Consolidated Financial Statements. The Corporation of the Town of Richmond Hill. December 31, 2015

Consolidated Financial Statements The Corporation of the Town of Richmond Hill December 31, 2015

Contents Page Independent Auditor's Report 1-2 Consolidated Statement of Financial Position 3 Consolidated Statement of Operations 4 Consolidated Statement of Change in Net Financial Assets 5 Consolidated Statement of Cash Flows 6 7-21 Consolidated Schedule of Segment Disclosure - Schedule 1 22-23 Consolidated Schedule of T angible Capital Assets - Schedule 2 24-27

Independent Auditor's Report Grant Thornton LLP Suite 200 15 Allstate Parkway Markham, ON LJR 584 T (416) 366 0100 F (905) 475 8906 www.grantthomton.ca To the Members of Council, Inhabitants and Ratepayers of the Corporation of the Town of Richmond Hill We have audited the accompanying consolidated financial statements of the Corporation of the Town of Richmond Hill, which comprise the consolidated statement of financial position as at December 31, 2015, and the consolidated statements of operations, change in net financial assets and cash flows 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 consolidated financial statements in accordance with Canadian public sector accounting standards, and for such internal control as management detem1ines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether du~ to fraud or error. Auditor's responsibility Our responsibility is to express an opinion on these consolidated 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 consolidated financial statements are free from material misstatement An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Town's preparation and fair presentation of the consolidated 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 Town'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 consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit o pinion. Opinion In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of The Corpora tion of the Town of Richmond Hill as at December 31, 2015, and its financial performance and its cash flows for the year then ended in accordance with Canadian public sector accounting standards. Markham, Canada June 27, 2016 Chartered P rofessional Accountants Licensed Public Accountants

Consolidated Statement of Financial Position For the Year Ended December 31 ~$OOO's~ 2015 2014 Restated Financial assets (Note 5) Cash and cash equivalents $ 107,549 $ 111,489 Investments (Note 3) 330,802 326,241 Taxes and payments-in-lieu receivable (Note 6) 19,981 21,622 Accounts receivable 56,925 54447 Liabilities 515,257 513 799 Accounts payable and accrued liabilities 50,566 47,093 Other liabilities 10,082 11,485 Deferred revenue (Note 7) 167,821 169,250 Employee future benefits liability (Note 8) 12,414 11,326 240,883 239.154 Net financial assets 274,374 274,645 Non-financial assets Tangible capital assets (Note 18) 754,1 44 726,865 Inventories 818 839 Prepaid expenses 2,225 1 479 757,187 729, 183 Accumulated surplus (Note 9) $ 11031,561 $ 1,003,828 Commitments (Note 15) Contingency (Note 16) Director See accompanying notes to the financial statements.

Consolidated Statement of Operations For the Year Ended December 31 2015 2015 2014 Restated Budget Actual Actual Revenues (Note 17) (Note 5) Taxation (Note 10) $ 95,218 $ 95,086 $ 89,745 User charges 81,797 87,380 76,487 Grants (Note 11) 7,601 6,169 6,949 Permits, penalties, rents and other 16,837 16,850 19,727 Investment income 15,308 15,954 16, 157 Revenue recognized on contributed tangible capital assets 9,233 15,314 12,303 Developer and other contributions earned 12,875 18,020 10,208 Total revenues 238,869 254,773 231,576 Expenses (Note 13) General government 33,383 33,673 32,659 Protection to persons and property 32,070 31,290 30, 111 Transportation services 38,095 25,641 26,416 Environmental services 77,290 72,924 67,024 Recreation and cultural services 77,140 56,117 54,496 Planning and development 8,179 7,148 7,846 Health and social services 318 247 262 Total expenses 266,475 227,040 218.814 Annual surplus (deficit) (27,606) 27,733 12,762 Accumulated surplus, beginning of year, as previously stated 1,003,828 1,003,828 990,422 Prior period adjustment (Note 5) 644 Accumulated surplus, beginning of year, as restated 1,003,828 1,003,828 991,066 Accumulated surplus, end of year $ 976,222 $ 1,031,561 $ 1,003,828 See accompanying notes to the financial statements. 4

Consolidated Statement of Change in Net Financial Assets For the Year Ended December 31 2015 2015 2014 Restated Budget (Note 17) Actual Actual (Note 5) Annual surplus (deficit) $ (27,606) $ 27,733 $ 12,762 Acquisition of tangible capital assets (9,233) (60,519) (48,510) Amortization of tangible capital assets 30,140 32,066 29,740 Gain/loss on disposal of tangible capital assets 900 (1,377) Proceeds from sale of tangible capital assets 274 2,379 Change in prepaid expenses (746) (993) Change in inventory 21 (200) Change in net financial assets (6,699) (271) (6,199) Net financial assets, beginning of year 274,645 274,645 280.844 Net financial assets, end of year $ 267,946 $ 274,374 $ 274,645 See accompanying notes to the financial statements. 5

