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Home My Public Portal About2014 Financial StatementsCORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2014 Welch LLP An Independent )lenther of MR ]nternatinnal CORPORATION OF THE MUNICIPALITY OF TWEED FINANCIAL STATEMENTS DECEMBER 31, 2013 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 5 Consolidated Statement of Change in Net Financial Assets 6 Consolidated Statement of Cash Flows 7 Notes to Consolidated Financial Statements 8-17 Schedule I - 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 Statement of Financial Position 27 Statement of Continuity 28 Notes to Financial Statements 29 Welch LLP An Ildc,>enckentil-fernber or IIIa( Intel national The Corporation of the MUNICIPALITY OF TWEED 255 Metcalf St., Postal Bag 729 Tweed, ON KOK 310 Tel.: (613) 478-2535 Fax: (613) 478.6457 Email: info®twp.twccd.on.ca Websitc: www.twecd,ea 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 Chartered Professional Accountants of Canada. 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 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 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. Jo- meVaeGikv rt Betty lagher Mayor Acting CAO/Clerk-`T'r'easurer INDEPENDENT AUDITOR'S REPORT To the Members of Council, of the CORPORATION OF THE MUNICIPALITY OF TWEED elch 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, 2014 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, 2014 and the results of its operations and its cash flows for the year then ended in accordance with Canadian public sector accounting standards, Belleville, Ontario September 29, 2015 ,/,„/ ,(1/° CHARTERED PROFESSIONAL ACCOUNTANTS LICENSED PUBLIC ACCOUNTANTS ...13 Welch rear — Chartered Professional Accountants 525 Dundas Street East, Belleville, ON KIIN I GA- T; 613 966 2844 F: 613 966 2206 W: wwwwelchllp.com An Independent Member of BKR International -11-a Belleville Carnpbellford Cornwall l Gatineau € Napanee Ottawa Pembroke Picton Renfrew 'tbrnnto Trenton CORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED STATEMENT OF FINANCIAL POSITION DECEMBER 31, 2014 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 6 Deferred revenue - note 7 Long-term debt- note 8 NET FINANCIAL ASSETS NON -FINANCIAL ASSETS Tangible capital assets - note 1, schedule 1 Inventories of supplies Prepaid expenses ACCUMULATED SURPLUS - note 9 Contingent liabilities - note 13 (See accompanying notes) 2014 $ 2,951,629 1,070,760 900,554 54,572 4,977,515 $ 304,830 646,000 930,040 54,572 1,935,442 3,042,073 26,43 0,785 59,855 528 26,491,168 $ 29,533,241 2013 $ 3,745,061 1,047,995 331,578 62,121 5,186,755 $ 189,483 612,000 1,347,052 62,121 2,210,656 2,976,099 25,420,476 25,376 704 25,446,556 $ 28,422,655 ..J4 Welch I ,LP An Indepeadenr &lcuiber of BKR 1n!ernatinnal CORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED STATEMENT OF OPERATIONS AND ACCUMULATED SURPLUS YEAR ENDED DECEMBER 31, 2014 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 REVENUE (EXPENDITURES) OTHER INCOME AND EXPENSES RELATED Municipal taxation for capital purposes Government transfers: Canada Ontario Tangible capital assets gain Donations Parkland User charges - water and sewer INTEREST EARNED ON RESERVE FUNDS ANNUAL SURPLUS (DEFICIT) ACCUMULATED SURPLUS, beginning of year ACCUMULATED SURPLUS, end of year 2014 Budget (note 12) $ 3,243,863 