The URL can be used to link to this page

Home My Public Portal About2012 Financial StatementsCORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED FINANCIAL STATEMENTS December 31, 2012 Welch LLP An Ind,:pcnrknt Member of I3KR International_ CORPORATION OF THE MUNICIPALITY OF TWEED FINANCIAL STATEMENTS DECEMBER 31, 2012 Management's Responsibility for the Consolidated Financial Statements 2 Independent Auditor's Report 3 Consolidated Statement of Financial Position 4 Consolidated Statement of Operations and Accumulated Surplus Consolidated Statement of Change in Net Financial Assets 6 Consolidated Statement of Cash Flows 7 Notes to Financial Statements 8-17 Schedule 1 - Consolidated Statement of Tangible Capital Assets 18 Schedule 2 - Consolidated Statement of Continuity of Reserves and Reserve Funds 19 Schedule 3 - Consolidated Schedule of Segment Disclosure Statement of Operations 20-22 Schedule 4 - Consolidated Schedule of Reconciliation of Financial Plan to the Budget 23 Trust Funds: Management's Responsibility for the Trust Fund Financial Statements 25 Independent Auditor's Report 26 Balance Sheet 27 Statement of Continuity 28 Notes to Financial Statements 29 Welch up An Tndependexll McnAcr of BKR International The. Corporation of the MUNICIPALITY OF TWEED 255 Metcalf St., Postal Bag 729 Tweed, ON KOK 3J0 Tel.: (613) 478-2535 Fax: (613)478-6457 Email: info@twp.tweed.on.ca Website: www.twp.tweed.on.ca Management's Responsibility for the Consolidated Financial Statements Jo -Anne Albert MAYOR Patricia L. Bergeron, A.M.C.T: CAO/CLERK The consolidated financial . statements of the Corporation of the Municipality . of Tweed are the responsibility of management and have been approved by Council. The consolidated financial statements have been prepared in compliance with Canadian public sector accounting standards for local governments established by the Public Sector Accounting Board of The Canadian Institute of. Chartered Accountants. A summary of the significant accounting policies are described in Note 1 to the consolidated financial statements. The preparation of consolidated financial statements necessarily involves the use of estimates based on management's judgement, particularly when transactions affecting the current accounting period cannot be finalized with certainty until future periods. The Corporation's managementmaintains a system of internal controls designed to provide reasonable assurance that assets are safeguarded, transactionsare properly authorized and recordedin compliance' with legislative and regulatory requirements, and reliable financial information is available on a timely basis for preparation of the consolidated financial statements. These systems are monitored and evaluated by management.. Municipal Council is responsible for ensuring that management fulfills its responsibilities for financial reporting. Council, through the Audit Committee, reviews the Corporation's consolidated financial statements and discusses any significant financial reporting or internal control matters prior to Council. approval of the consolidated financial statements. The consolidated financial statements have been audited by Welch LLP, independent external auditors appointed by the Corporation,in accordance with Canadian generally accepted auditing standards. The accompanying Independent Auditor's Report outlines their responsibilities, the scope of their examination and their opinion on the Corporation's consolidated financial statements. Patricia Bergeron Betty Gallagher. Chief Administrative Officer Deputy Clerk/Treasurer INDEPENDENT AUDITOR'S REPORT To the Members of Council, of the CORPORATION OF THE MUNICIPALITY OF TWEED We have audited the accompanying consolidated financial statements of CORPORATION OF THE MUNICIPALITY OF TWEED, which comprise the consolidated statement of financial position at December 31, 2012 and the consolidated statements of operations and accumulated surplus, changes 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 Consolidated 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 determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due 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 Corporation'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 Corporation'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 opinion. Opinion In our opinion, consolidated the financial statements present fairly, in all material respects, the financial position of CORPORATION OF THE MUNICIPALITY OF TWEED as at December 31, 2012 and the results of its operations and its cash flows for the year then ended in accordance with Canadian public sector accounting standards. L).€14. Lc.(3 Belleville, Ontario CHARTERED ACCOUNTANTS June 25, 2013 LICENSED PUBLIC ACCOUNTANTS ...13 Welch LIP Chartered Accountants 525 Duncias Street East, Belleville, Ontario K8N 1G4 T: 613 966 2844 F: 613 966 2206 W: vtivw:.laeIchllp.com An Independent Member of BKR International Belleville I Canrpbellford Cornwall Gatineau I Napanee 1 Ottawa 1 Pembroke 1 Picton Renfrew Trenton CORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED STATEMENT OF FINANCIAL POSITION DECEMBER 31, 2012 FINANCIAL ASSETS Cash - note 3 Taxes receivable Accounts receivable Long-term receivable - note 4 LIABILITIES Accounts payable and accrued liabilities Accrued liability - Waste disposal closure - note 5 Deferred revenue - note 6 Long-term debt- note 7 NET FINANCIAL ASSETS NON -FINANCIAL ASSETS Tangible capital assets - note 1, schedule 1 Inventories of supplies Prepaid expenses ACCUMULATED SURPLUS - note 8 Contingent liabilities - note 12 Approved by Council: . --L4ALL. &L ayor 2012 $ 2,577,177 $ 1,013,793 526,591 69,244 4,186,805 $ 160,031 $ 584,000 595,620 69,244 1,408,895 2,777 910 26,101,897 137,993 824 26,240,714 $ 29,018624 2011 1,945,545 963,364 511,789 75,963 3,496,661 205,325 561,800 205,015 75,963 1,048,103 2,448,558 26,650,522 32,220 26,682,742 $ 29,131,300 '4 Welch L LP An independent MembLr of HER International CORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED STATEMENT OF OPERATIONS AND ACCUMULATED SURPLUS (DEFICIT) YEAR ENDED DECEMBER 31, 2012 REVENUE Municipal taxation