (2,578,715) Net increase in cash related to operations 46,556,514 42,368,423 CAPITAL Proceeds on disposal of tangible capital assets 2,312, ,502 Purchased tangible capital assets (63,983,636) (60,288,128) Net decrease in cash related to capital (61,671,175) (60,124,626) INVESTING Proceeds from portfolio investments 46,817,474 34,386,360 Purchase of portfolio investments (50,099,137) (52,061,864) Dividends received from government business enterprise 5,335,000 3,482,000 Net decrease in cash related to investing 2,053,337 (14,193,504) FINANCING Long term debt issued 22,273,100 10,472,400 Long term debt principal repayment (10,230,255) (8,935,851) Net increase/(decrease) in cash related to financing 12,042,845 1,536,549 NET CHANGE IN CASH AND TEMPORARY INVESTMENTS (1,018,479) (30,413,158) CASH AND TEMPORARY INVESTMENTS, beginning of year 49,522,931 79,936,089 CASH AND TEMPORARY INVESTMENTS, end of year 48,504,452 49,522,931 The accompanying notes are an integral part of this financial statement Financial Report - Page 24 7 of 42

27 Corporation of the City of Peterborough Notes to the Consolidated Financial Statements For The Year Ended December 31, 2015 Notes to the Consolidated Financial Statements The City of Peterborough 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, Municipal Affairs Act and related legislation. 1. Significant Accounting Policies The consolidated financial statements of The Corporation of the City of Peterborough (the City ) are the representations of management prepared in accordance with accounting principles for local governments as established by the Public Sector Accounting Board (PSAB) of Chartered Professional Accountants Canada (CPA Canada). The focus of PSAB financial statements is on the financial position of the Municipality and the changes thereto. The Consolidated Statement of Financial Position includes all the assets and liabilities of the Municipality. Financial assets are those assets that could provide resources to discharge existing liabilities or finance future operations. Net financial assets represent the municipal position and consist of the difference between financial assets and liabilities. This provides information about the Municipality s overall future revenue requirements and its ability to finance activities and meet its obligations. Reporting Entity These consolidated financial statements reflect the assets, liabilities, sources of financing, expenses and accumulated surplus 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 the following fully consolidated local entities: 1. Peterborough Public Library Board 2. Peterborough Downtown Business Improvement Area 3. The Village Business Improvement Area 4. Peterborough Housing Corporation 5. Peterborough Utilities Commission The City has several partnership agreements in place with The Corporation of the County of Peterborough and as such, consistent with generally accepted accounting treatment for government partnerships, the following local boards are accounted for on a proportionate consolidation basis whereby the City s pro rata share of each of the assets, liabilities, revenues and expenses are combined on a line by line basis in the financial statements. These include: 1. Fairhaven ( %) ( %) 2. Peterborough County-City Health Unit ( %) ( %) 3. Greater Peterborough Area Economic Development Corporation ( %) ( %) 2015 Financial Report - Page 25 8 of 42

28 Corporation of the City of Peterborough Notes to the Consolidated Financial Statements For The Year Ended December 31, Peterborough County-City Waste Management Facility ( %) ( %) Interdepartmental and inter-organizational transactions and balances between these organizations are eliminated. City of Peterborough Holdings Inc. 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 to those of the City, and inter-organizational transactions and balances are not eliminated. Trust Funds Trust funds and their related operations administered by the City are not included in these consolidated financial statements but are reported on separately on the Trust Funds Statement of Continuity and Statement of Financial Position. Tangible Capital Assets Tangible capital assets are recorded at cost. Cost includes all amounts that are directly attributable to acquisition, construction, development or betterment of the asset. The cost, less residual value, if any, of the tangible capital assets are amortized on a straight-line basis over the expected useful life of the assets, with the exception of the Peterborough Utilities Commission that uses the declining balance basis at a rate of 5% per annum, as follows: Land improvements Buildings Vehicles, machinery and equipment Books and materials Roads and sidewalks Water, storm and waste water systems years 3-60 years 2-30 years 7 years years years Assets under construction are not amortized. When assets under construction are put in service they are transferred to the appropriate tangible capital asset classification. Tangible capital assets received as contributions are recorded at their fair value at the date of transfer and are also recorded as revenue. Historical treasures and works of art held by the City are not included as tangible capital assets Financial Report - Page 26 9 of 42

29 Corporation of the City of Peterborough Notes to the Consolidated Financial Statements For The Year Ended December 31, 2015 Recognition of Revenue and Expenses Revenues and expenses are reported on the accrual basis of accounting. The accrual basis of accounting recognizes revenues in the period in which the transactions or events took place that give rise to the revenue; expenses are recognized in the period the goods or services are acquired and a legal liability is incurred or transfers are due. Non-Financial Assets Non-financial assets are not available to discharge existing liabilities and are held for the provision of services. They have useful lives beyond the current year and are not intended for sale in the ordinary course of operations. The change in non-financial assets during the year combined with the annual surplus provides the change in net financial assets for the year. Forgivable Loans Forgivable loans are granted by the City based on specific criteria and funding arrangements. These forgivable loans are not included in the financial statements as repayment criteria are exceedingly rare. Revenue or a reserve transfer is recognized when the loan is issued and an amount equal to the loan amount expensed when the loan is granted. Deferred Revenue Deferred revenue generally represents user charges, grants and fees which have been received 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. Deferred Revenue - Obligatory Reserve Funds The City receives development charge contributions and payments in lieu of parkland under the authority of provincial legislation and City by-laws, The Building Code, Federal Gasoline Tax Revenues, Federal Public Transit Funds under Municipal Funding Agreements with the Association of Municipalities of Ontario and Provincial Gasoline Tax Revenues. These funds by their nature are restricted in their use and until applied to applicable capital works are recorded as deferred revenue. Amounts applied to qualifying capital projects are recorded as revenue in the fiscal period they are earned. Government Transfers Government transfers are recognized 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 - Page of 42

30 Corporation of the City of Peterborough Notes to the Consolidated Financial Statements For The Year Ended December 31, 2015 Taxation and Related Revenues Property tax billings are prepared by the City based on assessment rolls issued by the Municipal Property Assessment Corporation ( MPAC ). Municipal tax rates are established annually by City Council, incorporating amounts to be raised for local services. The City is required to collect on behalf of the local school boards in respect of education taxes based on rates established by the Province. Taxation revenues are recorded at the time tax billings are issued. A normal part of the assessment process is the issue of supplementary assessment rolls that provide updated information with respect to changes in property assessment. Assessments and the related property taxes are subject to appeal. Any supplementary billing adjustments made necessary by the determination of such changes will be recognized in the fiscal year they are reasonably determined and are shared with the school boards as appropriate. 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. Investment Income Investment income earned on surplus funds, (other than obligatory reserve funds) is reported as revenue in the period earned. Investment income earned on obligatory reserve funds is added to the fund balance and forms part of the respective deferred revenue balances. Pensions and Employee Benefits The City accounts for its participation in the Ontario Municipal Employees Retirement System (OMERS), a multi-employer public sector pension fund, as a defined contribution plan. Vacation entitlements are accrued as entitlements are earned. Sick leave benefits for members of the Peterborough Professional Firefighter s Association are accrued when they are vested and subject to pay out when an employee leaves the City s employ. Other post-employment benefits 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. 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 Financial Report - Page of 42

31 Corporation of the City of Peterborough Notes to the Consolidated Financial Statements For The Year Ended December 31, 2015 Use of Management Estimates The preparation of financial statements in conformity with Canadian 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 expenses during the year. Key areas where management has made complex or subjective judgements (often as a result of matters that are inherently uncertain) include, among others, allowance for uncollectible taxes, accounts payable, solid waste landfill closure and post-closure liability, employee future benefits and other liabilities, useful lives of capital assets and amortization. Actual results may differ from these and other estimates, the impact of which would be recorded in future periods. Financial Instruments The City s financial instruments consist of cash and temporary investments, taxes receivable, accounts receivable, investments, other receivables, accounts payable and accrued liabilities and long term debt. It is management s opinion that the fair value of its financial instruments is not materially different from their carrying value unless otherwise noted. a. Interest Rate Risk Interest rate risk is the risk that the value of financial instruments will fluctuate due to changes in market interest rates. The Corporation holds bonds, other marketable securities, loans and other receivables and has issued long term debt that may be impacted by interest rate risk. Management attempts to mitigate this risk through its investment policy. b. Credit Risk Credit risk arises from the potential that a counter party will fail to perform its obligations. The Corporation has limited exposure to credit risk as significant amounts are due from government agencies. Trade receivables are made up of a number of customers which minimizes concentrations of credit risk. c. Foreign Currency Risk Foreign currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates. The Corporation holds bank accounts in U.S. dollars and does not use derivative instruments to reduce exposure to foreign currency risk. The exposure to foreign currency risk is not significant Financial Report - Page of 42

32 Corporation of the City of Peterborough Notes to the Consolidated Financial Statements For The Year Ended December 31, Change in Accounting Policy The Corporation of the City of Peterborough implemented Public Sector Accounting Handbook section Liability for Contaminated Sites during the 2015 fiscal year. Section 3260 requires governments to record a liability in their financial statements if they own or have taken responsibility for a contaminated site that meets the requirements set out in the standard. This standard provides guidance on how to account for and report a liability associated with the remediation of contaminated sites, defines which activities are included in the liability for remediation, establishes when to recognize and how to measure the liability and provides guidance on financial statement presentation and disclosure. This change has been applied prospectively without restatement of prior periods in accordance with Handbook requirements. 3. Cash and Temporary Investments This figure is comprised of the following: $ $ Petty cash and cash floats 45,301 44,885 Temporary investments 18,924,412 4,000,000 Unrestricted cash 22,500,596 38,942,355 Restricted cash 7,034,143 6,535,691 48,504,452 49,522, Transfers to the School Boards During 2015, the City made property tax transfers to the School Boards. The amounts collected and remitted amounted to $30,766,887 ( $30,808,617). These amounts have not been included in the Consolidated Statement of Operations and Accumulated Surplus Financial Report - Page of 42

33 Corporation of the City of Peterborough Notes to the Consolidated Financial Statements For The Year Ended December 31, Taxes Receivable This figure is comprised of the following: $ $ Current year s levies 3,188,294 3,019,216 Previous year s levies 1,341,791 1,536,348 Prior year s levies 1,121,023 2,664,528 Penalties and interest 969,789 1,693,429 6,620,897 8,913,521 Allowance for uncollectible taxes (1,934,708) (3,607,411) 4,686,189 5,306, Accounts Receivable This figure is comprised of the following: $ $ Government of Canada 3,796,031 3,255,853 Government of Ontario 5,135,857 4,158,973 Other municipalities and school boards 1,546,067 1,995,400 User charges and other receivables 14,825,805 11,047,077 25,303,760 20,457, Investments The investments have a market value of $94,488,006 ( $91,206,343) at the end of the year. Investments consist of bonds, banker s acceptances and other principal guaranteed marketable securities. Any discount or premium on the purchase price is amortized over the life of the investment Financial Report - Page of 42

34 Corporation of the City of Peterborough Notes to the Consolidated Financial Statements For The Year Ended December 31, Other Receivables This figure is comprised of the following: $ $ Trent University Woodland Acres Sanitary Sewer 82, ,079 Peterborough Lakers Lacrosse Association 24,000 36,000 Peterborough Lawn Bowling Club 395, ,000 Market Hall Performing Arts Incorporated 419, ,940 Peterborough Rugby Union Football Club 230, ,678 Peterborough Youth Soccer Club 240, ,000 Kinsmen Minor Football League Inc. 35,000 40,000 1,426,256 1,597,697 The Woodland Acres Loan bears interest at a fixed rate of 7%. The interest rate on the Peterborough Lawn Bowling Club and Market Hall Performing Arts Incorporated loans are prime less 0.25%. The interest rate on the Peterborough Rugby Union Football Club loan is fixed at 2.75%. The remaining loans with a value of $299,000 ( $346,000) approved by Council to qualifying community groups have been made on an interest free basis. 9. Investment in Government Business Enterprise City of Peterborough Holdings Inc. City of Peterborough Holdings Inc. is the company established in 1999 to hold the shares of subsidiary companies created to meet the re-organizational requirements under the provincial government s Electricity Competition Act. The subsidiary companies of City of Peterborough Holdings Inc. are: 1. Peterborough Utilities Services Inc.; 2. Peterborough Distribution Inc.; 3. Peterborough Utilities Inc., and its wholly owned subsidiaries: - Campbellford-Seymour Electricity Generation Inc., Lily Lake Solar Inc, Trent Energy Inc., LFG Power Corporation, London Street Power Corporation and Trent Rapids Power Corporation. All of the above companies are wholly owned by the City of Peterborough Holdings Inc., which, in turn, is wholly owned by the Corporation of the City of Peterborough Financial Report - Page of 42

35 Corporation of the City of Peterborough Notes to the Consolidated Financial Statements For The Year Ended December 31, 2015 The investment in Government Business Enterprise is comprised of the following investment in City of Peterborough Holdings Inc.: 2015 $ 2014 $ Investment in shares 60,098,410 60,098,410 Retained earnings: Beginning balance 98,772,391 39,940,582 Net earnings 4,956,609 2,221,399 Less dividends (5,335,000) (3,482,000) 38,301,590 38,679,981 98,400,000 98,778,391 The following table provides condensed financial information in respect of City of Peterborough Holdings Inc. for its fiscal years ending December 31. Figures for 2014 and 2015 have been rounded to the nearest $1,000. Financial Position: $ $ Current assets 34,976,000 35,980,000 Capital and intangible assets 233,547, ,016,000 Regulatory assets 4,212,000 5,388,000 Deferred tax assets 4,175,000 4,411,000 Total Assets 276,910, ,795,000 Current liabilities 27,041,000 26,436,000 Other long term liabilities 143,800, ,363,000 Deferred tax liabilities 7,552,000 7,217,000 Total liabilities 178,393, ,016,000 Shareholder s Equity Capital stock 60,098,000 60,098,000 Accumulated other comprehensive income (2,905,000) (2,362,000) Retained earnings 41,207,000 41,043,000 98,400,000 98,779,000 Total liabilities and Shareholder s Equity 276,910, ,795, Financial Report - Page of 42

36 Corporation of the City of Peterborough Notes to the Consolidated Financial Statements For The Year Ended December 31, 2015 Results of Operations: $ $ Revenues 142,917, ,417,000 Expenses 135,442, ,638,000 Net income before provision for corporate income taxes 7,475,000 3,779,000 Provision for corporate income taxes 1,976, ,000 Income of government business enterprise 5,499,000 3,111,000 During the year the City received dividends totalling $5,335,000 ( $3,482,000) and interest totalling $Nil ( $1,646,912) on the notes receivable. 10. Deferred Revenue This figure is comprised of the following: $ $ Rents, user fees and service charges 1,100,586 1,150,538 Tickets, events and site deposits 903, ,946 Social and family services related 331, ,792 Government funding 1,067, ,087 3,402,844 2,909, Solid waste landfill closure and post closure The solid waste landfill closure and post closure liability of $6,684,196 ( $4,626,208) is for closure and post closure costs of the Peterborough County-City Waste Management Facility, The Harper Road closed landfill site and the Nelson closed landfill site. During 2010, the Peterborough County-City Waste Management Facility currently referred to as the North Fill Area received waste for the first time. The site referred to as the South Fill Area (SFA) reached full capacity in 2012 at which time the North Fill Area (NFA) began to receive the balance of waste and will continue for at least 15 years. The net present value of estimated closure and post closure costs for the Peterborough County-City Waste Management Facility as at December 31, 2015 is $11,839,290 ( $11,920,720). The estimated total expenses represent the sum of the discounted future cash flows using an inflation factor of 2.25% ( %), discounted at a rate of 5% (2014-5%). As the ownership of the facility is shared 2015 Financial Report - Page of 42

37 Corporation of the City of Peterborough Notes to the Consolidated Financial Statements For The Year Ended December 31, 2015 equally between the County and City of Peterborough, the liability recorded in these financial statements represents 50% of the estimated actual liability pro-rated on the basis of capacity used at the site. Estimated utilization of existing site capacity of the SFA at December 31 is 100% ( %) and at the NFA is 29% ( %). The net present value of estimated closure and post closure costs for the Harper Road closed landfill site as at December 31, 2015 is $917,220 ( $0). The estimated total expenses represent the sum of the discounted future cash flows using an inflation factor of 2.25% ( %), discounted at a rate of 5% (2014-0%). Estimated utilization of existing site capacity at December 31 is 100% (2014-0%) is the first year in which this closed landfill site was evaluated based on pronouncements received from the Ministry of the Environment and Climate Change. The net present value of estimated closure and post closure costs for the Nelson closed landfill site as at December 31, 2015 is $1,066,390 ( $0). The estimated total expenses represent the sum of the discounted future cash flows using an inflation factor of 2.25% ( %), discounted at a rate of 5% (2014-0%). Estimated utilization of existing site capacity at December 31 is 100% (2014-0%) is the first year in which this closed landfill site was evaluated based on pronouncements received from the Ministry of the Environment and Climate Change. Landfill closure and post closure care requirements have been defined in accordance with industry standards and include final covering and landscaping of the landfill, pumping of ground water and leachates from the site, ongoing environmental monitoring, site inspection and maintenance. The reported liability is based on estimates and assumptions with respect to events extending over a period of 174 years for the Peterborough County-City Waste Management Facility. The monitoring and inspection period for the the Harper Road closed landfill site and the Nelson closed landfill site extends over a period of 25 years. Future events may result in significant changes to the estimated total expenses, capacity used or total capacity. The estimated change in liability would be recognized prospectively, when applicable. 12. Deferred Revenue - Obligatory Reserve Funds A requirement of the public sector accounting board of Chartered Professional Accountants Canada (CPA Canada) 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 and under certain circumstances, these funds may possibly be refunded Financial Report - Page of 42

38 Corporation of the City of Peterborough Notes to the Consolidated Financial Statements For The Year Ended December 31, 2015 This figure is comprised of the following: $ $ Development Charges 8,208,578 6,287,402 Parkland 365, ,358 Building Code 161, ,739 Federal Gasoline Tax 6,147,905 8,301,465 Provincial Gasoline Tax 276, ,556 15,157,533 16,035,520 The continuity of deferred revenue obligatory reserve funds is comprised of the following: $ $ Balance beginning of year 16,035,520 17,568,208 Add amounts received: Development charges received 5,361,191 3,173,178 Parkland fees and subdivider contributions 84, ,097 Building code permits and other revenues 1,325,218 1,426,004 Provincial gasoline tax 1,576,350 1,570,227 Federal gasoline tax 4,557,466 4,680,229 Investment income 162, ,386 13,067,698 11,250,121 Less amounts utilized: Development charges earned 3,511,475 3,675,315 Parkland fees and subdivider contributions earned 645, ,000 Building code costs and expenses 1,441,642 1,403,463 Provincial and Federal gasoline tax earned 8,347,168 7,442,031 13,945,685 12,782,809 Balance end of year 15,157,533 16,035, Employee Benefits The City provides certain employee benefits that require funding in future periods. An actuarial valuation of these liabilities has been performed and the amounts are recorded in the Consolidated Statement of Financial Position Financial Report - Page of 42

39 Corporation of the City of Peterborough Notes to the Consolidated Financial Statements For The Year Ended December 31, 2015 This figure is comprised of the following: $ $ Accrued benefit obligation, beginning of year 27,310,204 26,764,463 Actuarial loss 949,287-28,259,491 26,764,463 Current period benefit expense 1,774,135 1,262,862 Interest 1,033, ,209 Benefit payments (2,045,665) (1,660,330) Accrued benefit obligation, end of year 29,021,882 27,310,204 Unamortized actuarial gain 2,010,680 3,214,520 Employee benefits and other liabilities, end of year 31,032,562 30,524,724 The actuarial valuations of the plans were based upon a number of assumptions about future events, which reflect management s best estimate. There was no change in the assumptions and related percentages from 2014 to 2015 with the exception of the interest discount rate as noted. The following represents the more significant assumptions made: Benefits Payable for Early Retirees Life Insurance Worker s Compensation Sick Leave Inflation rate 2% 2% 2% 2% Level of salary increases 3% 3% 3% 3% Interest discount rate Retirement Benefits 4.5% ( %) 4.5% ( %) 4.25% 4.5% ( %) Full-time employees of the City are provided with Health Care and Dental benefits while active. Certain benefits are also provided in early retirement if the retiree is eligible to receive an OMERS pension. The benefits cease on the retiree s 65 th birthday. Life Insurance Full-time employees of the City are provided with Life Insurance of two times salary while they are active employees. This coverage terminates at retirement. However, the member is provided with the option to continue the Life Insurance at a reduced amount until death and the member pays the required premium Financial Report - Page of 42

40 Corporation of the City of Peterborough Notes to the Consolidated Financial Statements For The Year Ended December 31, 2015 Workers Compensation Under the Workplace Safety and Insurance Act, the City is a self-insured employer (Schedule II) and remits payments to the WSIB as required to fund disability payments. The liability recorded by the City has been determined by a full actuarial review completed as of December 31, 2014, that is updated annually. Liability for Vested Sick Leave Fire Services and Fairhaven employees may vest a portion of their unused sick leave and earn entitlement to a cash payment when they leave the City's employment. Other employee groups have opted to join a new plan that does not have a vesting feature. The accrued benefit obligation and the net periodic benefit cost were determined by a full actuarial review completed as of December 31, 2014, that is updated annually. Vacation Pay Entitlements Vacation pay entitlements are based on employees years of service. Current obligations total $3,000,386 ( $2,792,060) of which $2,406,563 ( $2,222,825) does not need to be recovered in future periods. 14. Long Term Debt The long term debt reported on the Consolidated Statement of Financial Position has been approved by the Ontario Municipal Board or the Council of the City of Peterborough. Interest rates on outstanding debt range from 2.25% to 7.625% ( % to 7.625%) Future year s repayment obligations are comprised of the following: 2016 to 2020 $ 2021 to 2025 $ 2026 Onward $ Total $ From general revenues 61,601,667 32,590,167 13,341, ,533,626 The long term debt is issued in the name of the City have been approved by by-law. The annual principal and interest payments required to service these liabilities are within the annual debt repayment limit prescribed by The Ministry of Municipal Affairs and Housing. Interest on long-term debt in the year amounted to $3,859,734 ( $3,900,714) Financial Report - Page of 42

41 Corporation of the City of Peterborough Notes to the Consolidated Financial Statements For The Year Ended December 31, Tangible Capital Assets This figure is comprised of the following: 2015 $ Net Book Value 2014 $ General Land and land improvements 110,327, ,004,145 Buildings and leaseholds 118,059, ,605,215 Machinery and equipment 13,446,841 13,910,656 Vehicles 21,371,603 19,439,443 Books and materials 1,480,931 1,453,705 Infrastructure Land and land improvements 25,958,862 25,983,710 Buildings 29,027,767 21,360,750 Machinery & vehicles 898,749 1,201,840 Roadways and sidewalks 123,031, ,163,708 Storm sewer system 46,129,004 46,227,362 Wastewater system 68,052,248 64,221,652 Water system 84,575,443 82,991, ,359, ,564,151 Assets under construction 37,589,735 24,597,618 Total tangible capital assets 679,949, ,161,769 For additional information, see the Consolidated Schedule of Tangible Capital Assets. During 2015 and 2014, there were no write-downs of assets and no interest capitalized. Assets contributed to the City were capitalized at their fair value and amounted to $983,019 ( $2,637,075) Financial Report - Page of 42