20,000 1,546,808 775,445 18,755 130,000 91,525 5,826,396 788,848 1,247,590 3,156,890 1,027,140 724,341 134,770 7,079,579 (1,253,183) TO CAPITAL 453,702 418,433 1,322,675 181,825 2,376,635 1,123,452 28,422,655 $ 29,546,107 (See accompanying notes) 2014 Actual $ 3,258,299 22,347 1,699,423 875,100 28,705 139,666 123,692 2013 Actual $ 3,149,194 20,407 1,632,469 826,876 22,997 138,045 124,191 6,147.232 5,914,179 841,565 857,964 1,199,218 1,135,095 3,103,805 3,282,948 1,057,125 990,414 778,027 758,350 123,646 100,187 7,103,386 7,124,958 (956.154) (1.210,779) 435,702 435,511 387,007 1,083,818 132,991 (23,785) 4,083 (15,868) 37,471 16,059 129,334 2,039.518 582,805 27,222 32,005 1,110,586 (595969) 28,422,655 29,018,624 $ 29,533,241 $ 28,422,655 . ./5 Welch TIP An Ind pendent Mcnil,er d RKR Intrrnatinuzl CORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED STATEMENT OF CHANGE IN NET FINANCIAL ASSETS YEAR ENDED DECEMBER 31, 2014 ANNUAL SURPLUS (DEFICIT) Amortization of tangible capital assets Acquisition of tangible capital assets Changes in assets under construction Loss (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 2014 Budget (note 12) $ 1,123,452 $ 1,708,882 (3,139,750) 2014 Actual 1,110,586 $ 1,708,882 (2,788,930) 69,739 (59,855) 176 25,376 (307,416) 65,974 2,976,099 2,976,099 2013 Actual (595,969) 1,823,180 (1,172,876) 3,698 15,868 11,551 (25,376) 120 137,993 198,189 2,777,910 $ 2,668,683 $ 3,042,073 $ 2,976,099 (See accompanying notes) 16 Welch UP An Independent nfenz,ier oI BIUL international CORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED STATEMENT OF CASH FLOWS YEAR ENDED DECEMBER 31, 2014 OPERATING Annual surplus (deficit) Non -cash charges to operations: Amortization Loss (Gain) on sale of tangible capital asset Waste disposal closure Changes in non -cash charges to operations (net change): 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 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 (See accompanying notes) 2014 2013 $ 1,110,586 $ (595,969) 1,708,882 34,000 1,823,180 15,868 28,000 2,853,468 1,271,079 (22,765) (568,976) (34,479) 176 7,549 115,347 (417,012) (34,202) 195,013 112,618 120 7,122 29,452 751,432 1,933,308 2,332,634 (2,719,191) (1,169,178) 11,551 (2,719,191) (1,157 627) (7,549) (7,123) (793,432) 1,167,884 3,745,061 2,577,177 $ 2,951,629 $ 3,745,061 .../7 Welch LIT, e'1n Imkpoideni. Mrmher of ERR lnicrnati,mal CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2014 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 Chartered Professional Accountants of Canada. 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 Interdepartmental 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 LT :I) 1u indepevden, M n,her nl• 1SKR 1ntnrnaliuned CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2014 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 Chartered Professional Accountants of Canada 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. .19 Welch LLP An lndcpendcnt Mrmbcr nl' DKR International CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2014 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 - not amortized Buildings - 40 to 50 years Vehicles - 5 to 10 years Equipment - 4 to 20 years Transportation Bridges and other structures - 20 to 75 years Roads - 10 to 70 years Sidewalks - 40 years Waste and wastewater networks Underground networks - 50 