Taxation from other governments Grants User charges Investment income Penalties and interest on taxes Other EXPENDITURE General government Protection to persons and property Transportation services Environmental services Recreation and cultural services Planning and development NET EXPENDITURES OTHER INCOME AND EXPENSES RELATED Municipal taxation for capital purposes Government transfers: Canada Ontario Tangible capital assets gain Donations User charges - water and sewer INTEREST EARNED ON RESERVE FUNDS ANNUAL SURPLUS (DEFICIT) ACCUMULATED SURPLUS, beginning of year ACCUMULATED SURPLUS, end of year 2012 2012 Budget Actual (unaudited) $ 2,947,676 21,600 1,616,706 801,164 17,800 128,000 84,500 5,617,446 742,138 1,208,151 3,307,612 1,089,196 675,822 130,525 7,153,444 (1,535,998) TO CAPITAL 543,194 132,500 265,834 105,666 1,047,194 (488,804) 29,131,300 $ 2,979,811 18,348 1,646,021 833,515 18,582 134,789 153,897 5,784,963 2011 Actual $ 2,543,146 21,259 1,889,204 881,857 9,905 137,335 108,382 5,591,088 756,557 807,647 1,165,380 1,148,892 2,985,491 3,190, 809 1,072,916 1,275,718 718,486 651,117 139,438 73,560 6,838,268 7,147,743 (1,053,305) (1,556,655) 543,194 879,290 90,463 460,605 179,141 182,427 7,500 77,670 1,914 105,666 - 925,964 1,601,906 14,665 24,389 (112,676) 69,640 29,131,300 29,061,660 $$ 28 642 496 $ 29,018,624 $ 29,131,300 ...15 Welch Tip An Independent Member of RKR International CORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED STATEMENT OF CHANGE IN NET FINANCIAL ASSETS YEAR ENDED DECEMBER 31, 2012 ANNUAL SURPLUS Amortization of tangible capital assets Acquisition of tangible capital assets Changes in assets under construction Gain on sale of tangible capital assets Proceeds on sale of tangible capital assets Acquisition of inventories Acquisition of prepaid expense Consumption of inventories CHANGE IN NET ASSETS NET FINANCIAL ASSETS, beginning of year NET FINANCIAL ASSETS, end of year 2012 2012 Budget Actual (unaudited) 2011 Actual (488,804) (112,676) 69,640 1,791,998 1,791,998 1,875,818 (1,354,594) (1,323,300) (2,392,886) 79,927 108,339 - (7,500) (77,670) 7,500 193,500 (137,993) (32,220) (824) - 32,220 (51,400) 2,448,558 329,352 2,448,558 (255,479) 2,704,037 2,397,158 ,$ 2,777,910 $ 2,448,558 ...16 Welch I, _I) An Independent Member of BKR Incornationnd CORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED STATEMENT OF CASH FLOWS YEAR ENDED DECEMBER 31, 2012 OPERATING Annual surplus (deficit) Non -cash charges to operations: Amortization Gain on sale of tangible capital asset Waste disposal closure Changes in non -cash working capital components: Taxes receivable Accounts receivable Inventory Prepaid expenses Long-term receivable Accounts payable and accrued liabilities Deferred revenue CAPITAL Acquisition of tangible capital assets Proceeds on sale of tangible capital assets CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from long-term debt Repayment of long-term debt NET CHANGE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, beginning of year CASH AND CASH EQUIVALENTS, end of year 2012 2011 $ (112,676) $ 69,640 1,791,998 1,875,818 (7,500) (77,670) 22,200 261,800 1,694,022 2,129,588 (50,428) (14,801) (105,773) (824) 6,719 (45,295) 390,604 (7,453) 1,443,584 (32,220) (23,877) (183,721) 26348 1,874,224 3,352,649 (1,243,373) (2,284,547) 7,500 193,500 (1,235,873) (2,091,047) - 50,000 (6,719) (11,224) (6,719) 38,776 631,632 1,300,378 1,945,545 645,167 2 577,177 $ 1,945,545 ...17 Welch liL- An Independent btember of BTU. intornationai CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2012 The Corporation of the Municipality of Tweed is a municipality in the Province of Ontario and operates under the provisions of the Ontario Municipal Act. 1. SIGNIFICANT ACCOUNTING POLICIES The consolidated financial statements of the Corporation of the Municipality of Tweed are the representation of management prepared in accordance with accounting policies prescribed for local governments, as recommended by the Public Sector Accounting Board of the Canadian Institute of Chartered Accountants. Significant aspects of the accounting policies adopted by the Corporation are as follows: Reporting Entity The consolidated financial statements reflect the assets, liabilities, revenues, expenditures of the reporting entity. The reporting entity is comprised of all organizations and enterprises accountable for the administration of their financial affairs and resources to the Corporation and which are owned or controlled by the Corporation. In addition to general government tax -supported operations, they include the following: The Corporation of the Municipality of Tweed Public Library Board Interdepai tinental and organizational transactions and balances are eliminated. Accounting for County and School Board Transactions The assets, liabilities, revenues, and expenditures with respect to the operations of schools boards and the County of Hastings are not reflected in these consolidated financial statements. Trust Funds Trust funds and their related operations administered by the Corporation are not reflected in these consolidated financial statements, but are reported separately on the "Trust Funds Balance Sheet and Statement of Continuity". Basis of Accounting Revenues and expenditures are reported on the accrual basis of accounting. The accrual basis of accounting recognizes revenues as they become available and measurable. Expenditures are recognized as they are incurred and measurable as a result of receipt of goods or services and a creation of a legal obligation to pay. Deferred Revenue The Corporation receives contributions under the authority of provincial legislation and funding agencies. These funds, by their nature, are restricted in their use, and, until applied to applicable projects, are recorded as deferred revenue. Amounts applied to projects are recorded as revenue in the fiscal period in which they are expended. ./8 Welch LLP An Independent Member of BKR International CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2012 1. SIGNIFICANT ACCOUNTING POLICIES (continued) Reserves and Reserve Funds Certain amounts, as approved by Council, are set aside in