THE CORPORATION OF THE VILLAGE OF ALERT BAY FINANCIAL STATEMENTS DECEMBER 31, 2013

Transcription

1 THE CORPORATION OF THE VILLAGE OF ALERT BAY FINANCIAL STATEMENTS DECEMBER 31, 2013

2 THE CORPORATION OF THE VILLAGE OF ALERT BAY 2013 ELECTED OFFICIALS Councilor D. Aberley Councilor K. Gordon Mayor M. Berry Councilor K. Mercer Councilor W. White VILLAGE OFFICIALS Chief Administrative Officer Royal Canadian Mounted Police Fire Chief H. Nelson-Smith Staff Cpl. Burke K. Gordon MUNICIPAL AUDITORS Chan Nowosad Boates BANKERS Coastal Community Credit Union

3 THE CORPORATION OF THE VILLAGE OF ALERT BAY Index to the Financial Statements For the year ended December 31, 2013 AUDITORS REPORT STATEMENTS A Statement of Financial Position B Statement of Operations C Statement of Cash Flows D Statement of Changes in Net Financial Assets E Statement of Segmented Information F Statement of Tangible Capital Assets NOTES TO THE FINANCIAL STATEMENTS

4 INDEPENDENT AUDITORS' REPORT To: The Mayor and Council of the Corporation of the Village of Alert Bay We have audited the accompanying financial statements of the Corporation of the Village of Alert Bay, which comprise the statement of financial position as at December 31, 2013, and the statements of operations, cash flows, changes in net financial assets for the year then ended, and a summary of significant accounting policies and other explanatory information. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian public sector accounting standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors' Responsibility 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 comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of the Corporation of the Village of Alert Bay as at December 31, 2013, and the results of its operations and its cash flows for the year then ended in accordance with Canadian public sector accounting standards. Other Matter The financial statements as at December 31, 2012 and for the year then ended were audited by other auditors whose report dated May 22, 2013, expressed an unmodified opinion on those statements. Chartered Accountants Campbell River, BC April 23, 2014 John H. Chan Ltd. Shelly A. Boates Ltd. Erica Chan-Lafrance Ltd. Karen Stewart Ltd. 980 Alder Street Campbell River, BC V9W 2P9 Telephone (250) Facsimile (250) Toll Free CNB-4TAX cnb@channowosadboates.ca

5 Statement A Financial Assets Cash and equivalents (Note 2) 1,538,871 1,272,116 Property taxes receivable 119,655 97,193 Accounts receivable 48,666 52,168 Grants receivable 7, ,998 Investment (Note 3) 1 1 1,714,720 1,828,476 Liabilities Accounts payable 205, ,379 Contaminated site remediation (Note 4) 76,000 - Deferred revenue (Notes 5) 530, ,292 Long-term debt (Note 6) 662, ,371 Capital leases (Note 6) - 139,514 1,474,419 1,680,556 Net Financial Assets 240, ,920 Non-Financial Assets Tangible capital assets (Statement F) 6,075,038 6,254,149 Construction/Work in progress - 99,317 Prepaid expenses 19,948 29,132 6,094,986 6,382,598 Accumulated Surplus (Note 8) 6,335,287 6,530,518 Contingent liabilities and lease commitments (Note 7) Approved by: THE CORPORATION OF THE VILLAGE OF ALERT BAY Statement of Financial Position As at December 31, 2013 H. Nelson-Smith Michael Berry Administrator Mayor The accompanying notes are an integral part of these financial statements.

6 Statement B THE CORPORATION OF THE VILLAGE OF ALERT BAY Statement of Operations For the Year Ended December 31, Budget 2012 Unaudited - Note 14 Revenue Taxes 391, , ,769 Grants in lieu of taxes 18,618 18,628 21,327 Sewer user rates 81,282 84,000 82,415 Water user rates 27,811 32,000 39,993 Sale of services 352, , ,600 Other 135, , ,767 Interest and investment income 20,628 13,700 20,900 Transfers from governments 460, ,774 1,018,882 1,488,752 1,971,718 2,049,653 Expenses Administration 403, , ,607 Public works 413, , ,850 Protective services 22,664 37,568 32,797 Environmental health services 188, , ,531 Recreation services 111, , ,009 Economic development 77, ,991 83,800 Sewer utility 204, , ,694 Water utility 36,253 25,898 25,768 Small Boat Harbour 128, , ,771 Dock 98,527 50,032 66,621 1,683,983 1,571,311 1,576,448 Annual (deficit) surplus (195,231) 400, ,205 Accumulated surplus Beginning of year as previously stated 6,530,518 6,033,514 Prior period adjustment - 23,799 Beginning of the year as restated 6,530,518 6,057,313 Accumulated surplus end of year 6,335,287 6,530,518 The accompanying notes are an integral part of these financial statements.