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. .. ./10 Welch LLP An Independent Mcmhrr of BKR Inrernalinnal CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2014 3. CASH The balance of cash consists of the following: Market Value 2014 2013 Undesignated cash Petty cash and ehequing accounts $ 1,403,491 $ 1,403,491 $ 2,142,602 Guaranteed Investment Certificates 95,736 95,736 89,348 Mutual and segregated funds 563,619 584,884 569,201 Tweed Public Library Board 28,857 28,857 44,758 2,091,703 2,112,968 2,845,909 Designated cash Federal gas tax agreement - chequing account 784,386 784,386 849,019 Planning Act - Parkland - chequing account 54,275 54,275 50,133 838,661 838,661 899,152 $ 2,930,364 $ 2,951 629 $ 3,745,061 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. LONG-TERM RECEIVABLE The balance of long-term receivable consists of the following: Tile drainage and shore -line property assistance loans receivable 5. BANK INDEBTEDNESS The Corporation has an operating line of credit of $500,000 at an interest rate of prime plus .5% of which $nil was utilized at year-end. 2014 2013 $ 54,572 $ 62,121 Welch id ,P An irrdrpendcnt hlrrnber of 3BKR International CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2014 6. 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 $646,000 based on the present value of closure and post -closure costs estimated at $1,095,496 The Marlbank Road Waste Disposal site has an estimated remaining capacity of 51% and is expected to provide capacity for 23 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 43 years based on current waste generation rates. A reserve fund of $660,404 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. 7. DEFERRED REVENUE The balance of deferred revenue consists of the following: Obligatory Reserve Funds: Federal gas tax Parkland Other Government transfers Miscellaneous Tweed Public Library Balance December 31, 2013 $ 849,019 50,133 420,750 19,833 7,317 $ 1,347,052 Balance Transferred to December 3 I, Additions income 2014 $ 349,700 4,142 S 414,333 $ 784,386 54,275 27,453 420,750 27,453 55,117 11,024 63,926 - 7,317 - $ 436,412 $ 853,424 $ 930,040 .. .112 Welch I,I,P An Independent Member of SMKIt to ft.' Tuitional CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2014 8. LONG-TERM DEBT The balance of long-term debt consists of the following: 2014 2013 Debentures. $ 54,572 $ 62,121 Outstanding debentures of $54,572 (2013 - $62,121) are recoverable through special charges levied directly on ratepayers. Outstanding debentures have a maturity date of December 31, 2015 October 1, 2021, bearing interest at 6%. Principal repayments over the next five years are estimated to be as follows: 2015 2016 2017 2018 2019 9. ACCUMULATED SURPLUS The accumulated surplus position is comprised of the following: Equity in tangible capital assets Reserves and reserve funds - schedule 2 Amounts to be recovered Landfill closure and post -closure costs Unrestricted surplus Municipality of Tweed Municipality of Tweed Public Library Board $ 8,003 7,124 7,552 8,005 8,485 2014 2013 $ 26,430,785 $ 25,420,476 3,281,547 3,057,566 (646,000) (612,000) 444,189 22,720 $ 29,533,241. 537,974 18,639 $ 28,422,655 . . ./13 Welch 1,1,P An Tndrpradeni INErrnbei ol 131<IL lntrr,3aporrd CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2014 10. SEGMENTED INFORMATION Municipal services are provided by departments. 