reserves and reserve funds for future operating and capital expenditures. Transfer to, or from, reserves and reserve funds are an adjustment to the respective fund when approved. Government Transfers Government transfers are recognized as revenues or expenditures in the year that the events giving rise to the transfer occurred, provided the transfer is authorized, eligibility criteria, if any, have been met by the recipient, and a reasonable estimate of the amount can be made. Use of Estimates The preparation of consolidated financial statements in conformity with accounting policies for local governments, as recommended by the Public Sector Accounting Board of the Canadian Institute of Chartered Accountants requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenditures during the reporting period. Management makes accounting estimates when determining the estimated useful life of the Corporation's tangible capital assets, its allowance for doubtful accounts, the carrying value of its inventory and solid waste landfill closure and post -closure costs. Actual results could differ from those estimates. Taxation and Related Revenues Property tax billings are prepared by the Corporation based on assessment rolls issued by the Municipal Property Assessment Corporation("MPAC"). Tax rates are established annually by Council incorporating amounts to be raised for local services and amounts the Corporation is required to collect on behalf of Hastings County for general and library purposes and the Province of Ontario in respect of education taxes. Realty taxes are billed based on the assessment rolls provided by MPAC. Taxation revenues are recorded at the time tax billings are issued. A normal part of the assessment process is the issue of supplementary assessment rolls that provide updated information with respect to changes in property assessments. Once a supplementary assessment roll is received, the Corporation determines the taxes applicable and renders supplementary billings. Assessments and the related property taxes are subject to appeal. Any supplementary billing adjustments made necessary by the determination of such changes will be recognized in the fiscal year they are determined and the effect shared with the county and school boards as appropriate. 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 ordinary course of operations. The change in non -financial assets during the year, together with the annual surplus or deficit, provides the Change in Net Financial Assets for the year. . . ./9 Welch n An ]ndcpcndent Menhir of RKIR International CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2012 1. SIGNIFICANT ACCOUNTING POLICIES (continued) 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 asset. The cost, less residual value, of the tangible capital assets is amortized on a straight-line basis over their estimated useful life as follows: (a) Asset Categories and Estimated Useful Life Land Buildings Vehicles Equipment Transportation Bridges and other structures Roads Sidewalks Waste and wastewater networks Underground networks - 50 years - not amortized - 40 to 50 years - 5 to 10 years - 4 to 20 years - 20 to 75 years - 10 to 70 years - 40 years A full year of amortization is charged in the year of acquisition and none in the year of disposal. Assets under construction are not amortized until the asset is available for productive use, at which time the costs are transferred to the appropriate asset category. (b) Contribution of Tangible Capital Assets Tangible capital assets received as contributions are recorded at their fair value at the date of receipt and also are recorded as revenue. Similarly, transfer of assets to third parties are recorded as an expense equal to the net book value of the assets as of the date of transfer. Inventories of Supplies Inventories of supplies held for consumption are recorded at the lower of cost and replacement cost. 2. FINANCIAL INSTRUMENTS The Corporation's financial instruments consist of cash, taxes receivable, accounts receivable, long- term receivable, accounts payable and accrued liabilities and long-term debt. Unless otherwise noted, it is management's opinion that the Corporation is not exposed to significant interest rate, currency or credit risks arising from these financial instruments. ...110 Welch Lip An Independent Member of BKR Tniernation d CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2012 3. CASH The balance of cash consists of the following: Market Value 2012 2011 Undesignated cash Petty cash and chequing accounts $ 1,346,730 $ 1,346,731 $ 1,114,904 Guaranteed Investment Certificates 82,342 82,342 74,797 Mutual and segregated funds 541,513 543,730 535,444 Tweed Public Library Board 42,241 42,241 33,672 2,012,826 2,015,044 1,758,817 Designated cash Federal gas tax agreement - chequing account 499,117 499,117 127,859 Planning Act - Parkland - chequing account 63.016 63.016 58,869 562,133 562,133 186,728 $ 2,574,959 $ 2,577.177 $ 1,945,545 Cash received under the Federal Gas Tax agreement is restricted for expenditures on environmentally sustainable infrastructure. Cash raised under the Planning Act regarding Parkland is restricted for capital costs for the acquisition of land or other capital expenditures for park or other recreational purposes. 