FUNDY REGION SOLID WASTE COMMISSION

Transcription

1 FINANCIAL STATEMENTS DECEMBER 31, 2009

2 DECEMBER 31, 2009 CONTENTS Page AUDITORS REPORT 1 CAPITAL FUND Balance Sheet Statement of Investment in Capital Assets Statement of Source and Application of Capital Financing OPERATING FUND Balance Sheet Statement of Surplus Statement of Revenue and Expenditure GENERAL CAPITAL RESERVE FUND Balance Sheet NOTES TO FINANCIAL STATEMENTS ADDITIONAL INFORMATION Auditors Comments on Additional Information Schedule of Expenditure Schedule of Expenditure - Host Community Enhancement Fund

3 39 Canterbury Street P.O. Box 6668 Saint John New Brunswick E2L 4Sl Tel (506) Fax (506) Member of DFK Canada and DFK international AUDITORS REPORT To the Members of the Fundy Region Solid Waste Commission We have audited the balance sheets of the Capital Fund, Operating Fund and General Capital Reserve Fund of the Fundy Region Solid Waste Commission as at December 31, 2009 and the related statements of revenue and expenditure, surplus, investment in capital assets and source and application of capital f mancing for the year then ended. These f mancial statements have been prepared to comply with the accounting principles prescribed for New Brunswick municipalities by the Department of Local Government. These financial statements are the responsibility of the Commission s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. In our opinion, these f mancial statements present fairly, in all material respects, the f mancial position of the Commission as at December 31, 2009 and the results of its operations and changes in financial position for the year then ended, in accordance with the basis of accounting described in Note 2 to these financial statements. These financial statements, which have not been, and were not intended to be, prepared in accordance with Canadian generally accepted accounting principles, are solely for the information and use of the Commission and the Ministers of Environment and Local Government of the Province of New Brunswick, and are not intended to be and should not be used for any other purpose. Saint John, NB February 12, 2010 Saint John Partners John H Teed Andrew R Logan Peter L. Logan James K. Whittaker Fredericton Partners ~D~!~/ Brian d. Saunders Ralph D Gorman c ~, David H.Bradley John H, Landry 1. T,J. Smith Jeff E. Saunders

4 CAPITAL FUND ASAT DECEMBER 31, 2009 DEFERRED FINANCING CHARGES (Note 2) CAPITAL ASSETS (Note 2) Land Buildings Landfill site improvements Landscaping Highway intersection improvements Landfill Cell # 1 Landfill Cell # 2 Landfill Cell # 3 Landfill Cell # 4 Landfill Cell # 5 Capping - Cell #1, #2 and #3 Elevation Surge pond Furniture and office equipment Preliminary studies Landfill heavy equipment Light equipment and vehicles Recycling vehicles Recycling depot equipment Composting Gas management Household hazardous waste $ ,173,460 2,549,396 6,232,298 1,035,850 1,276,844 4,579,283 3,248,037 3,250,607 4,184,891 3,398,615 3,346,668 8, , ,765 3,471,807 1,689, , ,212 1,998,071 8,538,983 1,847, , $ $ 95_560 1,173,460 2,430,762 6,232,298 1,035,850 1,276,844 4,579,283 3,248,037 3,250,607 2,117,111 3,475,864 3,346,668 8, , ,765 3,471,807 1,694, , ,212 1,442,473 8,518, , CURRENT Due to operating fund (Note 6) LONG-TERM DEBENTURES (Notes 3 and 4) INVESTMENT IN CAPITAL ASSETS $ 78,691 S 94,639 9,530,000 11,279,000 45, ~1 $ 54,732.67~1 $~ APPRO~VE/~.ON?EHALF OF THE COMMISSION MEMBERS:. ~/~l~---~- Commission Member /~. ~. ~-7/~ )//~. Commission Member

5 CAPITAL FUND STATEMENT OF INVESTMENT IN CAPITAL ASSETS FOR THE YEAR ENDED DECEMBER 31, 2009 BALANCE AT BEGINNING OF YEAR TRANSFERS FROM OPERATING FUND CAPITAL EXPENDITURES CAPITAL GRANTS DEBT REPAYMENT CONTRIBUTIONS FROM GENERAL CAPITAL RESERVE FUND EQUIPMENT REPLACEMENT CELL CONSTRUCTION COST OF CAPITAL ASSET DISPOSITIONS BALANCE AT END OF YEAR $ 38,952,803 $ 34,126,874 44,198 30,476 2,129,874-1,749,000 1,714, , ,228 2,025,373 2,916,724 ( ) ( ) Chartered Act:ountants