7 Statement C THE CORPORATION OF THE VILLAGE OF ALERT BAY Statement of Cash Flows For the Year Ended December 31, 2013 Cash and equivalents at beginning of year 1,272,116 1,114,596 Cash flows from operating activities Cash received from: Taxes and utilities 490, ,077 Solid waste services and tipping fees 189, ,426 Sale of services and other receipts 256, ,478 Rent 42,218 41,129 Interest from late payments of taxes and utilities 13,259 16,511 Grants 731, ,486 Deferred revenue 72, ,413 Interest from investments 12,126 13,907 1,809,334 2,114,427 Cash used to pay for: Council honorariums and expenses (31,561) (34,943) Payroll and contracted services (529,795) (515,491) Goods and services used in operations (642,295) (656,732) Interest (49,182) (53,391) (1,252,833) (1,260,557) Net cash provided by operations 556, ,870 Cash flows from capital transactions Purchase of tangible capital assets (118,744) (582,131) Sale of tangible capital assets (117,994) (582,131) Cash flows from financing activities Repayment of long-term debt and capital leases (171,752) (114,219) Cash and equivalents at end of year 1,538,871 1,272,116 Increase in cash equivalents 266, ,520 The accompanying notes are an integral part of these financial statements.

8 Statement D THE CORPORATION OF THE VILLAGE OF ALERT BAY Statement of Changes in Net Financial Assets For the Year Ended December 31, 2013 Annual (deficit) surplus (195,231) 473,205 Acquisition of tangible capital assets (161,988) (582,131) Disposal of tangible capital assets Amortization of tangible capital assets 340, , ,111 (246,920) Decrease in prepaid expenses 9,184 2,135 Decrease (increase) in Construction/Work in progress 99,317 (80,198) 108,501 (78,063) Increase in Net Financial Assets for the year 92, ,222 Net financial assets (debt) at beginning of year 147,920 (302) Net financial assets at end of year 240, ,920 The accompanying notes are an integral part of these financial statements.

9 Statement of Segmented Information For the Year Ended December 31, 2013 Statement E Total Administration Public works Environmental Health Budget 2012 Revenue Taxes 410, , , , , User rates 109, , , Sale of Services 352, , ,600 12,450 2,356 7,889 9, , ,426 Interest and Investment income 20,628 13,700 20,900 20,628 20, Other 135, , , , ,121 9,109 8, Government transfers 460, ,774 1,018, , ,781 56,874 3, ,488,752 1,971,718 2,049, , ,024 73,872 20, , ,426 Expenses Council indemnity and travel 31,561 32,805 34,943 31,561 34, Wages and benefits 511, , , , ,243 61, ,859 97,169 74,390 Contracted services 91,570 92,300 91,406 12,000 11, ,895 52,411 Operating expenditures 651, , , , , , ,610 15,764 70,200 Interest 56,892 60,366 58,396 8,688 9,427 2,819 2, ,348 Amortization 340, ,211 8,601 9, , ,880 22,182 22,182 1,683,983 1,571,311 1,576, , , , , , ,531 Annual Surplus (195,231) 400, , , ,417 (339,440) (347,958) 1,462 (18,105) Protective services Recreation Economic development Water and sewer Marine ,012 Revenue Taxes ,130 60, User rates , , Sale of Services ,401 18, , ,939 Interest and Investment income Other 14,477 13, , Government transfers 23,500 25, ,500 21, ,621 9,721-37,977 39, ,753 41, , , , ,939 Expenses Council indemnity and travel Wages and benefits 6,337 8,823 7,978 2,991 46,260 44,293 22,789 11,857 70,700 68,295 Contracted services ,115 24, ,560 2,420 Operating expenditures 11,814 19,461 40,573 39,351 30,928 39,507 91,407 81, ,902 55,269 Interest ,120 45, Amortization 4,513 4,513 39,083 35, ,951 75,184 45,547 48,408 22,664 32, , ,009 77,188 83, , , , ,392 Annual Surplus 15,313 6,617 45,004 (61,310) (77,188) (83,800) (71,044) 445,797 (89,946) (61,453) The accompanying notes are an integral part of these financial statements.