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) department 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 CAO/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 department 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. Welch LIT P An Indcpeudeni Tfen her of 1SKlt International CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2014 11. 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 department 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. 11. 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 9.0% (2013 - 9.0%) for earnings up to the annual maximum pensionable earnings of $52,500 (2013 - $51,100) and at a rate of 14.6% (2013 - 12.8%) 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 9.3% (2013 - 9.3%) for earnings up to the annual maximum pensionable earnings of $52,500 (2013 - $51,100) and at a rate of 15.9% (2013 - 15.9%) for earnings greater than the annual maximum pensionable earnings. The amount contributed to OMERS for 2014 was $90,980 (2013 - $90,298) 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, 2014 indicated a deficit of $5,807,000,000 (2013 - $8,813,000,000) 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 in the consolidated financial statements. ./15 Welch [J,1) An 1nd(Ix:ndent Member nl "LSltlnicrnniiun�J CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2014 12. 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. 13. 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. 14. COMMITMENTS The Corporation has contracts committing it to payments in future years. The following agreements existed at December 31, 2014: The Corporation has outstanding capital projects contractual commitments of approximately $178,000. An agreement with the Province of Ontario for policing services. Costs will be charged on the basis of services used. Base charges for the 2014 year were $832,958 An agreement with David Moore & Son for the collection of household waste to July 31, 2015. Base charges for the 2014 year were $32,000. An agreement with Quinte Waste Solutions for the collection of recycling. Base charges for the 2014 year were $53,298. 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 2014 year were $251,850. Agreements with Larry Palmateer for winter road maintenance to 2015. Welch L I.aY AT) [1K 1y:wnw(fl• 11rnhhcr of IiKR lrj).n} )ttunal CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2014 15. COMPARATIVE FIGURES Certain comparative figures for 2013 have been reclassified to conform to the financial statement presentation adopted for 2014. 16. 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: 2014 2013 Taxation Taxation from other governments Amounts received or receivable Requisition School Boards $ 1,303,246 4,806 1,308,052 1,308,052 County $ 1,498,619 9,166 $ - $ School Boards $ 1,307,907 4,389 1,507,785 1,312,296 1,507,785 1,312,296 $ County $ 1,452,081 10,660 1,462,741 1,462,741 ...117 Welch UP An 6idcpendrw \iemier of [ KR [uteroational COR PORATI ON OF THE MUNICIPALITY OF TWEED SC H EDU LE I - CONSOLIDATED ST ATEM ENT OF TAN GIBLE CAPITAL ASSETS Y EAR E NDE D DECEMBER 31, 2014 COST Balan ce, beginning of year Additions during the year Disposals during the year Balan ce, end of year A CCU MULA TED AMORTIZATION Balance, beginn ing of year Amortization during the year Accumulated amortization on disposals Balance, end of year N et Book Value of Tangible Capital Assets COST Balance, beginning of year Additions during the year Disposals du rin g the year Balan ce, en d of year ACC UMULAT ED AMORTIZA TION Ba lan ce , beginning of year Amortization durin g the year Accumulated amortization on disposals Balance, en d of year N et Book V alu e of Tangible Capital Assets iimo ymt.m?13141 . 