6 CAPITAL FUND STATEMENT OF SOURCE AND APPLICATION OF CAPITAL FINANCING FOR THE YEAR ENDED DECEMBER 31, 2009 SOURCE Unapplied from previous year Deferred financing charges Transfers from Operating Fund Capital expenditures Debt repayment Transfer from General Capital Reserve Fund Equipment Replacement Cell Construction Capital grants (Note 2) Temporary financing at end of year Due to Operating Fund (Note 6) $ 95,56O $ 44,198 1,749, ,704 2,025,373 2,129, $ ,917 30,476 1,714, ,228 2,916, APPLICATION Temporary financing at end of previous year Due to Operating Fund (Note 6) Capital expenditures Repayment of long-term debentures Unapplied at end of year Deferred financing charges $ 94,639 $ 101,995 4,593,149 3,247,429 1,749,000 1,714, $ $

7 OPERATING FUND BALANCE SHEET AS AT DECEMBER 31, 2009 ASSETS CURRENT Cash and cash equivalents (Notes 2 and 3) Accounts receivable (Note 3) Due from Capital Fund (Note 6) Due from General Capital Reserve Fund (Notes 6 and 8) HST receivable Prepaid expenses INVESTMENTS RESTRICTED FOR FUTURE CLOSURE AND POST-CLOSURE COSTS (Notes 2 and 7) LIABILITIES CURRENT Accounts payable and accrued liabilities (Note 3) Security deposits FUTURE CLOSURE AND POST-CLOSURE LIABILITY (Notes 2 and 7) SURPLUS SURPLUS $ 188, ,673 78, , , $ $ 1,525, $ 695, ,133 94, , , $ 1,433, COMMITMENTS (Note 9) ~ ~ Commission Member ~ ~ ~~~~1,~ Commission Mem~r APPR~ ~.D?~BEHALF OF THE COMMISSION MEMBERS:

8 OPERATING FUND STATEMENT OF SURPLUS FOR THE YEAR ENDED DECEMBER 31, 2009 BALANCE AT BEGINNING OF YEAR TRANSFER OF SECOND PREVIOUS YEAR S SURPLUS (Note 2) EXCESS OF REVENUE OVER EXPENDITURE FOR THE YEAR BALANCE AT END OF YEAR $ 504,684 (334,295) $ 490,662 (156,367) $

9 OPERATING FUND STATEMENT OF REVENUE AND EXPENDITURE FOR THE YEAR ENDED DECEMBER 31, 2009 REVENUE (Note 2) Tipping fees Municipal solid waste Construction and demolition and special waste Compostable organics Interest Recycling commodity sales Other Surplus of second previous year (Note 2) Budget Actual $ 7,279,200 $ 7,538,957 $ 7,903, , , , , , ,633-30,346 90, ,000 40, ,838 15, ,017 66, ~ EXPENDITURE (Schedule) Administration Landfill Waste diversion - recycling program Waste diversion - composting program Public education EXCESS OF REVENUE OVER EXPENDITURE $ 857, , ,266 4,880,224 4,666,136 5,503, ,133 1,256, ,137 1,543,947 1,391,953 1,443, ~i $ $ o

10 GENERAL CAPITAL RESERVE FUND BALANCE SHEET AS AT DECEMBER 31, 2009 CURRENT Cash and cash equivalents (Notes 2 and 3) INVESTMENTS (Note 2) $ 177, $ 1,115,796 CURRENT Due to Operating Fund (Note 6) BALANCE AT BEGINNING OF YEAR TRANSFER FROM OPERATING FUND DURING THE YEAR TRANSFER TO CAPITAL FUND I~TMENT INCOME BALANCE AT END OF YEAR (Note 8) LIABILITIES EQUrrv $ ,583,100 1,834,233 (2,419,077) $ ,555,905 2,176,633 (3,216,952) ,100 APPRO ~VE~ ON ~MALF OF THE COMMISSION MEMBERS: ~ ~ ~:=::sion Member slon Member o Chartered Accountanls