Consolidated Statement of Cash Flows For the Year Ended December 31 2015 2014 Restated Operating activities Annual surplus $ 27,733 $ 12,762 Items not involving cash: Amortization of tangible capital assets 32,066 29,740 Revenue recognized on contributed capital assets (15,314) (12,303) Gain/loss on disposal of tangible capital assets 900 (1,377) Change in non-cash assets and liabilities Change in taxes and payments-in-lieu receivable 1,641 (825) Change in inventories 21 (200) Change in prepaid expenses (746) (993) Change in accounts receivable (2,478) (1,330) Change in accounts payable and accrued liabilities 3,473 10,759 Change in other liabilities (1,403) 3,826 Change in deferred revenue (1,429) 10,968 Change in employee future benefits liability 1,088 624 Capital activities 45,552 51 651 Acquisition of tangible capital assets (45,204) (36,207) Proceeds from sale of tangible capital assets 274 2 379 Investing activities (44,930) (33,828) Purchase of investments (209,500) (126,629) Proceeds from maturity of investments 204,939 11 4.638 (4,561) (11,991) Net change in cash and cash equivalents during the year (3,940) 5,832 Cash and cash equivalents, beginning of year 111,489 105,657 Cash and cash equivalents, end of year $ 107,549 $ 111,489 See accompanying notes to the financial statements. 6

December 31, 2015 1. Summary of significant accounting policies The consolidated financial statements of The Corporation of The Town of Richmond Hill (the "Town") are the representations of management prepared in accordance with local government accounting standards, as recommended by the Public Sector Accounting Board ("PSAB") of the Chartered Professional Accountants of Canada. Significant accounting policies adopted include: (a) i) Reporting entity These consolidated financial statements reflect the assets, liabilities, revenues and expenditures of the reporting entity. The reporting entity is comprised of all organizations, local boards and committees controlled by the Town, including the following: Richmond Hill Public Library Village of Richmond Hill Business Improvement Area All material inter-entity and interfund transactions and balances are eliminated on consolidation. ii) Accounting for region and school board The taxation, other revenues, expenditures, assets, and liabilities with respect to the operations of The York Region District School Board, The York Region Roman Catholic Separate School Board, and The Region of York are not reflected in the municipal fund balances of these consolidated financial statements. iii) Trust. Funds Trust funds and their related operations administered by the Town are not included in the financial statements but are reported separately on the Trust Funds Statement of Revenue, Expenditure and Fund Balance. (b) Basis of accounting i) Cash and cash equivalents Cash and cash equivalents are comprised of cash on hand, demand deposits and bankers acceptances, all of which are highly liquid, subject to insignificant risk of changes in value and have a short-term maturity of less than 90 days. ii) Investments Investments are recorded at the lower of cost or market value. iii) Revenues 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 occurred when they are earned and measurable; expenses are recognized in the period the goods or services are acquired and a legal liability is incurred or transfers are due. 7

December 31, 2015 1. Summary of significant accounting policies (continued) (b) Basis of accounting (continued) iii) Non-financial assets Non-financial assets are not available to discharge existing liabilities unless they are sold and are held for use in the provision of services. They have lives extending beyond the current year and are not intended for sale in the ordinary course of operations. Tangible capital and other non-financial assets are accounted for as assets by the Town because they can be used to provide services in future periods. iv.) Tangible capital assets Tangible capital assets are recorded at cost, which includes all amounts that are directly attributable to acquisition, construction, development, or betterment of the assets. The costs, less residual value, of the tangible capital assets, excluding land, are amortized on a straight-line basis over their estimated useful lives as follows: Asset Catego!}'. Asset Sub Categorl'.' Useful Life General assets (in years) Land Indefinite Land improvements Parks & Parkettes 10-40 Parking Lots 15 Buildings Structural & Architectural Comp 40 Mechanical 25 Electrical 20 Vehicles Vehicles 3-10 Machinery & Equipment Fire equipment 5-15 Arena & Fitness Equipment 4-20 Hardware & Software 4-15 Other Library Material 7 Infrastructure Assets Roads network Travelled roads 20 Sidewalk & walkways 40-80 Bridges & culverts 30-100 Water network Water main 50-100 Valves 35 Water meter 20 Waste water network Sanitary sewers 75-100 Pump & Lift station 10-50 Storm Water network Storm sewer 30-100 8