1° GENERAL INFRASTRUCT URE . TOT ALS Underground Assets Pla nt and and Other Bridges and Land Building Vehicles Equipment Other Under Facilities Roads Networks Other 2014 Constr uction Structures $ 1,679,402 $ 3,967,071 $ 2,694,096 $ I,037 ,897 $ 258,458 S 69,739 $ 2,709,348 $ 19,607,495 $ 5 ,407 ,059 $ 8,261,900 $ 45,692,465 5,000 31,709 50,461 11,851 - 161,283 1,092,554 385,717 1,050,355 2,788,930 - 10,631 69,739 - 108 .000 1,768 190.138 1,684 ,402 3.998,780 2.694,096 1,088.358 259,678 2.870,63I 20.592 049 5 ,792.776 9.310,487 48,291.257 100,884 1,088,583 1,545,645 485,747 124,619 - 1,220,786 12,333,2I0 I,351,129 2,021,386 20,271,989 26,632 98,959 171,390 74 ,477 25,424 - 102,125 938,007 121,834 150,034 1,708,882 - - 10,631 - 108,000 1,768 120,399 127,516 1,187 ,542 1,717,035 560,224 139 ,412 - 1.322,911 13.163,217 I,472,963 2,169 ,652 21.860,472 1 556, 886 $ 2,811.238 $ 977.061 $ 528 134 $ 120,266 S - $ 1 .547.720 $ 7.428,832 $ 4 ,319 .813 $ 7,140,835 $ 26.430,785 YEAR E NDED DECEMBER 31, 2013 GE NERAL INFRASTRUCT URE TOTALS Land Building Vehicles Eq uipment Other Assets Under Construction Undergro und Plant and and Other Facilities Roads Networks $ 1,693,836 $ 3,870,642 $ 2,482,471 $ 942,707 $ 204,957 $ 3,698 $ 2,693,427 $ 19,318,701 $ 5 ,374,923 $ 11,562 96,429 211,625 95,190 65,907 69,739 15,921 505,794 32,136 25,996 - - 12,406 3,698 217.000 Bridges and Other 2013 Structures 8,193,327 $ 44,778,689 68,573 1,172,876 259.100 1,679,402 3,967.071 2.694. 096 1,037.897 258,458 69,739 7,709,348 19,607,495 5,407.059 8.261,900 45,692,465 73,398 989,337 1,362,827 392,313 102 ,136 - 1,129,413 11,486,244 1,249,149 1,891 ,975 18,676,792 27,486 99,246 182,818 93,434 33,466 91,373 1,063,966 101,980 129,411 1,823,180 - - 10,983 - 217 ,000 - - 227,983 100,884 1.088. 583 1.545,645 485, 747 124,619 - 1.220,786 12,333.210 1,351,129 2.021,386 20,271,989 $ 1.578, 518 2.878,488 8 1.148, 451 $ 552150 $ 133 839 $ 69,739 $ 1.488 562 S 7,274.285 $ 4,055.930 $ 6240,514 $ 25.420 ,476 (See accompanying notes) .. ./18 CO RP ORATI ON OF THE M UNICIPALIT Y OF TWEED SCHEDU LE 2 - C ONS OLI DATED SCHED ULE OF CONTIN UITY OF RESERVES AN D RESE RVE FUN DS DECEMBER 31, 2014 Revenue Contributions Transfers Balance, Interest on From Operations Total To Operations To Capital Total Bala nce, end of beginning of year Reserve Funds Acquisitions year R eserv e Fun ds Waste site reclamation $ 801,737 $ 19,105 $ 147,537 $ 166,642 $ 73,275 $ $ 73,275 $ 895,104 R oads 89,348 6,388 6,388 - 95,736 V illage infrastructure 165 .787 1 ,729 1,729 - 167.516 1,056 .872 27.222 147,537 174,759 73,275 73,275 1,158,356 Reserves Working capital 300,439 71,226 71,226 164,000 164,000 207,665 Contingencies 150,000 - - - - 150,000 Water an d sewer 675,375 - 15 ,000 15 ,000 256,350 256,350 434,025 Municipal building expenditure 34,015 29,000 29,000 63,015 Capital acqu isition s - Fire 164,925 113,000 113,000 277,925 Capital acquisitions - Aren a 26, 300 5,000 5,000 - - 31,300 Arena - Building 9,800 - 9,800 Fire - Overage wages 15,000 - 2,440 2,440 12,560 