11 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, COMMISSION MANDATE AND COMMENCEMENT OF OPERATIONS The Commission s mandate is to develop and implement an environmentally and socioeconomically acceptable strategy for managing solid waste in the Fundy Region. The Commission is comprised of representatives from each municipality and the unincorporated areas in the region. The Commission constructed a landfill facility at Crane Mountain, which commenced operations on November 10, 1997 when it began receiving solid waste. The Provincial Government has issued to the Commission a Certificate of Approval to operate the landfill through to December 31, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Financial Statement Presentation The financial statements of the Fundy Region Solid Waste Commission have been prepared to conform in all material respects to the accounting principles prescribed for New Brunswick municipalities by the Department of Local Government. Under sections 15.7(6) and 15.7(7) of the Clean Environment Act, the second previous year surplus or deficit of a solid waste commission must be included in the operations of the current year. Basis of Accounting These financial statements have been prepared in accordance with fund basis accounting. The Operating Fund reflects the Commission s operating assets and liabilities and results of operations. The Capital Fund reflects the Commission s investment in capital assets and related debt. The General Capital Reserve Fund reflects the assets, liabilities and changes in fund equity relating to this specific purpose fund established by the Commission in accordance with its mandate and regulatory requirements. Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand, balances with banks and GIC s having maturity dates of 90 days or less from the date of acquisition. Deferred Financing Charges Financing charges related to the issuance of long-term debentures are deferred and amortized over the terms of the related debentures. Investments Investments are stated at cost and are managed in accordance with the New Bnmswick Trustees Act. At December 31, 2009, the market value was $970,250 ( $792,308) for the Operating Fund - investments restricted for future closure and post closure costs, and $1,089,855 ( $1,039,444) for the General Capital Reserve Fund. Capital Assets Capital assets are recorded at cost. The Commission does not record amortization on its capital assets. Funds received through capital assistance programs, cost sharing arrangements or loan forgiveness are treated as additions to investment in capital assets.

12 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2009 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont d) Revenue Recognition Tipping fees are recorded when the waste is delivered to the landfill facility and when collection is reasonably assured. Recycling commodity sales are recognized upon the delivery of the recyclables to the customers and when collectibility of proceeds is reasonably assured. Interest and other income are recorded on an accrual basis and when collection is reasonably assured. Use of Estimates The preparation of financial statements in accordance with Canadian generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenditures during the reporting period. These estimates are reviewed periodically, and as adjustments become necessary, they are reported in earnings in the period in which they become known. Examples of signiqcant estimates include: - the allowance for doubtful accounts; - the recoverability of tangible assets; - the recoverability of long-term investments; and - certain economic assumptions used in determining the provision for future closure and postclosure costs and the future closure and post-closure liability. o FINANCIAL INSTRUMENTS The Commission s financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities and long-term debentures. Unless otherwise noted, it is management s opinion that the Commission is not exposed to significant interest, currency or credit risks arising from these f mancial instruments. The Commission manages its exposure to credit risk by requiring its customers to supply a security deposit or a letter of credit. The fair value of these financial instruments approximate their carrying values, unless otherwise noted. LONG-TERM DEBENTURES N.B. Municipal Finance Corporation serial debenture, yearly repayment of principal and semi-annual interest at 2.1%-3.85%, maturing December 19, $ 2,339,000 $ 2,887,000 N.B. Municipal Finance Corporation serial dehenture, yearly repayment of principal and semi-annual interest at 1%-3.35%, maturing November 6, ,232,000 N.B. Municipal Finance Corporation serial debenture, yearly repayment of principal and semi-annual interest at 5.7%-6.5%, maturing December 14, 2009 at which time a final payment of $1,436,000 is due. 1,436,

13 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, LONG-TERM DEBENTURES (cont d) N.B. Municipal Finance Corporation serial debenture, yearly repayment of principal and semi-annual interest at 6.1%-6.4%, maturing August 10, , ,000 N.B. Municipal Finance Corporation serial debenture, yearly repayment of principal and semi-annual interest at 6.1%-6.4%, maturing August 10, 2010 at which time a final payment of $616,000 is due. 616, ,000 N.B. Municipal Finance Corporation serial debenture, yearly repayment of principal and semi-annual interest at 3.375%-5.75%, maturing July 12, ,774,000 2,042,000 N.B. Municipal Finance Corporation serial debenture, yearly repayment of principal and semi-annual interest at 3.375%-5.75%, maturing July 12, 2012 at which time a final payment of $2,206,000 is due. 2,325,000 2,717,000 N.B. Municipal Finance Corporation serial debenture, yearly repayment of principal and semi-annual interest at 2.75%-5.5%, maturing July 8, $ ~ $ The N.B. Municipal Finance Corporation has indicated that those debentures with balloon payments in their final year may be refinanced over a further 5 year term. Aggregate principal payments required over the next five years excluding balloon payments are as follows: 2010 $ 1,850, ,748, ,825, ,436, ,822 BORROWING AUTHORITY Operating Fund Section 6 of Regulation of the Clean Environment Act states that borrowing for operating cannot exceed 25% of the Commission s operating budget. At December 31, 2009, there were no borrowings for operations ( nil). II.

