Financial Statements
INDEPENDENT AUDITORS' REPORT To the Members of Council of We have audited the accompanying financial statements of, which comprise the statement of financial position as at and the statements of operations, change in net financial assets (debt) and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information. Administration s responsibility for the financial statements Administration 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 administration 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 auditors 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 auditors consider 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 administration, 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 as at, and the results of its operations and its cash flows for the year then ended, in accordance with Canadian public sector accounting standards. Edmonton, Canada, April 16, 2013. Chartered Accountants
STATEMENT OF FINANCIAL POSITION As at December 31 2012 2011 $ $ FINANCIAL ASSETS Cash 4,856,125 2,322,882 Temporary investments 3,383,792 Receivables: Taxes and grants in place of taxes [note 2] 236,464 255,516 Trade and other 5,466,107 4,123,728 Loans [note 3] 2,992,477 3,043,333 Long-term investments [note 4] 4,331,776 5,431,526 21,266,741 15,176,985 LIABILITIES Accounts payable and accrued liabilities 5,523,603 2,686,103 Deferred revenue 87,916 95,772 Over-levies 71,254 54,885 Long-term debt [note 5] 17,263,648 9,287,024 22,946,421 12,123,784 NET FINANCIAL ASSETS (DEBT) (1,679,680) 3,053,201 NON-FINANCIAL ASSETS Tangible capital assets [Schedule 1] 99,297,313 94,938,774 Inventories [note 6] 2,115,431 961,669 Prepaid expenses 292,331 250,661 101,705,075 96,151,104 ACCUMULATED SURPLUS [Schedule 5 and note 7] 100,025,395 99,204,305 Commitments and contingencies [note 8] See accompanying notes On behalf of the County: Mayor Chief Administrative Officer
STATEMENT OF OPERATIONS Year ended December 31 Budget 2012 2011 $ $ $ [note 12] REVENUES Net municipal property taxes [Schedule 2] 14,240,963 14,286,780 12,141,256 Government transfers for operations [Schedule 3] 3,798,716 3,073,989 4,044,994 User fees and sales of goods 2,022,838 1,229,338 1,335,067 Investment income 852,924 756,648 822,562 Penalties and costs on taxes 45,168 37,659 44,879 Development levies 12,273 8,682 13,551 Loss on disposal of tangible capital assets (23,656) (11,155) Total revenues 20,972,882 19,369,440 18,391,154 EXPENSES [Schedule 4] Roads, streets, walks and street lights 4,703,459 10,242,878 9,957,850 Administration 2,155,307 2,259,547 2,196,211 Recreation boards, parks and facilities 2,179,632 2,044,333 1,874,252 Fire, ambulance, bylaw enforcement and safety 1,695,751 1,565,789 1,352,004 Economic and agricultural development 1,005,721 991,887 872,972 Waste management 531,731 646,747 513,825 Legislative 566,256 614,094 641,697 Water and wastewater 542,424 568,587 520,563 Land use planning, zoning and development 801,880 557,600 306,254 Airport 691,807 481,622 587,989 Family and community support 492,227 393,175 493,243 Libraries 230,124 218,363 219,955 Total expenses 15,596,319 20,584,622 19,536,815 Excess (shortfall) of revenues over expenses, before other [Schedule 6] 5,376,563 (1,215,182) (1,145,661) OTHER Government transfers for capital [Schedule 3] 2,388,055 2,036,272 1,068,149 Excess (shortfall) of revenues over expenses 7,764,618 821,090 (77,512) Accumulated surplus, beginning of the year 99,204,305 99,204,305 99,281,817 Accumulated surplus, end of the year 106,968,923 100,025,395 99,204,305 See accompanying notes