10 Statement of Tangible Capital Assets For the Year Ended December 31, 2013 Statement F Cost Land Buildings Engineering Structures Paving and Seawalls Equipment Automotive Total 2013 Total 2012 Balance, beginning of year 121,109 1,300,872 6,581,616 1,968, , ,260 10,632,545 10,050,414 Add: Additions during the year , , , ,131 Less: Disposals during the year (500 ) (500 ) - Balance, end of year 121,109 1,300,872 6,736,939 1,968, , ,425 10,794,033 10,632,545 Accumulated Amortization Balance, beginning of year - 489,039 2,480,377 1,041, , ,384 4,378,396 4,043,185 Add: Additions during the year - 28, ,878 69,191 10,526 57, , ,211 Less: Disposals during the year Balance, end of year - 517,523 2,655,255 1,110, , ,904 4,718,995 4,378,396 Net book value of Tangible Capital Assets 121, ,349 4,081, ,283 40, ,521 6,075,038 6,254,149 The accompanying notes are an integral part of these financial statements.

11 Notes to the Financial Statements Year Ended December 31, 2013 The CORPORATION OF THE VILLAGE OF ALERT BAY (the Village ) was incorporated in 1946 under the provisions of the British Columbia Municipal Act. Its principal activities are the provision of local government services to the residents of the Village. These services include general government administration, by-law enforcement, planning and land use, fire protection, parks and recreation, water distribution and sewer collection, wastewater disposal, garbage and recycling services, boat harbour service and maintenance and road and street maintenance. 1. Significant Accounting Policies a) Accounting policies It is the Village s policy to follow Canadian public sector accounting standards. b) Revenue recognition The Village recognizes taxes as assets and revenue when they meet the definition of an asset; are authorized by a legislature, council, or legislative convention; and the taxable event has occurred. Tax revenue is initially measured at management s best estimate of the amount resulting from the original taxable event in accordance with tax legislation. The related tax receivable is initially recognized at its realizable value at the date of acquisition. Government transfers are recognized as revenues during the period, in which the events giving rise to the transfer occur, provided the transfers are authorized, any eligibility criteria have been met and reasonable estimates of the amounts have been made. Restricted grants are recognized when the related expenditure is incurred and when collection is reasonably assured. Sewer and water fees are recognized when the service has been received by the customer. Other sales of services and other revenue are recognized when the service is provided or the amount is earned, when the amount can be estimated and when collection is reasonably assured. At each financial statement date, the Village evaluates the sales of services receivable for collectability and records a valuation allowance to reflect the receivable at its net recoverable amount, if necessary. Amounts received in advance of services being rendered are recorded as deferred revenue until the Village discharges the obligation that led to the collection of funds. c) Use of estimates The preparation of financial statements in conformity with Canadian public sector accounting standards requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period.

12 Notes to the Financial Statements Year Ended December 31, Significant Accounting Policies (continued) c) Use of estimates (continued) Significant areas requiring the use of management estimates relates to the collectability of accounts receivable, contaminated site clean-up costs and the provision for amortization. Actual results may vary from those estimates. Adjustments, if any, will be reflected in operations in the period of settlement. These estimates and assumptions are reviewed periodically and, as adjustments become necessary, they are reported in earnings in the periods in which they become known. d) Accrued employee benefits Accrued employee benefits, which include an allowance for banked time, sick leave and vacation entitlement, are recorded in the year in which they are earned. These benefits are based on obligations as determined by contractual arrangements and Village policy. e) Pension Plan The Village s contributions due during the period to its multi-employer defined benefit plan are expensed as incurred. f) Environmental provisions The Village provides for the cost of compliance with environmental legislation when conditions are identified which indicate non-compliance and the cost of which can reasonably be determined. The estimated amounts of future restoration costs are reviewed regularly, based on available information and governing legislation. Where the costs are deemed to be likely and reasonably determinable, claims are reported as an operating expense and are shown as a liability on the Statement of Financial Position. g) Deferred revenue Receipts restricted by third parties are deferred and reported as deferred revenue and are refundable under certain circumstances. Deferred revenue is recognized as revenue when the qualifying expenditures are incurred. h) Tangible capital assets Tangible capital assets, which includes assets under construction, that exceed the threshold of the asset category are recorded at cost less accumulated amortization and are classified according to their functional use. Contributed tangible capital assets are recorded at fair value at the date of the contribution. Amortization is provided on a straight-line basis over the estimated useful life of the asset commencing the year the asset is put into service. One half of the amortization is claimed in the first year of acquisition and in the last year.