4. LOANS RECEIVABLE The balance of long-term receivable consists of the following: Tile drainage and shore -line property assistance loans receivable 2012 2011 X69,244 $ 75,963 Welch LL: A.An In dependent Member of BKR international CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2012 5. ACCRUED LIABILITY - WASTE DISPOSAL CLOSURE The Ontario Environmental Protection Act sets out the regulatory requirements to properly close and maintain all active and inactive landfill sites. The estimated liability for these expenditures is recognized based on the cumulative capacity used to date, compared to the total estimated landfill capacity. Estimated total expenditures represent the sum of the future discounted cash flows for the closure and post -closure care discounted at 4% and using an assumed rate of 2% for inflation. The Corporation has two active and three closed landfill sites. For the closed sites, the estimated liability is recognized immediately. The estimated liability for the Marlbank and Hunt Road waste disposal sites is $584,000 based on the present value of closure and post -closure costs estimated at $3,615,988 The Marlbank Road Waste Disposal site has an estimated remaining capacity of 51% and is expected to provide capacity for 24 years based on current waste generation rates. The Hunt Road Waste Disposal site was closed to use by the public, but will remain open to dispose of waste by the Municipality until filled, has an estimated remaining capacity of 30% and is expected to provide capacity for 44 years based on current waste generation rates. A reserve of $781,169 has been established to provide for this liability and is reported in schedule 2 to the financial statements. Post -closure care is estimated to continue for a period of approximately 25 years. 6. DEFERRED REVENUE The balance of deferred revenue consists of the following: Balance Balance December 31, Transferred to December 31, 2011 Additions income 2012 Obligatory Reserve Funds: Federal gas tax $ 127,859 $ 371,258 $ - $ 499,117 Parkland 58,869 4,147 63,016 Other Government transfers 12,678 12,678 Miscellaneous 5,609 5,500 - 11,109 Tweed Public Library - 9,700 - 9,700 205 015 $ 390,605 $ 595,620 ...112 Welch L An Independent Member of BKR T.uernadonal CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2012 7. LONG-TERM DEBT The balance of long-term debt consists of the following: 2012 2011 Debentures. $ 69244 $ 75,_963 Outstanding debentures of $69,244 (2011 - $75,963) are recoverable through special charges levied directly on ratepayers. Outstanding debentures have a maturity date of July 1, 2020, bearing interest at 6.6%. Principal repayments over the next five years are estimated to be as follows: 2013 $ 7,122 2014 7,550 2015 8,003 2016 7,124 2017 7,552 8. ACCUMULATED SURPLUS The accumulated surplus position is comprised of the following: 2012 2011 Equity in tangible capital assets $ 26,101,897 $ 26,650,522 Reserves and reserve funds - schedule 2 2,947,262 2,797,462 Amounts to be recovered Landfill closure and post -closure costs Unrestricted surplus Municipality of Tweed 537,572 223,497 Municipality of Tweed Public Library Board 15,893 21,619 $ 29 018,624 $ 29,131,300 (584,000) (561,800) .113 Welch L P An incicirendtalOcnh rof Blikinterrotiar,ai CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2012 9. SEGMENTED INFORMATION Municipal services are provided by depai Linents. Certain departments that have been separately disclosed in the segmented information along with the services they provide are as follows: General Government General government is comprised of council, chief administrative office (CAO/Clerk) depar lrnent and Treasury department. A municipal council is the ultimate authority, subject to provincial law, for all actions taken on behalf of the municipal corporation in that it exercises both executive and legislative roles. It fulfills its role by making policies in accordance with the wishes and concerns of the general public, subject to provincial laws, policies and directives. Council plays a managerial role by monitoring ongoing administrative performance and ensuring the best care of resources. The CAO/Clerk is responsible to municipal council for the general control and management of the affairs of the municipality as prescribed by municipal council. The CA.O/Clerk, as head of the Corporation's civic administration, provides leadership and direction to the Senior Management team, co-ordinates the administrative functions of the Corporation and exercises general management and control of Municipal operations. The CAO/Clerk ensures coordinated responsive services are delivered to the Municipality's residents and businesses in accordance with the approved policies and directions along with providing the following services: birth and death registrations, marriage, lottery and taxi licensing, commissioning oaths, Municipal by-laws and minutes. The Treasury department is responsible for the administration of taxes, accounts payable and receivable, financial statements and all other financial information and reporting for the Municipality. Protection to Persons and Property Protection to persons and property is comprised of police services, fire services, and by-law enforcement. Police services are provided by the Ontario Provincial Police whose mandate is the safety of lives and property of citizens, to preserve peace and good order, prevent crimes from occurring, detect offenders and enforce the law. Fire Services are provided to the Municipality by volunteer firefighters. By-law enforcement is committed to serve, protect and provide a desired quality of life for citizens and visitors to the Municipality through education to raise awareness of community standards, and enforcement of Municipal by-laws to ensure timely compliance with a professional, unbiased approach. Transportation Services The public works depar tment is responsible for the delivery of municipal public works services related to the planning, development and maintenance of roadway systems, storm water management and street lighting. Environmental Services The Municipality contracts with Dave Moore & Sons for the collection and disposal of household and commercial solid waste with the Village of Tweed. The Municipality contracts with Quinte Waste Solutions for the collection of household recycling. The Municipality owns and operates two landfill sites within the Municipal limits. The Municipality contracts with Ontario Clean Water Agency for the management of municipal drinking water and sanitary sewer systems. .. .114 Welch An Ii depcndent T Tembcr oC RKR. Inge national CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2012 9. SEGMENTED INFORMATION (continued) Recreation and Cultural Services The Parks and Recreation department is a social service whose purpose is to assist individual and community development to enhance social functioning and to improve the quality of life. The Parks and Recreation depaitinent provides accessible recreational programs including aquatics, minor ball and skating and operates Municipal facilities, including community halls, arenas, parks, ball diamonds and soccer fields. Planning and Development The Municipality of Tweed, the Township of Stirling-Rawdon, the Town of Deseronto and the Township of Tyendinaga have entered into an agreement for joint building services. The joint building services agreement came into effect April 1, 2005. Building services is responsible for all economic development, building and planning matters, including the issuance of building permits, land severance and minor variance applications, applications for the official plan amendments and zoning by-law amendments, site plan control and subdivision matters and property standards inspections. Tweed Public Library Tweed Public Library contributes towards the information needs of the Municipality's citizens through the provision of library services. 