STATEMENT OF CHANGE IN NET FINANCIAL ASSETS (DEBT) Year ended December 31 Budget 2012 2011 $ $ $ [note 12] Excess (shortfall) of revenues over expenses 7,764,618 821,090 (77,512) Acquisition of tangible capital assets (21,123,936) (11,197,570) (6,056,925) Proceeds on disposal of tangible capital assets 1,324,700 1,294,161 76,406 Amortization of tangible capital assets 5,521,214 5,698,660 Loss on disposal of tangible capital assets 23,656 11,155 (19,799,236) (4,358,539) (270,704) Decrease (increase) in inventories (1,153,762) 333,090 Increase in prepaid expenses (41,670) (150,445) (1,195,432) 182,645 Increase (decrease) in net financial assets (12,034,618) (4,732,881) (165,571) Net financial assets, beginning of the year 3,053,201 3,053,201 3,218,772 Net financial assets (debt), end of the year (8,981,417) (1,679,680) 3,053,201 See accompanying notes
STATEMENT OF CASH FLOWS Year ended December 31 Budget 2012 2011 $ $ $ [note 12] OPERATING ACTIVITIES Excess (shortfall) of revenues over expenses 7,764,618 821,090 (77,512) Add (deduct) changes in non-cash items: Amortization of tangible capital assets 5,521,214 5,698,660 Loss on disposal of tangible capital assets 23,656 11,155 Loss (gain) on sale of long-term investments (2,379) 5,121 Amortization of premium on long-term investments 8,170 10,338 Decrease (increase) in taxes and grants in place of taxes receivable 19,052 (43,797) Decrease (increase) in trade and other receivables (1,342,379) 337,025 Decrease in loans receivable 50,856 65,208 Increase in prepaid expenses (41,670) (150,445) Decrease (increase) in inventories (1,153,762) 333,090 Increase (decrease) in accounts payable and accrued liabilities 2,837,500 (269,517) Decrease in deferred revenue (7,856) (22,652) Increase (decrease) in over-levies 16,369 (9,594) 7,764,618 6,749,861 5,887,080 CAPITAL ACTIVITIES Acquisition of tangible capital assets (21,123,936) (11,197,570) (6,056,925) Proceeds on disposal of tangible capital assets 1,324,700 1,294,161 76,406 (19,799,236) (9,903,409) (5,980,519) INVESTING ACTIVITIES Proceeds on sale of long-term investments 1,093,959 1,374,000 Purchase of long-term investments (1,068,324) Proceeds on sale of temporary investments 2,264,709 1,500,000 Purchase of temporary investments (5,648,501) (2,289,833) 1,805,676 FINANCING ACTIVITIES Issue of debentures 9,240,000 9,244,000 Payment on long-term debt (2,831,216) (1,267,376) (2,831,217) 6,408,784 7,976,624 (2,831,217) Increase (decrease) in cash (5,625,834) 2,533,243 (1,118,980) Cash, beginning of the year 2,322,882 2,322,882 3,441,862 Cash (overdraft), end of the year (3,302,952) 4,856,125 2,322,882 See accompanying notes
Schedule 1 Year ended December 31 SCHEDULE OF TANGIBLE CAPITAL ASSETS 2012 2011 Engineered Machinery Land Improvements Buildings structures and equipment Vehicles Total Total $ $ $ $ $ $ $ $ COST Balance, beginning of the year 2,178,794 1,362,927 4,409,827 223,265,979 6,003,524 3,784,725 241,005,776 235,223,901 Acquisition of tangible capital assets 303,827 327,310 8,006,782 2,108,899 450,752 11,197,570 6,056,925 Disposal of tangible capital assets (2,128,802) (2,128,802) (275,050) Balance, end of the year 2,178,794 1,666,754 4,737,137 231,272,761 5,983,621 4,235,477 250,074,544 241,005,776 ACCUMULATED AMORTIZATION Balance, beginning of the year 239,269 1,521,102 140,843,186 1,792,704 1,670,741 146,067,002 140,555,831 Annual amortization 51,188 95,280 4,798,501 342,125 234,120 5,521,214 5,698,660 Accumulated amortization on disposals (810,985) (810,985) (187,489) Balance, end of the year 290,457 1,616,382 145,641,687 1,323,844 1,904,861 150,777,231 146,067,002 Net book value of tangible capital assets 2,178,794 1,376,297 3,120,755 85,631,074 4,659,777 2,330,616 99,297,313 94,938,774 2011 Net book value of tangible capital assets 2,178,794 1,123,658 2,888,725 82,422,793 4,210,820 2,113,984 94,938,774 See accompanying notes