13 Notes to the Financial Statements Year Ended December 31, 2013 h) Tangible capital assets (continued) Estimated useful lives are as follows: Asset Type Depreciable Life in Years Buildings (depending on construction material) Engineering Structures (depending on construction material) Automotive 5-8 Machinery and Equipment 5-10 Parks Infrastructure IT Infrastructure 4-10 Repairs and maintenance costs are charged to expense. Betterments which extend the estimated useful life of an asset or enhance the service potential of tangible capital assets and exceed the Village s internal capitalization threshold are capitalized. i) Recent accounting pronouncements In 2010, the Public Sector Accounting Board issued section PS This section addresses liabilities for remediation related to sites, or parts of a site no longer in active or productive use. Governments will be required to recognize a liability for contaminated sites when the government is responsible for, or accepts responsibility for, the contamination, and the contamination exceeds existing environmental standards. The amount recorded as a liability must be reasonably estimable and would include costs directly related to the remediation activities and post-remediation costs that are an integral part of the remediation strategy. Costs related to asset purchases to be used in the remediation would be included in the liability to the extent that the assets have no alternative use. Application of this section may be applied retroactively or prospectively as it represents a change in an accounting policy to conform to new Public Sector Accounting Standards. Section PS 3260 is effective for fiscal years beginning on or after January 1, 2014; however early adoption is encouraged. Section PS 3260 will be applied prospectively at its implementation on January 1, 2014 by the Village. The Village recognized in the current period a liability associated with site contamination clean-up costs under Section PS See Note 4 for further details. 2. Cash and Equivalents Included in cash and equivalents is $353,717 ( $259,934) held with the Municipal Finance Authority. 3. Investment The Village owns a 50% interest in the Historic Alert Bay Development Corporation, which was established under the Alert Bay Accord, an agreement between the Corporation of the Village of Alert Bay and the Namgis First Nation that was signed on September 20, 1999 and affirmed on March 31, Under this accord the parties agree to consult and coordinate their efforts in the areas of mutual interest for the development of the community of Alert Bay. The corporation is currently inactive. The investment is recorded at cost.

14 Notes to the Financial Statements Year Ended December 31, Contaminated Site Remediation In 1991, contaminated materials, being diesel spill, existed at 61 Fir Street, the site of a bulk fuel plant that has now been closed. These materials were eventually moved to a site at the corner of Gatu Road and Hemlock Street. The abatement order issued by the Ministry of Environment in 1996 was deemed to be satisfied in An environmental assessment carried out in 2013 determined that the site was still contaminated, creating a liability for the Village. Of the options available, the Village has chosen the least costly option which is to carry out on site, In-Situ treatment. The estimated remedial cost of $76,000 is recognized as an expenditure in the current period in the Statement of Operations of the Public Works Department. 5. Deferred Revenue December 31, 2012 Collections Transfers December 31, 2013 Community Works Fund 176,292 74, ,378 Ministry of Community, 388, , ,000 Sport and Cultural Development Namgis First Nation 20,000-20, ,292 74, , ,378 Included in the Community Works Fund above are gas tax funds provided by the Government of Canada. The use of the funding is established by a funding agreement between the Village and the Union of British Columbia Municipalities. Gas tax funding may be used towards designated public transit, community energy, water, wastewater, solid waste and capacity building projects, as specified in the funding agreements. The closing balance of unspent funds is included in deferred revenue. Funds received from The Ministry of Community, Sport and Cultural Development are to be used for the Jubilee Park upgrades. 6. Long-Term Debt and Capital Leases Long-Term Debt Municipal Finance Authority 662, ,371 Sewer loan repayable in two annual payments totaling $77,358 until 2025 with interest calculated at a fixed rate of 4.17% per annum. 662, ,371 Repayments on long-term debt in each of the next five years are estimated as follows: , , , , , ,312