December 31, 2015 1. Summary of significant accounting policies {continued) (b) Basis of accounting (continued) iv. 1) Tangible capital assets (continued} Amortization The cost, less residual value, of the tangible capital assets is amortized on a straight-line basis over their estimated useful lives. One-half of the annual amortization is charged in the year of acquisition and in the year of disposal. Contribution of tangible capital assets Tangible capital assets received as contributions are recorded at their fair value as the date of receipt and also are recorded as revenue. Intangible assets Intangible assets are not recognized as assets in the financial statements. Interest capitalization The Town's tangible capital asset policy does not allow for the capitalization of interest costs associated with the acquisition or construction of tangible capital assets. iv.2) Inventories Inventories held for consumption are recorded at the lower of cost and replacement cost. v) Contaminated sites Contaminated sites are the result of contamination being introduced in air, soil, water or sediment of a chemica l, organic, or radioactive material or live organism that exceed an environmental standard. A liability for remediation of contaminated sites is recognized, net of any expected recoveries, when all of the following criteria are met: a) an environmental standard exists; b) contamination exceeds the environmental standard; c) the organization is directly responsible or accepts responsibility for the liability; d) future economic benefits will be given up; and e) a reasonable estimate of the liability can be made. Changes in this estimate are recorded in the Town's statement of operations. vi) Deferred revenue Deferred revenues represent government transfers, user charges, development charges and other fees which have been collected but for which the related services have yet to be performed. These amounts will be recognized as revenues in the fiscal year the services are performed. 9

December 31, 2015 1. Summary of significant accounting policies (continued) (b) Basis of accounting (continued) vii) Employee future benefits The present value of the cost of providing employees with future benefits programs is expensed as employees earn these entitlements through service. The cost of the benefits earned by employees is actuarially determined using the projected benefit method prorated on service and management's best estimate of retirement ages of employees and expected health care and dental costs. Actuarial gains or losses are amortized on a straight-line basis over the expected average remaining service life of all employees covered. viii) Investment income Investment income earned is reported as revenue in the period earned. Investment income earned on development charges and parkland obligatory reserve funds is added to the obligatory reserve fund balance and forms part of the respective deferred revenue balances. ix) Government transfers Government transfers are recognized in the financial statements as revenue in the financial period in which the events giving rise to the transfer occur, eligibility criteria are met, and reasonable estimates of the amount can be determined. x) 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 amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amount of revenues and expenditures during the period. Actual results could differ from these amounts. Significant estimates include employee future benefits and amortization of tangible capital assets. 2. Adoption of a new accounting standard The Town adopted Public Sector Accounting Standards Board Standard PS 3260 Liability for Contaminated Sites effective January 1, 2014. Under PS 3260, contaminated sites are defined as the result of contamination being introduced in air, soil, water or sediment of a chemical, organic, or radioactive material or live organism that exceeds an environmental standard. This Standard relates to sites that are not in productive use and sites in productive use where an unexpected event resulted in contamination. The adoption of PS 3260 had no impact on the Town's financial statements. 10

December 31, 201 5 3. Investments Investments in the consolidated statement of fi nancial position are reported at cost. Investm ents had a market value of $402,065 (2014 - $373,579) at the end of the year. They consist of investments pursuant to provisions of the Town's investment policy and comprise government and corporate bonds, debentures and long-term instruments of various financial institutions. 4. Trust Funds Trust funds administrated by the Town amount to $11 (2014 - $5). As the Town holds these funds in trust for the benefit of others, they are not presented as part of the Town's financial position or financial activities. 5. Prior period adjustment The Town of Richmond Hill, Library Board has changed its capitalization policy in 2015 to reflect invoiced cost for library materials. The Library pools all such assets into one category and amortizes it over 7 years, instead of having a number of different sub pools with different lives. The details of the adjustments and their effect on the December 31, 2014 financial statements are outlined below: Previously Reported Adjustments Restated Tangible capital assets $ 725,860 $ 1,005 $ 726,865 Revenue recognized as Contributed tangible capital assets 12,014 289 12,303 Amortization of tangible capital assets 29,813 (73) 29,740 Accumulated surplus, beginning of the year 990,422 644 991,066 Loss on disposal of tangible capital assets (1,327) (50) (1,377) Proceeds from sale of tangible capital assets 2,399 (20) 2,379 6. Taxes and payments-in-lieu receivable The balance in taxes and payments-in-lieu receivable, including penalties and interest, is comprised of the following: 2015 2015 Current year $ 12,764 $ 13,700 Previous years 5,879 6,468 Penalties and interest 1,338 1 454 $ 19,981 $ 2_.1._62_2 11