10. PENSION AGREEMENTS The Corporation makes contributions to the Ontario Municipal Employees Retirement Fund (OMERS), which is a multi -employer plan, on behalf of its staff. The plan is a defined benefit plan which specifies the amount of the retirement benefit to be received by the employees based on the length of service and rate of pay. Employees and employers contribute jointly to the plan. Contributions for employees with a normal retirement age of 65 were being made at a rate of 8.3% (2011 - 7.4%) for earnings up to the annual maximum pensionable earnings of $50,100 (2011. - $48,300) and at a rate of 12.8% (2011 - 10.7%) for earnings greater than the annual maximum pensionable earnings. Contributions for employees with a normal retirement age of 60 were being made at a rate of 9.4% (2011 - 8.9%) for earnings up to the annual maximum pensionable earnings of $51,100 (2011 - $48,300) and at a rate of 13.9% (2011 - 14.1%) for earnings greater than the annual maximum pensionable earnings. The amount contributed to OMERS for 2012 was $68,594 (2011 - $64,442) for current service and is included as an expenditure on the "Consolidated Statement of Operations and Accumulated Surplus". The actuarial valuation of the OMERS plan at December 31, 2012 indicated a deficit in the plan. OMERS is a multi -employer plan, any pension plan surplus or deficit are a joint responsibility of Ontario Municipal organizations and their employees. As a result, the Corporation does not recognize any share of the OMERS pension surplus or deficit. .115 Welch An Independent Member of L'Ki2 International CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2012 11. BUDGET FIGURES Budgets established by the Corporation are based on a project oriented basis, the costs of which may be carried out over one or more years. Although they are not directly comparable with current year actual amounts, budget figures have been reflected on the "Consolidated Statement of Operations and Accumulated Surplus" and the "Consolidated Statement of Change in Net Financial Assets". Budget figures have been reclassified for the purpose of these financial statements to conform with PSAB reporting requirements. 12. CONTINGENT LIABILITIES In the course of its business, the Corporation becomes involved in various claims and legal proceedings. Litigation is subject to many uncertainties and the outcome of individual matters is not predictable. An estimate of the contingency cannot be made since the outcome of these matters cannot be determined at this time. The Corporation carries liability insurance. Any settlement in excess of amounts which have been recorded in the accounts and insurance coverage will be accounted for as a current transaction in the year of settlement. Contingent environmental liabilities may arise out of existing and former operations. Such liabilities are different from environmental remediation and solid waste landfill closure and post -closure care liabilities because the liabilities are not determinable, the conditions which may give rise to the expenditures are uncertain, and the future expectations of the applicable regulatory authorities are not known. Potential costs that may arise in connection which such liabilities are not included in the Corporation's consolidated statement of operations and accumulated surplus until the source and nature of the obligation becomes clear and is reasonably estimable. 13. COMMITMENTS The Corporation has contracts committing it to payments in future years. The following agreements existed at December 31, 2012: An agreement with the Province of Ontario for policing services. Costs will be charged on the basis of services used. Base charges for the 2012 year were $807,487 An agreement with David Moore & Son for the collection of household waste to July 31, 2014. Base charges for the 2012 year were $32,000. An agreement with Quinte Waste Solutions for the collection of recycling. Base charges for the 2012 year were $44,471. An agreement with Ontario Clean Water Agency for the operating, maintaining and managing of the water and waste water systems to December 31, 2015. Base charges for the 2012 year were $251,850. Agreements with William Broek and Larry Palmateer for winter road maintenance to 2013 and 2015. ...116 Welch An Indcpenderil Member of 13KIL International CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2012 14. COMPARATIVE FIGURES Certain comparative figures for 2011 have been reclassified to conform to the financial statement presentation adopted for 2012. 