Schedule 2 SCHEDULE OF NET MUNICIPAL PROPERTY TAXES Year ended December 31 Budget 2012 2011 $ $ $ [note 12] TAXATION Residential and farmland property 2,408,336 2,426,842 2,244,744 Linear property taxes 10,109,301 10,247,958 9,025,984 Commercial and industrial taxes 7,461,835 7,482,588 6,562,244 Refund of prior years' taxes (633) Government grants in place of property taxes 11,114 10,285 19,979,472 20,167,869 17,843,257 REQUISITIONS Alberta School Foundation Fund (5,210,537) (5,353,117) (5,161,657) Seniors Foundation (527,972) (527,972) (540,344) (5,738,509) (5,881,089) (5,702,001) Net municipal property taxes 14,240,963 14,286,780 12,141,256 See accompanying notes
Schedule 3 SCHEDULE OF GOVERNMENT TRANSFERS Year ended December 31 Budget 2012 2011 $ $ $ [note 12] TRANSFERS FOR OPERATIONS Provincial government 3,635,916 2,906,811 3,980,979 Other local government 162,800 167,178 64,015 3,798,716 3,073,989 4,044,994 TRANSFERS FOR CAPITAL Provincial government 2,388,055 2,036,272 1,068,149 Total government transfers 6,186,771 5,110,261 5,113,143 See accompanying notes
Schedule 4 SCHEDULE OF EXPENSES BY OBJECT Year ended December 31 Budget 2012 2011 $ $ $ [note 12] Salaries, wages and benefits 4,587,301 4,997,262 4,593,580 Contracted and general services 4,560,566 4,292,736 3,512,414 Materials, goods and utilities 2,514,910 1,975,334 2,124,384 Transfers to other local governments 2,333,651 2,498,284 2,195,939 Transfers to individuals and organizations 1,361,097 1,049,918 1,060,501 Amortization of tangible capital assets 5,521,214 5,698,660 Provision for allowances (24,636) 49,479 Bank charges and short-term interest 6,495 7,199 7,117 Interest on long-term debt 232,299 267,311 294,741 15,596,319 20,584,622 19,536,815 See accompanying notes
Schedule 5 Year ended December 31 SCHEDULE OF CHANGES IN ACCUMULATED SURPLUS 2012 2011 Budget - Equity in Unrestricted Unrestricted tangible surplus surplus capital (deficit) (deficit) Reserves assets Total Total [note 12] Accumulated surplus (deficit), beginning of the year (4,030,858) (4,030,858) 11,311,800 91,923,363 99,204,305 99,281,817 Excess (shortfall) of revenues over expenses 7,764,618 821,090 821,090 (77,512) Transfers to reserves (930,564) (10,935,638) 10,935,638 Transfers from reserves 301,649 341,649 (341,649) Acquisition of tangible capital assets (8,273,515) 1,741,389 (8,358,406) 6,617,017 Disposal of tangible capital assets 1,317,817 (1,317,817) Amortization of tangible capital assets 5,521,214 (5,521,214) Issue of debenture 4,663,447 (9,244,000) (4,580,553) Payment of long-term capital debt (695,076) (695,076) 695,076 Acquisition of tangible capital assets using debenture proceeds 4,580,553 4,580,553 Accumulated surplus (deficit), end of the year (5,863,746) (5,918,413) 18,210,830 87,732,978 100,025,395 99,204,305 See accompanying notes
Schedule 6 SCHEDULE OF OPERATING REVENUES AND EXPENSES Year ended December 31 2012 Roads, streets, walks, and Land use planning, zoning and General municipal Legislative Administration Fire, ambulance, bylaw enforcement and safety street lights Airport Water and wastewater Waste management Family and community support development Economic and agricultural development Recreation boards, parks and facilities Libraries Total $ $ $ $ $ $ $ $ $ $ $ $ $ $ REVENUES Net municipal property taxes 14,286,780 14,286,780 Government transfers 4,066 1,954,784 40,000 85,800 96,795 223,593 668,951 3,073,989 User fees and sales 7,584 71,591 23,320 74,048 38,718 14,693 3,207 233,161 Investment income and rentals 240,589 99,096 10,625 350,310 Licenses and permits 939,768 498 7,383 13,700 961,349 Loss on disposal of tangible capital assets (23,701) 45 (23,656) Fines 32,254 32,254 Royalties 396,271 396,271 Other revenues 45,219 5,111 340 1,000 783 21 3,308 3,200 58,982 Total revenues 15,884,926 5,111 7,924 109,409 1,978,932 146,479 159,869 42,026 96,795 13,700 252,111 672,158 19,369,440 EXPENSES Salaries, wages and benefits 398,442 1,052,216 392,597 2,117,780 183,215 54,710 160,202 4,792 179,703 299,828 153,777 4,997,262 Contracted services 199,908 631,570 327,137 1,743,609 220,998 120,914 170,982 49,068 371,962 328,196 107,670 20,722 4,292,736 Materials and supplies 14,294 108,204 215,684 