December 31, 2015 7. Deferred revenue Deferred revenue represents government transfers, user charges and fees which have been collected but for which the related services have yet to be performed. Obligatory Reserve Funds are funds set aside and legally restricted by provincial legislation, a municipal by-law, or agreement. The funds are raised for a specific purpose and cannot be used for any other purpose. The main obligatory reserve funds are the Development Charges Reserve Funds that are regulated by the Development Charges Act. These amounts will be recognized as revenues in the fiscal year the services are performed. The following is the current status of the deferred revenues: Obligatory Reserve Funds 2015 2015 Development charges $ 90,012 $ 98,896 Parkland 51,413 46,587 Government transfers 18,818 17,309 Other 3,539 3,370 Deferred revenue - general 41039 3 088 Total $ 167,821 $ 169,250 Continuity of deferred revenue is as follows: 2015 2015 Balance, beginning of year $ 1691250 $ 158,282 Developer and other contributions collected 12,234 11,068 Cash in lieu - Parkland collected 5,263 8,354 General deferred revenues collected 4,039 3,968 Federal Gas Tax Grant collected 5,216 5,506 Other 2,321 277 Interest earned 11969 2 146 Less Developer and other contributions used in $ 311042 $ 31 319 capital operations 16,512 11,520 Cash in lieu - Parkland used in capital operations 3,771 Federal Gas Tax Grant used in capital operations 5,072 5,923 Developer and other contributions used in current operations 3,047 89 General deferred revenues used 41069 2 819 32,471 20,351 Balance, end of year $ 167,821 $ 169,250 12

December 31, 2015 ($OOO's) 8. Employee future benefits (a) Employee future benefits Health and dental benefits Employee future benefits include health and dental benefits that the Town of Richmond Hill pays on behalf of its current and retired employees. The Town recognizes these postretirement costs as they are earned during the employees' tenure of service. Vested sick leave benefit Under the sick leave benefit plan available only to the Town's firefighters, unused sick leave can accumulate and employees may become entitled to a cash payment when they leave the Town's employment, provided they have ten years of service. The benefit liability at December31, 2015 of $9,502 (2014- $9,090) was determined by actuarial valuation. The accrued benefit liability and the expense for the year ended December 31, 2015 were based on assumptions used for the December 31, 2014 actuarial valuation An actuarial loss is being amortized on a straight-line basis over the expected average remaining service life, estimated to be 14 years. The significant actuarial assumptions employed in the actuarial valuations are as follows: (a) Employee future benefits i) General inflation Future general inflation levels were assumed to be 2.0% in 2015 and thereafter. ii) Interest (discount) rate The present value as at December 31, 2015 of the future benefits was determined using a discount rate of 4.50%. This corresponds to the assumed inflation rate plus an assumed rate of return of 2.50%. iii) Health costs Utilization weighted average health costs were assumed to increase at 5.67% rate for 2015, gradually reduce to a 4.0% in 2021 and remain at that level thereafter. iv) Dental costs Dental costs were assumed to increase at 4.0% per year for 2015 and thereafter. (b) Workplace Safety and Insurance Board Liability Effective January 1, 1994, the Corporation of the Town of Richmond Hill became a Schedule II employer under the Workplace Safety and Insurance Act and follows a policy of self insurance for all its employees. The Workplace Safety and Insurance Board liability at December 31, 2015 of $2,912 (2014 - $2,237) was determined by an actuarial update for the year ended December 31, 2015. 13

December 31, 2015 ($OOO's) 8. Employee future benefits (continued) (c) Workplace Safety and Insurance Board Liability (continued) The significant actuarial assumptions employed in the actuarial valuations are as follows: i) Interest (discount) rate The present value as at December 31, 20 15 of the future benefits was determined using a discount rate of 4.25%. ii) WSIB administration rate The WSIB administration rate at December 31, 2015 is set at 38% which reflects 36% for Schedule 2 administration fees and 2% for physician fees. Information about the Town's employee future benefits liability is as follows: Retirees WSIB 2015 2014 Accrued future benefits liability, beginning of year $ 9,090 $ 2,236 $ 11,326 $ 10,702 Current service costs 457 956 1,413 788 Interest accrued 446 121 567 494 Benefits paid during the period (565) (505) (1,070) (814) Actuarial loss/plan amendments Amortization of actuarial loss 74 104 178 157 Employee future benefits liability, end of year $ 9,502 $ 2,912 $ 12,414 $ 11,326 Accrued benefit obligations $ 10,313 $ 3, 175 $ 13,488 $ 12,087 Unamortized actuarial loss (811 ) (263) (11074) (761) Employee future benefits liability, end of year $ 9,502 $ 2,912 $ 12,414 $ 11,326 9. Accumulated surplus Accumulated surplus consists of individual fund surplus, invested in tangible capital assets, reserves, and reserve funds as follows: 2015 2014 Surplus Operating funds $ 811 $ 65 Unspent capital funds 43,438 49,200 Invested in tangible capital assets 754,144 726,865 Employees future benefits (12,414) (11,326) Unfunded Library's vacation pay (66) (60) $ 785,913 $ 764,744 14