15. OPERATIONS OF SCHOOL BOARDS AND THE COUNTY OF HASTINGS Further to note 1, the taxation, other revenues and expenditures of school boards and the County of Hastings are comprised of the following: 2012 2011 Taxation Taxation from other governments Amounts received or receivable Requisition School Boards $ 1,309,552 4,228 1,313,780 1,313,780 County $ 1,384,690 7,374 1,392,064 1,392,064 School Boards $ 1,290,240 4,712 1,294,952 1,294,952 County $ 1,347,482 10,949 1,358,431 1,358,431 ...117 Welch Li, An Independent Member of 13KR International C ORPORATION OF THE MUNICIPALITY OF TWEE D SCHEDULE 1- CONSOLIDATED ST ATEMENT OF TANGIBLE C APITAL ASSETS DECEMBE R 31, 2012 le uooe u. k 4u j 3f)IH Jo .iacituayi wapuaciapu j u` CO ST Ba lan ce, beginnin g of year Additions durin g the year Disposals during the year Balan ce, end of year ACCU MULAT ED AMORT IZA TION Balance, beginnin g of year A mo rtization during the year Accumulated amortization on dispo sals Balan ce, end of year Net Book Va lu e of Tan gible Ca pital A ssets CO ST Balance, begin ning of year Addition s during the year D isposals during the year Balance, en d of year ACCUMULATE D AMORTIZATION Balan ce, beginning of yea r Amortization during the year Accu mulated amortization on disposals Balan ce, end of year GENERAL INFRASTRUCTURE TOTALS La nd $ 1,685,098 8,738 Assets Pla nt and Building Vehicles Equipment Other Under Facilities Construction $ 3,826,449 44,193 $ 2,420,986 76,875 15,390 $ 1,397,567 $ 225,055 $ 79 ,927 $ 2,651,737 $ 125,786 8,744 3,698 41,690 48,730 28 ,842 79,927 Roads 18,883,639 913,284 478,222 Underground a nd Other Networks Bridges and Other 2012 Structures $ 4,748,641 $ 8,187,401 94,366 5,926 $ 44,106,500 1,323,300 651,111 1,693,836 3,870,642 2,482,471 1,474,623 204,957 3 ,698 2,693,427 19,318,701 4,843,007 8,193,327 44,778,689 48,720 896,370 1,190,070 604,797 109,813 1,039,632 10,892,350 903,632 24,678 92,967 188,147 92,357 21,165 - 89,781 1,072,116 89,406 - 15,390 48,730 28,842 - - 478,222 73,398 989,337 1,362,827 648,424 102,136 - 1 129 413 11,486,244 993,038 1 ,891 ,975 18,676,792 1,770,594 17,455,978 121,381 1,791,998 571,184 $ 1,620,438 $ 2,881,3305 1,119,644 $ 826 ,199 $ _ J02 ,821 $ 3 698 $ 1,564,014 $ 7 ,832,457 $ 3,.849,969 DECEMBER 31, 2011 GENER AL INFRASTR UCTURE Undergro und Assets Pl ant a nd and Other Land Building Vehicles Equipme nt Other Under Facilities Roads Networks C onstr ucti on $ 6301,352 $ 26 ,101,897 TOTALS Bridges and Other 2011 Str uct ures $ 1,680,098 $ 3,727,082 $ 2,153,191 $ 1,224,197 $ 201,753 $ 108,339 $ 2,651,737 $ 18,382,043 $ 4,748,641 $ 7,988 ,535 $ 42.865,616 5,000 195,289 566,023 175,620 24,302 79,927 1,147,859 198,866 2,392,886 95,922 2988228 2,250 1,000 108 ,339 - 646 ,263 1,152,002 1,685,098 3,826,449 2,420,986 1,397,567 225,055 79,927 2,651,737 18,883,639 4,748,641 8,187,401 44,106,500 24,235 897,093 1,165,828 531,518 81,683 951,241 10,407,241 814,919 24, 485 91,862 202,040 74,557 28,797 88,391 1,140,614 88,713 92,585 177,798 1,278 667 655,505 - 1,634,235 16,507,993 136,359 1,875,818 927,833 48,720 896, 370 1,190,070 604,797 109,813 1,039,632 10,892,350 903,632 1,770,594 17,455,978 Net Book Value of Tangible Capital Assets .$____1_,_616„1/8, $ 2,930 079 $ 1 230 916 $ 792,770 $ 115,242 $ 79,927 $ 1,61105 $ 7,991 ,289 $ 3,845,009 6 $ ,416,807 26,650,522 118 COR PORATIO N OF THE MU NICIPALI TY OF TWEE D SCHEDULE 2 - C ONSOLIDATED SCHEDULE OF CONTINUITY OF RESERVES AND RESERVE FUNDS DECEM BER 31, 2012 Revenue C ont ributions Transfers Bala nce, Interest on From Operations beginning of year Reserve F unds Total To Operations To Capital Acq uisitio ns R eserve Fun ds Waste site reclamation $ 733,258 $ 10,988 $ 155,923 $ 166,911 $ Roads 74,797 1,964 5,581 7,545 V illage in frastruc ture 162344 1,712 - 1 ,712 970399 14,664 161,504 176,168 119,000 $ 119,000 Total Balance, end of ye ar $ 119,000 $ 781,169 82,342 164,056 119,000 1,027,567 R eserv es Working capital 390,699 - 26,300 6,360 32,660 358,039 Contingen cies 150,000 - - - 150,000 Water an d sewer 449,300 - 109,400 109,400 - 38,052 38,052 520,648 Mun icipal building expenditure 20,000 - 28,470 28,470 6,700 5,000 11,700 36,770 Ca pita l a cquisitions - Fire 65,000 - 60,000 60,000 - 35,075 35,075 89,925 Capital acquisitions - A rena 16,300 5,000 5,000 - - 21,300 Arena - R oof 38,300 - - - 35,300 35,300 3,000 Fire - Overage wages 3,000 - 12,000 12,000 15,000 15,000 - Fire - Equipment main tenance 20,000 - - 20,000 Heritage 50,000 - - - 50,000 Hamlets 24,720 7,960 7,960 - 32,680 Parks 3,700 - 13,694 13,694 - - 17,394 Public works - O/T overage 15,000 - - - 15,000 Public works - Equipment 220,377 100,000 100,000 - 34,388 34,388 285,989 Public works - Winter maintenance 128,000 53,700 - 53,700 74,300 Public works - Ro ads and streets 232,667 100,600 100,600 - 88,617 88,617 244,650 1,827,063 437,124 437,124 101 ,700 242,792 344,492 1,919,695 Total $ 2,797,462 S 14,664 8 598,628 $ 613,292 $ 220,700 $ 242,792 $ 463,492 $ 2 ,947 262 ... 119 CORP ORATIO N OF THE M UNICIPA LIT Y OF TWEED SCHEDULE 3 - CONSOLIDATED SCHEDULE OF SEGMENT DISCLOSURE ST ATEMENT OF OPERATI ONS DECEMBER 31, 2012 BUD GET Ietto!reu .iat ii 217Ifl Io log,. 1.uopuaclapui Tay REVENUES Municipa l ta xation $ (572,714) $ 1,010,095 S 1,943,710 $ 89,610 $ 368,350 $ 108,625 S - $ - $ 2,947,676 Taxa tion from other gov ernments 21,600 - - - - - 21,600 Government Transfers Gov ernment of Canada - - - 1,200 - 1,230 - 2,430 Province of Ontario 1,391,800 164,300 - 40,000 - 18,176 - 1,614,276 O ther Municipalities 97,700 (97,700) - User charges 13,100 6,000 2,000 649,834 127,050 - 3,180 - 80I,164 In vestmen t in come 6,500 - - 11,300 - - 17,800 Penalty an d intere st on taxes 128,000 - - _ 128,000 Do nations - - - 5,750 5,750 Miscellan eou s 34,000 7,500 12,000 10,600 14,650 78,750 1,022,286 1,187,895 1,945,710 779,444 508,600 130,525 140,686 (97,700) 5 ,617,446 GENERAL P ROTECTION TRA NSPO RT ATION EN VI RONME NTAL RECREA TION AND PLANNING TWEE D PUBLIC ELIMINATIONS CO NSOLIDAT ED GOVER NMEN T SERVICES SE RVICES SERVICES CULTURAL DE VELOPMENT LIBRARY BOARD S ER VICES CU RRENT -EXPENDITU RES Salaries, wages and emplo yee bene fits 423,650 140,335 7]0,290 202,360 217,390 52,925 94 ,760 1,841,710 Interest on long-temr debt - - - 11,300 - 11,300 Ma terials an d su pplies 239,870 96,560 1,071,420 359,400 198,510 59,100 34,726 2,059,586 Contracted services and gen eral services - 853,000 164,000 323,350 - - 1,340,350 R ents an d financial ex penses 52,300 - 7,200 59 ,500 Ex ternal tran sfers - 49,000 - - 97,700 (97,700) 49,000 Amortization 26,318 69,256 1 ,361,902 204,086 84 ,076 46,360 - 1,791,998 742,138 1,208,151 3,307,612 1,089,196 597,676 130,525 175,846 (97,700) 7,153,444 $ 280,148 $ (20,256) $ S1,361,902) $ (309 752) $ (89,076) $ - $ (35,160) $ S (1,535,998) .. .120 CORP ORATION OF THE MUNICIPALITY OF TWEED SCHEDULE 3 - CO NSOLIDATED SC HEDULE OF SEGMENT DISCLOSURE STATEMENT OF OPER ATIONS