1,312,560 22,780 108,032 5,654 5,354 5,935 117,813 59,024 1,975,334 Transfers to other local governments 392,751 527,248 304,650 115,773 207,899 913,024 36,939 2,498,284 Transfers to local organizations 1,450 15,000 9,600 217,858 20,710 631,256 154,044 1,049,918 Interest on long-term debt 64,167 65,532 137,612 267,311 Other expenses (17,437) (17,437) Total expenses 614,094 2,182,304 1,472,266 5,238,116 426,993 349,188 641,488 392,845 557,600 974,446 2,002,363 211,705 15,063,408 Excess (shortfall) of revenues over expenses before amortization 15,884,926 (608,983) (2,174,380) (1,362,857) (3,259,184) (280,514) (189,319) (599,462) (296,050) (543,900) (722,335) (1,330,205) (211,705) 4,306,032 Amortization of tangible capital assets 77,243 93,524 5,004,762 54,629 219,399 5,259 329 17,440 41,971 6,658 5,521,214 Excess (shortfall) of revenues over expenses 15,884,926 (608,983) (2,251,623) (1,456,381) (8,263,946) (335,143) (408,718) (604,721) (296,379) (543,900) (739,775) (1,372,176) (218,363) (1,215,182) Budget excess (shortfall) of revenues over expenses [note 12] 15,627,030 (561,786) (2,146,955) (1,620,236) (2,029,381) (284,582) 617,407 (498,993) (387,816) (785,470) (775,040) (1,547,491) (230,124) 5,376,563 2011 excess (shortfall) of revenues over expenses 13,924,793 (706,133) (2,119,801) (1,274,587) (6,947,325) (377,956) (454,792) (478,886) (396,448) (289,043) (563,675) (1,241,854) (219,954) (1,145,661) See accompanying notes
NOTES TO FINANCIAL STATEMENTS 1. SIGNIFICANT ACCOUNTING POLICIES The financial statements of [the County ] are prepared by the County s administration in accordance with Canadian generally accepted accounting principles for local governments recommended by the Public Sector Accounting Board of The Canadian Institute of Chartered Accountants. Basis of accounting Revenues and expenses are recorded on the accrual basis of accounting. The accrual basis of accounting recognizes revenues as they are earned and measurable. Expenses are recognized in the period goods and services are acquired and a liability is incurred or transfers are due. Funds from external parties and earnings thereon restricted by agreement or legislation are accounted for as deferred revenue until used for the purpose specified. Government transfers, contributions and other amounts are received from third parties pursuant to legislation, regulation or agreement and may only be used for certain programs, in the completion of specific work, or for the purchase of tangible capital assets. In addition, certain user charges and fees are collected for which the related services have yet to be performed. Revenue is recognized in the period when the related expenses are incurred, services performed or the tangible capital assets are acquired. Schedule 2 Net Municipal Property Taxes includes requisitions for education and other external organizations that are not part of the municipal reporting entity. Use of estimates The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires administration 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 reporting period. Where measurement uncertainty exists, the financial statements have been prepared within reasonable limits of materiality. Actual results could differ from those estimates. Cash and cash equivalents Cash and cash equivalents consist of cash and term deposits with initial maturity dates of less than 90 days. 1