December 31, 2015 9. Accumulated surplus (continued) 2015 2014 Reserves set aside for special purposes by Council Elections $ 200 $ Contingencies 9,801 8,385 Acquisition of tangible capital assets 2,285 1,716 Operations and special purposes 7,255 7 770 Total Reserves 19,541 17 871 Reserve Funds set aside for special purposes by Council Acquisition of tangible capital assets 129,212 128,933 Insurance 1,192 986 W.S.l.B. 6,915 7,265 Fire fighters' sick leave 1,278 1,260 Operating and special purposes 87,510 89 769 Total Reserve funds 226,107 221.213 Total accumulated surplus $ 1,031,561 $ 1,003,828 10. Taxation Property tax billings are prepared by the Town based on assessment rolls issued by the Municipal Property Assessment Corporation (MPAC) and in accordance with the provisions of the Municipal Act, 2001. The Municipal Council establishes the tax rates annually, incorporating amounts to be raised for local services, the requisitions made by the Region of York in respect to Regional services and amounts the Town is required to collect on behalf of the School Board(s) in respect of education taxes. From time to time property assessments are adjusted by MPAC through the reconsideration process or by the Assessment Review Board through the appeal process. Additional assessments, referred to as supplementary and omitted assessments can also be issued by MPAC in accordance with the Assessment Act. These adjustments and additional assessments are processed by the Town upon receipt and recognized in the fiscal year they are determined. All property taxes are secured by the land and pose no collection risk. 11. Grants and government transfers 2015 2014 Government of Canada $ 2,536 $ 2,961 Province of Ontario 2,792 3,337 Other grants 841 651 $ 6,169 $ 6,949 15

December 31, 2015 ($OOO's) 12. Segment information The Corporation of the Town of Richmond Hill is a diversified municipal government institution that provides a wide range of services to its residents, including water, fire, library, and arena. For management reporting purposes the municipal operations and activities are organized and reported by Fund. Funds were created for the purpose of recording specific activities to accomplish certain objectives in accordance with special regulations, restrictions or limitations. Town services are provided by departments/divisions and their activities are reported in these funds. Divisions that have been separately disclosed in the segmented information as follows: General government Corporate and Financial services department is primarily responsible for the provision of internal services that support the work of management and staff across all municipal departments as well as for the provision of external services to the public. These services are provided through governance and corporate management divisions that include Council, CAO's office, Town Clerk, IT, HR, Taxation, and Corporate finance. Protection to persons and property Protection to person and property is comprised of the Fire Service and Regulatory Services divisions. The Fire Service is responsible to provide fire suppression service; fire prevention, training and other emergency services to the Town. The Fire Services responds to a variety of calls including fires, medical assistance, rescue, auto extrication, public assistance, spills, and release of materials hazardous to the environment. The Regulato!Y Services division ensures an acceptable quality of building construction and maintenance of properties through enforcement of construction codes,. building standards, parking, and by-law for the protection of occupants. Transportation services The Environment and Infrastructure Service (EIS) department provides the majority of the capital transportation services, such as roads design construction, maintenance, and assessment of infrastructure. The Roads Section of Community Services (CS) department is responsible for the maintenance for all municipal roads, sidewalks, storm sewers, road and sidewalk snow clearing and winter control. Environmental services The EIS department and Public Works Operations of the Community Services department provide environmental services. The EIS department is responsible for the capital design and construction of water, wastewater, and sewer infrastructure. The operation and maintenance of the Town's water, wastewater, and sewage infrastructure is the responsibility of the Public Works Operations Division of the Community Services department. 16

December 31, 2015 12. Segment information (continued) Health and social services The expenses grouped in this segment relate primarily to services and contributions to seniors and voluntary organizations. Recreation and cultural services The Community Services department provides public services that contribute to neighborhood development and sustainability through the provision of parks operations, recreation, and leisure services such as fitness, skating, and aquatic programs. The department also contributes towards information and cultural needs of the Town's residents through the provision of theater services and special events. Library services provided by Richmond Hill Library Board are also included. Planning and development The Planning and Regulatory Services department manages urban development, local neighborhood planning, community development and heritage matters. It deals with planning from a broad policy perspective, formulating and promoting long-term planning policy. The Heritage Richmond Hill (HRH) Committee provides advice on Heritage matters, as well as recommendations to Council under the Ontario Heritage Act with respect to the heritage designation of properties. The Development Section processes and makes recommendations on development applications. Such applications include Official Plan and zoning by-law amendments, plans of subdivisions and site plans. The Committee of Adjustment processes applications related for minor variances and consents to sever parcels of land. 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. The accounting policies used in these segments are consistent with those followed in the preparation of the consolidated financial statements. 13. Classification of expenditures by object The Consolidated Statement of Operations presents the expenditures by function, whereas the following classifies those same expenditures by object: 2015 2014 Restated Salaries, wages and employee benefits $ 98,214 $ 94,104 Operating materials and supplies 30,829 31,418 Contracted services 59,476 57,639 Rents and financial expenses 6,190 5,645 External transfers to others 265 267 Amortization of tangible capital assets 32,066 29,740 Total expenditures by object $ 227,040 $ 218,814 17