42 Corporation of the City of Peterborough Notes to the Consolidated Financial Statements For The Year Ended December 31, 2015 Tangible capital assets by function are comprised of the following: Net Book Value 2015 $ 2014 $ General government 31,950,085 29,991,247 Protection to persons and property 17,273,982 17,868,894 Transportation services 188,038, ,870,574 Environmental services 252,704, ,713,699 Health services 173, ,386 Social and family services 9,606,700 10,341,461 Social housing 36,372,782 37,164,246 Recreation and cultural services 82,422,276 82,380,183 Planning and development 23,816,991 23,824,461 Assets under construction 37,589,735 17,924,711 Total tangible capital assets 679,949, ,161, Financial Report - Page of 42

43 Corporation of the City of Peterborough Notes to the Consolidated Financial Statements For The Year Ended December 31, Accumulated Surplus This figure is comprised of the following: 2015 $ 2014 $ Surplus/(Deficit) City of Peterborough Operating surplus before consolidated entities 145, ,081 Unexpended financing 6,487,012 4,702,893 6,632,554 4,882,974 Consolidated Entities Peterborough County-City Health Unit 2,223,504 49,528 The Village Business Improvement Area 36,699 31,689 Greater Peterborough Area Economic Development Corporation 76,792 43,195 Peterborough Downtown Business Improvement Area 166,389 87,658 Peterborough Utilities Commission 4,490,915 8,461,472 Peterborough Public Library Board - 47,190 6,994,299 8,720,732 Unfunded amounts Employee benefits (28,625,999) (28,301,899) Solid waste landfill closure and post-closure (6,684,196) (4,626,208) Accrued interest on long term debt (952,597) (896,900) (36,262,792) (33,825,007) Inventory held for resale 8,480,593 8,480,593 Equity in government business enterprise (below) 92,650,000 93,028,391 Invested in Tangible Capital Assets Tangible capital assets net book value 679,949, ,161,769 Unexpended capital financing 4,617, ,175 Long term debt (107,533,626) (95,490,781) 577,032, ,155,163 Reserve Funds and Reserves Discretionary reserve funds 27,381,164 32,770,728 Reserves 81,159,470 78,311, ,540, ,082,090 Accumulated Surplus 764,067, ,524, Financial Report - Page of 42

44 Corporation of the City of Peterborough Notes to the Consolidated Financial Statements For The Year Ended December 31, 2015 The equity in government business enterprise is comprised of the following: 2015 $ 2014 $ Investment in government business enterprise (Note 9) 98,400,000 98,778,391 Short term advances due on demand converted to shares (5,750,000) (5,750,000) Equity in government business enterprise 92,650,000 93,028, Change in Non-Cash Working Capital The increase/(decrease) in this figure is comprised of the following: $ $ Taxes receivable 619,921 (457,077) Accounts receivable (4,846,457) 6,665,417 Inventory held for resale 4,791 2,075 Other receivables 171, ,127 Accounts payable and accrued liabilities 5,512,424 (7,248,277) Deferred revenue 493,481 (21,005) Deferred revenue obligatory reserves (877,987) (1,532,688) Prepaid expenses (571,827) (177,531) Inventory of supplies 14,537 (7,756) 520,324 (2,578,715) 2015 Financial Report - Page of 42

45 Corporation of the City of Peterborough Notes to the Consolidated Financial Statements For The Year Ended December 31, Expenses by Object The expenses for the year reported on the Consolidated Statement of Operations and Accumulated Surplus by object are comprised of the following: Budget 2015 $ (Unaudited) 2015 $ 2014 $ Salary, wages and employee benefits 105,325, ,002, ,096,492 Interest on long term debt 6,396,958 3,859,734 3,922,714 Materials 34,769,320 36,553,850 33,270,549 Contracted services 45,774,453 45,259,918 41,515,576 Rents and financial expenses 2,167,977 2,048,876 2,153,002 External transfers 54,016,130 52,046,387 50,352,432 Amortization 29,115,061 29,750,948 28,091,974 (Gain)/loss on disposal of tangible capital assets - (1,883,995) 697, ,565, ,638, ,100, Partnerships with the County of Peterborough Certain services are provided by joint local boards established in partnership with the County of Peterborough. Under the agreements created at the time each board was established, decisions related to the financial and operating activities are shared, neither partner is in a position to exercise unilateral control. Operations of each board are included in these financial statements based on the share of net operating expenses contributed by the City during the fiscal period being reported. The following provides a brief description of the nature and purpose of each entity and condensed financial information. Fairhaven Fairhaven is dedicated to serving the continuum of long-term care needs of Peterborough City and County by providing innovative programs and services to clients in a caring environment that upholds dignity and promotes quality of life Financial Report - Page of 42

46 Corporation of the City of Peterborough Notes to the Consolidated Financial Statements For The Year Ended December 31, 2015 Financial Position: Total City Portion Total City Portion $ $ $ $ Financial assets 2,851,298 1,900,865 2,603,661 1,719,000 Liabilities 14,612,374 9,741,583 15,240,044 10,160,029 Net financial liabilities (11,761,076) (7,840,718) (12,661,544) (8,441,029) Non-financial assets 14,297,863 9,531,909 15,404,873 10,269,915 Accumulated surplus 2,536,787 1,671,191 2,743,329 1,828,886 Results of Operations: Total City Portion Total City Portion $ $ $ $ Revenues 20,305,958 13,537,305 19,574,213 13,049,475 Expenses 20,512,500 13,675,000 19,591,769 13,061,179 Annual deficit (206,542) (137,695) (17,556) (11,704) Fairhaven has incurred long-term debt as a result of a mandated rebuild by the Ministry of Health and Long-Term Care. Fairhaven will finance the annual debenture payments through a Ministry of Health and Long-Term Care annual contribution of $955,752 for twenty years and contributions from the City and County for eighteen years in the amounts of $709,939 and $342,702 respectively Financial Report - Page of 42

47 Corporation of the City of Peterborough Notes to the Consolidated Financial Statements For The Year Ended December 31, 2015 Peterborough County-City Health Unit The Peterborough County-City Health Unit strives to enable people and the community to be as healthy as possible. The Health Unit is a not-for-profit organization, which provides accessible, community based programs, and services that promote, protect and restore health. Financial Position: Total City Portion Total City Portion $ $ $ $ Financial assets 7,889,897 4,497,242 3,739,667 2,131,610 Liabilities 3,713,943 2,116,949 2,995,721 1,707,561 Net financial assets 4,175,954 2,380, , ,049 Non-financial assets 1,777,967 1,013, , ,684 Accumulated surplus 5,953,921 3,393,734 1,504, ,733 Results of Operations: Total City Portion Total City Portion $ $ $ $ Revenues 16,923,876 9,646,609 12,271,791 6,994,921 Expenses 12,474,750 7,110,608 12,389,871 7,062,226 Annual surplus/(deficit) 4,449,126 2,536,001 (118,080) (67,305) 2015 Financial Report - Page of 42

48 Corporation of the City of Peterborough Notes to the Consolidated Financial Statements For The Year Ended December 31, 2015 Greater Peterborough Area Economic Development Corporation (GPAEDC) The GPAEDC promotes economic development in the Greater Peterborough area, with the co-operation and participation of available community resources, by encouraging, facilitating and supporting community strategic planning and increasing self-reliance, investment and job creation within the community. Financial Position: Total City Portion Total City Portion $ $ $ $ Financial assets 490, , , ,753 Liabilities 322, , , ,255 Net financial assets 168, , ,829 69,498 Non-financial assets 10,833 6,500 4,986 2,992 Accumulated surplus 179, , ,815 72,490 Results of Operations: Total City Portion Total City Portion $ $ $ $ Revenues 2,594,964 1,556,978 2,022,132 1,213,279 Expenses 2,536,197 1,521,718 1,967,377 1,180,426 Annual surplus 58,767 35,260 54,755 32, Financial Report - Page of 42

49 Corporation of the City of Peterborough Notes to the Consolidated Financial Statements For The Year Ended December 31, 2015 Peterborough County-City Waste Management Facility On July 1, 2002, the City and County of Peterborough entered into an agreement to jointly develop and operate a waste disposal facility. The Facility will receive non-hazardous waste from the County and City in accordance with the applicable regulations and the Certificate of Approval issued by the Ministry of the Environment and Energy to develop, operate and close the Facility. All revenues and expenses related to the development, management, closure, post-closure care and monitoring of the Facility are shared equally by both organizations. Included in the Statement of Financial Position is an amount due to/(from) the County of Peterborough of $(41,485) (2014 $425,076). Results of Operations: Total City Portion Total City Portion $ $ $ $ Revenues 2,513,672 1,256,836 3,030,426 1,515,213 Expenses 3,391,504 1,695,752 3,323,104 1,661,552 Net expenses (877,832) (438,916) (292,678) (146,339) 20. Pension Agreements The City is a member of the Ontario Municipal Employees Retirement System (OMERS), which is a multi-employer plan, on behalf of all permanent, full-time members of its staff and part-time staff that meet specific eligibility requirements. The plan is a defined benefit plan which specifies the amount of the retirement benefit to be received by the employees based on length of credited service and average earnings. The City's share of the annual contribution to the pension plan for current service is charged to operations in the year in which the contribution is made. For 2015, the current service cost amounted to $8,219,217 ( $6,508,818). 21. Trust Funds Trust funds administered by the Corporation of the City of Peterborough amounting to $394,251 ( $391,050) have not been included in the Consolidated Statement of Financial Position nor have their operations been included in the Consolidated Statement of Financial Activities. Due to the fact that balances are held in trust by the Corporation for the benefit of others, they are not presented as part of financial position or financial activities Financial Report - Page of 42

50 Corporation of the City of Peterborough Notes to the Consolidated Financial Statements For The Year Ended December 31, Budget Figures The budget approved by the Corporation for the year is reflected on the Consolidated Statement of Operations and Accumulated Surplus and the Consolidated Statement of Change in Net Financial Assets. The budgets established for capital investment in tangible capital assets are on a project-oriented basis, the costs of which may be carried out over one or more years and, therefore, may not be comparable with current year s actual expenditure amounts. Budget figures have been reclassified for the purposes of these financial statements to comply with PSAB reporting requirements. Budget figures are not subject to audit. 23. Lease Commitments The City has entered into the following long-term operating lease agreements. The following table provides information on the minimum lease payments: (a) (b) Total ,529, ,362 3,173, ,570, ,362 3,215, ,613, ,090 2,774, ,657,801-2,657, ,703,151-2,703,151 Thereafter 15,985,352-15,985,352 Total minimum lease payments 29,060,343 1,449,814 30,510,157 Less: payments assumed by sub-lessee 9,541,360-9,541,360 19,518,983 1,449,814 20,968,797 (a) On October 30, 2000 the City committed to lease an office building, associated land and leaseholds for a 25-year term. The lease payments shown above include basic rent and base operating costs adjusted for estimated escalation and de-escalation provisions according to the agreement. The City in turn has an agreement to sublease the premises to Americredit Financial Services of Canada Ltd, the terms of which expire July 31, Although there are provisions in the sublease agreement to either terminate the lease prior to this date, or, alternatively extend it for a further 7 years, the above table assumes that the sublease will continue to July 31, It is the City s expectation that the sublease will remain in place for the duration of the 25 years. (b) The City has executed lease agreements for office space for its own use that require annual payments in future years as they become due and payable Financial Report - Page of 42

51 Corporation of the City of Peterborough Notes to the Consolidated Financial Statements For The Year Ended December 31, Contingent Liabilities The Corporation of the City of Peterborough, in the course of operations is subject to claims, lawsuits and contingencies. The City records settlements as liabilities in the period they are reasonably determined. Although it is possible that liabilities may arise in other instances for which no accruals have been made, the City does not believe that such an outcome will significantly impair its operations or have a material adverse effect on its financial position. On May 4, 2007, Bill 233, the Workplace Safety and Insurance Amendment Act (Presumptions for Firefighters), 2007, received Royal Assent. The Act provides for the eligibility of firefighters, and fire investigators, to receive compensation when they were deemed to have been subjected to certain illnesses and/or injuries sustained since January 1, The Act presumes that certain conditions, illnesses or injuries were work-related unless it can be demonstrated that the condition, illness or injury was a result of a non-work related incident, or was hereditary. As a Schedule 2 employer under the Workplace Safety and Insurance Board Act, the City self-insures against claims made under the provisions of this Act. As the City provides fire protection services, certain current and former employees of the City may be eligible to receive awards under the amended Act. At this point in time, it is not practical to determine what exposure, if any, the City has as a result of the amended Act coming to force, and consequently, no amount has been provided for in these financial statements. 25. Contaminated Sites The Corporation of the City of Peterborough in the normal course of operations owns certain contaminated sites. The contamination associated with the sites has been determined or is likely expected to be in excess of environmental standards. A reasonable estimate of the costs to remediate the sites cannot be determined as at the financial statement date, as a result, no liability has been recognized in these financial statements. 26. Loan Guarantee In August 2005, the City of Peterborough entered into an agreement with the Peterborough Family Y.M.C.A. to guarantee the mortgage for the new Y.M.C.A. building to an amount not to exceed $7,250,000. The balance outstanding on the loan at December 31, 2015 is $4,183,000 ( $4,355,000) Financial Report - Page of 42

52 Corporation of the City of Peterborough Notes to the Consolidated Financial Statements For The Year Ended December 31, Provincial Offences Offices Revenues from the POA office consist of fines levied under Parts I and III (including delay penalties) for POA charges filed at 99 Simcoe Street in Peterborough. Offenders may pay their fines at any court office in Ontario, at which time, their receipt is recorded in the Integrated Courts Operation Network system ( ICON ) operated by the Province of Ontario. The City of Peterborough recognizes fine revenue when the receipt of funds is recorded by ICON and matched to the offence notice, regardless of the location where payment is made. Gross and net revenues for the year ended December 31, 2015, amounted to $2,642,272 ( $2,217,226) and $1,459,828 (2014 $1,110,754) respectively. The Provincial Offences Office net revenues are jointly shared by the County of Peterborough and the City of Peterborough based on weighted assessments. During 2015, the proportion based on weighted assessment for the City was 46.0% ( %). Based on this percentage, the City s portion of Net Revenues was $671,521( $514,279). Included in the Statement of Financial Position is an amount due from/(to) the County of Peterborough of $162,531 (2014 $6,435). 28. Segment Information The Corporation of the City of Peterborough is a diversified municipal government institution that provides a range of services to its residents including police, fire, public transit, community services, solid waste management and recycling. Municipal services are reported by function and their activities are separately disclosed in the segment information. For 2015, the City reviewed the it s methodology for allocation of segmented information and determined an update was required. As a result, certain figures in both current and prior years have been reclassified to conform to the segmented presentation adopted in the current year. The annual surplus for either year is not affected by this reclassification. For each reported segment, revenues and expenses represent both amounts that are directly attributable to the segment and amounts that are allocated on a reasonable basis. Certain allocation methodologies are employed in the preparation of segment financial information. Taxation, payments-in-lieu of taxes and investment income are apportioned based on each segment s net requirements. Revenues are allocated to segments based on amounts originally budgeted, adjusted for Public Sector Accounting Board recommendations or based on the Provincial requirements of the Financial Information Return. Expenses are allocated to segments based on the Provincial requirements for the Financial Information Return Financial Report - Page of 42

53 Corporation of the City of Peterborough Notes to the Consolidated Financial Statements For The Year Ended December 31, 2015 Interfunctional transfers include an administrative overhead allocation, data processing costs and accounting fees that are allocated based on the original amount budgeted. Interfunctional transfers also include a percentage overhead charge based on the amount of wages allocated to specific recoverable jobs that are undertaken by the public works department. That allocation is based on the percentage originally budgeted. Other internal charges are made for wages and materials used during repair and preventative maintenance activities based on actual costs of the inputs. Other interfunctional charges such as leachate treatment are based on the actual costs of undertaking the testing. Engineering costs are allocated to capital projects based on a percentage of administrative overhead dictated in request for proposals award reports. The accounting policies used in these segments are consistent with those followed in the preparation of the consolidated financial statements as disclosed in Note 1. For additional information see the Consolidated Schedule of Segment Disclosure. Functions disclosed separately in the segment information are as follows: General Government General government consists of the activities of Council and general financial and administrative management of the City and its programs and services. Protection to Persons and Property Protection services include police, fire, conservation authority, protective inspection and control, emergency measures and the Provincial Offences Office. Transportation Services The activities of the transportation function include construction and maintenance of the City s roads and bridges, winter control, public transit, parking, street lighting and air transportation. Environmental Services The environmental function is responsible for the sanitary sewer system, storm sewers, solid waste collection, and waste disposal and recycling. Health Services The health services function consists of activities of the Peterborough County-City Health Unit and activities of the land ambulance service that is a shared service with the County of Peterborough. Social and Family Services 2015 Financial Report - Page of 42

54 Corporation of the City of Peterborough Notes to the Consolidated Financial Statements For The Year Ended December 31, 2015 The social and family services function includes general assistance as well as childcare services and assistance to aged persons provided by Fairhaven. Social Housing Services The social housing function provides access and administration related to affordable housing in the City including the activities of Peterborough Housing Corporation. Recreation and Cultural Services The recreation and cultural services function provides indoor and outdoor recreational facilities and programs, library services and information about the City s heritage through the Peterborough Museum and Archives. Planning and Development Services The planning and development services function manages commercial, industrial and residential development within the Municipality. Electric Utility The electric utility function consists of the equity investment in City of Peterborough Holdings Inc. 29. Comparative Figures The financial statements have been reclassified, where applicable, to conform to the presentation adopted in the current year. Annual surplus for the previous year is not affected by this reclassification Financial Report - Page of 42

55 CORPORATION OF THE CITY OF PETERBOROUGH CONSOLIDATED SCHEDULE OF TANGIBLE CAPITAL ASSETS For The Year Ended December 31, 2015 General Infrastructure Land and land Buildings Machinery Books and Land and land Machinery & Roadways Storm sewer Wastewater Water Assets under Total Improvements and leaseholds and equipment Vehicles materials Improvements Buildings Vehicles and sidewalks system System System Construction $ COST Balance, beginning of year 132,208, ,113,832 24,860,880 32,419,236 3,206,366 26,070,678 44,735,277 4,263, ,357,209 66,309,454 92,004, ,631,719 24,597,618 1,036,779,600 Add: Additions 386, ,978 48, ,779-4,887, ,663,539 53,320,487 64,966,655 Less: disposals and retirements 6, , , , , ,148 1,376,377 3,192 23, ,947,298 Interfund transfers 3,779,595 13,723,033 2,002,318 4,281, ,950,382-4,914, ,520 6,526, ,628 (40,328,370) - BALANCE, end of year 136,368, ,523,581 26,740,065 36,259,445 3,347,765 26,070,678 53,573,353 4,170, ,895,621 67,175,782 98,507, ,575,886 37,589,735 1,098,798, of 42 ACCUMULATED AMORTIZATION Balance, beginning of year 23,204,796 98,508,617 10,950,224 12,979,793 1,752,661 86,968 23,374,527 3,062, ,193,501 20,082,092 27,782,868 69,639, ,617,831 Add: Amortization 2,836,390 6,282,078 2,536,136 2,259, ,553 24,848 1,171, ,091 5,880, ,998 2,687,043 4,360,689-29,750,948 Less: disposals and retirements - 326, , , , ,148 1,209,343 1,312 14, ,518, Financial Report - Page 53 BALANCE, end of year 26,041, ,464,448 13,293,224 14,887,842 1,866, ,816 24,545,586 3,271, ,864,216 21,046,778 30,455,601 74,000, ,849,947 NET BOOK VALUE 110,327, ,059,133 13,446,841 21,371,603 1,480,931 25,958,862 29,027, , ,031,405 46,129,004 68,052,248 84,575,443 37,589, ,949,010 The accompanying notes are an integral part of this financial statement.

56 CORPORATION OF THE CITY OF PETERBOROUGH CONSOLIDATED SCHEDULE OF SEGMENT DISCLOSURE For The Year Ended December 31, 2015 General Protection Transportation Environmental Health Social and Social Recreation Planning and Electric Government Services Services Services Services Family Services Housing and Cultural Development Utility Total $ $ $ $ $ $ $ $ $ $ $ REVENUES Property taxation 12,661,723 38,623,396 21,342,494 8,075,918 5,262,998 8,709,375 4,259,378 12,125,949 3,638, ,699,575 Taxation from other governments 338,898 1,033, , , , , , ,558 97,382-3,069,998 User fees and service charges 605, ,515 8,504,627 32,933, ,177 5,985,872 5,726,269 8,880, ,075-64,095,404 Government grants and other municipalities 491,338 2,234,891 8,945,556 2,148,363 6,010,845 60,504,578 10,906, ,291 1,893,909-93,415,189 Development levies and contributions from developers 1, ,780 1,686, , ,604 1,000,260-4,442,309 Licences, permits, royalties and rents 819,605 1,475,964 30,386 80, , ,910,916 Fines and other charges - 2,642, ,642,272 Penalties and interest on taxes 922, ,744 Investment income 254, , , , , , , ,657 73,119-2,504,151 Donations and contributed tangible capital assets ,430, ,932 92,800-2,135,823 Other 93,849 5, , , , ,022-1,386,598 Income from government business enterprise (Note 9) ,956,609 4,956,609 TOTAL REVENUES 16,189,606 47,882,528 41,510,042 46,736,437 12,124,301 75,623,562 21,484,508 23,602,084 7,071,911 4,956, ,181, of 42 EXPENSES Salaries, wages and employee benefits 5,698,391 39,860,879 16,067,910 4,411,075 5,468,546 20,823,940 2,672,638 10,687,606 2,311, ,002,831 Interest on net long term debt 70, ,112 1,191, , , , ,493 25,883-3,859,734 Materials 4,223,112 2,631,988 8,101,015 5,194,960 1,336,625 3,900,239 5,981,046 3,966,783 1,218,082-36,553,850 Contracted services 2,201, ,038 4,047,379 16,493,638 4,380,989 1,576,646 10,138,637 4,500,430 1,048,293-45,259,918 Rents and financial expenses 216,832 52,115 24, ,564 76, , , ,785 54,641-2,048,876 External transfers 559,553 1,811, ,090 45,833,130 1,600,419 1,854,295 22,680-52,046,387 Amortization 1,780, ,469,381 10,175, ,155, , , ,530 4,350,137 11,925-29,750, Loss/(gain) on disposal of tangible capital assets 26,838 (55,700) 129,936 11,112 (1,984,999) (7,584) - (3,602) 4 - (1,883,995) Interfunctional transfers (1,681,374) 1,824,722 (3,643,375) 1,247,802 (50) 1,543,277 (816,699) 1,505,411 20, Financial Report - Page 54 TOTAL EXPENSES 13,096,091 48,666,755 36,093,892 38,893,791 9,697,562 75,497,700 21,386,780 27,592,338 4,713, ,638,549 NET SURPLUS (DEFICIT) 3,093,515 (784,227) 5,416,150 7,842,646 2,426, ,862 97,728 (3,990,254) 2,358,271 4,956,609 21,543,039 The accompanying notes are an integral part of this financial statement.