NOTES TO FINANCIAL STATEMENTS 1. SIGNIFICANT ACCOUNTING POLICIES [CONTINUED] Temporary investments Term deposits with initial maturity dates of between 90 and 365 days are presented as temporary investments. Loans receivable Loans receivable are recorded at cost. A valuation allowance for uncollectible amounts is recorded in the period in which collectability is assessed to be uncertain. Interest revenue is recorded in the period in which the interest is earned. Long-term investments Investments are recorded at amortized cost. Investment premiums and discounts are amortized to revenue over the term of the respective investments. Where there has been a loss in value that is other than a temporary decline, the respective investment is written down to recognize the loss. Over-levies and under-levies Over-levies and under-levies arise from the difference between the actual levy made to cover each requisition and the actual amount requisitioned. If the actual levy exceeds the requisition, the over-levy is accrued as a liability and property tax revenue is reduced. Where the actual levy is less than the requisition amounts, the under-levy is accrued as a receivable and as property tax revenue. Requisition tax rates in the subsequent year are adjusted for any over-levies or under-levies of the prior year. Pension expenses The County participates in a multi-employer defined benefit pension plan. This plan is accounted for as a defined contribution plan whereby contributions are expensed as incurred. 2
NOTES TO FINANCIAL STATEMENTS 1. SIGNIFICANT ACCOUNTING POLICIES [CONTINUED] Government transfers Government transfers are the transfer of assets from senior levels of government that are not the result of an exchange transaction, are not expected to be repaid in the future, or are not expected to result in a direct financial return. Government transfers are recognized in the financial statements as revenue in the period in which events giving rise to the transfer occur, providing the transfers are authorized, any eligibility criteria have been met, and reasonable estimates of the amounts can be determined. Non-financial assets Non-financial assets are not available to discharge existing liabilities and are held for use in the provision of services. They have useful lives extending beyond the current year and are not intended for sale in the normal course of operations. The change in non-financial assets during the year, together with the excess of revenues over expenses, provides the change in net financial assets for the year. [a] Tangible capital assets Tangible capital assets are recorded at cost, which includes all amounts directly attributable to acquisition, construction, development or betterment of the asset. The cost, less residual value, of the tangible capital assets, is amortized on a straight-line basis over their estimated useful lives as follows: Years Land improvements 10-20 Buildings 10-50 Engineered structures Roadway system 9-70 Water and waste water systems 24-70 Machinery and equipment 2-25 Vehicles 3-25 No annual amortization is charged in the year of acquisition and the full annual amortization is charged in the year of disposal. 3
NOTES TO FINANCIAL STATEMENTS 1. SIGNIFICANT ACCOUNTING POLICIES [CONTINUED] [b] Contributions of tangible capital assets Tangible capital assets received as contributions are recorded at fair value at the date of receipt and also are recorded as revenue. [c] Leases Leases are classified as capital or operating leases. Leases which transfer substantially the entire benefits and risks incidental to ownership of property are accounted for as capital leases. All other leases are accounted for as operating leases and the related lease payments are charged to expenses as incurred. [d] Inventories Inventories comprise materials and supplies for consumption and are valued at the lower of cost and net realizable value with cost determined by the average cost method. Equity in tangible capital assets Equity in tangible capital assets represents the County s net investment in its tangible capital assets after deducting the portion financed by third parties through debenture, bond and mortgage debts, long-term capital borrowing, capitalized leases and other capital liabilities. 2. TAXES AND GRANTS IN PLACE OF TAXES RECEIVABLE 2012 2011 $ $ Current taxes and grants in place of taxes 141,452 176,428 Non-current taxes and grants in place of taxes 95,012 91,463 Less allowance for doubtful accounts (12,375) 95,012 79,088 236,464 255,516 4