DECEMBER 31, 2012 ACTU AL REVENUES Munic ipal taxation Taxation from other go vernments Gov ernment Tran sfers Gove rn ment of Canada Province of Ontario O ther Mun icipalities U ser charges Investment income Penalty and in terest on taxes Donation s Miscellaneo us CURR ENT - EXPENDITURE S Salaries, wages an d employee ben efits Interest on long-temi debt Materials and supplies Contracted servic es and general services Ren ts an d financial expen ses External tran sfers Amortization GENER AL GO VER NMENT $ (533,879) $ 18,348 1,394,800 13,290 13,869 134,789 88 ,012 1,129,229 465,172 215,891 49,176 26,318 756,557 PR OTECTI ON SERVICES TRANSPORTA TION E NVI RO NMENTAL REC RE ATION AND PLAN NING TW EED PU BLIC ELIMINATIONS CONS OLIDATED SERVICES SERVICES CULTUR AL DEVELOPMENT LIBRARY BOAR D SERVICES 1,010,095 $ 164,300 9,353 10,845 1,194,593 148,068 92,374 808,916 46,766 69,256 372,672 $ 1,165,380 1,943,710 $ 12 ,472 1,956,182 696,895 758 ,803 167,891 1,361,902 2,985 ,491 29,213 $ 89,610 $ 368 ,350 $ 37,000 660,857 787,467 201,122 345,273 322,435 204,086 1,072 ,916 3,147 2,760 133,822 36,342 544,421 (1,029,309) $ (285 449) $ 230,067 205,734 97,700 84,076 617,577 101,925 $ 4,558 4.400 110,883 52,192 4,558 75,488 7,200 (73, 56) $ 139,438 17,300 26,714 97,700 3,721 155 7,001 7,297 159,888 103,091 37,701 11,457 46 ,360 198,609 $ (97,700) (97,700) (97,700) (97,700) $ 2,979,811 18 ,348 20,447 1,625,574 833,515 18,582 134,789 7,001 146,896 5,784,963 1,896,607 4,558 1,731,264 1,310,699 56 ,376 46,766 1,791,998 6,838,268 (28,555) $ 38 721) $ $ (1,053 305) ./21 C ORPORATION OF THE M UNICIPALIT Y OF TWEED SCHEDULE 3 - CONS OLIDATED SCHEDULE OF SEGMENT DISCL OSURE ST ATEMENT OF OPERATIONS DECEMBER 31, 2011 ACTUAL RE VEN UES Mun icipal ta xation Taxation fiver other governments Governmen t Tr ansfers Govern men t of Can ada Provin ce of On tario Other Municipalities User charges Inv estmen t in come Penalty and in terest on taxes Don ations Miscellaneous CURRENT - EX PENDIT URES Salaries, wages an d e mployee ben efits Interest on long-term debt Materials and supplies Con tracted services and general serv ices R ents an d financial ex penses External transfers Amortization GENERAL PROTECTION GOVERNMENT SE RVICES $ (577,966) $ 21,259 798 1,479,150 13,090 8,111 137,335 39,716 1,121,493 416,441 275,106 91,914 24,186 807,647 TR ANSPORTATION E NVIRONMENTAL REC REATION A ND PLANNIN G TWEE D P UBLIC ELIMINATIONS CONSOLIDATED S ER VICES SE RVICES CULT URAL DEV ELOPMENT LIB RAR Y BOAR D S ERVICES 932,826 $ 213 ,612 10,570 532 1,157 ,540 145,825 83,914 802,044 44,154 72,955 1,148,892 1,792,225 $ 21,135 1,813,360 686,681 853,280 201,203 1 ,449,645 3,190,809 31,790 $ 266,291 $ 1,200 40,000 51,236 704,018 125,860 23,942 775,808 468,529 191,617 211,045 570,913 191,481 312,815 - 96,277 200,373 82,412 1,275,718 581,215 97,980 $ 8,298 1,794 11,200 119,272 20,763 1,794 43,803 7,200 73,560 11,880 83,030 96,277 7,184 16,911 14,168 229,450 93,517 26,415 46.247 166 ,179 (96 ,277) $ 2,543,146 21,259 13,878 1 ,875,326 881,857 9,905 137,335 16,911 91,471 (96,277) 5,591,088 (96,277) (96,277) 1,765,889 1,794 2,044,912 1,316,062 99,114 44,154 1,875,818 7,147,743 313,846 $ 8648 $ ,(1,377449) $ (499.91Q $ (112,686) $ 45,7€2 $ 63 271 $ - $ (1,556 655) . , .122 CORPORA TION OF THE MUNICIPALITY OF TWEE D SCHEDULE 4 - CONSOLID ATED SCHED ULE OF RECO NCILIATI ON OF FINA NCI AL PL AN TO THE BUDGET YEAR ENDED DECEMBER 31, 2012 ITT Ti-mg7o laquuaT. ava puadiPuT REV EN UES Municipal taxatio n $ 2 ,947,676 $ Taxation from other go vernments 21,600 Government Transfers Government of Canada 1,200 Prov ince of Onta rio 1,556,100 40,000 Other Mun icipalities - User fees and sale of goods and services 797,984 Investment income 17,800 Penalty an d interest on taxes 128,000 Donations - Miscellaneous 64,100 5,534,460 40 ,000 OPERATING CAPITAL RESERVES AND TANGIBLE CAPITAL TWEED PUBLIC ELIMINATIONS PSAB BU DGET BU DGET BU DGET RESERVE FUNDS ASSET LIBRARY BO AR D ADJUSTMENTS $ $ - $ - $ 2,947,676 21,600 1,230 - 2,430 18,176 - 1,614,276 97,700 (97,700) - 3,180 - 801,164 17,800 128,000 5,750 5,750 14,650 - 78,750 140,686 (97,700) 5,617,446 EXPEN DITURE S Current Gen eral government 715,820 - 26,318 - - 742,138 Protection serv ices 1,138,895 69,256 1,208,151 Transporta tion services 1,945,710 - - 1,361,902 3,307,612 En vironmental services 845,110 40,000 - 204,086 - - 1,089,196 Recreational an d cu ltural services 508,600 5,000 84,076 175,846 (97,700) 675 ,822 Plann ing and developmen t 123,825 6,700 - 130,525 Capital Gen era l government _ 33,000 - (33,000) Protection services - 31,000 - (31,000) Transportation services - 910,200 - (910,200) Enviromn en tal serv ices 329,400 (329,400) Recreational and cultural servic es - 50,994 - (50 ,994) 5,277,960 1,406,294 - 391,044 175,846 (97,700) 7,153,444 NET REV ENUES (E XPENDITUR ES) 256,500 (1,366,294) (391,044) (35,160) - (1,535,998) OTHER INCO ME A ND EXPENSES R ELATED TO CAPITA L Municipal ta xation 543,194 - 543,194 G overnment transfers Canada - 132,500 - 132,500 On tario - 265,834 - 265,834 Other - U ser charges - water and sewer - 105,666 - - 105,666 1,047,194 - - 1,047,194 FINA NCIN G AND TRAN SFER S Debt repaymen t (6,719) 6,719 Ben efiting lando wners principal repayments 6,719 - (6,719) - - Tran sfers from (to) othe r funds (256,500) 319,100 (62,600) (256,500) 319,100 (62,600) ANNU AL SUR PLUS (D EFIC IT) $ $ $ L,600) $ 3f 91.044) $ (35,160) $ $ (488,804) . 