57 CORPORATION OF THE CITY OF PETERBOROUGH CONSOLIDATED SCHEDULE OF SEGMENT DISCLOSURE For The Year Ended December 31, 2014 General Protection Transportation Environmental Health Social and Social Recreation Planning and Electric Government Services Services Services Services Family Services Housing and Cultural Development Utility Total $ $ $ $ $ $ $ $ $ $ $ REVENUES Property taxation 13,072,569 36,938,886 20,675,637 5,926,114 5,053,942 8,637,705 3,976,307 11,284,069 3,519, ,084,703 Taxation from other governments 347, , , , , , , ,958 93,556-2,899,741 User fees and service charges 520,677 1,017,136 8,293,108 34,524, ,816 5,668,717 5,607,117 9,193, ,591-65,537,694 Government grants and other municipalities 52,500 2,112,039 8,392,121 1,217,704 5,296,792 57,048,321 9,217, , ,314-84,684,043 Development levies and contributions from developers 42, ,096,196 1,826, ,085 1,142,430-4,145,496 Licences, permits, royalties and rents 553,017 1,418,154 31,625 84, , ,659,837 Fines and other charges - 2,217, ,217,226 Penalties and interest on taxes 928, ,807 Investment income 469,059 1,325, , , , , , , ,295-4,276,743 Donations and contributed tangible capital assets - - 2,637,075 79, , ,902,850 Other 77, , , , ,544-1,402,791 Income from government business enterprise (Note 8) ,221,399 2,221,399 TOTAL REVENUES 16,063,996 46,011,083 42,417,239 45,014,965 11,251,590 71,914,549 19,469,560 22,496,745 6,100,204 2,221, ,961,330 EXPENSES Salaries, wages and employee benefits 5,139,478 38,418,725 15,499,555 4,246,977 5,207,333 19,030,430 2,821,996 9,548,429 2,183, ,096,492 Interest on net long term debt 71, ,360 1,087, , , , ,663 18,639-3,922,714 Materials 4,273,562 2,388,883 8,285,997 2,715,454 1,126,905 3,760,969 5,734,017 3,916,966 1,067,796-33,270,549 Contracted services 2,313, ,719 4,047,965 13,931,807 4,257,996 1,376,234 8,938,401 4,210,026 1,537,242-41,515,576 Rents and financial expenses 214,100 50,794 19, ,349 75, , , ,966 53,878-2,153,002 External transfers 344,615 1,581, ,882 44,578,335 1,624,915 1,682,732 13,443-50,352,432 Amortization 1,300,098 1,449,344 10,134,873 9,228,746 62, , ,153 4,150,414 11,481-28,091,974 Loss/(gain) on disposal of tangible capital assets - (11,046) 310, , , ,459 Interfunctional transfers (1,640,336) 1,835,424 (3,263,024) 1,129,277-1,085,473 (379,662) 1,221,291 11, of Financial Report - Page 55 TOTAL EXPENSES 12,016,437 46,842,713 36,123,311 32,981,699 11,256,939 71,754,205 20,578,302 25,502,487 5,044, ,100,198 NET SURPLUS (DEFICIT) 4,047,559 (831,630) 6,293,928 12,033,266 (5,349) 160,344 (1,108,742) (3,005,742) 1,056,099 2,221,399 20,861,132 The accompanying notes are an integral part of this financial statement.

58 2015 Financial Report - Page of 42

59 2015 Financial Report - Page of 42

60 CORPORATION OF THE CITY OF PETERBOROUGH TRUST FUNDS STATEMENT OF CONTINUITY For The Year Ended December 31, 2015 Library Morrow Parks Parks Fairhaven Residents' City Special Safety Cenotaph Trust Park Hancock Tollington Special Personal Parks Holding Patrol Trust Funds Trust Trust Endowment Purpose Trust $ $ $ $ $ $ $ $ $ $ $ $ ACCUMULATED SURPLUS, beginning of year 120,199 18,553 24,569 20,467 20,344 6,583 32,970 80,009 5,996 61, , ,573 REVENUES Deposits and grants , ,532-99, , ,080 Transfer from Fairhaven ,333 42,333 39,014 Interest earned 1, ,028 3,544 1, , , , , , of Financial Report - Page 58 EXPENSES Transfers to operations ,500-2, Withdrawals, purchases ,495 1, , , , ,010 Residents maintenance ,829 Donation , ,495 1, ,898 2, , , ,161 ACCUMULATED SURPLUS, end of year 121,453 18,747 25,774 19,245 20,347 6,652 33,314 87,094 3,544 58, , ,050 TRUST FUNDS STATEMENT OF FINANCIAL POSITION At December 31, 2015 Library Morrow Parks Parks Fairhaven Residents' City Special Safety Cenotaph Trust Park Hancock Tollington Special Personal Parks Holding Patrol Trust Funds Trust Trust Endowment Purpose Trust $ $ $ $ $ $ $ $ $ $ $ $ FINANCIAL ASSETS Cash 121,453 18,747 29,040 19,245 20,556 6,652 33,314 6,562 3,544 63, , ,034 Accounts receivable , , ,453 18,747 29,040 19,245 20,556 6,652 33,314 87,094 3,544 63, , ,034 LIABILITIES AND ACCUMULATED SURPLUS Accounts payable - - 3, ,475 2,894 Due to revenue fund ,198 5,198 3,090 Accumulated surplus 121,453 18,747 25,774 19,245 20,347 6,652 33,314 87,094 3,544 58, , ,050 LIABILITIES AND ACCUMULATED SURPLUS 121,453 18,747 29,040 19,245 20,556 6,652 33,314 87,094 3,544 63, , ,034

61 Corporation of the City of Peterborough Trust Funds - Note to the Financial Statements For The Year Ended December 31, Significant Accounting Policies These financial statements have been prepared in accordance with Canadian generally accepted accounting principles for local governments as recommended by the Public Sector Accounting Board of Chartered Professional Accountants Canada (CPA Canada). Basis of presentation These trust fund statements reflect the assets, liabilities, sources of financing and expenditures combining trust funds of the City of Peterborough and the following local boards: 1. Peterborough Public Library Board 2. Fairhaven Basis of Accounting 1. Sources of financing and expenses are reported on the accrual basis of accounting. 2. The accrual basis of accounting recognizes revenues as they become available and measureable. Expenses are recognized as they are incurred and measureable as a result of receipt of goods or services and the creation of a legal obligation to pay. Financial Instruments The Trust Fund s financial instruments consist of cash, accounts payable and due to revenue fund. It is management s opinion that the fair values of its financial instruments are not materially different from their carrying value due to their immediate or short term maturity. The Trust Funds do not have any significant concentration of currency, interest or credit risk. Use of Estimates The preparation of financial statements in conformity with Canadian 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 year. Actual results could differ from those estimates Financial Report - Page of 42

62 THE CORPORATION OF THE CITY OF PETERBOROUGH Financial Information Return December 31, Financial Report - Page 60

63 2015 Financial Report - Page 61

64 CProvince of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Schedule 10 Asmt Code: 1514 CONSOLIDATED STATEMENT OF OPERATIONS: REVENUE MAH Code: for the year ended December 31, 2015 STATEMENT OF OPERATIONS: REVENUE Own Purposes Revenue Property Taxation $ 0299 Taxation - Own Purposes (SLC ) For UT (SLC ) ,699, Payments-In-Lieu of Taxation (SLC ) For UT (SLC ) ,069, Subtotal 117,769, Estimated tax revenue Ontario Municipal Partnership Fund (OMPF) Other Other Other Other Subtotal 0 Conditional Grants 0810 Ontario conditional grants (SLC ) ,603, Ontario Grants for Tangible Capital Assets (SLC ) ,412, Canada conditional grants (SLC ) ,533, Canada Grants for Tangible Capital Assets (SLC ) , Deferred revenue earned (Provincial Gas Tax) (SLC SLC ) ,550, Deferred revenue earned (Canada Gas Tax) (SLC ) ,797, Subtotal 83,586, Revenue from other municipalities for Tangible Capital Assets (SLC ) , Revenue from other municipalities (SLC ) ,527, Total User Fees and Service Charges (SLC ) ,095,404 Licences, permits, rents, etc Trailer revenue and permits Licences and permits , Rents, concessions and franchises ,071, Royalties Green Energy , Other Subtotal 1,469,274 Fines and penalties 1605 Provincial Offences Act (POA) Municipality which administers POA only ,642, Other fines Penalties and interest on taxes , Other Subtotal 3,565,016 Other revenue 1805 Investment income ,273, Interest earned on reserves and reserve funds , Gain/Loss on sale of land & capital assets ,883, Deferred revenue earned (Development Charges) (SLC SLC ) ,511, Deferred revenue earned (Recreational land (The Planning Act)) (SLC SLC ) , Other Deferred revenue earned Revenue from obligatory reserves ,441, Donations ,152, Donated Tangible Capital Assets (SLC ) , Sale of publications, equipment, etc , Contributions from non-consolidated entities Other Revenues from Government Business Enterprise (ie. Dividends, etc.) ,956, Gaming and Casino Revenues Other Unclassified revenues ,381, Other Developer levies , Other Other Other Other Other Other Other Subtotal 18,751, Municipal Land Transfer Tax (City of Toronto Act, 2006) Increase/Decrease in Government Business Enterprise equity Financial Report - Page TOTAL Revenues 299,065,583

65 CProvince of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Schedule 10 Asmt Code: 1514 CONSOLIDATED STATEMENT OF OPERATIONS: REVENUE MAH Code: for the year ended December 31, 2015 Continuity of Accumulated Surplus/(Deficit) 1 $ 2010 PLUS: Total Revenues (SLC ) ,065, LESS: Total Expenses (SLC ) ,522, PLUS: PLUS: PLUS: PSAB Adjustments Annual Surplus/(Deficit) ,543, Accumulated surplus/(deficit) at the beginning of year ,524, Prior period adjustments Restated accumulated surplus/(deficit) at the beginning of year ,524, Accumulated surplus/(deficit) at the end of year (SLC SLC ) ,067,975 Continuity of Government Business Enterprise Equity 6010 Government Business Enterprise Equity, beginning of year ,028, PLUS: Net Income for Government Business Enterprise for year , PLUS: Government Business Enterprise Equity, end of year ,650,000 1 $ Total of line 0899 includes: Provincial Gas Tax Funding 4018 Provincial Gas Tax for Transit operating expenses ,550, Provincial Gas Tax for Transit capital expenses Provincial Gas Tax ,550,000 1 $ Total of line 0899 includes: Canada Gas Tax Funding 1 $ 4025 General Government Transportation Services: 4030 Roads - Paved ,560, Roads - Unpaved Roads - Bridges and Culverts , Roadways - Traffic Operations & Roadside Transit - Conventional ,631, Transit - Disabled & special needs Air transportation Other Environmental Services: 4060 Wastewater collection/conveyance Wastewater treatment & disposal Urban storm sewer system , Rural storm sewer system Water treatment Water distribution/transmission Solid waste collection Solid waste disposal Waste diversion Other , Recreation Facilities - All Other Cultural services Commercial and industrial Canada Gas Tax 6,797, Financial Report - Page 63

66 1Province of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Schedule 12 Asmt Code: 1514 GRANTS, USER FEES AND SERVICE CHARGES MAH Code: for the year ended December 31, 2015 Ontario Conditional Grants Canada Conditional Grants Other Municipalities User Fees and Service Charges Ontario Grants - Tangible Capital Assets Canada Grants - Tangible Capital Assets Other Municipalities - Tangible Capital Assets $ $ $ $ $ $ $ 0299 General government , ,398 1,940 Protection services 0410 Fire , , Police , , , Court Security , Prisoner Transportation Conservation authority Protective inspection and control , Building permit and inspection services , Emergency measures Provincial Offences Act (POA) Other Subtotal 1,301, , , Transportation services 0611 Roads - Paved ,147, ,719 79, Roads - Unpaved Roads - Bridges and Culverts , , , Roads - Traffic Operations & Roadside Winter Control - Except sidewalks, Parking Lots ,732, Winter Control - Sidewalks, Parking Lots Only , Transit - Conventional ,000, Transit - Disabled & special needs Parking , Street lighting Air transportation Other Subtotal ,504, , ,377 0 Environmental services 0811 Wastewater collection/conveyance ,422,204 1,198, Wastewater treatment & disposal , Urban storm sewer system , Rural storm sewer system Water treatment ,076, Water distribution/transmission ,854, Solid waste collection , Solid waste disposal ,157 1,203, Waste diversion ,365 92,489 1,019, Other Subtotal 841, ,489 32,933,175 1,198, Health services 1010 Public health services ,500, , , Hospitals Ambulance services Ambulance dispatch Cemeteries Other Subtotal 5,500, , , Social and family services 1210 General assistance ,590,411 1,632, , Assistance to aged persons ,515, ,400 3,783, Child care ,123, ,530 1,520, Other Subtotal 58,229, ,276,450 5,985, Social Housing 1410 Public Housing ,101 2,244,045 1,490,694 53, Non - Profit/Cooperative Housing ,795 2,391,902 2,958, Rent Supplement Programs , ,387 5,673, Other Other Subtotal 219,896 5,401,042 5,285,480 5,726, Recreation and cultural services 1610 Parks , Recreation programs ,318 1, , Recreation facilities - Golf Course, Marina, Ski Hill Recreation facilities - All Other ,231 5,260 7,056, Libraries , , Museums ,433 21, ,491 5, Cultural services ,010 20, Other Riverview Park and Zoo , Subtotal 246,333 27, ,880, ,000 0 Planning and development 1810 Planning and zoning , , , , Commercial and industrial , , , Residential development Agriculture and reforestation Tile drainage/shoreline assistance Other Subtotal 264, , , , , , Other TOTAL 66,603,297 5,533,708 9,527,080 64,095,404 2,412, , , Financial Report - Page 64

67 SProvince of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Schedule 20 Asmt Code: 1514 TAXATION INFORMATION MAH Code: for the year ended December 31, 2015 General Information 1. Optional Property Classes in Effect 2 Y or N 0202 N New Multi-Residential Y 0205 G Parking Lot (Includes CJ, CR, CX, CY, CZ) N 0210 D Office Building N 0215 S Shopping Centre N 0220 L Large Industrial N 0225 Other N 2. Capping Parameters and Results Decrease - Percentage Retained Tax Adjustment - Increasers Net Class Impact Annualized Tax Limit CVA Tax Limit CVA Threshold Value for Protected Properties CVA Threshold Value for Clawed Back Properties Exclude Properties Previously at CVA Tax Exclude Properties that go from Capped to Clawed Back Exclude Properties that go from Clawed Back to Capped % $ $ % % $ $ Y or N Y or N Y or N 0320 M Multi-Residential % 17, % 5.0% Y Y Y 0330 C Commercial % 55, % 5.0% Y Y Y 0340 I Industrial % % 5.0% Y Y Y Low Band Middle Band Grad. Tax Rates in Effect? Number of Tax Bands CVA Boundary % of Highest Band Rate CVA Boundary % of Highest Band Rate 3. Graduated Taxation (Tax Bands) Y or N # $ % $ % 0610 C Commercial N 0611 G Parking Lot N 0612 D Office Building N 0613 S Shopping Centre N 0620 I Industrial N 0621 L Large Industrial N Phase-In Program in Effect? Year Current Phase- In Initiated Term of Current Phase-In 4. Phase-In Program in Effect (Most recent Phase-In only) R Residential N 0810 M Multi-Residential N 0815 N New Multi-Residential N 0820 C Commercial (Includes G, D, S) N 0840 I Industrial (Includes L) N 0850 F Farmland N 0855 T Managed Forest N 0860 P Pipeline N Y or N Year # of Yrs 5. Rebates for Eligible Charities Rebate Percentage for Eligible Charities (SLC xx) % % INTERIM Billing Installments FINAL Billing Installments 6. Property Tax Due Dates for Current Year Installments First Due Date Last Due Date Installments First Due Date Last Due Date To be completed by Single/Lower-tier Municipalities Only # YYYYMMDD YYYYMMDD # YYYYMMDD YYYYMMDD 1210 R Residential M Multi-Residential F Farmland T Managed Forest C Commercial I Industrial P Pipeline Other Financial Report - Page 65

68 2015 FinaProvince of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Schedule 22 Asmt Code: 1514 MUNICIPAL and SCHOOL BOARD TAXATION MAH Code: for the year ended December 31, GENERAL PURPOSE LEVY INFORMATION Phase-In Taxable Assessment LT/ST Taxes UT Taxes Education Taxes TOTAL 9299 TOTAL ,071,060, ,981, ,505, ,486,999 Property Tax Rate Percent of CVA Phase-In Tax Rates Municipal Taxes Education RTC RTQ Tax Band Class Description Tax Ratio Full Rate Assessment Taxable Assessment LT / ST UT EDUC TOTAL LT / ST UT Taxes TOTAL 2015 Financial Report - Page LIST LIST % $ $ 0.xxxxxx% 0.xxxxxx% 0.xxxxxx% 0.xxxxxx% $ $ $ $ Peterborough C 0010 RT 0 Residential Full Occupied % 6,412,196,428 6,281,662, % % % 77,653, ,249,243 89,902, RD 0 Residential Education Only % 2,412,000 2,302, % % % 0 0 4,490 4, MT 0 Multi-Residential Full Occupied % 494,104, ,306, % % % 11,537, ,648 12,472, NT 0 New Multi-Residential Full Occupied % 51,992,470 50,451, % % % 623, , , FT 0 Farmland Full Occupied % 5,520,100 5,338, % % % 16, ,602 19, TT 0 Managed Forest Full Occupied % 68,400 67, % % % CT 0 Commercial Full Occupied % 742,267, ,894, % % % 14,558, ,295,122 24,853, CH 0 Commercial Full Occupied, Shared PIL % 1,073,000 1,059, % % % 21, ,002 36, CU 0 Commercial Excess Land % 13,265,367 12,979, % % % 181, , , CX 0 Commercial Vacant Land % 19,706,401 19,218, % % % 269, , , GT 0 Parking Lot Full Occupied % 3,524,000 3,365, % % % 67, , , DT 0 Office Building Full Occupied % 34,646,200 34,206, % % % 685, ,472 1,169, DU 0 Office Building Excess Land % 137, , % % % 1, ,366 3, ST 0 Shopping Centre Full Occupied % 142,441, ,085, % % % 2,805, ,984,056 4,789, SU 0 Shopping Centre Excess Land % 201, , % % % 2, ,997 4, IT 0 Industrial Full Occupied % 55,654,600 54,872, % % % 1,296, ,553 2,136, IH 0 Industrial Full Occupied, Shared PIL % 1,497,400 1,465, % % % 34, ,419 57, IU 0 Industrial Excess Land % 2,833,700 2,793, % % % 42, ,785 70, IX 0 Industrial Vacant Land % 1,953,300 1,903, % % % 29, ,935 48, IJ 0 Industrial Vacant Land, Shared PIL % 826, , % % % 12, ,028 20, LT 0 Large Industrial Full Occupied % 49,402,472 48,753, % % % 1,152, ,932 1,898, LU 0 Large Industrial Excess Land % 213, , % % % 3, ,037 5, PT 0 Pipeline Full Occupied % 15,291,000 15,092, % % % 237, , , JT 0 Industrial, NConstr. Full Occupied % 2,138,000 2,077, % % % 49, ,723 73, JU 0 Industrial, NConstr. Excess Land % 194, , % % % 2, ,462 4, XT 0 Commercial, NConstr. Full Occupied % 90,726,376 88,489, % % % 1,772, ,053,025 2,825, XU 0 Commercial, NConstr. Excess Land % 3,358,304 3,258, % % % 45, ,147 72, YT 0 Office Build., NConstr. Full Occupied % 3,846,860 3,740, % % % 74, , , ZT 0 Shopp. Centre, NConstr. Full Occupied % 93,705,240 89,869, % % % 1,799, ,069,452 2,869, ZU 0 Shopp. Centre, NConstr. Excess Land % 265, , % % % 3, ,190 5, Subtotal 8,245,462,886 8,071,060, ,981, ,505, ,486,999

69 ch Province of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Schedule 22 Asmt Code: 1514 MUNICIPAL and SCHOOL BOARD TAXATION MAH Code: for the year ended December 31, 2015 Municipal Taxes Education LT / ST UT Taxes TOTAL 4. ADJUSTMENTS TO TAXATION $ $ $ $ 7010 Adjustments for properties, shared as if Payment-In-Lieu (Hydro properties RTQ = H, J, K) ,449-45, SUPPLEMENTARY TAXES 9799 Total of all supplementary taxes (Supps, Omits, Section 359) ,078, ,092 1,366, AMOUNT LEVIED BY TAX RATE 9910 TOTAL Levied by Tax Rate 116,105, ,747, ,853, AMOUNTS ADDED TO TAX BILL 2015 Financial Report - Page Local improvements ,912 12, Sewer and water service charges Sewer and water connection charges Fire service charges Minimum tax (differential only) Municipal drainage charges Waste management collection charges , , Business improvement area , , Other Subtotal 459, , OTHER TAXATION AMOUNTS 8045 Railway rights-of-way (RTC = W) ,061 3,946 7, Utility transmission and utility corridors (RTC = U) Other Subtotal 3, ,946 7, TOTAL AMOUNT LEVIED 9990 TOTAL Levies 116,568, ,751, ,320,505

70 - Province of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Schedule 24 Asmt Code: 1514 PAYMENTS-IN-LIEU of TAXATION MAH Code: for the year ended December 31, GENERAL PURPOSE PAYMENTS-IN-LIEU PIL Phased-In LT/ST PILS UT PILS Education PILS TOTAL Assessment 9299 TOTAL ,982, ,914, ,852 2,372, Financial Report - Page 68 Property Tax Rate Percent of PIL CVA PIL Phased-In Tax Rates Municipal PILS Education RTC Tax Class Description Tax Ratio Full Rate Assessment Assessment LT / ST UT EDUC TOTAL LT / ST UT PILS TOTAL LIST LIST % $ $ 0.xxxxxx% 0.xxxxxx% 0.xxxxxx% 0.xxxxxx% $ $ $ $ Peterborough C 1010 RF 0 Residential PIL: Full Occupied % 320, , % % % 3, , RP 0 Residential PIL: Full Occupied, Taxable Tenant of Province % 1,127,000 1,099, % % % 13, ,145 15, MP 0 Multi-Residential PIL: Full Occupied, Taxable Tenant of Province % 5,192,000 5,046, % % % 121, , , CF 0 Commercial PIL: Full Occupied % 29,367,160 29,126, % % % 583, , , CP 0 Commercial PIL: Full Occupied, Taxable Tenant of Province % 191, , % % % 3, ,630 6, CG 0 Commercial PIL: 'General' Only (No Educ.) % 13,715,540 13,289, % % % 266, , CY 0 Commercial PIL: Vacant Land % 2,945,500 2,853, % % % 40, ,288 68, CZ 0 Commercial PIL: Vacant Land, 'General' Only % 11,500 10, % % % DG 0 Office Building PIL: 'General' Only (No Educ.) % 46,576,460 43,909, % % % 879, , IF 0 Industrial PIL: Full Occupied % 61,000 60, % % % 1, , IY 0 Industrial PIL: Vacant Land % 93,000 91, % % % 1, , Subtotal 99,600,160 95,982,999 1,914, ,852 2,372,389

71 eu Province of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Schedule 24 Asmt Code: 1514 PAYMENTS-IN-LIEU of TAXATION MAH Code: for the year ended December 31, 2015 Municipal PILS Education LT / ST UT PILS TOTAL 4. SUPPLEMENTARY PAYMENTS-IN-LIEU $ $ $ $ 9799 Total of all supplementary PILS (Supps, Omits, Section 444) PAYMENTS-IN-LIEU LEVIED BY TAX RATE 9910 TOTAL PILS Levied by Tax Rate 1,914, ,852 2,372, AMOUNTS ADDED TO PAYMENTS-IN-LIEU 2015 Financial Report - Page Local improvements Sewer and water service charges Sewer and water connection charges Fire service charges Municipal drainage charges Waste management collection charges Business improvement area Other Subtotal OTHER PAYMENTS-IN-LIEU AMOUNTS 8045 Railway rights-of-way (RTC = W) - from Ontario Enterprises Railway rights-of-way (RTC = W) - from Province Utility transmission and utility corridors (RTC = U) - from Ontario Enterprises Utility transmission and utility corridors (RTC = U) - from Province Institutional Payments - Heads and Beds (Mun. Act 323, 324) , , Hydro-electric Power Dams - from Province ,575 34, Other Subtotal 867, , TOTAL PAYMENTS-IN-LIEU LEVIED 9990 TOTAL PILS Levied 2,781, ,852 3,239,524