NOTES TO FINANCIAL STATEMENTS 3. LOANS RECEIVABLE 2012 2011 $ $ Lac Ste. Anne Foundation 2,911,891 2,996,247 The Friends of Whitecourt Society Whitecourt Woodlands Flying Club 64,586 16,000 27,086 20,000 2,992,477 3,043,333 The loan receivable from Lac Ste. Anne Foundation includes accrued interest of $40,394 [2011 - $41,564]. The County passed Bylaw 216/06 on July 4, 2006 authorizing Council to lend $3,250,000 to the Lac Ste. Anne Foundation for the purpose of assisting the Foundation to undertake and complete the construction of the Seniors Lodge in Onoway, Alberta. The loan was advanced during 2007 and is repayable in 50 semi-annual installments of $113,333, including interest of 4.89% per annum, commencing March 15, 2008. The loan was financed by an equivalent borrowing from the Alberta Capital Finance Authority [see note 5]. The County passed Bylaw 243/07 on January 16, 2007 authorizing Council to lend money to The Friends of Whitecourt Society for the purpose of assisting the Society in inducing physicians to relocate to the Town of Whitecourt. Loans have been made in increments of $25,000, are noninterest bearing and are generally repayable in three annual installments of $8,333 commencing on the anniversary of the advance of each loan, although repayments may be made earlier in differing amounts. The County passed motion C-15-379-11 on June 7, 2011 authorizing Council to lend $20,000 to the Whitecourt Woodlands Flying Club for the purpose of assisting this community group. The remaining amount of the non-interest bearing loan is to be paid back in three payments as follows: December 2012 4,000 December 2013 8,000 December 2014 4,000 16,000 The payment required in December 2012 was received subsequent to the year end in January 2013. $ 5
NOTES TO FINANCIAL STATEMENTS 4. LONG-TERM INVESTMENTS Cost $ 2012 2011 Market value Cost $ $ Market value $ Bonds and notes Provincial 997,851 1,030,226 1,298,049 1,357,357 Canadian banks 865,455 898,523 1,503,000 1,560,888 Public corporations 813,713 866,770 817,956 869,881 Crown corporations 1,654,687 1,727,609 1,812,451 1,922,263 4,331,706 4,523,128 5,431,456 5,710,389 Alberta Capital Finance Authority - shares at cost 70 70 70 70 4,331,776 4,523,198 5,431,526 5,710,459 Long-term investments have interest rates ranging from 2.75% to 6.63% with maturity dates from June 15, 2013 to March 31, 2018. 6
NOTES TO FINANCIAL STATEMENTS 5. LONG-TERM DEBT Tax supported debentures 2012 2011 $ $ Tower and West Mountain Road paving - Alberta Capital Finance Authority, 1.6610%, due September 2017 9,244,000 Old Blue Ridge Highway paving - Alberta Capital Finance Authority, 2.14%, due September 2013 645,095 1,276,604 Water and sewer extension - Alberta Capital Finance Authority, 3.8448%, due September 2030 1,675,240 1,738,807 Town of Whitecourt multi-plex - Alberta Capital Finance Authority, 4.311%, due March 2017 251,479 301,106 Alberta Capital Finance Authority, 4.68%, due September 2017 1,035,432 1,215,299 Alberta Capital Finance Authority, 4.4925%, due December 2017 917,368 1,077,631 Alberta Capital Finance Authority, 4.04%, due March 2018 623,537 722,894 Lac Ste. Anne Foundation - Alberta Capital Finance Authority, 4.89%, due September 2032 2,871,497 2,954,683 17,263,648 9,287,024 Interest on long-term debt was $409,620 [2011 - $441,030], and the County s total cash payment for interest on long-term debt was $375,778 [2011 - $472,370], for the year ended December 31, 2012. 7