15 Notes to the Financial Statements Year Ended December 31, Long-Term Debt and Capital Leases (continued) Capital Leases Municipal Finance Authority Garbage truck capital lease was paid out in full on March 20, Municipal Finance Authority Electric truck capital lease was paid out in full on March 20, Municipal Finance Authority Chevrolet Silverado capital lease was paid out in full on March 20, Municipal Finance Authority Freightliner Dump Truck capital lease was paid out in full on March 20, ,394-10,611-14,417-85, , Contingent Liabilities and Lease Commitments a) As a member of the Municipal Insurance Association of British Columbia, the Village is contingently liable for claims in excess of insurance funds. As at December 31, 2013, the Village is not liable for any claims in excess of insurance funds. b) The Village is obligated to collect and transmit the tax levies on behalf of other governmental bodies as shown in Note 12. These levies are not included in the revenues or cash flow statements of the Village. c) As at December 31, 2013, there were no assessment appeals pending with respect to properties which may result in adjustments to property taxes receivables for the current or prior years. d) The provincial Waste Management Act, as well as the B.C. Landfill Criteria for Municipal Solid Waste, sets out the regulatory requirements to properly close and maintain all active and inactive landfill sites. The Village is committed to ensuring that its landfill is managed in a fiscally responsible manner, which includes ensuring that there are adequate funds available to pay for landfill closure and post-closure activities. Landfill closure and post-closure requirements have been defined in accordance with industry standards and include final covering of the site, groundwater and surface water monitoring, maintenance of the drainage structure, site inspection and environmental monitoring. e) The Village has no active landfill sites. The site that existed at the end of 2011 has been permanently closed and is monitored on a regular basis. The estimated annual cost of monitoring is $10,000. No liability is recognized in these financial statements because neither the term nor frequency of the monitoring, which is determined by the Ministry of the Environment, is known.

16 Notes to the Financial Statements Year Ended December 31, Contingent Liabilities and Lease Commitments (continued) f) The Village is committed to minimum monthly payments under operating leases for the next two years, with no commitments beyond the next two years. Minimum payments for each of the next two years are as follows: 8. Fund Accounting , ,025 11,056 The Village follows the normal practice for local government accounting according to the principle of fund accounting. Funds are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions or limitations. Currently in use, are: a. General Revenue Fund The General Revenue Fund is the Village s operating fund and is used to account for all financial resources except those required to be accounted for in another fund. b. Reserve Funds These funds have been created to hold assets for specific future requirements. The funds are governed by bylaws defining their purpose. c. Capital Funds These funds are used to account for tangible capital assets which are offset by related long-term debt and investment in tangible capital assets. Accumulated Surplus Operating Surplus 748, ,236 Statutory Reserves 175, ,018 Equity in Tangible capital assets 5,412,091 5,409,264 6,335,287 6,530,518 Operating Surplus The following reserves are set aside internally for the purposes as stated. Operations 229, ,740 Official Community Plan 14,943 12,763 Airport 41,000 41,000 Building maintenance 15,500 15,500 Municipal wharf 41,736 41,736 Sewer works 35,926 35,926 Water works 45,000 45,000 Sewer debentures 47,881 37, , ,173 Operating surplus 276, , , ,236

17 Notes to the Financial Statements Year Ended December 31, Fund Accounting (continued) Statutory Reserves The following reserves have been set aside by Council resolution for future capital projects. Capital 115, ,019 Fire 59,999 59, , ,018 Equity in Tangible Capital Assets Equity in tangible capital assets represents the cost of tangible capital assets less amortization and the outstanding long-term debt incurred to acquire those assets. The change in equity in tangible capital assets is as follows: Purchase of tangible capital assets 161, ,131 Withdrawal of tangible capital assets (500) - Debt principal repayments and actuarial adjustment 181, ,773 Amortization (340,599) (335,211) Change in equity in tangible capital assets 2, ,693 Equity in tangible capital assets beginning of year 5,409,264 5,039,571 Equity in tangible capital assets end of year 5,412,091 5,409, Pension Plan The Village and its employees contribute to the Municipal Pension Plan (the Plan ), a jointly trusted pension plan. The Board of Trustees, representing plan members and employers, is responsible for overseeing the management of the Plan, including investment of the assets and administration of benefits. The Plan is a multi-employer contributory pension plan. Basic pension benefits provided are based on a formula. The Plan has about 179,000 active members and approximately 71,000 retired members. Active members include approximately 9 contributors from The Corporation of the village of Alert Bay. The latest evaluation as at December 31, 2012 indicated an unfunded liability of $1.370 billion for basic pension benefits. The next valuation will be as at December 31, 2015 with results available in Employers participating in the Plan record their pension expense as the amount of employer contributions made during the fiscal year. This is because the Plan records accrued liabilities and accrued assets for the Plan in aggregate with the result that there is no consistent and reliable basis for allocating the obligation, assets and cost to the individual employers participating in the Plan. The Corporation of the Village of Alert Bay paid $32,427 ( $33,068) for employer contributions while employees contributed $25,719 ( $26,294) to the plan in fiscal 2013.