72 2 Province of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Schedule 26 Asmt Code: 1514 TAXATION and PAYMENTS-IN-LIEU SUMMARY MAH Code: for the year ended December 31, Financial Report - Page Municipal and School Board Taxation TOTAL ENG - Public FRE - Public ENG - Separate FRE - Separate Other 9010 Legislated Percentage of Education Taxes distributed to each School Board (Applic. to Com, Ind, Pipelines) % % 0.681% % 0.844% 0.000% Taxable Asmt. Taxable Asmt. Phase-In Phase-In Municipal Taxes Distribution of Education Taxes in column 6 by School Board (CVA) (Wtd & Disc CVA) Taxable Asmt. Taxable Asmt. TOTAL Taxes LT / ST UT Education Taxes ENG - Public FRE - Public ENG - Separate FRE - Separate Other Property Class Group 16 2 (CVA) 18 (Wtd & Disc CVA) $ $ $ $ $ $ $ $ $ $ $ $ $ 0010 Residential ,414,608,428 6,414,608,428 6,283,965,373 6,283,965,373 89,907,147 77,653, ,253,733 10,201,049 17,129 1,988,544 47, Multi-residential ,096,870 1,014,117, ,758, ,762,081 13,194,214 12,161, ,033, , ,592 1, Farmland ,520,100 1,380,025 5,338,341 1,334,585 19,100 16, ,602 2, Managed Forests ,400 17,100 67,015 16, Subtotal 6,966,293,798 7,430,123,052 6,819,128,758 7,269,078, ,120,701 89,831, ,289,396 11,173,530 17,862 2,049,276 48, Commercial ,312,527 1,241,716, ,152,374 1,215,910,837 25,660,338 15,030, ,629,349 7,538,441 72,386 2,928,811 89, Commercial New Construction. 94,084, ,799,007 91,748, ,062,307 2,898,144 1,817, ,080, ,069 7, ,631 9, Parking Lot ,524,000 5,709,409 3,365,991 5,453, ,088 67, ,673 33, , Office Building ,784,010 56,288,332 34,344,295 55,575,928 1,172, , , ,561 3, ,868 4, Office Building New Constructio 3,846,860 6,232,490 3,740,158 6,059, ,416 74, ,508 31, , Shopping Centre ,642, ,004, ,287, ,188,218 4,794,535 2,808, ,986,053 1,408,529 13, ,237 16, Shopping Centre New Construc 93,970, ,117,332 90,132, ,900,831 2,875,256 1,803, ,071, ,019 7, ,280 9, Subtotal 1,149,165,057 1,843,867,898 1,123,771,156 1,803,151,148 37,635,640 22,290, ,345,235 10,882, ,501 4,228, , Industrial ,765, ,226,140 61,843, ,536,056 2,332,606 1,415, , ,147 6, ,593 7, Industrial New Construction.. 2,332,000 4,328,054 2,266,575 4,206,332 78,183 51, ,185 18, , Large Industrial ,616,031 94,703,121 48,958,523 93,452,078 1,903,216 1,155, , ,467 5, ,095 6, Large Industrial New Constructi Subtotal 114,713, ,257, ,068, ,194,467 4,314,005 2,623, ,690,874 1,199,185 11, ,903 14, Pipelines ,291,000 19,428,745 15,092,232 19,176, , , , ,373 1,223 49,486 1, Other Property Classes Adj. for shared PIL properties , ,449-32, , Supplementary Taxes ,366,670 1,078, , ,552 1,063 49,160 1, Total Levied by Rate 146,853, ,105, ,747,746 23,587, ,854 6,829, , Amts Added to Tax Bill , , Other Taxation Amounts ,007 3, ,946 2, , TOTAL before Adj. 8,245,462,886 9,508,677,009 8,071,060,351 9,303,600, ,320, ,568, ,751,692 23,590, ,881 6,830, , Payments-In-Lieu of Taxation PIL Asmt. PIL Asmt. Phase-In Phase-In Municipal PILS (CVA) (Wtd & Disc CVA) PIL Asmt. PIL Asmt. Total PILS Levied Education PILS LT / ST UT (CVA) (Wtd & Disc CVA) Property Class Group $ $ $ $ $ $ $ $ 1010 Residential ,447,000 1,447,000 1,410,750 1,410,750 20,191 17, , Multi-residential ,192,000 10,109,914 5,046,575 9,826, , , , Farmland Managed Forests Subtotal 6,639,000 11,556,914 6,457,325 11,237, , , , Commercial ,230,700 73,463,434 45,464,876 72,267,995 1,336, , , Commercial New Construction Parking Lot Office Building ,576,460 75,460,852 43,909,798 71,140, , , Office Building New Constructio Shopping Centre Part 3 contains Distribution of PILS by School Boards 1345 Shopping Centre New Construc Subtotal 92,807, ,924,285 89,374, ,408,455 2,216,241 1,772, , Industrial , , , ,767 4,639 2, , Industrial New Construction Large Industrial Large Industrial New Constructi Subtotal 154, , , ,767 4,639 2, , Pipelines Other Property Classes Supplementary PILS Total Levied by Rate 2,372,389 1,914, , Amts Added to PILs Other PIL Amounts , , TOTAL before Adj. 99,600, ,713,363 95,982, ,873,713 3,239,524 2,781, ,852

73 2 Province of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Schedule 26 Asmt Code: 1514 TAXATION and PAYMENTS-IN-LIEU SUMMARY MAH Code: for the year ended December 31, Payments-In-Lieu of Taxation: Distribution of Entitlements PILS Levied TOTAL PILS Adjustment TOTAL PIL Distrib. of PIL Entitlement in Col. 7 Distribution of Education PILS in column 10 by School Board Source of PILS LT / ST UT Education Levied Entitlement English - English - French - to PILS Levied LT / ST UT Education French - Public Public Separate Separate Other $ $ $ $ $ $ $ $ $ $ $ $ $ $ 5010 Canada , , , , , , Canada Enterprises ,772 28,833 69,605 69,605 69,605 Ontario Municipal Tax Assist. Act 5210 Prev. Exempt Properties Other Mun. Tax Asst. Act ,191,899 12,957 1,204,856 9,774 1,214,630 1,201,673 12,957 10, , Inst. Payments - Heads and Beds , , , , Railway Rights-of-way Utility Corridors/Transmission Hydro-Electric Power Dams , ,575 34,575 34, Other Ontario Enterprises 5410 Ontario Mortgage and Housing Corporation... 81,055 1,658 82,713 62, , ,835 1,658 1, Liquor Control Board of Ont ,576 11,576 11,576 11, Railway Rights-of-way Utility Corridors/Transmission Ontario Lottery and Gaming Corp Other Municipal Enterprises , , , , , , Other Muns and Enterprises ,450 2,450 2, Amounts Added to PIL TOTAL 2,781, ,852 3,239, ,305 3,085,219 3,069, ,221 12, , Financial Report - Page 71

74 c Province of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Upper-Tier ONLY Schedule 28 Asmt Code: 1514 UPPER-TIER ENTITLEMENTS MAH Code: for the year ended December 31, 2015 Upper-tier Entitlements from Lower-tiers Lower-Tier Municipality MAH Code Asmt Code General Purpose Levy Upper-Tier Special Area Levies (Total) Supplementary Taxes Amounts Added to Tax Bills Other Taxation Amounts Payments - In - Lieu 5% Capping Limit Adjustment PLUS: UT Tax Adjust. Applied to Taxation LESS: UT Tax Adjust. Recovered from Allowances TOTAL $ $ $ $ $ $ $ $ $ $ Financial Report - Page Hydro - Electric Power Dams TOTAL Upper-Tier Entitlement

75 C Province of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Schedule 40 Asmt Code: 1514 CONSOLIDATED STATEMENT OF OPERATIONS: EXPENSES MAH Code: for the year ended December 31, 2015 Salaries, Wages and Employee Benefits Interest on Long Term Debt Materials Contracted Services Rents and Financial Expenses External Transfers Amortization Total Expenses Before Adjustments Inter-Functional Adjustments Allocation of Program Support * Total Expenses After Adjustments $ $ $ $ $ $ $ $ $ $ $ General government 0240 Governance ,066, ,966 31,875 1,756 1,233,728-14,491 40,416 1,259, Corporate Management ,941, ,582 1,181, , ,553 1,780,744 5,961, , ,849 5,732, Program Support ,690,591 70,127 3,805, ,643 7,554,925-1,328,978-6,155,820 70, Subtotal 5,698,391 70,127 4,223,112 2,201, , ,553 1,780,744 14,750,627-1,681,374-6,006,555 7,062,698 Protection services 0410 Fire ,619,829 23, ,257 84, ,950 14,917,578 1,024, ,157 16,453, Police ,899, ,095 1,650, ,905 1,323 16, ,960 25,111, , ,319 26,461, Court Security ,747,315 24,328 1,771,643 58,726 1,830, Prisoner Transportation Conservation authority , , , Protective inspection and control ,223 14, , ,874 35,639 17, , Building permit and inspection services ,193,989 86,626 4, ,285, ,169 48,213 1,502, Emergency measures ,822 49,899 25,813 5, ,930 9, , Provincial Offences Act (POA) ,663 83, ,430 50, , ,075 2,019,889 59,937 39,195 2,119, Other Subtotal 39,860, ,112 2,631, ,038 52,115 1,811,220 1,469,381 46,897,733 1,824,722 1,499,652 50,222, Financial Report - Page 73 Transportation services 0611 Roads - Paved ,043, ,232 2,163, ,813 4,430,790 12,942,900-5,831,045 73,085 7,184, Roads - Unpaved ,037 9,037 9, Roads - Bridges and Culverts , , , , Roads - Traffic Operations & Roadside , , ,774 1,764,420 3,421, ,132 66,318 3,831, Winter Control - Except sidewalks, Parking Lots , , ,763 5,398 1,358, ,116 76,694 2,395, Winter Control - Sidewalks, Parking Lots Only ,783 30,664 8,318 6, , ,263 20, , Transit - Conventional ,062,251 34,499 2,510, ,111 8,428 1,476,348 12,541,556 65, ,814 12,974, Transit - Disabled & special needs ,262 1,060 64, , ,677 37,092 1,220, Parking ,338 82, , ,685 12, ,923 2,008, ,787 50,304 2,201, Street lighting ,673,162 87,575 81,504 1,842,241 58,364 1,900, Air transportation , , ,994 1,344,340 3,463 1,029,913 3,548,900 3,133 64,750 3,616, Other Public Works Building 223, , , Subtotal 16,067,910 1,191,325 8,101,015 4,047,379 24, ,175,402 39,607,331-3,643, ,338 36,779,294 Environmental services 0811 Wastewater collection/conveyance , , ,437 2,820,510 1,390,217 5,472, , ,975 6,328, Wastewater treatment & disposal ,149,067 2,317, ,011 1,421,501 6,676,601-67, ,944 6,780, Urban storm sewer system , , , ,519 1,994, ,208 44,794 2,395, Rural storm sewer system Water treatment ,901, ,246 1,251,756 6,365, , ,730 6,760, Water distribution/transmission ,540 3,378, ,662 4,360,687 8,246, ,870 89,226 7,468, Solid waste collection , ,671 68, ,270 1,465, ,432 42,696 1,662, Solid waste disposal ,407 2,098,577 1,342, , ,873 4,049, , ,893 4,475, Waste diversion ,740 98,115 2,695,982 43,820 64,428 3,361, , ,216 3,936, Other Other environmental 2,102 2,102 2, Subtotal 4,411, ,288 5,194,960 16,493, , ,155,353 37,634,878 1,247, ,474 39,809,154 Health services 1010 Public health services ,468,546 1,336, ,576 76, ,090 54,682 7,453, ,139 7,686, Hospitals Ambulance services ,229,413 4,229, ,195 4,369, Ambulance dispatch Cemeteries Other Subtotal 5,468, ,336,625 4,380,989 76, ,090 54,682 11,682, ,334 12,055,895 Social and family services 1210 General assistance ,280, , , ,924 37,183,463 47,619,924 1,581, ,353 49,599, Assistance to aged persons ,433, ,239 1,568, ,941-2, ,151 13,838, ,321 14,259, Child care ,109,984 1,622,800 13,919 97,390 8,649,667 9,644 12,503,404-37, ,168 12,591, Other Subtotal 20,823, ,239 3,900,239 1,576, ,018 45,833, ,795 73,962,007 1,543, ,842 76,450,126

76 C Province of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Schedule 40 Asmt Code: 1514 CONSOLIDATED STATEMENT OF OPERATIONS: EXPENSES MAH Code: for the year ended December 31, 2015 Salaries, Wages and Employee Benefits Interest on Long Term Debt Materials Contracted Services Rents and Financial Expenses External Transfers Amortization Total Expenses Before Adjustments Inter-Functional Adjustments Allocation of Program Support * Total Expenses After Adjustments Social Housing $ $ $ $ $ $ $ $ $ $ $ 1410 Public Housing ,987, ,572 5,913,889 1,977, , ,416 11,670, ,057 12,001, Non-Profit/Cooperative Housing ,950 7,695 67,157 6,719,227 1,270 10,114 7,490,413-1,127, ,310 6,572, Rent Supplement Programs ,442,277 1,600,419 3,042, ,242 58,125 3,412, Other Other Subtotal 2,672, ,267 5,981,046 10,138, ,942 1,600, ,530 22,203, , ,492 21,986,272 Recreation and cultural services 1610 Parks ,258, , , ,712 2,624,005 1,429, ,409 4,160, Recreation programs ,112, , ,987 19, ,781 1,772, ,351 1,827, Rec. Fac. - Golf Crs, Marina, Ski Hill ,238 5, ,038 2,585 6, ,623 11, , Rec. Fac. - All Other ,819, ,846 2,601,148 1,218,946 87, ,051 1,975,484 11,232,874 77, ,845 11,602, Libraries ,575, ,528 95,862 5, ,706 3,379, ,601 3,475, Museums ,516 46, ,218 58, ,095-2,397 28, , Cultural services ,841 85, ,449 1,648, ,381 3,322,976 29,738 3,352, Other Riverview Park and Zoo 2,106, , ,854 2,498,549 74,274 2,572, Subtotal 10,687, ,493 3,966,783 4,500, ,785 1,854,295 4,350,137 26,090,529 1,505, ,183 28,289, Financial Report - Page 74 Planning and development 1810 Planning and zoning ,542, , ,302 18,240 2,139,336 70,309 2,209, Commercial and Industrial ,706 25,883 1,108, ,991 54,641 4,440 11,925 2,554,014 20,286 83,931 2,658, Residential development Agriculture and reforestation Tile drainage/shoreline assistance Other Subtotal 2,311,846 25,883 1,218,082 1,048,293 54,641 22,680 11,925 4,693,350 20, ,240 4,867, Other TOTAL 108,002,831 3,859,734 36,553,850 45,259,918 2,048,876 52,046,387 29,750, ,522, ,522,545

77 Province of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Schedule 42 Asmt Code: 1514 ADDITIONAL INFORMATION MAH Code: for the year ended December 31, 2015 Additional information contained in Schedule 40 1 Total of column 1 includes: $ 5010 Salaries and wages ,436, Employee benefits ,566, Total Salaries, Wages and Employee benefits (Not including line 5050) ,002, Salaries, Wages and Employee benefits capitalized on Schedule Total Salaries, Wages and Employee benefits (including capitalized wages) ,002,831 Total of column 3 includes: 5110 Amounts for tax write-offs reported in SLC Total of column 4 includes: 5210 Municipal Property Assessment Corporation (MPAC) ,495 Total of column 5 includes: 5610 Short term interest costs Total of column 6 includes: 5810 Grants to charitable and non-profit organizations ,616, Grants to universities and colleges Contributions to UNCONSOLIDATED joint local boards 5840 Health unit District Social Services Administration Board (DSSAB) Consolidated Municipal Service Manager (CMSM) Homes for the aged Recreation boards Fire area boards Other Other Other Other Total of column 11 includes: Payments for long term commitments and liabilities financed from the consolidated 6010 statement of operations , Financial Report - Page 75

78 Tan Province of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Schedule 51 Asmt Code: 1514 SCHEDULE OF TANGIBLE CAPITAL ASSETS MAH Code: for the year ended December 31, Financial Report - Page 76 ANALYSIS BY FUNCTIONAL CLASSIFICATION COST AMORTIZATION 2015 Opening Net Book Value 2015 Opening Cost Balance Additions and Betterments Disposals Write Downs 2015 Closing Cost Balance 2015 Opening Amortization Balance Annual Amortization Amortization Disposal 2015 Closing Amortization Balance 2015 Closing Net Book Value $ $ $ $ $ $ $ $ $ $ $ 0299 General government ,991,247 36,477,765 3,888,820 40, ,400 40,204,157 6,486,518 1,780,744 13,190 8,254,072 31,950,085 Protection services 0410 Fire ,156,087 10,456, ,844 10,977,640 4,300, ,950 4,768,659 6,208, Police ,264,703 15,075, , ,369 15,232,479 4,810, , ,266 5,501,111 9,731, Court Security Prisoner Transportation Conservation authority Protective inspection and control Building permit and inspection services Emergency measures , , ,816 15,290 5,396 20, , Provincial Offences Act (POA) ,193,578 2,524,948 2,524,948 1,331, ,075 1,440,445 1,084, Other Subtotal 17,868,894 28,326, , , ,004,883 10,457,786 1,469, ,266 11,730,901 17,273,982 Transportation services 0611 Roads - Paved ,431, ,001,609 3,085,900 1,344, ,742,745 74,570,182 4,430,790 1,230,418 77,770,554 63,972, Roads - Unpaved , , ,768 92,399 9, , , Roads - Bridges and Culverts ,703,181 25,102,248 25,102,248 6,399, ,689 6,930,756 18,171, Roads - Traffic Operations & Roadside ,623,843 64,144,398 2,113,727 74,992 66,183,133 24,520,555 1,764,420 70,808 26,214,167 39,968, Winter Control - Except sidewalks, Parking Lots , , ,000 79,250 5,398 84, , Winter Control - Sidewalks, Parking Lots Only , , , ,731 6, ,161 45, Transit - Conventional ,242,959 27,801,428 4,373, ,685 31,972,443 13,558,469 1,476, ,721 14,909,096 17,063, Transit - Disabled & special needs , , , ,189 64, , , Parking ,492,406 19,348,057 85,480 28,969 19,404,568 9,855, ,923 28,967 10,378,607 9,025, Street lighting ,269,063 2,037,344 1,270 1,270 2,037, ,281 81,504 1, ,516 1,188, Air transportation ,243,143 34,606, ,975 35,214,981 3,362,863 1,029,913 4,392,776 30,822, Other Public Works Building. 6,925,749 7,398, ,418 7,668, , , ,029 6,971, Subtotal 187,870, ,834,359 10,538,470 1,652, ,720, ,963,785 10,175,402 1,457, ,682, ,038,145 Environmental services 0811 Wastewater collection/conveyance ,092,072 65,213,056 3,169,418 23,543 68,358,931 20,120,984 1,390,217 14,310 21,496,891 46,862, Wastewater treatment & disposal ,534,282 27,075,030 3,593,079 30,668,109 8,540,748 1,421,501 9,962,249 20,705, Urban storm sewer system ,274,451 69,391, ,679 3,191 70,272,296 20,117, ,519 1,312 21,115,564 49,156, Rural storm sewer system Water treatment ,099,662 50,244,785 18,264,801 68,509,586 23,145,123 1,251,756 24,396,879 44,112, Water distribution/transmission ,991, ,631,720 5,944, ,575,887 69,639,756 4,360,687 74,000,443 84,575, Solid waste collection ,221,288 3,402, ,514 3,622,013 1,181, ,270 1,512,481 2,109, Solid waste disposal ,143,751 7,324,817 82,719 7,407,536 3,181, ,873 3,514,939 3,892, Waste diversion ,306,307 3,210,424 3,210,424 1,904,117 64,428 1,968,545 1,241, Other Other environmental. 49,922 52,549 52,549 2,627 2,102 4,729 47, Subtotal 230,713, ,546,688 32,157,377 26, ,677, ,832,989 10,155,353 15, ,972, ,704,611 Health services 1010 Public health services ,386 1,073, , , ,081 54, , , , Hospitals Ambulance services Ambulance dispatch Cemeteries Other Subtotal 409,386 1,073, , , ,081 54, , , ,703 Social and family services 1210 General assistance Assistance to aged persons ,220,868 18,229,523 24,030 18,253,553 8,008, ,151 8,757,806 9,495, Child care , , , ,387 9, , , Other Subtotal 10,341,461 18,513,503 24, ,537,537 8,172, , ,930,837 9,606,700

79 Tan Province of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Schedule 51 Asmt Code: 1514 SCHEDULE OF TANGIBLE CAPITAL ASSETS MAH Code: for the year ended December 31, 2015 ANALYSIS BY FUNCTIONAL CLASSIFICATION COST AMORTIZATION 2015 Opening Net Book Value 2015 Opening Cost Balance Additions and Betterments Disposals Write Downs 2015 Closing Cost Balance 2015 Opening Amortization Balance Annual Amortization Amortization Disposal 2015 Closing Amortization Balance 2015 Closing Net Book Value $ $ $ $ $ $ $ $ $ $ $ Social Housing 1410 Public Housing ,164,246 74,176, ,066 11,386 74,367,853 37,011, ,530 11,386 37,995,071 36,372, Non-Profit/Cooperative Housing Rent Supplement Programs Other Other Subtotal 37,164,246 74,176, ,066 11, ,367,853 37,011, ,530 11,386 37,995,071 36,372, Financial Report - Page 77 Recreation and cultural services 1610 Parks ,550,038 39,387, , ,400 39,902,174 8,837, ,712 9,680,833 30,221, Recreation programs Rec. Fac. - Golf Crs, Marina, Ski Hill Rec. Fac. - All Other ,590,361 60,082,368 1,353,474 49,458 61,386,384 27,492,007 1,975,484 49,458 29,418,033 31,968, Libraries ,904,945 5,766, , ,379 5,912,899 3,861, , ,379 4,027,130 1,885, Museums Cultural services ,330,656 15,481,995 1,072,352 16,554,347 3,151, ,381 3,928,720 12,625, Other Riverview Park and Zoo. 5,004,181 8,658, ,860 9,633,018 3,653, ,854 3,911,831 5,721, Subtotal 82,380, ,376,428 4,270, , , ,388,822 46,996,247 4,350, ,837 50,966,547 82,422,275 Planning and development 1810 Planning and zoning ,791,578 23,791, ,791, ,791, Commercial and Industrial ,884 65,339 4,446 69,785 32,455 11,925 44,380 25, Residential development Agriculture and reforestation Tile drainage/shoreline assistance Other Subtotal 23,824,462 23,856,917 4, ,861,372 32,455 11, ,380 23,816, Other Total Tangible Capital Assets 620,564,150 1,012,181,980 51,974,539 2,947, ,061,209, ,617,830 29,750,949 2,518, ,849, ,359,275

80 eprovince of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Schedule 51 SCHEDULE OF TANGIBLE CAPITAL ASSETS Asmt Code: 1514 MAH Code: for the year ended December 31, 2015 SEGMENTED BY ASSET CLASS 2015 Opening Net Book Value (NBV) 2015 Closing Net Book Value (NBV) 1 11 General Capital Assets $ $ 2005 Land ,585,133 52,525, Land Improvements ,419,012 57,801, Buildings ,605, ,059, Machinery & Equipment ,910,656 13,446, Vehicles ,439,443 21,371, Other Books and meterials ,453,705 1,480, Other Total General Capital Assets 254,413, ,685, Opening Net Book Value (NBV) 2015 Closing Net Book Value (NBV) 1 11 Infrastructure Assets $ $ 2205 Land ,697,958 25,697, Land Improvements , , Buildings ,360,750 29,027, Machinery & Equipment Vehicles ,201, , Linear Assets ,604, ,788, Other Other Total Infrastructure Assets 366,150, ,673, Total Tangible Capital Assets 620,564, ,359, Construction-in-progress 24,597,617 37,589, Total Tangible Capital Assets and Construction-in-progress 645,161, ,949, Financial Report - Page 78