NOTES TO FINANCIAL STATEMENTS 5. LONG-TERM DEBT [CONTINUED] Principal and interest repayment requirements on long-term debt over the next five years and thereafter are as follows: Principal Interest Total $ $ $ 2013 3,097,708 479,740 3,577,448 2014 2,512,331 409,653 2,921,984 2015 2,573,897 348,087 2,921,984 2016 2017 2,637,382 2,671,821 284,601 219,123 2,921,983 2,890,944 Thereafter 3,770,509 1,380,862 5,151,371 17,263,648 3,122,066 20,385,714 Section 276(2) of the Municipal Government Act requires that debt and debt limits as defined by Alberta Regulation 255/00 for the County be disclosed as follows: 2012 2011 $ $ Total debt limit 29,054,160 27,586,731 Total debt 17,263,648 9,287,025 Amount of debt limit unused 11,790,512 18,299,706 Debt servicing limit 4,842,360 4,597,789 Debt servicing 3,577,448 1,643,153 Amount of debt servicing limit unused 1,264,912 2,954,636 The debt limit is calculated at 1.5 times revenue of the municipality [as defined in Alberta Regulation 255/00] and the debt service limit is calculated at.25 times such revenue. Incurring debt beyond these limitations requires approval by the Minister of Municipal Affairs. These thresholds are guidelines used by Alberta Municipal Affairs to identify municipalities that could be at financial risk if further debt is acquired. The calculation taken alone does not represent the financial stability of the municipality. Rather, the financial statements must be interpreted as a whole. 8
NOTES TO FINANCIAL STATEMENTS 6. INVENTORIES 2012 2011 $ $ Gravel supplies 1,800,454 647,150 Public works and general municipal materials and supplies 314,977 314,519 2,115,431 961,669 7. ACCUMULATED SURPLUS Accumulated surplus consists of restricted and unrestricted amounts and equity in tangible capital assets as follows: 2012 2011 $ $ Unrestricted deficit (5,918,413) (4,030,858) Restricted surplus Working capital 3,513,745 4,478,912 Property tax stabilization 656,122 656,123 General operating 364,130 341,649 General capital 8,643,261 2,336,136 Fire protection 989,308 879,297 Infrastructure services 2,010,506 2,441,584 Airport water and sewer development 1,918,777 65,000 Recreation boards, parks and facilities 114,981 113,099 18,210,830 11,311,800 Equity in tangible capital assets Tangible capital assets, net book value [Schedule 1] 99,297,313 94,938,774 Long-term debt on tangible capital assets [note 5] (11,564,335) (3,015,411) 87,732,978 91,923,363 100,025,395 99,204,305 9
NOTES TO FINANCIAL STATEMENTS 8. COMMITMENTS AND CONTINGENCIES The County is committed to sharing the capital and operating costs of the Whitecourt Regional Waste Management Authority [the Authority ] with the Town of Whitecourt. The Authority is responsible for the management of a regional landfill site serving the County and Town of Whitecourt. Capital and operating costs for the Authority are shared by the County and the Town of Whitecourt on a pro-rated per capita basis, calculated based on the current population of the Town of Whitecourt and the County. The County s share of the Authority s capital and operating costs for the year ended was $304,650 [2011 - $151,933], which was 31.77% [2011-31.77%] of the total operating deficit of the Authority. The County is committed to sharing the capital and operating costs for certain functions with the Town of Whitecourt on a pro-rated per capita basis, calculated on the current population of the Town of Whitecourt and the County. The County s commitment under these cost-sharing arrangements varies from year to year. The County is a member of the Alberta Municipal Insurance Exchange [ MUNIX ]. Under the terms of the membership, the County could become liable for its proportionate share of any claim losses in excess of the funds held by MUNIX. Any liability incurred would be accounted for as a current transaction in the year the losses are determined. In the normal conduct of operations, various legal claims are pending against the County in connection with road maintenance and construction and other matters. The County carries liability insurance, subject to certain deductibles and policy limits, against such claims. Administration believes that the County has recognized adequate provisions for probable and reasonably estimable liabilities associated with these claims, and that their ultimate resolutions will not materially exceed insurance coverage s nor have a material adverse effect on the financial position of the County or its financial activities. 10