Fire - Equipment maintenance 20,000 - - - 20,000 Fire - Fire hall - Bay for EMS 18,700 85,000 85,000 103,700 Heritage 50,000 50,000 H amlets 22,007 24,000 24,000 19,679 19,679 26,328 Parks 17,574 13 ,000 13,000 30,574 Pu blic works - Off ov erage 15,000 - - 15,000 Public works - Equipment 209,259 120,000 120,000 - 329,259 Pu blic works - Equipment Contingen cy - 15,000 15,000 13,180 13,180 1,820 Pu blic works - Winter maintenance 22,300 105,700 105,700 117,780 117,780 10,220 Public works - Bridges 250,000 100.000 100,000 - 350,000 2.000, 694 695.926 695.926 153,079 420,350 573,429 2,123,I91 u r;rq 71Af[ 7u Sazq Total $ 3.057.566 $ 27,222 $ 843.463 $ 870,685 $ 226,354 $ (See accompan ying n otes) 420.350 $ 646 704 ', 3 281,547 .. .119 CORPORATION OF THE MUNICIPALITY OF TWEED SCHEDULE 3 - C ONSOLID ATED SCHED ULE OF SE GMENT DISCLOSU RE ST ATEME NT OF OPERATIONS YEAR ENDED DECEMBER 31, 2014 BUDGET GENERAL PROTECTION TRA NSPORTATION EN VIRONMENTAL RECREATION AND PLANNING TWEED PUBLIC ELIMINATIONS CO NSOLIDATED GOVERNMENT SERVICES SERVICES SERVICES CULTURAL DEVELOPMENT LIBRARY BOARD SE RVICES REV EN UES Municipa l taxa tion $ 3,121,143 $ - $ $ - $ - $ 122 ,720 S $ S 3,243,863 Taxation from o ther govern ments 20,000 - _ - - 20,000 G overnmen t Transfers G overnment of Canada - - - 1,200 - 11,232 12,432 Prov ince of Ontario 1,515,053 2,300 1,947 15,076 - 1,534,376 Other Municipalities - - - - 115,041 (115 ,041) - U ser charges 23,000 15,000 3,000 600,300 130,300 - 3,845 775,445 Investment income 15,000 - 3,750 5 I8,755 Penalty an d interest on taxes 130,000 - - - 130,000 D on ations - - - - 3 ,685 3,685 Miscellaneous 39, 200 8.900 - 12,000 8,300 19.440 81840 4, 863, 396 23.900 3.000 602,600 145,447 134 ,770 168,324 (115,041) 5,826,396 CURRENT -EXPENDITURES Salaries, wages and employee benefits 441,900 162,790 739,800 208,650 221,152 61,120 104 ,277 1,939,689 In terest on long-term debt - - - - - 3,750 - 3,750 Materials and supplies 272,590 I01, 610 1,001 ,065 272,300 210 ,520 62,700 38,047 1,958,832 Contracted services and general services 867,925 152,000 330,700 - 10,000 1,360,625 Rents and financial expenses 49,500 - - - 7,200 - - 56,700 Ex terna l transfe rs - 51,100 115 ,041 - (115,041) 51,100 A mortization 24, 858 64, 165 L264.025 215,490 93 ,749 46,596 - 1.708,883 788, 848 1.247, 590 3,156.890 1 ,027,140 640,462 134 770 198,920 (115,041) 7,079,579 $ 4, 074, 548 $ (1, 223, 690) $ (3,153,890) $ 1424.540) $ (495,015) $ _ $ (30,596) $ $ J1.253,183 iTolmadaprq „r puo ilott 111}18 J°''r11 (See ac compan yin g n otes) .120 C ORPORATIO N OF THE MU NICIPALITY OF TWEED SCHE DULE 3 - C ONS OLIDATED SCHED ULE OF SEGMENT DISCL OSURE STATEME NT OF OPE RATIONS YEAR EN DED DECEMBER 31, 2014 ACTUAL GE NERAL PROTECTION TRANSPORTATIO N E NVIRONMENTAL RECRE ATION AND PL ANNING TWEED PUBLIC ELIMI NATIONS CONSOLIDATED GOVERNMENT SER VICES SERVICES SERVICES CULTURAL DEVELOPMENT LIBR ARY BOARD SERVICES REVEN UES Municipal taxation $ 3.258,299 $ - $ $ - $ $ $ - $ $ 3,258,299 Taxation from other governments 22,347 22,347 Gov ern ment Transfers Governm ent of Can ada - - - - 1,200 - 18,472 19,672 Province of Ontario 1,656,105 - 2,300 1,947 - 19,399 1,679,751 Other Municipalities - - - - - - 115 ,041 (115,041) - User charges 30,623 16,535 6,075 675,459 140,508 - 5,900 875,100 Investme nt inco me 24,977 - - 3,727 1 28,705 Penalty an d interest on taxes 139,666 - - 139,666 Don ations - - 7,623 7,623 Miscellaneous 81. 