81 t Province of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Schedule 51 Asmt Code: 1514 SCHEDULE OF TANGIBLE CAPITAL ASSET: CONSTRUCTION-IN-PROGRESS MAH Code: for the year ended December 31, 2015 ANALYSIS BY FUNCTIONAL CLASSIFICATION COST 2015 Opening Balance Expenditures in 2015 Less Assets Capitalized 2015 Closing Balance $ $ $ $ 0299 General government ,841 3,867,404 3,747, ,704 Protection services 0410 Fire , , ,844 39, Police , , ,729 8, Court Security Prisoner Transportation Conservation authority Protective inspection and control Building permit and inspection services Emergency measures Provincial Offences Act (POA) Other Subtotal 27,745 1,131,245 1,111,573 47,417 Transportation services 0611 Roads - Paved ,402,974 17,958,507 4,990,412 20,371, Roads - Unpaved Roads - Bridges and Culverts , , , , Roadways - Traffic Operations & Roadside ,567 70, Winter Control - Except sidewalks, Parking Lots Winter Control - Sidewalks, Parking Lots Only Transit - Conventional ,632 4,547,279 4,397, , Transit - Disabled & special needs Parking ,186,458 85,479 1,100, Street lighting Air transportation ,093 36, Other Subtotal 7,620,110 24,326,597 10,057,941 21,888,766 Environmental services 0811 Wastewater collection/conveyance ,318,435 10,907,817 16,766,439 3,459, Wastewater treatment & disposal Urban storm sewer system , , , , Rural storm sewer system Water treatment Water distribution/transmission ,903,505 4,819,005 1,084, Solid waste collection Solid waste disposal ,930,853 82,718 1,848, Waste diversion ,856 32,471 71, Other Subtotal 15,661,931 13,724,456 22,449,320 6,937,067 Health services 1010 Public health services , , Hospitals Ambulance services Ambulance dispatch Cemeteries Other Subtotal 0 585, ,505 Social and family services 1210 General assistance , ,326 1,074, Assistance to aged persons Child care Other Subtotal 75, , ,074,081 Social Housing 1410 Public Housing ,333 28,634 54, Non-Profit/Cooperative Housing Rent Supplement Programs Other Other Subtotal 26,333 28, ,967 Recreation and cultural services 1610 Parks ,127, , , Recreation programs ,293 1,881, ,611 1,759, Rec. Fac. - Golf Crs, Marina, Ski Hill Rec. Fac. - All Other , , , Libraries , ,979 78, , Museums ,169 78, Cultural services ,051 39,075 65, Other Subtotal 201,210 3,759, ,998 3,174,645 Planning and development 1810 Planning and zoning ,692 4,898,887 2,175,996 3,321, Commercial and Industrial Residential development Agriculture and reforestation Tile drainage/shoreline assistance Other Subtotal 598,692 4,898,887 2,175,996 3,321, Other Total Construction-In-Progress 24,597,617 53,320,487 40,328,369 37,589, Financial Report - Page 79

82 et Province of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Schedule 53 Asmt Code: 1514 MAH Code: CONSOLIDATED STATEMENT OF CHANGE IN NET FINANCIAL ASSETS (NET DEBT) AND TANGIBLE CAPITAL ASSET ACQUISITION FINANCING/DONATIONS for the year ended December 31, 2015 CONSOLIDATED STATEMENT OF CHANGE IN NET FINANCIAL ASSETS (NET DEBT) 1 $ 1010 Annual Surplus/(Deficit) (SLC ) ,543, Acquisition of tangible capital assets ,991, Amortization of tangible capital assets (SLC ) ,750, Contributed (Donated) tangible capital assets , Change in construction-in-progress ,992, (Gain)/Loss on sale of tangible capital assets ,883, Proceeds on sale of tangible capital assets ,312, Write-downs of tangible capital assets Other Other Subtotal -34,787, Change in supplies inventories , Change in prepaid expenses , Other Subtotal -557, (Increase)/decrease in net financial assets/net debt ,801, Net financial assets (net debt), beginning of year ,654, Net financial assets (net debt), end of year ,853,383 SOURCES OF FINANCING FOR TCA ACQUISITIONS / DONATIONS 1 Long Term Liabilities Incurred $ 0205 Canada Mortgage and Housing Corporation (CMHC) Ontario Financing Authority Commercial Area Improvement Program Other Ontario housing programs Serial debentures ,273, Sinking fund debentures Long term bank loans Long term reserve fund loans Lease purchase agreements (Tangible capital leases) Construction Financing Debentures Infrastructure Ontario Other Other Subtotal 22,273,100 Financing from Dedicated Revenue 0405 Municipal Property Tax by Levy ,066, Reserves and Reserve funds (SLC SLC SLC ) ,017, Municipal User Fees & Service Charges , Development Charges (SLC ) ,862, Recreation land (The Planning Act) (SLC ) , Donations , Other Proceeds from the sale of Tangible Capital Assets, etc Investment income Prepaid special charges Other Other Other Other Subtotal 31,509,432 Government Transfers 0425 Capital Grants: Federal (SLC (SLC SLC ) , Capital Grants: Provincial (SLC (SLC SLC ) ,412, Capital Grants: Other Municipalities (SLC ) , Canada Gas Tax (SLC ) ,797, Provincial Gas Tax (SLC ) Subtotal 10,201, Subtotal 41,710, Contributed (Donated) tangible capital assets , Total Capital Financing 64,966, Unexpended Capital Financing or (Unfinanced Capital Outlay) Financial Report - Page 80

83 ConProvince of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Schedule 54 Asmt Code: 1514 CONSOLIDATED STATEMENT OF CASH FLOW - DIRECT METHOD MAH Code: for the year ended December 31, 2015 * Municipalities must choose either the direct or indirect method. If indirect method is chosen, please use Schedule 54B. CONSOLIDATED STATEMENT OF CASH FLOW - DIRECT METHOD 2015 Actual Operating Transactions 1 Cash received from $ 0210 Taxes Transfers User Fees Fees, Permits, Licenses and Fines Enterprises Investments Other Subtotal 0 Cash paid for 0410 Salaries, Wages and Employment Contracts and Benefits Material and Supplies Contracted Services Financing Charges External Transfers Other Subtotal Cash provided by operating transactions 0 Capital Transactions 0610 Proceeds on sale of tangible capital assets Cash used to acquire tangible capital assets Change in construction-in-progress Other Cash applied to capital transactions 0 Investing Transactions 0810 Proceeds from portfolio investments Portfolio investments Other Cash provided by / (applied to) investing transactions 0 Financing Transactions 1010 Proceeds from long term debt issues Principal long term debt repayment Temporary loans Repayment of temporary loans Other Other Other Cash applied to financing transactions Increase in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year Actual 1 Cash and cash equivalents represented by: $ 1401 Cash Temporary borrowings Short term investments Other Cash and cash equivalents, end of year Cash: $ 1501 Unrestricted Restricted Unallocated Cash and cash equivalents, end of year Financial Report Page

84 onsprovince of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Schedule 54 Asmt Code: 1514 CONSOLIDATED STATEMENT OF CASH FLOW - INDIRECT METHOD MAH Code: for the year ended December 31, 2015 * Municipalities must choose either the direct or indirect method. If direct method is chosen, please use Schedule 54A. CONSOLIDATED STATEMENT OF CASH FLOW - INDIRECT METHOD 2015 Actual 1 Operating Transactions $ 2010 Annual Surplus/(Deficit) (SLC ) ,543, Non-cash items including amortization ,750, Contributed (Donated) tangible capital assets , Change in non-cash assets and liabilities ,057, Prepaid expenses , Change in deferred revenue , Other Gain on sale of tangible capital assets ,883, Other Income from Government business enterprise ,956, Other Other operating transactions ,106, Cash provided by operating transactions 46,556,517 Capital Transactions 0610 Proceeds on sale of tangible capital assets ,312, Cash used to acquire tangible capital assets ,991, Change in construction-in-progress ,992, Other Cash applied to capital transactions -61,671,178 Investing Transactions 0810 Proceeds from portfolio investments ,817, Portfolio investments ,099, Other Dividend from Government business enterprise ,335, Cash provided by / (applied to) investing transactions 2,053,337 Financing Transactions 1010 Proceeds from long term debt issues ,273, Principal long term debt repayment ,230, Temporary loans Repayment of temporary loans Other Other Other Cash applied to financing transactions 12,042, Increase in cash and cash equivalents ,018, Cash and cash equivalents, beginning of year ,522, Cash and cash equivalents, end of year ,504, Actual 1 Cash and cash equivalents represented by: $ 1401 Cash ,580, Temporary borrowings Short term investments ,924, Other Cash and cash equivalents, end of year ,504,452 Cash: $ 1501 Unrestricted ,470, Restricted ,034, Unallocated Cash and cash equivalents, end of year ,504, Financial Report - Page 82 1

85 0Province of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Schedule 60 Asmt Code: 1514 CONTINUITY OF RESERVES AND RESERVE FUNDS MAH Code: for the year ended December 31, 2015 Obligatory Res. Funds, Deferred Rev. Discretionary Res. Funds $ $ $ 0299 Balance, beginning of year ,035,520 32,770,728 78,311, Allocation of Surplus ,557,219 15,872, Allocation of Surplus : for operating ,120,523 15,269, Allocation of Surplus : for capital , ,277 Development Charges Act 0610 Non-discounted services ,050, Discounted services ,310, Credits utilized (Development Charges Act) (SLC ) Subtotal Development Charges Act 5,361, Lot levies ,780 25, Subdivider contributions , Recreational land (the Planning Act) , Investment Income , , , Gasoline Tax - Province ,576, Building Code Act, 1992 (Section (d)) ,325, Gasoline Tax - Federal ,557, Building Canada Fund (BCF) Inter - Reserve Fund / Reserves Transfer Other 0896 Other 0897 Other 0898 Other 9940 TOTAL Revenues & Surplus 13,067,698 9,678,747 16,091,505 Reserves Less: Utilization of reserve funds and reserves (transfers) 1012 For acquisition of tangible capital asset ,362,919 10,654, For current operations ,441, ,392 2,589, Development Charges earned to tangible capital asset acquisition (SLC ) ,862, Development Charges earned to operations (SLC ) ,649, Recreational land (the Planning Act) earned to tangible capital asset acquisition , Recreational land (the Planning Act) earned to operations Deferred revenue earned (Provincial Gas Tax) for Transit (Operations) ,550, Deferred revenue earned (Provincial Gas Tax) for Transit (Capital) Deferred revenue earned (Canada Gas Tax) ,797, Development Charges Act - Credits Provided (SLC ) Inter - Reserve Fund / Reserves Transfer Less: Utilization (deferred revenue recognized) ,945,685 15,068,311 13,243, Balance, end of year ,157,533 27,381,164 81,159, Financial Report - Page 83

86 0Province of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Schedule 60 Asmt Code: 1514 CONTINUITY OF RESERVES AND RESERVE FUNDS MAH Code: for the year ended December 31, 2015 Obligatory Res. Funds, Deferred Rev. Discretionary Res. Funds Reserves Totals in line 2099 are analysed as follows: $ $ $ 5010 Working funds ,210, Contingencies , ,529 Asset Replacement funds for: Sewer & Water 5030 Sewer Water Replacement of equipment , , Sick leave ,139, Insurance ,651, Workplace Safety and Insurance Board (WSIB) ,457, Post-employment benefits Tax rate stabilization , Lot levies Parking revenues Debenture repayment , Exchange rate stabilization Per Service Purpose: 5205 General government ,175, Protection services ,047 1,142,433 Transportation services: 5215 Roadways ,214,983 3,826, Winter Control Transit ,993 2,963, Parking Street lighting Air transportation Environmental services: 5225 Wastewater system ,202,275 17,657, Storm water system ,795, Waterworks system ,327, Solid waste collection Solid waste disposal ,637, Waste diversion Health services , Social and family services ,852 7,884, Social housing ,347,404 10,276,649 Recreation and cultural services: 5265 Parks , Recreation programs Recreation facilities - Golf Course, Marina, Ski Hill , Recreation facilities - All Other , Libraries , Museums Cultural services ,729 77, Planning and development ,019, Other Obligatory Deferred Revenue: 5610 Development Charges Act - Non-discounted services ,964, Development Charges Act - Discounted services ,241, Subdivider contributions , Recreational land (the Planning Act) , Building Code Act, 1992 (Section (d)) , Gasoline Tax - Province , Gasoline Tax - Federal ,147, Canada Transit Funding (Bill C-48) Building Canada Fund (BCF) Other 5696 Other 5697 Other 5698 Other 5699 Other 9930 TOTAL 15,157,533 27,381,164 81,159, Financial Report - Page 84

87 ule Province of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Schedule 61 Asmt Code: 1514 DEVELOPMENT CHARGES RESERVE FUNDS MAH Code: for the year ended December 31, 2015 Development Charges Proceeds Development Charges Disbursements Balance January 1 Development Charges Collected Interest and Investment Income Credits Utilized Total To: Consolidated To: Tangible Capital Statement of Operations Asset Acquisition Other Disbursements Credits Provided Total Balance December Financial Report - Page Development Charges $ $ $ $ $ $ $ $ $ $ $ 0205 General Government ,676 23, ,699 77,313 77,313 21, Fire Protection , ,205-3, , , , , Police Protection , ,780 15,780 48, Roads and Structures ,558,528 3,542,945 76,728 3,619,673 40,507 1,426,907 1,467,414 8,710, Transit ,986 89,139 4,716 93, , Wastewater ,219, ,660-14, , , ,892-1,582, Stormwater Water Emergency Medical Services Homes for the Aged Daycare Housing , , , Parkland Development , ,084 4, ,339 29,059 29, , GO Transit Library ,656, ,387 11, , , ,000 1,311, Recreation , ,713 3, , , Development Studies Parking , ,638 7, , , Animal Control Municipal Cemeteries Other... Growth Areas -2,228, ,913-23, , ,645 97, ,017-2,678, Other Other Other TOTAL 6,287,402 5,361,191 68, ,429,650 1,649,044 1,862, ,511,475 8,205,577

88 15 F Province of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Schedule 62 Asmt Code: 1514 DEVELOPMENT CHARGES RATES MAH Code: for the year ended December 31, 2015 Sq. Foot / Sq. Metre / Per Hectare / Per Other (Please specify) Sq. Metre RESIDENTIAL CHARGES ($) NON - RESIDENTIAL CHARGES ($) Apartments NON Res. Industrial Commercial Institutional 2015 Financial Report - Page 86 Single Detached Semi- Detached Other Multiples < = 1 Bedroom > = 2 Bedroom Apartments Per Sq. Metre Per Sq. Metre Per Sq. Metre Per Sq. Metre Service Municipal Wide Charges If Other, Please Specify > Apartments If Other, Please Specify > 230 General Government Police Transit Indoor Recreation Services 1, , , Library Fire Road Related 13, , , Parks and Recreation 1, Public Works Wastewater Other Transportation Service Social Housing Other Other Other Other 14 Other 15 Other TOTAL MUNICIPAL WIDE CHARGES 20, , , Are the rates being reported based on a new development charge by-law that was approved by council within the reporting year? If yes(y), please attach an electronic version of the new by-law.

89 -Province of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Schedule 70 Asmt Code: 1514 CONSOLIDATED STATEMENT OF FINANCIAL POSITION MAH Code: for the year ended December 31, 2015 Financial Assets 1 $ 0299 Cash and cash equivalents ,504,452 Accounts receivable 0410 Canada ,796, Ontario ,135, Upper-tier Other municipalities ,546, School boards Other receivables ,825, Subtotal 25,303,760 Taxes receivable 0610 Current year's levies ,188, Previous year's levies ,341, Prior year's levies ,121, Penalties and interest , LESS: Allowance for uncollectables ,934, Subtotal 4,686,189 Investments * 0805 Canada Ontario Municipal Government business enterprises ,400, Other Investments ,488, Subtotal 192,888,006 Debt Recoverable from Others 0861 Municipalities (SLC ) School Boards (SLC ) Retirement Funds (SLC ) Sinking Funds (SLC ) Individuals Other Subtotal 0 Other financial assets 0830 Inventories held for resale , Land held for resale ,554, Notes receivable Mortgages receivable Deferred taxes receivable Other Loans receivable ,426, Subtotal 10,016, TOTAL Financial Assets 281,399, * Market value of Investments included in Line ,488, Financial Report - Page 87

90 -Province of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Schedule 70 Asmt Code: 1514 CONSOLIDATED STATEMENT OF FINANCIAL POSITION MAH Code: for the year ended December 31, 2015 Liabilities 1 Temporary loans $ 2010 Operating purposes Tangible Capital Assets: 2020 Canada Ontario Other Subtotal 0 Accounts Payable 2210 Canada , Ontario ,085, Upper-tier Other municipalities , School boards , Interest on debt , Trade accounts payable ,860, Other ,121, Subtotal 35,734, Estimated Tax Liabilities (PS3510) Deferred revenue 2410 Obligatory reserve funds (SLC ) ,157, Other ,402, Subtotal 18,560,377 Long term liabilities 2610 Debt issued ,533, Debt payable to others Lease purchase agreements (Tangible capital leases) Other Other LESS: Debt issued on behalf of Government Business Enterprise Subtotal 107,533,626 Solid Waste Management Facility Liabilities 2799 Solid waste landfill closure and post-closure ,684,196 Post employment benefits 2810 Accumulated sick leave ,982, Accrued vacation pay ,000, Accrued pensions payable Accrued Workplace Safety and Insurance Board claims (WSIB) ,887, Other Retirement benefits ,161, Subtotal post employment benefits 31,032,562 Liability for contaminated sites 2910 Remediation costs of contaminated sites TOTAL Liabilities 199,545, Net Financial Assets / Net Debt (Total Financial Assets LESS Total Liabilities) 81,853,383 Non-Financial Assets 1 $ 6210 Tangible Capital Assets (SLC ) ,949, Inventories of Supplies , Prepaid Expenses ,547, Total Non-Financial Assets 682,214, Total Accumulated Surplus/(Deficit) 764,067,975 Analysis of the Accumulated Surplus/(Deficit) 1 $ 6410 Equity in Tangible Capital Assets ,949, Reserves and Reserve Funds (SLC SLC ) ,540, General Surplus/ (Deficit) , Unexpended capital financing ,617,303 Local boards 5030 Transit operations Water operations ,490, Wastewater operations Solid waste operations Libraries Cemeteries Recreation, community centres and arenas Business Improvement Area , Other Unexpended financing ,487, Other Health Unit ,223, Other Economic Development Corporation , Other Total Local Boards 13,481, Equity in Government Business Enterprises (SLC ) ,650, Unfunded Employee Benefits ,625, Unfunded Landfill closure costs ,684, Unfunded Remediation costs of contaminated sites Other Long term debt to be recovered ,533, Other Accrued interest on long term debt , Other Inventory for resale ,480, Other Total Other -135,315, Total Accumulated Surplus/(Deficit) 764,067, Financial Report - Page 88

91 d Province of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Single/Lower-Tier ONLY Schedule 72 Asmt Code: 1514 CONTINUITY OF TAXES RECEIVABLE MAH Code: for the year ended December 31, 2015 Continuity of Taxes Receivable 9 $ 0210 Taxes receivable, beginning of year ,306, PLUS: Amounts added to tax bills for collection purposes only , PLUS: Tax amounts levied in the year (SLC ) ,320, PLUS: Current Year Penalties and Interest , LESS: Total cash collections (SLC ) ,557, LESS: Tax adjustments before allowances (SLC ) ,864, LESS: Tax adjustments not applied to taxation (SLC ) PLUS: Change in allowance for doubtful taxes ,487, Taxes receivable, end of year ,686,189 Cash Collections 9 $ 0610 Current year's tax ,496, Previous year's tax ,964, Penalties and interest ,096, Amounts added to tax bills for collection purposes only Other TOTAL Cash Collections 144,557, Financial Report - Page 89

92 d Province of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Single/Lower-Tier ONLY Schedule 72 Asmt Code: 1514 CONTINUITY OF TAXES RECEIVABLE MAH Code: for the year ended December 31, 2015 SCHOOL BOARDS Lower-Tier (Single- TOTAL Tax English - Public French - Public English - Separate French - Separate Other TOTAL Education Upper-Tier Tier) Adjustment Tax Adjustments Applied to Taxation $ $ $ $ $ $ $ $ $ 1099 Municipal Act (353, 354, 357, 358, RfR) ,517 3, ,223 3, , ,127 1,392, Discounts for Advance Payments (Mun. Act 345(10)) Tax Credit (Mun. Act 474.3) Tax Cancellation - Low income seniors and Disabled persons (Mu 10, , ,497 91, , Rebates to Commercial properties (Mun. Act 362) Rebates to Industrial properties (Mun. Act 362) Subtotal Financial Report - Page Rebates for Charities (Mun. Act 361) ,738 1,620 65,558 2, , , , Vacant Unit Rebates (Mun. Act 364) ,729 1,543 62,446 1, , , , Reduction for Heritage Property (Mun. Act 365.2) , , , , , Other Other Other Other Tax adjustments before allowances 724,007 6, ,696 8, ,526 1,869, ,864,764 SCHOOL BOARDS Lower-Tier (Single- TOTAL Tax English - Public French - Public English - Separate French - Separate Other TOTAL Education Upper-Tier Tier) Adjustment Tax Adjustments Not Applied to Taxation $ $ $ $ $ $ $ $ $ 4010 Tax sale, Tax registration accounts Tax Deferral - Low income seniors and Disabled persons (Mun. Ac Net Impact of 5% Capping Limit Program Other Other Tax Adjustments Not Applied to Taxation Additional Information 6010 Recovery of Tax Deferrals Entitlement of School Boards ,879, ,277 6,576, , ,771,387

93 7Province of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Schedule 74 Asmt Code: 1514 LONG TERM LIABILITIES AND COMMITMENTS MAH Code: for the year ended December 31, Debt burden of the municipality All outstanding debt issued by the municipality, predecessor municipalities and consolidated entities $ 0210 To Ontario and agencies To Canada and agencies To Others ,533, Other Other Subtotal 107,533, PLUS: All debt assumed by the municipality from others LESS: All debt assumed by others 0610 Ontario School boards Other Municipalities Government Business Enterprises Other Other Subtotal 0 LESS: Debt retirement funds 0810 Sewer Water Other Other Other Subtotal 0 LESS: Own sinking funds (Actual balances) 1010 General municipal Enterprises and others Other Other Other Subtotal TOTAL Net Long Term Liabilities of the Municipality 107,533, Debt burden of the municipality: Analysed by debt instrument 1210 Sinking fund debentures Installment (serial) debentures ,655, Long term bank loans ,731, Lease purchase agreements (Tangible capital leases) Mortgages ,123, Construction Financing Debentures Other Vehicle financing arrangements , Other TOTAL Net Long Term Liabilities of the Municipality 107,533, Debt burden of the municipality: Analysed by function 1405 General government ,681, Protection services ,091,944 Transportation services: 1415 Roadways ,465, Winter Control Transit ,642, Parking , Street Lighting Air Transportation ,342,273 Environmental services: 1425 Wastewater system ,107, Storm water system Waterworks system ,733, Solid Waste collection Solid Waste disposal Waste diversion Health services Social and family services ,189, Social housing ,892,008 Recreation and cultural services: 1465 Parks , Recreation programs Recreation facilities - Golf Course, Marina, Ski Hill , Recreation facilities - All Other ,387, Libraries Museums ,831, Cultural services Planning and development , Other long term liabilities TOTAL Net Long Term Liabilities of the Municipality 107,533, Financial Report - Page 91