NOTES TO FINANCIAL STATEMENTS 9. SALARY AND BENEFITS DISCLOSURE Disclosure of salaries and benefits for municipal officials, the chief administrative officer and designated officers required by Alberta Regulation 313/2000 is as follows: 2012 2011 No. of persons Salary 1 Benefits 2 Total No. of persons Total $ $ $ $ Councilors: Anselmo - Daryl Yagos 55,800 2,440 58,240 65,899 Whitecourt West - Leann Caron 5,850 214 6,064 45,751 Whitecourt West - Chad Merrifield 30,000 2,824 32,824 Whitecourt Central Alan Deane 61,940 7,349 69,289 65,825 Whitecourt East - Jim Rennie (Mayor) 84,000 3,878 87,878 89,698 Blue Ridge - Dan Pritchard 62,700 7,109 69,809 70,231 Goose Lake - Dale McQueen 44,850 1,715 46,565 50,594 Fort Assiniboine/Timeu - Olaf Nieslony 46,050 1,668 47,718 47,594 Chief Administrative Officer 1 172,095 37,809 209,904 1 200,953 Designated Officers 2 175,830 39,194 215,024 2 208,515 [1] Salary includes regular base pay, bonuses, overtime, severance payments, gross honoraria and any other direct cash remuneration. [2] Employer s share of all employee benefits and contributions or payments made on behalf of employees including pension, health care, dental coverage, vision coverage, group life insurance, accidental disability and dismemberment insurance, long-term disability plans, Workers Compensation Board, Canada Pension Plan and Employment Insurance. 11
NOTES TO FINANCIAL STATEMENTS 10. LOCAL AUTHORITIES PENSION PLAN Employees of the County participate in the Local Authorities Pension Plan [ LAPP or the Plan ], which is covered by the Public Sector Pension Plans Act. The Plan serves about 214,326 people and 423 employers. It is financed by employer and employee contributions and investment earnings of the LAPP Fund. The County is required to make current service contributions to the Plan of 9.91% of pensionable earnings up to the Canada Pension Plan s Yearly Maximum Pensionable Earnings and 13.74% for the excess. Employees of the County are required to make current service contributions to the Plan of 8.91% of pensionable earnings up to the Canada Pension Plan s Yearly Maximum Pensionable Earnings and 12.74% for the excess. Total current and past service contributions made by the County to the LAPP in 2012 were $327,581 [2011 - $271,423]. Total current and past service contributions made by the employees of the County to the LAPP in 2012 were $297,592 [2011 - $245,599]. As at December 31, 2011, the Plan disclosed an actuarial deficiency of $4,639,390,000. 11. FINANCIAL INSTRUMENTS The County s financial instruments consist of cash, temporary investments, receivables, loans receivable, long-term investments, accounts payable and accrued liabilities, over-levies and longterm debt. It is the administration s opinion that the County is not exposed to significant interest rate or currency risks arising from these financial instruments. Unless otherwise noted, the fair values of these financial instruments approximate their carrying values. The County is subject to credit risk with respect to taxes and grants in place of taxes, trade and other, and loans receivables. Credit risk arises from the possibility that taxpayers and entities to which the County provides services and loans may experience financial difficulty and be unable to fulfill their obligations. The large number and diversity of taxpayers and customers minimizes the credit risk. 12. BUDGET FIGURES Budget figures are included for information purposes only and are not audited. 13. APPROVAL OF FINANCIAL STATEMENTS Council and administration have approved these financial statements. 12