123 CORPORATION OF THE MUNICIPALITY OF TWEED TRUST FUNDS FINANCIAL STATEMENTS December 31, 2012 Welch An Independent Member of Milt International The Corporation of the MUNICIPALITY OF TWEED 255 Metcalf St, Postal Bag 729 Tweed, ON KOK 3J0 Tel.: (613) 478-2535 Fax: (613)478-6457 Email: info@twp.tweed.on.ca Website: www.twp.tweed.on.ca. Jo -Anne Albert MAYOR Patricia L. Bergeron, A.M.C.T. CAO/CLERK Management's Responsibility for the Trust Fund Financial Statements The Trust Fund financial statements of the Corporation of the Municipality of Tweed are the responsibility ofmanagement and, have been approved by Council. The Trust Fund financial statements have been prepared in compliance with Canadian public sector accounting standards for local governments established by the Public Sector Accounting Board of The Canadian Institute of Chartered Accountants. A summary of the significant accounting policies are described in Note 1 to the financial statements. The preparation of Trust Fund financial statements necessarily involves the use of estimates based on management's judgement, particularly when transactions affecting the current accounting period cannot be finalized with certainty until future periods. The Corporation's management maintains a system of internal controls designed to provide reasonable assurance that assets are safeguarded, transactions are properly authorized and recorded in compliance with legislative and regulatory requirements, and reliable financial information is available on a timely basis for preparation of the Trust Fund financial statements. These systems are monitored and evaluated by management. Municipal Council is responsible for ensuring thatmanagement fulfills its responsibilities for financial reporting. Council, through the . Audit Committee, reviews the Corporation's Trust Fund financial.. statements and discusses any significant financial reporting or internal control matters prior to Council approval of the Trust Fund financial statements. The Trust Fund financial statementshave been audited by Welch LLP, independent external auditors appointed by the Corporation, in accordance with Canadian generally accepted auditing standards. The accompanying Independent Auditor's Report outlines their responsibilities, the scope of their examination and their opinion on the Corporation's Trust. Fund financial statements. Patricia Bergeron Betty Gallagher Chief Administrative Officer Deputy ClerldTreasurer 25 INDEPENDENT AUDITOR'S REPORT To the Members of Council of the Corporation of the Municipality of Tweed We have audited the statement of financial position of the CORPORATION OF THE MUNICIPALITY OF TWEED Trust Funds as at December 31, 2012 and the statement of continuity for the year then ended, and a summary of significant accounting policies. These financial statements have been prepared by management using the cash receipts and disbursements basis of accounting described in the notes to financial statements. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with the cash receipts and disbursements basis of accounting described in the notes to financial statements; this includes determining that the cash receipts and disbursements basis of accounting is an acceptable basis for the preparation of the financial statements in the circumstances, and for such internal control as management determines is necessary to enable the presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's 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 Corporation'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 Corporation'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 statement. 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, these financial statements presents fairly, in all material respects, the cash receipts and disbursements and financial position of the CORPORATION OF THE MUNICIPALITY OF TWEED Trust Funds for the year ended December 31, 2012 in accordance with the cash receipts and disbursements basis of accounting described in the notes to financial statements. 6\leiri\ Belleville, Ontario CHARTERED ACCOUNTANTS June 25, 2013 LICENSED PUBLIC ACCOUNTANTS Welch LLP — Chartered Accountants 525 Dundas Street East, Belleville, Ontario K8N 1G4 T: 613 966 2844 F: 613 966 2206 W: www.welchllp.com An Independent Member of BIER International 26 Belleville I Campbellfard I Cornwall I Gatineau I Napanee I Ottawa I Pembroke I Picton I Renfrew I Trenton CORPORATION OF THE MUNICIPALITY OF TWEED TRUST FUNDS STATEMENT OF FINANCIAL POSITION DECEMBER 31, 2012 ASSETS Ontario Santa Home Claus Recreation Renewal Parade Associations Plan Fund Total Cash $ - $ 458 $ 1,908 $ 2,366 Investments 9,736 - 9,736 Loans receivable - 936 936 $ 9,736 $ 1,394 $ 1,908 $ 13,038 FUND BALANCE Fund balances Approved by Council: $ 9,736 $ 1,394 $ 1,908 $ 13,038 Mayor CAO/Clerk (See accompanying notes) Welch An independent Member of BKR International CORPORATION OF THE MUNICIPALITY OF TWEED TRUST FUNDS STATEMENT OF CONTINUITY YEAR ENDED DECEMBER 31, 2012 Ontario Santa Home Claus Recreation Renewal Parade Associations Plan Fund Total FUND BALANCES, beginning of year $ 11,622 $ 5,095 $ 1,683 $ 18,400 RECEIPTS Donations - - 1,600 1,600 Interest earned 81 - - 81 81 1,600 1,681 EXPENDITURES Parade expenses - - 1,375 1,375 OHRP discharges - 3,701 - 3,701 Funds returned to committees 1,967 - - 1,967 1,967 3,701 1,375 7,043 FUND BALANCES, end of year $ 9,736 $ 1,394 $ 1,908 $ 13,038 (See accompanying notes) Welch r ., An Independent Nlernher oz EKR Triter,taleormi CORPORATION OF THE MUNICIPALITY OF TWEED TRUST FUNDS NOTES TO FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2012 1. ACCOUNTING PRINCIPLES Basis of Accounting Capital receipts and income are reported on the cash basis of accounting. Expenditures are reported on the cash basis of accounting with the exception of administrative expenses which are reported on the accrual basis of accounting, which recognizes expenditures as they are incurred and measurable as a result of the receipt of goods or services and the creation of a legal obligation to pay. 2. ONTARIO HOME RENEWAL PROGRAM The Ontario Home Renewal Program was established by the Ontario Ministry of Housing in 1973 to provide grants for municipalities to make loans to assist owner occupants to repair, rehabilitate and improve their homes to local property standards. Individual loans are limited to $7,500 of which the maximum forgivable portion is $4,000. Ontario Home Renewal Program loans receivable at December 31, 2012 consist of repayable loans totalling $936 and forgivable loans totalling $NIL. Loan forgiveness is earned and recorded at a rate of up to $600 per year of continued ownership and occupancy. In the event that the home owner ceases to occupy the home, the balances of the repayable loan and the unearned forgivable loan immediately become due and payable. 29 Welch h. Anindepennlcnf Riecnber of 13102. International