94 7Province of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Schedule 74 Asmt Code: 1514 LONG TERM LIABILITIES AND COMMITMENTS MAH Code: for the year ended December 31, Debt payable in foreign currencies (net of sinking fund holdings) US Dollars: $ 1610 Canadian dollar equivalent included in SLC Par value in 'U.S. Dollars' Other currency: 1630 Canadian dollar equivalent included in SLC Par value in Canadian dollar equivalent included in SLC Par value in Interest earned on sinking funds and on debt retirement funds during the year 1810 Own funds Details of sinking fund balance 2010 Value of own sinking fund debentures issued and outstanding at year end Balance of own sinking funds at year end 2110 Total contributions to own sinking funds Total income earned from investments of sinking funds' monies Subtotal Estimated total future contributions from this municipality required to meet obligations in line 2010 above Estimated total future income earned from investments in lines 2199 and 2210 above Long term commitments at year end 2410 Hospital support University support Leases and other agreements ,968, Capital equipment, land acquisition Other Other Other TOTAL 20,968, Financial Report - Page 92

95 7Province of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Schedule 74 Asmt Code: 1514 LONG TERM LIABILITIES AND COMMITMENTS MAH Code: for the year ended December 31, 2015 Contingent Liabilities Is Value in Column 2 Estimated? 8. Contingent liabilities Pending or threatened litigation N 2620 Retroactive wage settlements N 2630 Guarantees of long term indebtedness in the name of the municipality but assumed by others N Value Number of Years Payable Over Y or N Y or N $ Years 2640 Outstanding loans guaranteed Y N 4,183, Other 2699 TOTAL 4,183,000 Principal Interest Total 10. Debt Charges for the current year Recovered from the Consolidated Statement of Operations $ $ $ 3012 General Tax Rates ,307,428 1,706, Other ,820,962 2,153, Tile Drainage/Shoreline Assistance Recovered from reserve funds ,865 Recovered from unconsolidated entities: 3030 Electricity Gas Telephone Other 3098 Other 3099 TOTAL 10,230,255 3,859,734 Line 3099 includes: 3110 Lump sum (balloon) repayments of long term debt Provincial Grant funding for repayment of long term debt Analysis of Lease Purchase Agreements (Tangible Capital Leases) 3140 Debt charges for Lease purchase agreements (Tangible capital leases) Long term debt refinanced 1 2 $ $ 3410 Repayment of Provincial Special Assistance Other long term debt refinanced Principal Interest 2015 Financial Report - Page 93

96 74 - L Province of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Schedule 74 Asmt Code: 1514 LONG TERM LIABILITIES AND COMMITMENTS MAH Code: for the year ended December 31, Future principal and Interest payments on EXISTING debt RECOVERABLE FROM: Consolidated Statement of Operations Reserve Funds Unconsolidated Entities All Others Principal Interest Principal Interest Principal Interest Principal Interest $ $ $ $ $ $ $ $ 3210 Year ,510,573 2,447,548 3,653,496 1,467, Year ,612,121 2,114,881 3,659,888 1,311, Year ,812,148 1,715,493 3,462,122 1,190, Year ,987,100 1,502,694 3,518,098 1,008, Year ,844,377 1,220,898 3,541, , Years 2021 to ,261,089 2,607,136 12,329,077 2,473, Years 2026 onwards ,697,119 2,043,210 6,644, , Int. to be earned on sink. funds TOTAL 70,724,527 13,651, ,809,099 9,277, Other notes Please list all Other Notes and forward supporting schedules as required by to: FIR.mah@ontario.ca * Use ALT + ENTER Keys to "Return" to the next line Financial Report - Page 94

97 dul Province of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Schedule 76 Asmt Code: 1514 GOVERNMENT BUSINESS ENTERPRISES MAH Code: for the year ended December 31, 2015 GOVERNMENT BUSINESS ENTERPRISES STATEMENT OF FINANCIAL POSITION Please Specify GBE City of Peterborough Holdings Inc. Total Assets $ $ $ $ $ $ 0210 Current ,976,000 34,976, Capital ,547, ,547, Other ,212,000 4,212, Other Deferred tax assets ,175,000 4,175, Total Assets 276,910, ,910, Financial Report - Page 95 Liabilities 0410 Current ,041,000 27,041, Long-term ,800, ,800, Other Other deferred tax liabilities ,552,000 7,552, Total Liabilities 178,393, ,393, Net Equity 98,517, ,517, Municipality's Share 98,517,000 98,517,000 STATEMENT OF OPERATIONS 0810 Revenues ,917, ,917, Expenses ,418, ,418, Net Income (Loss) 5,499, ,499, Municipality's Share 5,499,000 5,499, Dividends paid 5,335,000 5,335,000

98 ed Province of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Schedule 79 Asmt Code: 1514 COMMUNITY IMPROVEMENT PLANS MAH Code: for the year ended December 31, 2015 Community Improvement Plans (Section 28 of the Planning Act) Total Value of all approved Grants, Loans & Tax Assistance Number of Approved Grants/Loans/Tax Assistance Applications 1 2 Grants $ # 2010 Environment Site Assessment/Remediation , Development/Redevelopment of Land/Buildings , Loans 2210 Loans issued in current year (2015) Outstanding Loans as of Tax Assistance (per Municipal Act ss21) 2410 Cancellation Deferral Long Term Commitments for Grants, Loans or Tax Assistance beyond Year: , Year: , Year: , Year: , Year: , Years beyond ,628, Financial Report - Page 96

99 ScProvince of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Schedule 80 Asmt Code: 1514 STATISTICAL INFORMATION MAH Code: for the year ended December 31, 2015 Full-Time Funded Part-Time Funded Seasonal Employees Positions Positions 1. Municipal workforce profile Employees of the Municipality # # # 0205 Administration Fire Uniform Civilian Police Uniform Civilian Court Security Uniform Civilian Prisoner Transportation Uniform Civilian Transit Public Works Ambulance Uniform Civilian Health Services Homes for the Aged Other Social Services Parks and Recreation Libraries Planning Other Subtotal Proportion of Munic. Empl. covered by 'Collective Agreements' (%) % 9% Employees of Joint Local Boards 0305 Administration Fire Uniform Civilian Police Uniform Civilian Court Security Uniform Civilian Prisoner Transportation Uniform Civilian Transit Public Works Ambulance Uniform Civilian Health Services Homes for the Aged Other Social Services Parks and Recreation Libraries Planning Other Subtotal TOTAL 1, Financial Report - Page 97

100 ScProvince of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Schedule 80 Asmt Code: 1514 STATISTICAL INFORMATION MAH Code: for the year ended December 31, 2015 Own Municipality Other Munic., School Boards Provincial Federal 2. Selected investments of own sinking funds as at Dec $ $ $ $ 0610 Own sinking funds Number of Contracts Value of Contracts 3. Municipal procurement this year 1 2 # $ 1010 Total construction contracts awarded ,477, Construction contracts awarded at $100,000 or greater ,849,663 Number of Building Permits Total Value of Building Permits 4. Building permit information 1 2 # $ 1210 Residential properties ,557, Multi-Residential properties ,747, All other property classes ,649, Subtotal ,954, Insured value of physical assets 1 $ 1410 Buildings ,000, Machinery and equipment ,100, Vehicles ,500, Other Other Subtotal 338,600, Total Dollar Losses due to Structural Fires 1 $ 1510 Losses due to structural fires, averaged over 3 yrs ( ) ,944, Financial Report - Page 98

101 ScProvince of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Schedule 80 Asmt Code: 1514 STATISTICAL INFORMATION MAH Code: for the year ended December 31, Alternate service delivery arrangements Municipal services which the municipality currently provides through some form of alternate service delivery: (Top 10 by Operating Expenses Municipal service S40 Functional Heading S40 Line Number Statement of Operations: Expenses LIST $ 1601 Land Ambulance Ambulance services ,229, Recycling Waste diversion ,114, Landfill Site Operator Solid waste disposal ,360, Property Assessment Corporate Management , Airport Operations Air transportation , Biosolids Water treatment , Fire Hydrants Fire , Recyclables Waste diversion , Parking Administration/Enforcement Parking , Street Light Maintenance Roads - Paved ,655 Comments 2015 Financial Report - Page 99

102 ScProvince of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Schedule 80 Asmt Code: 1514 STATISTICAL INFORMATION MAH Code: for the year ended December 31, Consolidated Local boards including Joint local boards and all local entities set up by the municipality (I) PROPORTIONALLY CONSOLIDATED joint local boards Name of Board or Entity Board Description Board Code Proportion of Total Munic. Contributions Consolidated Municipality's Share of Total Contributions Municipality's Share of Total Fee Revenues LIST % $ $ 0801 Fairhaven Home for the Aged % 818,715 13,537, Peterborough County-City Health Unit Health Board (Unit), Medical Centre % 1,046,906 9,646, Greater Peterborough Area Economic Development CorpoDevelopment Board % 368,349 1,556, Peterborough County-City Waste Management Facility Waste Management Board % 438,916 1,256, Financial Report - Page 100

103 ScProvince of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Schedule 80 Asmt Code: 1514 STATISTICAL INFORMATION MAH Code: for the year ended December 31, 2015 (II) FULLY CONSOLIDATED local boards and any local entities set up by the municipality Name of Board or Entity Board Description Board Code Proportion of Total Munic. Contributions Consolidated Municipality's Share of Total Contributions Municipality's Share of Total Fee Revenues LIST % $ $ 0851 Peterborough Public Library Board Library Board % 0852 Peterborough Downtown Business Inprovment Agency Business Improvement Area % 0853 The Village Business Improvement Agency Business Improvement Area % 0854 Peterborough Housing Corporation Housing Authority % 0855 Peterborough Utilities Commission Water - Public Utility % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % 2015 Financial Report - Page 101

104 Sc Province of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Schedule 80 Asmt Code: 1514 STATISTICAL INFORMATION MAH Code: for the year ended December 31, 2015 Column Column Column Description 9. Building Permit Information (Performance Measures) # # # LIST 1300 What method does your municipality use to determine total construction value? Other Method (Please describe below) 1302 If "Other Method" is selected in line 1300, please describe the method used to determine total construction value Combination of submitted construction value and estimation Total Value of Construction Activity $ 1304 Total Value of Construction Activity for 2015 based on permits issued ,954,219 Review of Complete Building Permit Applications: Median number of working days to review a complete building Median Number of Working Days permit application and issue a permit or not issue a permit, and provide all reasons for refusal (by Category): 1 # 1306 Category 1 : Houses (houses not exceeding 3 storeys/600 square metres) Reference : provincial standard is 10 working days Financial Report - Page Category 2 : Small Buildings (small commercial/industrial not exceeding 3 storeys/600 square metres) Reference : provincial standard is 15 working days 1310 Category 3 : Large Buildings (large residential/commercial/industrial/institutional) Reference : provincial standard is 20 working days 1312 Category 4 : Complex Buildings (post disaster buildings, including hospitals, power/water, 14 fire/police/ems), communications Note : If no complete applications were submitted and accepted for a Category on lines 1306 to 1312, please leave the cell blank and do not enter zero. Number of Complete Applications Number of Incomplete Applications Total Number of Complete and Incomplete Applications Number Of Building Permit Applications # # # 1314 Category 1 : Houses (houses not exceeding 3 storeys/600 square metres) Category 2 : Small Buildings (small commercial/industrial not exceeding 3 storeys/600 square metres) Category 3 : Large Buildings (large residential/ commercial/ industrial/ institutional) Category 4 : Complex Buildings (post disaster buildings, including hospitals, power/water, 1320 fire/police/ems), communications Subtotal Note: Zero should be entered on lines 1314 to 1320 in column 1 if no complete applications were submitted and accepted for a category. Zero should be entered in column 2 if no incomplete applications were submitted and accepted for a category. Residential Units within Settlement Areas Total Residential Units 10. Planning and Development 1 2 Land Use Planning (using building permit information) # # 1350 Number of residential units in new detached houses Number of residential units in new semi-detached houses Number of residential units in new row houses Number of residential units in new apartments/condo apartments

105 Sc Province of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Schedule 80 Asmt Code: 1514 STATISTICAL INFORMATION MAH Code: for the year ended December 31, Subtotal Hectares 1 Land Designated for Agricultural Purposes # 1370 Hectares of land designated for agricultural purposes in the Official Plan as of December 31, Financial Report - Page 103

106 Sc Province of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Schedule 80 Asmt Code: 1514 STATISTICAL INFORMATION MAH Code: for the year ended December 31, Transportation Services 1 # 1710 Roads : Total Paved Lane Km Condition of Roads : Number of paved lane kilometres where the condition is rated as good to very good Column Column Column Description # # # LIST 1722 Has the entire municipal road system been rated? Y 1725 Indicate the rating system used and the year the rating was conducted PCI 1730 Roads : Total UnPaved Lane Km Winter Control : Total Lane Km maintained in winter Financial Report - Page Transit : Total Number of Regular Service Passenger Trips on Conventional Transit in Service Area ,766, Transit : Population of Service Area Bridges and Culverts : Total Square Metres of Surface Area on Bridges and Culverts ,454 Number of structures where the condition of primary components is rated as good to very good, requiring only repair Total Number 1 2 Rating Of Bridges And Culverts # # 1765 Bridges Culverts Subtotal Column Column Column Description # # # LIST 1768 Have all bridges and culverts in the municipal system been rated? Y 1769 Indicate the rating system used and the year the rating was conducted OSIM INSPECTIONS 12. Environmental Services 1 # 1810 Wastewater Main Backups : Total number of backed up wastewater mains Wastewater Collection/Conveyance : Total KM of Wastewater Mains ######### 14, Wastewater Bypasses Treatment : Estimated megalitres of untreated wastewater Urban Storm Water Management : Total KM of Urban Drainage System plus (0.005 KM times No. of Catch basins) Rural Storm Water Management : Total KM of Rural Drainage System plus (0.005 KM times No. of Catch basins) Water Treatment : Total Megalitres of Drinking Water Treated , Water Main Breaks : Number of water main breaks in a year Water Distribution/Transmission : Total kilometres of Water Distribution / Transmission Pipe Solid Waste Collection : Total tonnes collected from all property classes ,973

107 Sc Province of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Schedule 80 Asmt Code: 1514 STATISTICAL INFORMATION MAH Code: for the year ended December 31, Solid Waste Disposal : Total tonnes disposed off from all property classes , Waste Diversion : Total tonnes diverted from all property classes , Recreation Services 1 # 1910 Trails : Total kilometres of trails (owned by municipality and third parties) Indoor recreation facility space : Square metres of indoor recreation facilities (municipally owned) , Outdoor recreation facility space : Square metres of outdoor recreation facility space (municipally owned) , Other Revenue (Used for the calculation of Operating Cost) $ 2310 Fire Services: Other revenue Paved Roads : Other revenue Solid Waste Disposal : Other revenue Waste Diversion : Other Revenue Financial Report - Page Assessment on Exempt Properties (Enter data from returned roll)

108 hedprovince of Ontario - Ministry of Municipal Affairs and Housing : V01 FIR2015: Peterborough C Schedule 81 Asmt Code: 1514 ANNUAL DEBT REPAYMENT LIMIT MAH Code: based on the information reported for the year ended December 31, 2015 NOTE: THE ESTIMATED ANNUAL REPAYMENT LIMIT IS EFFECTIVE JANUARY 01, 2017 Please note that fees and revenues for Homes for the Aged are not reflected in this estimate. DETERMINATION OF ANNUAL DEBT REPAYMENT LIMIT 1 Debt Charges for the Current Year $ 0210 Principal (SLC ) ,230, Interest (SLC ) ,859, Subtotal 14,089, Payments for Long Term Commitments and Liabilities financed from the consolidated statement of operations (SLC ) , Total Debt Charges 14,896,973 1 Excluded Debt Charges $ 1010 Electricity - Principal (SLC ) Electricity - Interest (SLC ) Gas - Principal (SLC ) Gas - Interest (SLC ) Telephone - Principal (SLC ) Telephone - Interest (SLC ) Subtotal Debt Charges for Tile Drainage/Shoreline Assistance (SLC SLC ) Provincial Grant funding for repayment of long term debt (SLC SLC ) Lump sum (balloon) repayments of long term debt (SLC SLC ) Total Debt Charges to be Excluded Net Debt Charges 14,896,973 1 $ 1610 Total Revenues (* Sale of Hydro Utilities Removed) (SLC ) ,065,583 Excluded Revenue Amounts 2010 Fees for Tile Drainage / Shoreline Assistance (SLC ) Ontario Grants, including Grants for Tangible Capital Assets (SLC SLC SLC ) ,015, Canada Grants, including Grants for Tangible Capital Assets (SLC SLC ) ,223, Deferred revenue earned (Provincial Gas Tax) (SLC ) ,550, Deferred revenue earned (Canada Gas Tax) (SLC ) ,797, Revenue from other municipalities, including Revenue for Tangible Capital Assets (SLC SLC ) ,829, Gain/Loss on sale of land & capital assets (SLC ) ,883, Deferred revenue earned (Development Charges) (SLC ) ,511, Deferred revenue earned (Recreation Land (The Planning Act)) (SLC ) , Other Deferred revenue earned (SLC ) ,441, Donated Tangible Capital Assets (SLC ) , Increase / Decrease in Government Business Enterprise equity (SLC ) Subtotal 101,880, Fees and Revenue for Joint Local Boards for Homes for the Aged Net Revenues 197,184, % of Net Revenues 49,296, ESTIMATED ANNUAL REPAYMENT LIMIT 34,399,243 For Illustration Purposes Only Annual Interest Rate Term 5 years = 141,043, Financial Report - Page 106

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242 CONSOLIDATED FINANCIAL STATEMENTS OF CITY OF PETERBOROUGH HOLDINGS INC. December 31, 2015 TABLE OF CONTENTS Page INDEPENDENT AUDITORS REPORT FINANCIAL STATEMENTS Consolidated Statement of Financial Position 1-2 Consolidated Statement of Income 3 Consolidated Statement of Comprehensive Income 4 Consolidated Statement of Changes in Equity 5 Consolidated Statement of Cash Flows 6 Notes to the Consolidated Financial Statements Financial Report - Page 240

243 2015 Financial Report - Page 241

244 CITY OF PETERBOROUGH HOLDINGS INC. CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at December 31, 2015 ($s in thousands) $ $ ASSETS Current assets Cash 8,593 10,531 Restricted cash (note 4) 3,953 2,995 Accounts receivable 9,259 9,802 Unbilled revenue on customer accounts 11,060 9,714 Inventories (note 5) 1,773 1,766 Prepaid expenses Income taxes receivable ,976 35,980 Other assets Intangible assets (note 6) 4,430 4,646 Property, plant and equipment (note 7) 229, ,370 Deferred tax assets (note 20) 4,175 4, , ,427 Regulatory assets (note 8) 4,212 5, , ,795 The accompanying notes are an integral part of these financial statements 2015 Financial Report 1 - Page 242

245 2015 Financial Report - Page 243

246 CITY OF PETERBOROUGH HOLDINGS INC. CONSOLIDATED STATEMENT OF INCOME For the year ended December 31, 2015 ($s in thousands) $ $ Revenue (note 17) 142, ,417 Expenses Operations and administration (note 18) 119, ,360 Amortization 10,398 14, , ,053 Income from operations 12,942 6,364 Other expense (income) Net finance charges (note 19) 4,221 5,967 Gain on reduction of provisions (363) - Loss on disposal of property plant and equipment 634-4,492 5,967 Income before income taxes and regulatory items 8, Net movement on regulatory deferral accounts (975) 3,382 Income before income taxes 7,475 3,779 Provision for income taxes (note 20) Current 1, Deferred (recovery) 766 (234) 1, Net income for the year 5,499 3,111 The accompanying notes are an integral part of these financial statements 2015 Financial Report 3 - Page 244

247 CITY OF PETERBOROUGH HOLDINGS INC. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the year ended December 31, 2015 ($s in thousands) $ $ Net income for the year 5,499 3,111 Other comprehensive income Items that will not be reclassified subsequently to net income Employee benefit plan actuarial gains (losses) (62) 342 Related deferred tax 16 (90) Items that will be reclassified subsequently to net income Change in fair value of derivative instruments (676) (1,553) Related deferred tax Other comprehensive loss for the year (543) (889) Total comprehensive income for the year 4,956 2,222 The accompanying notes are an integral part of these financial statements 2015 Financial Report 4 - Page 245

248 CITY OF PETERBOROUGH HOLDINGS INC. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the year ended December 31, 2015 ($s in thousands) Accumulated Other Share Retained Comprehensive Total Capital Earnings Income (Loss) Equity $ $ $ $ Balance, January 1, ,399 41,414 (1,473) 68,340 Net income for the year 3,111-3,111 Actuarial loss on accrued employee benefit liabilities, net of tax Change in fair value of hedging instruments, net of tax (1,141) (1,141) Issuance of common shares 31,699 31,699 Dividends paid (3,482) - (3,482) Balance, December 31, ,098 41,043 (2,362) 98,779 Balance, January 1, ,098 41,043 (2,362) 98,779 Net income for the year 5,499-5,499 Actuarial gain on accrued employee benefit liabilities, net of tax (46) (46) Change in fair value of hedging instruments, (497) (497) net of tax Dividends paid (5,335) - (5,335) Balance, December 31, ,098 41,207 (2,905) 98,400 The accompanying notes are an integral part of these financial statements 2015 Financial Report 5 - Page 246

249 CITY OF PETERBOROUGH HOLDINGS INC. CONSOLIDATED STATEMENT OF CASH FLOWS For the year ended December 31, 2015 ($s in thousands) $ $ CASH PROVIDED FROM (USED FOR) Operating activities Net income for the year 5,499 3,111 Charges to operations not requiring a current cash payment - Amortization 10,398 14,693 Deferred income tax (recovery) 766 (234) Recognition of contributed capital (382) (340) Current income tax 1, Net finance costs 4,392 5,968 Gain on reduction of provisions (363) - Loss on write-down of property plant and equipment ,673 24,100 Change in non-cash working capital items (note 21) (579) 8,786 Taxes paid (288) (1,037) Interest received Change in customer deposits Receipt of deferred contributions 2,203 1,313 Increase (decrease) in employee future liabilities (4) ,560 33,877 Investing activities Purchase of property, plant and equipment (34,271) (22,708) Decrease (increase) in regulatory assets and liabilities 975 (3,382) Transfers to restricted cash account (958) (893) (34,254) (26,983) Financing activities Proceeds of construction loan - 1,840 Repayment of construction loan - (17,500) Proceeds from long term debt 24,314 21,000 Repayment of long-term debt (5,290) (4,831) Repayment of shareholder debt - (31,699) Issuance of share capital - 31,699 Interest paid (4,933) (6,474) Dividends paid (5,335) (3,482) 8,756 (9,447) Net decrease in cash (1,938) (2,553) Cash and cash equivalents - beginning of year 10,531 13,084 Cash and cash equivalents - end of year 8,593 10,531 The accompanying notes are an integral part of these financial statements 2015 Financial Report 6 - Page 247