127 11,581 - - 10.644 5 ,945 6.772 116 ,069 5,213, 144 28,116 6,075 677 759 154,299 9,672 173,208 (115.041) 6,147.232 CURR ENT -EXPEN DITUR ES Salaries, wages and employee benefits 467,456 151,500 727,335 209,643 208,288 53,448 106,080 1,923,750 In terest on long-term debt - - - - - 3,727 - 3,727 Materia ls and su pplies 298,026 97,482 957,933 293 ,877 273,914 59,271 42,190 2,022,693 Contracted services and general services - 835,002 154 ,512 338,115 - 7 ,210 1 ,334,839 R ents and fin an cial expenses 51,226 - - - 7,200 - 58,426 External transfers 51,069 - 115,04I - - (115,041) 51,069 Amortization 24,857 64,165 1,264.025 215,490 93,749 - 46.596 - 1.708 ,882 841,565 1 199 218 3103.805 1 ,057,125 690 ,992 123,646 202.076 (115.041) 7.103,386 $ 4371579 $ (1, 171,102) $ (3, 097,730) $ (379,366) $ (536 693) 5 (113 974) $ (28.868) $ S (956 ,154) IEl0ItEtE 1aµ 12[Nf1 J( (See accompanying no tes) .121 CO RP ORATIO N OF THE MUNI CIPALITY OF TWEE D SCHED ULE 3 - C ONSOLI DATED SCHEDULE OF SEGMENT DISCLOSURE STATEME NT OF OPERATIONS YEA R EN DED DECEMBE R 31, 2013 ACTUAL GENERAL PROTECTION T RANSP ORTATION ENVIRONMENTAL RECREATION AND PLA NNING TWEED PU BLIC ELIMINATIONS CONSOLI DATED GOVERNMENT SERVICES SER VICES SERVICES CULTURAL DEVELOPMENT LIBRAR Y BOARD SERVICES REV EN UES Municipal taxation S (530,626) S 1,135,532 $ 1 ,942,710 $ 53,480 $ 413,703 5 - 134,395 S - $ S 3,149 ,194 Taxation from other governments 20,407 - - - 20 ,407 Government Transfers Govern ment of Canada - - - 1,200 - 4,115 5,315 Province of Ontario 1 ,423,658 162,165 4 ,083 4,240 33,008 1,627,154 Other Municipalities - - - 115,041 (I15,041) User charges 20 ,677 13,866 9,015 647,027 132,785 - 3,506 826,876 Inve stme nt income 18,836 - - - - 4,155 6 22,997 Pena lty an d interest on taxes 138,045 - - - 138,045 Don ations - - - - - - 10,984 I0,984 Miscellaneous 84,427 7,270 - 7.826 7,400 6.284 113,207 1,175,424 1 ,318 ,833 1,951.725 704,590 559,754 145,950 172.944 (115 ,04I) 5 ,914 ,179 CURRENT - EX PEND ITU RES Salaries, wages a nd employe e benefits 486, 236 I60,789 706,064 195,311 234,746 36 ,460 105 ,609 Interest on long-term debt - - - 4 ,155 Materials and supplies 288,465 92,804 1,048 ,855 259 ,010 223,796 52,372 39,043 - Con tracted services and general services - 760,278 164,149 330,054 - - 5,476 Ren ts an d financial expen ses 51,502 - - 7,200 - External transfers - 49,404 - - 115,041 - (115,041) Amortization 31.761 71.820 1.363,880 206.039 103,378 46 ,302 - 857, 964 1. 135,095 3,282,948 317,460 $ 183 738 S 3i,[ 21)18 Jn 0 - (1,331223 S 1,925,215 4,155 2,004,345 1,259,957 58,702 49,404 1 ,823,180 990,414 676,961 100 ,187 196,430 (115,041) 7,124 ,958 (285,824) $ 117 207) $ 45 763 5 (23,486) $ S (1 210 779 (See accompanying notes) 122 CORPORATION OF THE MU NICIPALIT Y OF TWEED SCHE DULE 4 - C ONSOLIDATED SCHED ULE OF RECONCILIATION OF FINANC IAL PLAN TO THE BUDGET YEA R ENDED DECEMBER 31, 2014 OPE RATI NG C APITAL RESERVES AND TANGIBLE CAPIT AL TWEED PUBLIC ELIMI NATIONS PS AB BUDGET BUDGET BUDGET RESERVE F UNDS ASSET LIBRARY BOARD ADJUSTMENTS "1 NN£1 .1 l aarjwal\ R EVENUES Mun icipal taxation $ 3 ,243,863 $ Tax ation fro m o ther governments 20 ,000 Go vern men t Tra nsfers Govern men t of Can ada 1 ,200 Province of Ontario 1,519,300 Other Municipalities - U ser fees an d sale of goods and services 771,600 Inv estmen