December 31, 2015 14. Pension agreements The Town is required to participate in and make contributions to the Ontario Municipal Employees Retirement Fund (OMERS), which is a multi-employer plan, on behalf of staff. The plan is a defined benefit plan that specifies the amount of the retirement benefit to be received by the employees based on the length of service and rates of pay. Each year, an independent actuary determines the funding status of OMERS Primary Pension Plan (the Plan) by comparing the actuarial value of invested assets to the estimated present value of all pension benefits that members have earned to date. The most recent actuarial valuation of the Plan was conducted at December 31, 2015. The results of this valuation disclosed total actuarial liabilities of $82,369 million with respect to benefits accrued for service with actuarial assets at that date of $75,392 million indicating an actuarial deficit of $6,977 million. Because OMERS is a multi-employer plan, any Plan surpluses or deficits are a joint responsibility of Ontario municipal organizations and their employees. As a result, the Board does not recognize any share of the Plan surplus or deficit. The contribution rate for 2015 was 9.0% (2014-9.0%) up to CPP earnings limit and 14.6 % above CPP earnings limit (2014-14.6% ). The amount contributed to OMERS for 2015 was $6,713 (2014 - $6,841 ) for current service and is included as an expenditure on the Consolidated statement of operations. CPP earning's limit (Year's Maximum Pensionable Earnings or YMPE) in 2015 was $53,600 (2014 - $52,500). 15. Commitments a) The term of the Town of Richmond Hill Public Library leases of office space expires March 31, 2018. The fixed annual obligations over the next three years are as follows: 2016 $ 165 2017 182 2018 48 $ 395 b) The Town has entered into various contracts for maintenance and repairs of Town's infrastructure. The obligations over the remaining life of these contracts are as follows: 2016 $ 1,295 2017 268 $ 1,563 c) For the supply and delivery of insurance the remaining obligations are as follows: 2016 $ 1,358 18

December 31, 2015 15. Commitments (continued) d) The Town leases various equipment such as postage metres and photocopiers. The fixed annual obligations over next three years are as follows: 2016 $ 13 2017 4 2018 5 $ 22 e) The Town continues to be in a contract for the handling of garbage, recycling materials, and snow removal. The obligations over the remaining life of this contract are as follows: 2016 $ 5,142 2017 7155 $ 12,297 f) The Town has entered into contracts for the construction of major tangible capital assets. The unpaid portion of these contracts amounted to $18,780 as at December 31, 2015 (2014 - $25,360). g) The Town continues to be in a common area maintenance agreement for the Town hall building. The obligations over the remaining life of this contract are as follows: 2016 $ 167 2017 170 2018 174 2019 178 $ 689 h) The Town of Richmond Hill has entered into contracts for shelter for domestic animals and control wildlife services. The obligations over the remaining life of these contracts are as follows: 2016 $ 645 2017 546 $ 1, 191 16. Contingency The Town is the defendant in several legal actions claiming personal, property, and other damages. Many of these claims are being handled by the Town's insurers. The outcome of these actions is not determinable as at the date of reporting and accordingly, to the extent not covered by insurance or inclusion in the financial statements, management is of the opinion that no liability would be material to the Town's financial position. 19

December 31, 2015 17. Budget figures The budgets originally approved by Town Council for 2015, for the current year was prepared on a modified accrual basis and has been restated on the Consolidated Statement of Operations to conform with the Canadian Public Sector Accounting Standards except for the effect of amortization of tangible capital assets. A reconciliation of the adopted and reported budgets is presented below: Adopted budget: Budgeted annual surplus for the year (per By-law #42-15 and #32-15) Adjustments to adopted budget Carry-forward from prior year $ (65) Decrease in reserves and reserve funds (6,636) Amortization of tangible capital assets (30,140) Acquisition of contributed tangible capital assets 9.233 Restated budgeted annual deficit $ (27,606) 18. Tangible capital assets Tangible capital assets are recorded at cost, which includes all amounts that are directly attributable to acquisition, construction, or betterment of the asset. Net Book Value 2015 Net Book Value 2014 General Land $ 93,049 $ 93,049 Land improvements 65,475 56,458 Buildings 164,681 168,1 10 Vehicles 9,097 8,474 Machinery and equipment 9,817 9,163 Other 5,672 5,585 Total General 347,791 340,839 Infrastructure Land 8,624 8,624 Roads network 122,581 117,601 Water network 55,028 53,586 Wastewater network 46,11 3 44,889 Storm water network 141 447 137 404 Total Infrastructure 373,793 362,104 Work in progress 32,560 23,922 Total $ 754,144 $ 726,865 20