250 CITY OF PETERBOROUGH HOLDINGS INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2015 (in thousands of dollars) 1. NATURE OF OPERATIONS City of Peterborough Holdings Inc. (the Company ) is an investment holding company with a 100% ownership interest in Peterborough Distribution Inc. ( PDI ), Peterborough Utilities Inc. ( PUI ) and Peterborough Utilities Services Inc. ( PUSI ). The Company is incorporated and domiciled in Canada with its head and registered office located at 1867 Ashburnham Drive, Peterborough, ON K9J 6Z5. PDI is an electricity distribution company, delivering electricity and related services to residential and commercial customers in the City of Peterborough, the Village of Lakefield and the Town of Norwood. PDI is regulated under the Ontario Energy Board ( OEB ) and adjustments to the distribution rates require OEB approval. PUI is primarily involved in the development and generation of electricity through its hydroelectric, solar and landfill gas generating stations which are located in Trent Hills, Otonabee-South Monaghan and Peterborough, Ontario. The Company also carries out a hot water heater and lighting equipment rental business and provides metering services to customers in Ontario. PUSI is a professional services company that delivers outsourcing services to affiliated companies and others. The Company is 100% owned by the Corporation of the City of Peterborough. 2. BASIS OF PREPARATION (a) Statement of compliance The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ( IFRS ). The consolidated financial statements were authorized for issue by the Board of Directors on April 7, (b) Basis of measurement The consolidated financial statements have been prepared on a historical cost basis, except for certain financial instruments which are measured at their fair values, as explained in the relevant accounting policies. (c) Presentation currency The financial statements are presented in Canadian dollars, which is also the Company s functional currency. All financial information has been rounded to the nearest thousand, except when otherwise noted Financial Report - Page 248

251 CITY OF PETERBOROUGH HOLDINGS INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2015 (in thousands of dollars) 2. BASIS OF PREPARATION, continued (d) Use of significant estimates and judgments The preparation of the consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. Significant judgments and estimates made by the Company are outlined below: (i) Significant Accounting Judgments Property, plant and equipment and intangibles The company makes judgments to assess the nature of the costs to be capitalized in the purchase or construction of an asset; evaluate the appropriate level of componentization where an asset is made up of individual components for which different depreciation methods and useful lives are appropriate; and distinguish major overhauls to be capitalized from repair and maintenance activities to be expensed. Project Development The Company is in the business of developing prospective generation projects as described in note 3(g). Determining whether a project meets IFRS capitalization criteria requires judgment and depends primarily on the probability that future economic benefits associated with the project will flow to the Company. Expenditures on projects that do not meet this test are expensed in the period. Evidence of asset impairment At each reporting date, management is required to use its judgment to assess whether there is any evidence that property, plant and equipment and intangible assets may be impaired. If applicable, the Company performs impairment tests to assess whether the carrying amounts of assets are recoverable. (ii) Significant Estimates and Assumptions Useful lives of Property Plant and Equipment and Intangibles Depreciation is based on estimates of the useful lives of each significant component of property plant and equipment and each intangible asset. Estimated useful lives are determined based on current facts and past experience, and take into consideration the anticipated physical life of the asset, existing long-term sales contracts, technological obsolescence, regulations and independent studies conducted by an independent consulting firm Financial Report - Page 249

252 CITY OF PETERBOROUGH HOLDINGS INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2015 (in thousands of dollars) 2. BASIS OF PREPARATION, continued Unbilled revenue The measurement of unbilled revenue for electric distribution customers is based on an estimate of the amount of electricity delivered to customers between the date of the last bill and the end of the year. The measurement of unbilled revenue for rental customers is based on an estimate of the period between the date of the last bill and the end of the year. The measurement of unbilled revenue for electric meter installations is based on the estimated percentage of completion of the project at the end of the year. Measurement of fair value of financial instruments As described in Note 24, the Company uses the discounted cash flow model to estimate the fair value of financial instruments for disclosure purposes. Measurement of provisions As described in Note 3(i) and Note 11, the Company recognizes provisions for decommission obligations. Calculation of the provision requires the Company s best estimate of the required cash expenditures, adjusted to reflect the risks and uncertainties inherent in the timing and amount of settlement. The estimated cash expenditures are present valued using the current, risk-adjusted, pre-tax discount rate. A change in estimated cash flows, market interest rates, or timing could have a material impact on the carrying amount of the provision. Impairment of assets The Company continually monitors its long-lived assets for indications of impairment. Where necessary, the Company estimates the recoverable amount for the cashgenerating unit ( CGU ) to determine if an impairment loss is to be recognized. Calculation of the recoverable amount requires estimates of future revenues and expenses, and is based on assumptions such as the discount rate to be applied to these cash flows. Subsequent changes to these estimates or assumptions could significantly impact the carry value of the assets. Measurement of employee future liabilities Employee future liabilities are based on certain assumptions arising from an actuarial report performed on behalf of the Company. These assumptions are detailed in note Financial Report - Page 250

253 CITY OF PETERBOROUGH HOLDINGS INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2015 (in thousands of dollars) 2. BASIS OF PREPARATION, continued (e) Accounting for Electricity Regulation A subsidiary of the Company, PDI, is regulated by the OEB. The Company accounts for the impact of rate regulation by the OEB as follows: (i) Regulatory Decisions to Adjust Distribution Rates In the event that a regulatory decision is rendered, providing regulatory approval and certainty to the recognition of an asset, or creation of a liability, and culminating in an adjustment to Company distribution rates, such occurrences are immediately reflected in the Company s accounts. (ii) Regulatory Accounting Practice In the absence of a regulatory decision impacting rates, and where the Company is required by regulatory accounting practice or direction to accumulate balances for future rate recovery or create liabilities for future discharge, those amounts are recorded in accordance with that regulatory direction. Management assesses the future uncertainty with respect to the final regulatory disposition of those amounts, and to the extent required, makes accounting provisions to reduce the deferred balances accumulated or to increase the recorded liabilities. Upon rendering of the final regulatory decision adjusting distribution rates, the provisions are adjusted to reflect the final impact of the decision and such adjustments are reflected in net income for the period. Amounts currently confirmed by regulatory decision, and amounts currently accounted for in the absence of regulatory decision together with related provisions are more fully described in note SIGNIFICANT ACCOUNTING POLICIES The accounting policies set out below have been applied consistently to all years presented in these financial statements. (a) Basis of consolidation Subsidiaries are entities controlled by the Company. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. The accounting policies of subsidiaries have been changed when necessary to align them with polices adopted by the Company. The subsidiaries included in these financial statements include the following 100% owned companies: Peterborough Utilities Services Inc. ( PUSI ); Peterborough Distribution Inc. ( PDI ); and Peterborough Utilities Inc. ( PUI ). All significant inter-company accounts and transactions have been eliminated Financial Report - Page 251

254 CITY OF PETERBOROUGH HOLDINGS INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2015 (in thousands of dollars) 3. SIGNIFICANT ACCOUNTING POLICIES, continued (b) Revenue recognition a. Electricity Distribution Revenue attributable to the delivery of electricity is based upon OEB-approved distribution tariff rates and includes the amounts billed to customers for electricity, including the cost of electricity supplied, distribution charges and any other regulatory charges. Revenue is recognized as electricity is delivered and consumed by customers. Revenue is measured at the fair value of the consideration received or receivable, net of sales tax and debt retirement charges. b. Sale of Electricity Revenue from the sale of electricity is recognized when the service is provided. Revenue is measured at the fair value of the consideration received or receivable, net of sales tax. c. Service Revenue Revenue earned on services is recognized as services are rendered. d. Customer Contributions Certain items of property, plant and equipment are acquired or constructed with financial assistance in the form of contributions from developers of customers ( customer contributions ). Such contributions, whether in cash or in-kind, are recognized as deferred contributions and amortized into income over the life of the related assets. Customer contributions in-kind are valued at their fair value at the date of their contribution. e. Rental Income Rental income is recognized in income on a straight-line basis over the term of the agreement. f. Conservation and Demand Management ( CDM ) Performance incentive payments under CDM programs are recognized by the Company when there is reasonable assurance that the program conditions have been satisfied and the incentive payments will be received Financial Report - Page 252

255 CITY OF PETERBOROUGH HOLDINGS INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2015 (in thousands of dollars) 3. SIGNIFICANT ACCOUNTING POLICIES, continued (c) Financial Instruments Non-derivative financial assets The Company initially recognizes loans and receivables on the date that they are originated. All other financial assets are recognized initially on the settlement date of the instrument. The Company derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Company is recognized as a separate asset or liability. Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Company has a legal right to offset the amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. The Company has the following non-derivative financial assets which it has classified as follows: Cash and cash equivalents Loans and receivables Restricted cash Loans and receivables Accounts receivable Loans and receivables Unbilled revenue Loans and receivables Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognized initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition loans and receivables are measured at amortized cost using the effective interest method, less any impairment losses. Non-derivative financial liabilities The Company initially recognizes debt securities issued on the date that they are originated. All other financial liabilities are recognized initially on the settlement date of the instrument. The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled or expire. Financial assets and liabilities are offset and the net amount presented in the consolidated statement of financial position when, and only when, the Company has a legal right to offset the amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. The Company has the following non-derivative financial liabilities which it has classified as follows: Accounts payable and accrued liabilities Other financial liabilities Customer deposits Other financial liabilities Due to shareholder Other financial liabilities Long-term debt Other financial liabilities Other financial liabilities are recognized initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition these financial liabilities are measured at amortized cost using the effective interest method Financial Report - Page 253

256 CITY OF PETERBOROUGH HOLDINGS INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2015 (in thousands of dollars) 3. SIGNIFICANT ACCOUNTING POLICIES, continued Derivative financial instruments and hedge accounting Derivative financial instruments in the form of interest rate swap contracts are used to manage exposure to fluctuations in interest rates on the Company s bank debt. The contracts are designed as hedges, and therefore any gain or loss, net of tax, is included in other comprehensive income. (d) Cash Cash consists of balances with financial institutions. (e) Inventory Inventory consists of system maintenance and construction materials and is valued at the lower of moving average cost and replacement cost. Major spare parts and stand-by equipment are recorded in property, plant and equipment. (f) Intangible assets Intangible assets that are acquired by the Company and have finite useful lives are measured at cost less accumulated amortization and accumulated impairment losses. Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. Amortization is calculated over the cost of the asset, or other amount substituted for cost, less its residual value. Amortization is recognized in income on a straight-line basis over the estimated useful lives of intangible assets from the date that they are available for use. Intangible assets consist of renewable energy contracts which have duration of 20 to 40 years. Amortization methods and useful lives of all intangible assets are reviewed at each reporting date and adjusted prospectively. (g) Property, plant and equipment Recognition and measurement Items of property, plant and equipment ( PP&E ) are measured at cost less accumulated depreciation, and accumulated impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a working condition for their intended use, the costs of dismantling and removing the items and restoring the site on which they are located, and borrowing costs on qualifying assets. Borrowing costs directly attributable to the acquisition or construction of an asset that necessarily takes a substantial period of time to get ready for its intended use are capitalized as part of the cost of the asset Financial Report - Page 254

257 CITY OF PETERBOROUGH HOLDINGS INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2015 (in thousands of dollars) 3. SIGNIFICANT ACCOUNTING POLICIES, continued In circumstances where parts of an item of PP&E have different useful lives, they are accounted for as separate items (major components) of PP&E. Major spare parts and standby equipment are recognized as items of PP&E. The cost and related accumulated depreciation for identifiable PP&E, such as substations, remain in the accounts until the assets are retired or disposed of at which time any gain or loss is reflected in operations. Project development Project development costs represent costs incurred for the development of prospective generation projects. The project costs are capitalized and recorded as work in progress in PP&E. Current costs for prospective projects that do not meet the criteria for capitalization under IFRS, as described in note 2(d), are expensed as incurred. Projects under development are reviewed annually and expensed in the year if future economic benefits are no longer probable. Borrowing costs directly attributable to the development are capitalized as work in progress. Once a project is complete and ready for use, the project development costs are transferred from work in progress to the applicable PP&E account and amortized over the useful life of the project. Capitalized development expenditures are measured at cost less accumulated amortization and accumulated impairment losses. Subsequent costs The cost of replacing a part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company, and its cost can be measured reliably. The carrying amount of the replaced part is derecognized. The costs of the day-to-day servicing of property, plant and equipment are recognized in net income as incurred. Depreciation Depreciation of PP&E is recognized on a straight-line basis designed to amortize the assets over their estimated useful lives as follows: Land and buildings Buildings Distribution Distribution lines Transformers Generation Hydro Generation Solar Generation Vehicles, Equipment and Other Vehicles Meters Water heaters Equipment and other years years years years years 4 8 years years 15 years 2 30 years Financial Report - Page 255

258 CITY OF PETERBOROUGH HOLDINGS INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2015 (in thousands of dollars) 3. SIGNIFICANT ACCOUNTING POLICIES, continued Depreciation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate. Work in process assets are not depreciated until the project is complete and ready for use. Gains and losses on disposal of an item of PP&E are recognized in income and determined by the difference between proceeds from disposal and the carrying amount of the item. (h) Employee benefits i. O.M.E.R.S. The Company participates in an industry-wide multi-employer post-employment defined benefit pension plan, the Ontario Municipal Employees Retirement Systems (O.M.E.R.S). Both participating employers and employees are required to make plan contributions based on the employees contributory earnings. The Company recognizes its employee benefit expense related to this plan as the contributions are made. ii. Vested sick leave benefits After five years of service upon retirement or termination, the Company has agreed to pay at the employee s then current pay rate; the lesser of one-half of the employee s accumulated sick leave benefits or 130 days. For those employees who commenced employment on or after April 1, 1982, the amount will not exceed 130 days or the number of years of service prior to April 1, 2007, times six days. For financial statement purposes the liability is valued at the total of each employee s current vested sick leave hours at current pay rates in accordance with the above formula. iii. Short-term employee benefits Short-term employee benefit obligations, including accumulating vested sick leave and vacation, are measured on an undiscounted basis using management s best estimates and are expensed as the related service is provided Financial Report - Page 256

259 CITY OF PETERBOROUGH HOLDINGS INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2015 (in thousands of dollars) 3. SIGNIFICANT ACCOUNTING POLICIES, continued iv. Employee benefit plans The Company provides certain health care, dental care, life insurance and other benefits for certain retired employees. These defined benefit plans are not funded. Accordingly, there are no plan assets. The Company s net obligation in respect of these is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. Any unrecognized past service costs are deducted. The discount rate is the yield at the reporting date on AA credit-rated bonds that have maturity dates approximating the terms of the Company s obligations. The calculation is performed annually by an independent qualified actuary using the projected unit credit method. When the benefits of a plan are improved, the portion of the increased benefit relating to past service by employees is recognized in profit or loss on a straight-line basis over the average period until the benefits become vested. To the extent that the benefits vest immediately, the expense is recognized immediately in net income. The Company recognizes all actuarial gains and losses arising from these plans in other comprehensive income during the period in which they occur and all expenses related to defined benefit plans in profit or loss. The actuarial gains and losses are not reclassified to net income in subsequent periods. (i) Provisions A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. Where discounting is used, the unwinding of the discount (accretion) is recognized as finance cost. When there is a legal or constructive obligation to decommission items of property, plant and equipment at the end of their useful lives and/or to restore the site on which the asset is located, a provision for such future removal, restoration and/or disposal costs is recognized. The provision is recorded at the present value of expected costs to settle the obligation and is recognized as part of the cost of that particular asset. The cash flows are discounted at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount (accretion) is recognized as finance cost. The estimated future costs of decommissioning are reviewed annually and adjusted as appropriate. The effect of changes in the estimated future costs or in the discount rate applied are added to or deducted from the cost of the asset Financial Report - Page 257

260 CITY OF PETERBOROUGH HOLDINGS INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2015 (in thousands of dollars) 3. SIGNIFICANT ACCOUNTING POLICIES, continued (j) Deferred contributions When an asset is received as a capital contribution, the asset is initially recognized at its fair value, with the corresponding amount recognized as deferred contributions. Deferred contributions represent the Company s obligation to continue to provide customers access to the supply of electricity and is amortized to income over the economic useful life of the contributed asset. (k) Leases Company as Lessor Rental income from operating leases is recognized on a straight-line basis over the term of the corresponding lease. Indirect costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the lease asset and recognized over the term of the lease. The Company accounts for all of its water heater and street light rentals as operating leases. Company as Lessee Payments made under operating leases are recognized in income on a straight-line basis over the term of the lease. Lease incentives received are recognized as an integral part of the total lease expense, over the term of the lease. (l) Finance income and finance costs Finance income comprises interest income on funds invested, interest regulatory account balances and gains on the disposal of financial assets. Interest income is recognized as it accrues in income, using the effective interest method. Finance costs comprise interest expense on borrowings, unwinding of the discount on provisions and impairment losses recognized on financial assets. Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognized in comprehensive income using the effective interest method. Borrowing costs directly attributable to the acquisition or construction of an asset that necessarily takes a substantial period of time to get ready for its intended use are capitalized as part of the cost of the asset. All other borrowing costs are expensed in the period in which they are incurred. Borrowing costs consist of interest and other finance charges that the Company incurs in borrowing funds Financial Report - Page 258

261 CITY OF PETERBOROUGH HOLDINGS INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2015 (in thousands of dollars) 3. SIGNIFICANT ACCOUNTING POLICIES, continued (m) Corporate income taxes Under the Electricity Act, 1998, the Company is required to make payments in lieu of corporate income taxes to Ontario Electricity Financial Corporation ( OEFC ). The payments in lieu of taxes are calculated on a basis as if the Company was a taxable company under the Income Tax Act (Canada). Corporate income taxes are calculated using the deferred income tax liabilities and asset method of tax accounting. Temporary differences arising from the difference between the tax basis of an asset and its carrying amount on the statement of financial position are used to calculate future tax liabilities or assets. Deferred tax liabilities or assets are measured using tax rates anticipated to apply in the periods that the temporary differences are expected to be recovered or settled. The effect on deferred taxes of a change in tax rates is recognized in income in the year in which the change occurs. (n) Impairment Financial assets (including receivables) A financial asset not carried at fair value through income is assessed at each reporting date to determine whether there is objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future cash flows of that asset that can be estimated reliably. The Company considers evidence of impairment for receivables at both a specific asset and collective level. All individually significant receivables are assessed for specific impairment. All individually significant receivables found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified. Receivables that are not individually significant are collectively assessed for impairment by grouping together receivables with similar risk characteristics. In assessing collective impairment the Company uses historical trends of the probability of default, timing of recoveries and the amount of loss incurred, adjusted for management s judgment as to whether current economic and credit conditions are such that the actual losses are likely to be greater or less than suggested by historical trends. An impairment loss in respect of a financial asset measured at amortized cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset s original effective interest rate. Losses are recognized in net income and reflected in an allowance account against receivables. Interest on the impaired asset continues to be recognized through the unwinding of the discount. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through income Financial Report - Page 259

262 CITY OF PETERBOROUGH HOLDINGS INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2015 (in thousands of dollars) 3. SIGNIFICANT ACCOUNTING POLICIES, continued Non-financial assets The carrying amounts of the Company s non-financial assets, other than inventories, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset s recoverable amount is estimated. The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the cash-generating unit, or CGU ). An impairment loss is recognized if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Impairment losses are recognized in net income. Impairment losses recognized in respect of CGUs reduce the carrying amounts of the assets in the unit (group of units) on a pro rata basis. Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. (o) New Standards and interpretations not yet effective or adopted i. Effective for annual periods beginning on or after July 1, 2016 IFRS 14 Regulatory Deferral Accounts: Interim standard permits IFRS adopters to continue to recognize amounts related to rate regulation in accordance with previous GAAP. IAS 1 Presentation of Financial Statements: Amendments are designed to further encourage companies to apply professional judgment in determining what information to disclose in their financial statements. ii. Effective for annual periods beginning on or after January 1, 2018 IFRS 9 Financial Instruments: Recognition and Measurement (new) modifies IAS 39 eliminating categories and redefines gain and loss re-measurement. IFRS 15 Revenue from Contracts with Customers: The core principle of the new standard is for companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. The new standard contains enhanced disclosures about revenue and provides guidance for transactions that were not previously addressed comprehensively. The Company has early adopted IFRS 14 for the year ended December 31, 2014 and as such continues to recognize rate regulated activities. The Company has not early adopted IAS 1, IFRS 9 or IFRS 15 and is currently assessing the impact that these standards will have on the consolidated statements Financial Report - Page 260

263 CITY OF PETERBOROUGH HOLDINGS INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2015 (in thousands of dollars) 4. RESTRICTED CASH As a condition of financing, certain subsidiaries of the Company are required to maintain restricted cash reserves. The reserves are to be used solely for replacement or maintenance of capital equipment, or to address material contingencies, as approved by the lenders. 5. INVENTORIES The amount of inventory consumed by the Company and recognized as an expense during 2015 was $2,131 ( $1,809). 6. INTANGIBLE ASSETS The Company holds Renewable Energy Standard Offer Contracts with the Independent Electricity System Operator ( IESO ). The contracts are for periods of twenty and forty years and provide fixed pricing per kwh for solar power generation and pricing partially indexed to inflation for hydro power generation. The cost of the contracts will be amortized on a straight line basis over the term of the contract, from the commencement of operation $ 2014 $ Cost, beginning of year 5,330 5,330 Additions - - Cost, end of year 5,330 5,330 Accumulated amortization, beginning of year Amortization Accumulated amortization, end of year Net book value 4,430 4, Financial Report - Page 261

264 CITY OF PETERBOROUGH HOLDINGS INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2015 (in thousands of dollars) 7. PROPERTY, PLANT AND EQUIPMENT Land and buildings $ Vehicles, equipment and other $ Distribution $ Generation $ Work in progress $ Total $ Cost or deemed cost Balance, Jan 1, ,742 18,713 67, ,023 4, ,049 Additions 312 1,773 5,615 1,354 19,565 28,619 Transfers (5,708) (5,708) Disposals - (201) (201) Balance, Dec 31, ,054 20,285 73, ,377 18, ,759 Additions 141 1,187 9,210 8,671 23,958 43,167 Transfers (8,558) (8,558) Disposals - (2,281) - (5,152) (22) (7,455) Balance, Dec 31, ,195 19,191 82, ,896 34, ,913 Land and buildings $ Vehicles, equipment and other $ Distribution $ Generation $ Work in progress $ Total $ Accumulated depreciation Balance, Jan 1, ,080 13,386 2,975 14,664-33,105 Depreciation expense 213 1,406 3,039 9,820-14,478 Disposals - (194) (194) Balance, Dec 31, ,293 14,598 6,014 24,484-47,389 Depreciation expense 223 1,180 3,257 5,522-10,182 Disposals - (1,665) - (5,110) - (6,775) Balance, Dec 31, ,516 14,113 9,271 24,896-50,796 Net Book Value At Dec 31, ,761 5,687 67, ,893 18, ,370 At Dec 31, ,679 5,078 73, ,000 34, ,117 Borrowing costs totaling $282 ( $197) were capitalized as part of property plant and equipment. At December 31, 2015, property, plant and equipment with a carrying amount of $148,516 ( $84,850) is pledged as security on the promissory note and debentures described in note 14. Distribution assets with a carry value of $73,314 ( $67,361) have been pledged as security on the bank debt described in note Financial Report - Page 262

265 CITY OF PETERBOROUGH HOLDINGS INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2015 (in thousands of dollars) 7. PROPERTY, PLANT AND EQUIPMENT, continued Work in progress is composed of $420 of major sustaining capital repairs on existing generation assets that had not been completed at December 31, and $31,093 of costs related to new generation assets currently under construction, primarily the London Street Generating Station. The remaining balance is comprised $1,442 relating to the electricity distribution system and $1,061 for roof top solar, ground mount solar and hydro-electric generation projects with an associated power purchase agreement not currently under construction. Solar additions in 2015 represent costs associated with rebuilding a portion of solar farm owned by the Company through its 100% owned subsidiary Lily Lake Solar Inc. In the prior year, the carrying amount of the assets replaced was adjusted down by $4,313 and in 2015 an additional loss of $496 was recorded against net income relating to the remediation. Generation assets and distribution assets include land with an unamortized cost of $2,278 ( $2,278) and $135 ( $135) respectfully. 8. REGULATORY ASSETS AND LIABILITIES The Company has recorded the following regulatory assets and liabilities: Retail settlement variance (i) $ Smart meter variance (ii) $ Regulatory items approved for settlement (iii) $ Other (iv) $ Total $ Regulatory Assets Balance, Jan 1, ,298 1, ,801 Recovery/reversal 3,114 (540) ,587 Balance, Dec 31, , ,388 Recovery/reversal (1,433) (366) (1,176) Balance, Dec 31, , ,212 Remaining recovery/ reversal period (years) Financial Report - Page 263