14 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2009 BORROWING AUTHORITY (concd) Capital Fund The Commission currently has no outstanding borrowing authority as granted by the Municipal Capital Borrowing Board. INTER-FUNDACCOUNTS The policy established by the Department of Local Goverv_ment requires that short-term interfund borrowings be repaid within the year unless the borrowing is for a capital project. All inter-fund balances at December 31, 2009 are in compliance with this policy. FUTURE CLOSURE AND POST-CLOSURE LIABILITY Section 6.5(2) of Regulation of the Clean Environment Act requires that closure and postclosure expenses be calculated in accordance with the recommendations of the Public Sector Accounting Board (PSAB 3270) pronouncement regarding "solid waste landfill closure and postclosure liability". This recommendation requires that a liability be recognized for closure and post-closure costs as the landfill site s capacity is utilized. Closure and post-closure expenses include restoration of landfill sites, maintenance of equipment and environmental monitoring. The Crane Mountain facility, with a total estimated capacity of 3,461,674 tonne, is expected to receive solid waste until December The Provincial Government has mandated that the Commission is responsible for site maintenance for a period of 30 years after closure. The present value in December 2047 of the total costs associated with this period are estimated at $14,869,642. At December 31, 2009, the Commission has recognized $617,130 of this liability representing a decrease of $290,160 ( increase of $227,656) from the prior year. In order to meet this future obligation, the Commission has established a special account as permitted under section 6.50) of Regulation of the Clean Environment Act. The fair value of all assets accumulated to December 3 I, 2009 are $1,030,641 ( $848,589). GENERAL CAPITAL RESERVE FUND The General Capital Reserve Fund was established to provide for the future replacement of assets for the facility. Contributions and withdrawals require a resolution of the Commission and are determined on an annual basis. The Commission has internally segregated this reserve as follows: Equipment replacement Cell construction $ 441,160 $ 640, $ $

15 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2009 o COMMITMENTS Crane Mountain Enhancement Inc. The Commission has committed to provide $20,000 annually (adjusted for inflation) to Crane Mountain Enhancement Inc. (CMEI) to fund operating expenditures for such time that the facilities are operated at the site. The annual payment is reduced accordingly if the cash or near cash assets of CMEI exceed $60,000. Host Community Enhancement Fund In order to meet Provincial Government requirements, the Commission allocates a dedicated portion of the tipping fee to the Host Community Enhancement Fund for special projects designed to enhance the Facility and it s surrounding communities. For 2000 and subsequent years, while solid waste is received at the landfill site, the Commission has committed to provide $75,000 per year (adjusted for inflation) to this Fund (schedule, page 17). The Fund is administered by Crane Mountain Enhancement Inc. (formerly known as the Fundy Future Environment and Benefits Council) and the Commission. 10. CHANGE IN ACCOUNTING POLICY The Commission currently prepares its financial statements to comply with the accounting principles prescribed for New Brunswick municipalities by the Department of Local Government. The Department has indicated that municipalities will be required to adopt recommendations of the Canadian Institute of Public Sector Accounting Board s new reporting model PS 1000, 1100, 1200 and The Department has yet to establish an implementation date. ll. COMPARATIVE FIGURES Certain accounts in the prior year financial statements have been reclassified for comparative purposes to conform with the presentation in the current year f mancial statements. 13.