December 31, 2015 18. Tangible capital assets (continued) a) Contributed Tangible Capital Assets Tangible capital assets received as contributions are recorded at their fair value at the date of receipt and are recorded as revenue. The value of contributed tangible assets received during the year is $15,314 (2014 - $12,014) comprised of roads infrastructure in the amount of $7,554 (2014 - $3,090), storm water $4,376 (2014 - $7,862), and water and wastewater infrastructure in the amount of $3,384 (2014 - $1,062). b) Capital Work in Progress (WIP) Tangible capital assets under construction are not amortized until the assets are available for productive use. The value of WIP at the end of year is$ 32,560 (2014 - $23,922). For additional information, see the Consolidated Schedule of Tangible Capital Assets (Schedule 2). 19. Comparative information Certain of the comparative information has been revised to comply with the presentation adopted in the current year. 21

Consolidated Schedule of Segmented Disclosure - Schedule 1 Year ended December 31, 2015 Expenses General Government Protection to Persons and Pro12ertl:'. Transportation Services Environmental Services Health and Social Services Recreation and Cultural Services Planning and Develo12ment Consolidated Salaries, wages and employees benefits $ Operating materials and supplies Contracted services Rents and financial expenses Community grants Amortization expenses 17,784 6,677 1,152 5,082-2 978 $ 28,055 1,404 726 (76) - 1 181 $ 7,050 5,245 3,472 256-9 618 $ 9, 101 5,862 51,806 546-5609 $ - $ - - - 247 29,563 11,237 2,299 320 18 12,680 $ 6,661 404 21 62 - - $ 98,214 30,829 59,476 6,190 265 32,066 Total expenses $ 33,673 $ 31.290 $ 25,641 $ _72~24 $ 247 $ 56,117 $ 7,148 $ 227,040 Revenues Tax revenues $ 14,921 $ 14,552 $ 7,667 $ 32,661 $ 120 $ 21,818 $ 3,347 $ 95,086 User charges 3,748 603 614 67,606-12,835 1,974 Grants 1,509 5 1,562 547-2,400 146 Permits, penalties, rents and other 4,909 2,733-4 - 5,412 3,792 Investment income 8,678 3 3,038 2,953-1,068 214 assets - - 7,554 7,760 - - - contribution 7,258 245 1 384 374-7 351 1 408 Contributed tangible capital Developers and other 87,380 6,169 16,850 15,954 15,314 18 020 Total revenues 41,023 18,141 21,819 11 1,905 120 50,884 10,881 254,773 Annual surplus $ 7,350 $ (13,149) $ (3,822) $ 38,981 $ (127) $ (5,233) $ 3,733 $ 27,733 22

Consolidated Schedule of Segmented Disclosure - Schedule 1 Year ended December 31, 2014 Restated Expenses General Government Protection to Persons and Pro12erty Transportation Services Environmental Services Health and Social Services Recreation and Cultural Services Planning and Development Consolidated Salaries, wages and employees benefits $ Operating materials and supplies Contracted services Rents and financial expenses Community grants Amortization expenses 16,272 7,418 1,626 4,403-2,940 $ 26,662 1,555 671 113-1 110 $ 8,192 4,910 4,293 278 -.8 743 $ 8,682 5,163 47,353 491-5 335 $ - $ - - - 262-27,593 11,334 3,672 279 5 11 612 $ 6,703 1,038 24 82 - - $ 94,104 31,418 57,639 5,646 267 29,740 Total expenses 32.659 30l 111 2_6AJ6 67,024 262 54.495 7.847 218.814 Revenues Tax revenues 14,107 13,765 8,388 29,282 127 20,352 3,724 89,745 User charges 1,338 581 1,322 59,644-11,664 1,938 Grants 421 49 3,256 1,421-1,674 128 Permits, penalties, rents and other 7,300 2,579 - - - 5,250 4,598 Investment income 12,244 48 1,819 1,963-83 - contribution 289 776 1,237 (917) - 8,412 411 Contributed TCA - - 3 379 8 924 - - - Developers and other 76,487 6,949 19,727 16,157 10,208 12,303 Total revenues 35,699 17 798 19 401 100 317 127 47 435 10 799 231,576 Annual surplus $ 3,040 $ (12,313) $ (7,015) $ 33,293 $ (135) $ {7_._060) $ 2,952 $ 12,762 23