266 CITY OF PETERBOROUGH HOLDINGS INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2015 (in thousands of dollars) 8. REGULATORY ASSETS AND LIABILITIES, continued Regulatory items approved for settlement (iii) $ Total $ Regulatory Liabilities Balance, Jan 1, ,113 1,113 Recovery/reversal (795) (795) Balance, Dec 31, Recovery/reversal (201) (201) Balance, Dec 31, Remaining recovery/ reversal period (years) 2 (i) Retail settlement variances represent the difference between the amount paid by the Company to the Independent Electricity System Operator ( IESO ) for the cost of energy and the amount billed by the Company to its customers as energy sales, and related carrying costs. These amounts are recorded on the statement of financial position as retail settlement variances until their final disposition is decided by the OEB. The Company recognizes retail settlement variances as a regulatory deferral account debit or credit based on the expectation that these amounts will be approved by the OEB for future collection from, or refund to, customers through the rate setting and approval process, the timing of which has yet to be determined. (ii) In 2012, the OEB approved disposition of the Smart Meter variance account, excluding the portion related to the meters replaced ( stranded meters ). As prescribed by the regulator, the smart meter disposition resulted in the transfer of approximately $5,200 to property, plant and equipment and $1,200 in additional amortization expense in The remaining balance in the Smart Meter variance account of $366 ( $732) represents the estimated net recoverable value of stranded meter assets to be recovered in future rates. (iii) Regulatory items approved for settlement consists of various deferred amounts in connection with accounting policy changes, global adjustment dispositions, and other amounts approved by the OEB. Costs incurred with respect to these various activities are included in rate recoveries effective until (iv) Included in other is the lost revenue adjustment ( LRAM ) variance account with a balance of $74 at December 31, 2015 ( $73). The LRAM variance account is a retrospective adjustment designed to recover revenues lost from distributor supported CDM activities in a prior year. The Company expects future collection of these amounts through the rate setting and approval process, the timing of which has yet to be determined Financial Report - Page 264

267 CITY OF PETERBOROUGH HOLDINGS INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2015 (in thousands of dollars) 9. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES 2015 $ 2014 $ Trade payables and accrued liabilities 9,028 10,197 Energy purchases payable 6,523 7,168 Payroll payable 1,173 1,257 Commodity taxes payable Holdbacks 2, Debt retirement charge payable ,297 20, CUSTOMER DEPOSITS Customer deposits represent cash deposits from customers and electrical retailers, as well as construction deposits. Customers may be required to post security to obtain electricity or other services, which are refundable. Where the security posted is in the form of cash or cash equivalents, these amounts are recorded in the accounts as deposits, which are reported separately from the Company s own cash and cash equivalents. Interest rates paid on customer deposits are based on the Bank of Canada s prime business rate less 2.0%. Construction deposits represent cash prepayments for the estimated cost of capital projects recoverable from customers and developers. Upon completion of the capital project, these deposits are transferred to deferred contributions $ 2014 $ Customer deposits 2,070 1,894 Electrical retailer deposits Construction deposits ,347 2,052 Less: Current portion included in above (1,093) (807) 1,254 1, Financial Report - Page 265

268 CITY OF PETERBOROUGH HOLDINGS INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2015 (in thousands of dollars) 11. PROVISIONS The Company operates a water heater rental business for which a provision of $838 was carried at the end of 2014 to cover future removal costs associated with the water heaters. During the year the company reviewed costs recently incurred for water heater removal, implemented new water heater contracts and made changes to its billing policy on water heaters without a contract. As a result of the review and changes it was determined a decommissioning provision was no longer required. The provision was reduced nil resulting in a non-cash gain of $363. The Company is also liable for the decommissioning of their landfill gas generation project, owned by LFG Power Corporation, a subsidiary of PUI. In recognition of this liability, a decommissioning provision has been established as the present value of the expected future cash outflows required to settle this obligation utilizing a discount rate of 5% (2014-5%) $ 2014 $ Decommissioning provision, beginning of year Provisions made during the year - 58 Provisions eliminated during the year (838) Provisions used during the year - (104) Accretion of discount 4 28 Decommissioning provision, end of year Current Non-current Total provision Composition: Water heater rental LFG Power Corporation DEFERRED CONTRIBUTIONS The continuity of deferred customer contribution in aid of construction of PP&E is as follows: 2015 $ 2014 $ Balance, beginning of year 12,409 11,436 Add : Customer contributions during the year 2,203 1,313 14,612 12,749 Less: Amount recognized as other revenue (382) (340) Balance, end of year 14,230 12, Financial Report - Page 266

269 CITY OF PETERBOROUGH HOLDINGS INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2015 (in thousands of dollars) 13. EMPLOYEE FUTURE LIABILITIES (a) Employee Future Liabilities Employee future liabilities are comprised of vested sick leave and accrued benefit liabilities related to the Company s post employment medical and life insurance plan. Amounts accrued in these financial statements are summarized as follows: 2015 $ 2014 $ Vested sick leave liability 1,336 1,439 Accrued employee benefit liability 4,746 4,585 Employee future liabilities 6,082 6,024 (b) Post Employment Medical and Life Insurance Plan Under the plan, the Company provides certain health care, dental care, life insurance and other benefits for certain retired employees. The present value of the employee benefit liability is actuarially determined and fully reflected as an obligation. Actuarial gains and losses arising from these plans are recognized in other comprehensive income during the period in which they occur. The accrued employee benefit liability is based on an actuarial valuation as at December 31, A reconciliation of the obligation for these liabilities is as follows: 2015 $ 2014 $ Accrued employee benefit liability, beginning of year 4,585 4,616 Current service cost Interest expense Past Service Cost Benefits paid (240) (213) Actuarial loss (gain) charged to other comprehensive income 62 (342) Accrued employee benefit liability, end of year 4,746 4,585 The significant actuarial assumptions adopted in measuring the Company s accrued benefit obligation are as follows: % % Discount rate Rate of compensation increase Medical benefits costs escalation Dental benefits cost escalation Financial Report - Page 267

270 CITY OF PETERBOROUGH HOLDINGS INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2015 (in thousands of dollars) 13. EMPLOYEE FUTURE LIABILITIES, continued The Company recognizes all actuarial gains and losses arising from these plans in other comprehensive income during the period in which they occur and all expenses related to defined benefit plans in income from operations. The actuarial gains and losses are not reclassified to income from operations in subsequent periods. The plan is not funded and accordingly there are no plan assets. The approximate effect on the accrued benefit obligation of the entire plan and the estimated net benefit expense of the entire plan if the discount rate assumption was increased or decreased 0.5%, or the health care trend rate assumption was increased or decreased by 1% and all other assumptions were held constant, is as follows: Period Benefit Cost Defined Benefit Obligation 0.5% increase in discount rate 0.5% decrease in discount rate 1% increase in health care trend rate (9) (300) % decrease in health care trend rate (38) (273) (c) Pension Plan The Company s share of contributions to the O.M.E.R.S. defined benefit pension plan during the year amounted to $1,515 ( $1,424). 14. LONG-TERM DEBT Note Maturity Rate % 2015 $ 2014 $ Peterborough Distribution Inc. term loan a) ,000 6,000 Peterborough Distribution Inc. term loan b) ,550 20,932 Peterborough Distribution Inc. term loan c) ,070 4,482 Peterborough Distribution Inc. term loan d) ,925 7,509 Trent Rapids Power Corporation debenture e) ,498 18,907 Lily Lake Solar Inc. debenture f) ,473 30,340 Trent Energy Inc. secured promissory note g) ,558 17,194 Peterborough Utilities Inc. term loan h) , , ,364 Current portion of debt (5,455) (5,290) 118, , Financial Report - Page 268

271 CITY OF PETERBOROUGH HOLDINGS INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2015 (in thousands of dollars) 14. LONG-TERM DEBT, continued (a) At December 31, 2015 PDI, had drawn $9,000 on its $16,000 multi draw variable rate committed loan facility with the Toronto-Dominion Bank ( TD ) ( $6,000). This loan, along with term loans b through d below, is secured by a general security agreement covering the assets of PDI. (b) This loan is a committed reducing term loan payable to TD, originally amortized over 10 years, due August 21, 2023 with a balloon payment of $17,120 due upon maturity. PDI makes monthly blended payments of principal and interest of $105. To reduce exposure to interest rate fluctuations, PDI has entered into a receive-variable/pay-fixed interest rate swap agreement at a rate of 4.25% for this liability. (c) This loan is a committed reducing term loan payable to TD, originally amortized over 10 years, due December 24, 2018 with a balloon payment of $2,765 due upon maturity. PDI makes monthly blended payments of principal and interest of $51. To reduce exposure to interest rate fluctuations, PDI has entered into a receive-variable/pay-fixed interest rate swap agreement at a rate of 4.55% for this liability (d) This loan is a committed reducing term loan payable to TD, originally amortized over 10 years, due December 22, 2019 with a balloon payment of $4,315 due upon maturity. PDI makes monthly blended payments of principal and interest of $81. To reduce exposure to interest rate fluctuations, PDI has entered into a receive-variable/pay-fixed interest rate swap agreement at a rate of 5.36% for this liability. (e) (f) (g) This debenture payable to Ontario Infrastructure and Lands Corporation ( IO ), is secured by a first charge on all property and equipment of Trent Rapids Power Corporation, primarily the 8 MW Robert G. Lake Generating Station. Repayment of the loan commenced on August 3, 2010 and consists of monthly blended payments of principal and interest of $189 at an interest rate of 4.74%. The Loan is due July 3, 2025 This debenture payable to IO, is secured by a first charge on all property and equipment of Lily Lake Solar Inc. Commencing in April 2012 the loan is repayable in monthly principal payments of $155 plus interest at 3.74%, maturing March 3, This note payable to IO, is secured by a first charge on all property and equipment of Trent Energy Inc., primarily the 3.9 MW Stanley Adamson Powerhouse. Repayment of the loan commenced July 16, 2014 consisting of monthly blended payments of principal and interest at 4.74% of $116. The loan is due December 16, (h) At December 31, 2015 the Company had drawn $21,314 on its $45,000 credit facility with TD. The loan is available through four facilities for the expansion of the London Street Generating Station and other approved generation projects. Maturing in 2019, the loan bears interest at rates from prime to prime plus 0.5% and is secured by a general security agreement covering the operating assets directly held by the Company, LFG Power Corporation and Campbellford Seymour Electric Generation Inc. and a first charge mortgage on the London Street Generating Station Financial Report - Page 269

272 CITY OF PETERBOROUGH HOLDINGS INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2015 (in thousands of dollars) 14. LONG-TERM DEBT, continued All of the Company s lending agreements require maintenance of certain financial covenants and restricted cash reserves as stated in note 4. Throughout the year and at December 31, 2015 the Company was compliant with its financial covenants. The aggregate amounts of principal payments required are as follows: , , , , ,920 Thereafter 59,790 $ 124,388 The Company has posted $ 7,064 ( $7,064) in stand-by letters of credit with the Independent Electricity System Operator, as required by regulation. 15. SHARE CAPITAL The Company s authorized share capital is made up of an unlimited number of common shares, and an unlimited number of preferred shares. The company has no issued and outstanding preferred shares. The common shares issued during the period are as follows: Common shares # $ Balance, January 1, ,000 28,399 Add : Issued 3,349 31,699 Balance, December 31, ,349 60,098 Add: Issued - - Balance, December 31, ,349 60, Financial Report - Page 270

273 CITY OF PETERBOROUGH HOLDINGS INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2015 (in thousands of dollars) 16. ACCUMULATED OTHER COMPREHENSIVE LOSS The Company s accumulated other comprehensive loss is comprised of the following: 2015 $ 2014 $ Actuarial loss on accrued employee benefit liabilities, net of tax Change in fair value of derivative instruments, net of tax 2,359 1,862 2,905 2, REVENUE 2015 $ 2014 $ Sale of energy 94,966 88,576 Electrical distribution revenue 14,154 14,254 Professional services 12,360 11,766 Electricity generation 14,754 17,189 Metering and technical services 2,332 3,284 Water heater rental 1,480 1,463 Electrical distribution miscellaneous Building rental and other 1,892 1, , ,417 Subsidiaries of the company have contracts to sell the electric power that they generate to the Independent Electricity System Operator ( IESO ). Details of the contracts are as follows: Contract Capacity (kw) Expiry Date Peterborough Utilities Inc. 4,100 December 31, 2029 Lily Lake Solar Inc. 10,000 March 16, 2031 Trent Energy Inc. 3,900 June 15, 2033 Trent Rapids Power Corporation 8,000 December 30, 2049 Cambellford Seymour Electric Generation Inc. 2,000 December 31, 2029 LFG Power Corporation 2,000 February 1, Financial Report - Page 271

274 CITY OF PETERBOROUGH HOLDINGS INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2015 (in thousands of dollars) 18. OPERATIONS AND ADMINISTRATION EXPENSES 2015 $ 2014 $ Sale of energy 94,151 91,960 Wages and benefits 14,196 14,070 Materials and other operating expenses 8,069 9,152 Administration 3,161 3, , , FINANCE INCOME AND CHARGES 2015 $ 2014 $ Interest on bank balances Interest on regulatory assets 44 - Finance income Interest expense on bank debt 4,683 4,686 Interest expense on shareholder debt - 1,748 Accretion and other 14 - Less: borrowing costs capitalized (282) (197) Finance charges 4,415 6,237 Net finance charges recognized in earnings 4,221 5, Financial Report - Page 272

275 CITY OF PETERBOROUGH HOLDINGS INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2015 (in thousands of dollars) 20. INCOME TAXES a) Deferred tax assets and liabilities The effects of the temporary differences that give rise to the deferred income tax assets and liabilities are as follows: 2015 $ 2014 $ Deferred tax asset Tax basis of PP&E in excess of carrying amount 1,466 1,755 Loss carry forwards Provisions Derivative financial instruments Employee future benefits 1,611 1,594 Other temporary differences 22 - Deferred tax liability 4,175 4,411 Carrying amount of PP&E in excess of tax basis 7,018 6,690 Carrying amount of intangibles in excess of tax basis Carrying amount of PP&E in excess of tax basis 7,552 7,217 b) Reconciliation to effective tax rate The provision for income taxes recorded in the financial statements differs from the amount which would be obtained by applying the statutory income tax rate of 26.5% ( %) to the income for the years as follows: 2015 $ 2014 $ Income for the year before income taxes 7,475 3,779 Anticipated income tax expense 1,980 1,001 Increase (decrease) in income taxes resulting from: SR&ED tax credits Impact of rate changes and other (82) 78 (102) (231) Provision for income taxes 1, Financial Report - Page 273

276 CITY OF PETERBOROUGH HOLDINGS INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2015 (in thousands of dollars) 21. NET CHANGE IN NON-CASH WORKING CAPITAL 2015 $ 2014 $ Accounts receivable Unbilled revenue on customer accounts (1,346) 1,178 Inventories (7) 121 Prepaid expenses Accounts payable and accrued liabilities 124 6,322 (579) 8, RELATED PARTY TRANSACTIONS The Company through its subsidiaries provides services to the Peterborough Utilities Commission, an affiliate, and its Shareholder the Corporation of the City of Peterborough. Details of services provided during the year to the Peterborough Utilities Commission and the Corporation of the City of Peterborough are as follows: 2015 $ 2014 $ Professional Services 10,353 10,436 Building and vehicle rental Software and equipment rent ,236 11,365 Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly, including any director. Compensation applicable to management and directors directly or indirectly through allocations from affiliated companies during the year amounted to approximately $1,438 ( $1,363) Financial Report - Page 274

277 CITY OF PETERBOROUGH HOLDINGS INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2015 (in thousands of dollars) 23. CAPITAL DISCLOSURES The Company s primary objective when managing capital is to address the expectation as outlined in the Unanimous Shareholder Declaration between the City of Peterborough Holdings Inc., and its shareholder, the Corporation of the City of Peterborough. The expectation is that the Company will maintain a prudent financial and capitalization structure consistent with industry norms and on the basis that it is intended to be a self-financed entity. The regulated distribution business is expected to have a capitalization structure of 60% debt and 40% equity as targeted by the Ontario Energy Board. The unregulated business targets to have a capitalization structure of 75% debt and 25% equity consistent with market norms. The Shareholder Declaration further defines that the amounts due to the City are excluded from the definition of debt in assessing the Company s capitalization structure. Changes in the Company s capital structure are also constrained by existing lending agreement provisions that limit the amount of dividend distributions and the repayment of related party debt subject to certain cash flow tests. Additionally the agreements provide for a restriction on the issuance of new debt or the posting of security without prior lender consent. The Company has complied with these requirements during the year. The Company s current capital structure is defined as follows: 2015 $ 2014 $ Long-term bank debt 124, ,364 Share capital 60,098 60,098 Accumulated other comprehensive income (2,905) (2,362) Retained earnings 41,207 41,043 Equity 98,400 98, Financial Report - Page 275

278 CITY OF PETERBOROUGH HOLDINGS INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2015 (in thousands of dollars) 24. FINANCIAL INSTRUMENTS The fair value of financial instruments is the amount of consideration that would be agreed upon in an arms length transaction between knowledgeable, willing parties who are under no compulsion to act. The fair values of cash, restricted cash, accounts receivables, unbilled revenue on customer accounts, accounts payable and accrued liabilities, and customer deposits approximates their carry amounts due to their short-term maturities. Financial instruments which are disclosed at fair value are to be classified using a three-level hierarchy. Each level reflects the inputs used to measure the fair values disclosed of the financial liabilities, and are as follows: Level 1: Inputs are unadjusted quoted prices of identical instruments in active markets; Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly; and Level 3: Inputs for the liabilities that are not based on observable market data (unobservable inputs) The Company s fair value hierarchy is classified as Level 2 for bank debt, promissory note, derivative financial instruments and debentures payable. The classification has been calculated using the discounted cash flow model based on the contractual terms of the instrument discounted using an appropriate market rate of interest. The carrying and fair values of these financial instruments are as follows: Carrying value Fair value Carrying value Fair value $ $ $ $ Long-term debt 124, , , ,504 The Company has entered into interest rate swap agreements for $31,545 ( $32,923) of its bank debt held in PDI as described in note 14. These swaps qualify as hedges, and as result the unrealized loss on the debt is included in other comprehensive income for the period incurred. As of December 31, 2015, the Company has an unrealized loss on its derivative financial instruments of $3,210 (December 31, $2,534). 25. FINANCIAL RISK MANAGEMENT In the course of its business the Company may be exposed to various financial risks: market risk (including foreign exchange risk, price risk and interest rate risk), credit risk and liquidity risk. An assessment of these risks as they apply to the Company is provided below: (a) Credit risk By regulation, in addition to the distribution service charges that the Company earns, the customers electricity bills include, transmission charges, non competitive energy charges, debt retirement and electricity commodity charges. The Company acts as an agent for billing and collecting these charges on behalf of other market participants and under regulation the Company bears the risk of non-collection of these amounts Financial Report - Page 276

279 CITY OF PETERBOROUGH HOLDINGS INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2015 (in thousands of dollars) 25. FINANCIAL RISK MANAGEMENT, continued To mitigate credit risk the Company is permitted to request certain customers to provide deposits for a prescribed period. Furthermore, relief from substantial or catastrophic collection loss relief may be afforded by applying for recovery for those losses through distribution rate adjustments in future years, if approved by the regulator. The Company is not exposed to a significant concentration of credit risk within any customer segment or individual customer. The allowance for collection of doubtful accounts included in accounts receivable is in the amount of $472 ( $392). Pursuant to their respective terms, accounts receivable are aged as follows at December 31: 2015 $ 2015 % 2014 $ 2014 % Less than 30 days 8, , days days Greater than 91 days Total outstanding 9, , Less: allowance for doubtful accounts (472) (4) (392) (4) 9, , (b) Interest rate risk As described in Note 14 to the financial statements the Company has entered into an interest rate swap arrangements for $31,545 ( $32,923) of its $40,545 ( $38,923) debt issued by PDI to manage the impact of fluctuating interest rates. The swaps require the periodic exchange of interest payments without the exchange of the notional principal amount on which the payments are based. The swap instruments are recognized on the statement of financial position as a derivative financial instrument. The debentures and promissory notes issued by the Company described in note 14 all have fixed interest charges and do not expose the company to interest rate risk. At December 31, 2015, the Company is exposed to interest rate fluctuations on the $21,315 loan facilities payable to TD that bear interest at a variable rate. This debt is associated with the expansion of the London Street Generating Station. Upon commissioning of this project, the Company plans to convert this debt to a fixed interest rate loan to reduce interest rate risk. (c) Foreign currency risk The Company conducts the majority of its business without significant exposure to foreign currency Financial Report - Page 277

280 CITY OF PETERBOROUGH HOLDINGS INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2015 (in thousands of dollars) 25. FINANCIAL RISK MANAGEMENT, continued (d) Liquidity risk Liquidity risk is the risk that the Company will not be able to meet is financial obligations as they occur. The Company s approach to managing liquidity is to ensure as far as possible, that it will have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damages to the Company s reputation. The following are the contractual maturities of financial liabilities, including estimated interest payments Undiscounted cash flows (principal and interest) Carrying amount $ Under 1 year $ 1 to 2 years $ 2 to 5 years $ Over 5 years $ Total $ Long-term debt 124,388 9,416 9,344 49,374 79, ,517 Accounts payable and accruals 20,297 20, , ,685 29,713 9,344 49,374 79, , Undiscounted cash flows (principal and interest) Carrying amount $ Under 1 year $ 1 to 2 years $ 2 to 5 years $ Over 5 years $ Total $ Long-term debt 105,364 6,754 6,853 23,216 73, ,334 Accounts payable and accruals 20,173 20, , ,537 26,927 6,853 23,216 73, ,507 At the present time the liquidity risk of the Company is low as it has unutilized existing debt capacity, additional room within its capital structure to attain additional financing as required, and sufficient cash flow to address existing debt obligations. (e) Commodity price risk The Company is not exposed to electricity commodity price risk as the Company entered into long term power purchase agreements with the IESO providing price stability. Details regarding these contracts are included in Note Financial Report - Page 278

281 CITY OF PETERBOROUGH HOLDINGS INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2015 (in thousands of dollars) 26. CONTINGENCIES The Company has the following contingent liabilities: (a) The Company participates with other municipal utilities in Ontario in an agreement to exchange reciprocal contracts of indemnity through the Municipal Electric Association Reciprocal Insurance Exchange. Under this agreement the Company is contingently liable for additional assessments to the extent that premiums collected are not sufficient to cover actual losses, claims and costs experiences. 27. COMMITMENTS The Company leases land for certain of its generation assets under non-cancellable operating lease arrangements. The future aggregate minimum lease payments under non cancellable operating leases are as follows: 2015 $ 2014 $ No less than 1 year Later than 1 year and no later than 5 years 1,000 1,000 Later than 5 years 3,713 3,963 4,963 5, SUBSEQUENT EVENTS Subsequent to the year end, the shareholder of the Company, the Corporation of the City of Peterborough, initiated a public process to receive constituent input on the potential disposition of 100% of the regulated business operated by Peterborough Distribution Inc., a 100% owned subsidiary of the Company. An estimate of the related financial impact is not determinable since there is no agreement or approval for a sale at this time. 29. COMPARATIVE AMOUNTS The prior years figures have been reclassified, where applicable, to conform to the presentation used in the current year. The changes do not affect prior year earnings Financial Report - Page 279

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