18 Notes to the Financial Statements Year Ended December 31, Municipal Finance Authority Debt Reserve Fund The Municipal Finance Authority of British Columbia provides capital financing for regional districts and their member municipalities. The Authority is required to establish a Debt Reserve Fund. Each entity who shares the proceeds of a debt issue is required to pay into the Debt Reserve Fund certain amount set out in the debt agreements. The Authority pays into the Debt Reserve Fund these monies from which interest earned thereon less administrative expenses becomes an obligation to the entity. It must then use this fund if at any-time there are insufficient funds to meet payments on its obligations. When this occurs the entity may be called upon to restore the fund. Upon maturity of the debt issue, the unused portion of the Debt Reserve Fund established for that issue will be discharged to the Village. The proceeds of the Debt Reserve Fund established will be credited to income in the year they are received. As at December 31, 2013 the total of the Village s MFA Debt Reserve Fund is comprised of: Sewer Fund 13,118 12, Commitments The Village is not involved with projects that have required it to enter into contractual obligations or contractual commitments beyond December 31, Collections for Other Governments Provincial Government School District # , ,847 Police tax 18,603 17,229 Mount Waddington Regional District 56,311 53,006 Mount Waddington Regional Hospital District 18,725 17,667 British Columbia Assessment Authority 3,566 3,516 Municipal Finance Authority , , Segmented Information The Village is a local government providing a wide range of services to the residents of Alert Bay, including public works, solid waste and recycling, protective services, recreation, economic development, water, sewer and marine. As a requirement of the Local Government Act, separate financial records must be kept for each service providing particulars of assets and liabilities, revenues and expenditures, information concerning reserve funds and other pertinent financial details.

19 Notes to the Financial Statements Year Ended December 31, Segmented Information (continued) Categories of services that have been separately disclosed in Statement E are: Administration Administration is comprised of municipal governance and general administration which includes legislative services, finance, human resources, feasibility studies, grants in aid, business licensing and bylaw enforcement. Public Works Public works consists of road and street patching, maintenance and repairs, snow removal, brush and tree cutting, maintenance of all municipal buildings and property and bylaw enforcement. Environmental Health Solid waste and recycling consists of solid waste collection and transfer to the regional landfill and the collection and processing of recyclable materials for shipment to market, as well as the operation of a public recycling and transfer station. Protective Services Protective services consist of the operation of the fire department and the provision of animal control services and the operation of an animal pound. Recreation Recreation consists of repairs, maintenance and operations of the community hall, bowling alley, campsites and parks and trails. Economic Development Economic development consists of the operations of the tourism and visitor s center and the investment and operations involving the Historic Alert Bay Development Corporation. Water and Sewer Water and sewer consists of repairs and maintenance of their infra-structure systems and connection of sewer and water lines and the operation and maintenance of a ground source water supply and reservoir system. Marine Marine consists of the operations, repairs and maintenance of the Small Craft Harbours, Alert Bay Boat Harbour, and the Dock public boat launch. 14. Budget Figures The budget amounts presented throughout these statements are unaudited and are based upon the Five Year Financial Plan bylaw adopted by Council on May 8, The budget adopted by Council is designed to determine the annual financial resources required by the Village to meet its fiscal responsibilities. These responsibilities include the annual cost of debt servicing, the purchase of capital assets not requiring financing and transfers to and from reserves but not the amortization of capital assets.

20 Notes to the Financial Statements Year Ended December 31, Budget Figures (continued) The summary below provides the reconciliation between the annual surplus reported on Statement B and the neutral budget as adopted by Council. Annual budgeted surplus as reported on Statement B 400,407 Less: Debt principal repayments (98,511) Purchase of tangible capital assets (521,000) Amounts transferred to reserves (42,058) (661,569) Add: Amounts transferred from reserves 261,162 Neutral budget as adopted by Council -