Consolidated Schedule of Tangible Capital Assets - Schedule 2 Year ended December 31, 2015 Land General Land Improvements Buildings Vehicles Machinery & Equipment Other Cost Balance, beginning of year $ 93,049 $ 101,334 $ 270,969 $ 18,232 $ 24,238 $ 12,668 Add: Additions during the year - 6,484 2,253 2,054 3,011 1,617 WIP completed - 7,048 2,337-102 Contributed assets Less: Disposals during the year - (157) - - (1,219) (1,178) (119) Balance, end of year 93,049 114 709 275,559 19 067 26,173 14,166 Accumulated amortization Balance, beginning of year $ - $ 44,876 $ 102,859 $ 9,758 $ 15,075 $ 7,083 Add: Amortization during the year - 4,511 8,019 1, 147 2,285 1,517 Less: Accumulated amortization on Disposals (153) - (935) (1,004) (106) Balance, end of year - 49,234 110,878 9,970 16.356 8.494 Net book value of tangible capital assets $ 93,049 $ 65,475 $ 164,681 $ 9,097 $ 9,817 $ 5,672 24

Consolidated Schedule of Tangible Capital Assets - Schedule 2 (continued) Year ended December 31, 2015!: DQ (Infrastructure) Infrastructure Roads Water Storm Wastewater W IP Total Cost Balance, beginning of year Add: Additions during the year W IP completed Contributed assets Less: Disposals during the year Balance, end of year $ 8,624 $ 312,148 $ 75,316 $ 186,240 $ 59,029 $ 23,922 $ 1,185,769-5,438 2,119 2,808 48 19,372 45,204-1,086 41 120 - (10,734) - 7,554 1,460 4,376 1,924-15,314 - (56) (2,666) (22) (14) - (5,431) 8,624 326.170 76.270 193,522 60,987 32,560 1,240,856 Accumulated amortization Balance, beginning of year Add: Amortization during the year Less: Accumulated amortization on disposals Balance, end of year - 194,547 21,730 48,836 14,140-458,904-9,083 1,523 3,242 739-32,066 - (41 ) (2,011) (3) (5) - (4,258) - 203,589 21,242 52,075-14,874-486.712 Net book value of tangible capital assets $ 8,624 $ 122, 58~ $ 55,028 $ 141,447 $ 46, 113 $ 32,560 $ 754,144 25

Consolidated Schedule of Tangible Capital Assets - Schedule 2 (continued) Year ended December 31, 2014 Restated Land General Land Improvements Buildings Vehicles Machinery & Equipment Other Cost Balance, beginning of year $ 90,701 $ 95,026 $ 267,307 $ 17,863 $ 23,416 12,825 Add: Additions during the year 2,348 3,613 2,297 1,936 1,335 W IP completed - 3,213 1,365 - Contributed assets - - - - - Less: Disposals during the year - (518) - (1,567) (563) Balance, end of year 93,049 101,334 270,969 18,232 24,238 50 1,376 289 (1,822) 12,668 $ Accumulated amortization Balance, beginning of year Add: Amortization during the year Less: Accumulated amortization on disposals Balance, end of year - - - 41,205 4,157 (486) 44,876 94,867 7,992-102,859 11,367 (100) (1,509) 9,758 13,837 1,725 (487) 15,075 7,154 1,382 (1,453) 7,083 Net book value of tangible capital assets $ 93,049 $ 56,458 $ 168,110 $ 8,474 $ 9,163 $ 5,585 26

Consolidated Schedule of Tangible Capital Assets - Schedule 2 (continued) Year ended December 31, 2014 Restated Land (Infrastructure) Infrastructure Roads Water Storm Wastewater WIP Total Cost Balance, beginning of year Add: Additions during the year W IP completed Contributed assets Less: Disposals during the year Balance, end of year $ 8,590 $ 303,917 $ 74,428 $ 170,861 $ 58,511 $ 21,397 $ 1,144,842 34 4,784 2,794 2,774 72 12,844 36,207-377 513 4,749 52 (10,319) - 3,090 440 7,862 622-12,303 - (20) (2,859) (6) (228) - (7,583) 8.624 312. 148 75.316 186,240 59,029 23.922 1. 185.769 Accumulated amortization Balance, beginning of year Add: Amortization during the year Less: Accumulated amortization on disposals Balance, end of year - 185,409 22,149 45,861 13,535-435,384-9,150 1,690 2,976 768-29,740 - (12) (2, 109) (1) (163) - (6,220) - 194.547 21.730 48,836 14,140-458.904 Net book value of tangible capital assets $ 8,624 $ 117,601 $ 53,586 $ 137,404 $ 44,889 $ 23,922 $ 726,865 27