16 39 Canterbury Street RO. Box 6668 Saint John New Brunswick E2L 4S1 Tel (506) Fax (506) teedsaundersdoyte.com Member of DFK Canada and DFK ~nterna~ional AUDITORS COMMENTS ON ADDITIONAL INFORMATION The accompanying Schedules of Expenditure are presented as supplementary information only. In this respect, they do not form part of the financial statements of the Fundy Region Solid Waste Commission for the year ended December 31, 20~ and hence are excluded from the opinion expressed in our report dated February 12, 2010 to the Commission members on such financial statements. The information in these schedules has been subject to audit procedures only to the extent necessary to express an opinion on the f mancial statements of the Commission and, in our opinion, is fairly presented in all respects material to those financial statements. Saint John, NB February 12, 2010 Saint John Partners John H Teed Andrew R Logan Peter L. Logan James K. Whittaker Fredericton Partners Brian J. Saunders Ratph D Gorrnar, ~D~l~ ~... :, ~ David H.Bradley John H. Landry 14. T.J. Smith Jeff E. Saunders

17 ADMINISTRATION Office and administration Professional services Personnel Insurance Property taxes FUNDY REGION SOLID WASTE COMMISSION OPERATING FUND SCHEDULE OF EXPENDITURE (Unaudited) FOR THE YEAR ENDED DECEMBER 31, O09 Budget Actual Actual $ 95,790 $ 81,806 90,595 88, , , , , $ $ $ 87,251 59, , ,528 LANDFILL Operating costs Daily cover Site labour Site non-labour operation Site maintenance Scalehouse Leachate management Special waste handling Gas management Environmental health and safety Household hazardous waste Support to CMEI monitoring and education Host Community Enhancement Fund Provision for future closure and post-closure costs (Note 7) Transfer to General Capital Reserve Fund Equipment Replacement Cell Construction $ 155,309 $ 103, , , , ,802 19,710 25, , , , ,904 8,500 7,731 64,409 53, , , ,721 54,768 22,691 22,691 82,629 82,629 $ 117, , ,999 24,277 91, ,900 10,294 89, , ,007 22,411 78, ,327 (290,160) 227, ,545 94, , ~ Fiscal services Principal payments on long-term debentures Interest on interim financing and long-term debentures Capital expenditures financed from Operating Fund 982, , , , , , $ Chartered Accountant.,

18 OPERATING FUND SCHEDULE OF EXPENDITURE (Unaudited) FOR THE YEAR ENDED DECEMBER 31, 2009 WASTE DIVERSION - RECYCLING PROGRAM Operating costs Transfer to General Capital Reserve Fund Equipment replacement Drop-off depot system 7~09 Budget $ 100, Fiscal services Principal payments on long-term debentures Interest on interim financing and long-term debentures 126, , ,179 WASTE DIVERSION - COMPOSTING PROGRAM Operating costs Transfer to General Capital Reserve Fund Equipment replacement $ Processing Fiscal services Principal payments on long-term debentures Interest on interim financing and long-term debentures PUBLIC EDUCATION Personnel Advertising, tours and promotional material Administration , $ 30, , $ , $ $ 119,296 $ 106, ,800 73, ~ $ , ~ $ $ 108, ,331 $ 297.3~ $ [ $

19 SCHEDULE OF EXPENDITURE - HOST COMMUNITY ENHANCEMENT FUND (Unaudited) FOR THE YEAR ENDED DECEMBER 31, 2009 Reciaient Inglewood School KBM Community Centre Mattinon Community Centre RV Community Centre Morna Heights School Grand Bay Primary School Westfield Home and School Westfield School Emergency Measures Org. Nature Land Trust Various Schools NBCC/UNBSJ Students Fundy Region Solid Waste Commission River Valley Lions Morna Heights Home and School River Valley Arena Seniors - Grand Bay - Westfield GBW Scouts Ketepec Scouts Westfield Scouts Westfield Elementary RV Volunteer Hunting Education RV Track Association Smart Boards Building repairs and improvements, survey, consultant and 80th anniversary celebration Install steel door Arena lighting Catwalk Smart Boards Software, scanner and materials to catalog school library Smart Boards Playground Scoreboard for gym Smart Board and two laptops Base Line Study Develop Site Plan Projects for schools Scholarships $ $ 6,90o 21,882 19,794 1,300-14,645 1,918-3,800 4,600-6,900 15,000 2,208-3,238-1,500 10,610-2,568 3,000 4,000 4,000 Compost Drop Off 7,794 Kitchen items 547 Waste receptacles Rain gutters - 1,500 Catwalk - 4,000 Appliances 1,115 Camping gear 2,068 - Camping gear 3, Camping gear - 2,123 Equipment for intramural program and tournaments 1,260 Education of young hunters 1,000 Improvements to track 17. $ 82.6g~ $ 1,