t income 18 ,750 Pen alty and interest on tax es 130,000 Do nations - Miscellan eous 68,400 5 .773.113 EXPENDITURES Current G eneral government 763,990 Protection services 1,183,425 Transporta tion services 1,892,865 Environmental services 811,650 Recreation al and cultural services 541,713 Planning an d dev elopment 134,770 $ 5,000 $ $ S $ 3,243,863 20,000 11 ,232 12,432 15.076 - 1,534 ,376 115,041 (115,041) 3,845 775,445 5 18,755 130,000 3,685 3,685 19,440 87,840 168,324 (115 ,041) 5,826 ,396 24,858 788,848 64 ,165 1,247,590 1,264,025 3,156,890 215,490 - - 1,027,140 93,749 198,920 (115 ,041) 724,341 134,770 Capital General gov ernment 70,700 - (70,700) Prote ction se rv ic es 135,000 - (135,000) Tran spor tation s ervices 2,573,500 - (2,573,500) Env ironmental serv ices - 264,950 (264,950) Recreational an d cultural services 95,600 - (111,600) 5.328 413 3.144.750 (1.493,463) N ET REV EN UES (EXPENDITUR ES) OTHER INCO ME AND EX PENSES RELATE D TO CA PITAL Municipal taxation Government tran sfers Canada On tario Other User charges - water and sewer Parkland FINA NCIN G AND TR AN SFER S Debt repayment enetiting landowners principal repayments ansfers from (to) other funds CD YNUAL SUR PLUS (DEFICIT) 16,000 214,920 (115.041) 7,079,579 444, 700 (3,144,750) 1,493,463 (46,596) (1,253,183) 453,702 - 418,433 - - 1,322,675 - - 181,825 2,376, 635 (7,550) - - 7,550 7,550 - - (7,550) (768,115) 768,115 - (768.115) 768, 115 453,702 418,433 1,322,675 /81,825 2,376,635 $ (323„, 4,L) $ S $ 1,493,463 $ (46,596) $ - $ L123 452 (See a ccompanyin g no tes) ./23 CORPORATION OF THE MUNICIPALITY OF TWEED TRUST FUNDS FINANCIAL STATEMENTS December 31, 2014 Welch LLB iA11 inclrprndcnt 4icmhcr of BKR International The Corporation of the MUNICIPALITY OF TWEED 255 Metcalf St., Postal Bag 729 Tweed, ON KOK 310 Tel.: (613) 478-2535 Fax: (613) 478-6457 Email: infa@twp.tweed.on.ca Website: www.tweed,ea Management's Responsibility for the Trust Fund Financial Statements Jo -Anne Albert MAYOR Patricia L. Bergeron, A.M.C.T. CAO/CLERK The Trust Fund financial statements of the Corporation of the Municipality of Tweed are the responsibility of management 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 Chartered Professional Accountants of Canada. 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 that management 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 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 Trust Fund financial statements. APIAL eglijellY— JIAnne Albert Betty Gallagher Mayor Acting CAOIClerk-Trsurer 25 elch 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, 2014 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, 2014 in accordance with the cash receipts and disbursements basis of accounting described in the notes to financial statements. Belleville, Ontario September 29, 2015 Welch t1,P -- Chartered Professional Accountants 525 Dundas Street East, Belleville, ON K8N I U4 T7613 966 2844 F: 613 966 2206 W: wwwwelchllp.com An Independent Member of BKR International CHARTERED PROFESSIONAL ACCOUNTANTS LICENSED PUBLIC ACCOUNTANTS 26 Belleville Campbell[ rd Cornwall Gatineau Nahanee Ottawa Pembroke € Picton Rc,nfre w Toronto Trenton CORPORATION OF THE MUNICIPALITY OF TWEED TRUST FUNDS STATEMENT OF FINANCIAL POSITION DECEMBER 31, 2014 ASSETS Ontario Santa Home Claus Recreation Renewal Parade Associations Plan Fund Total Cash $ $ 493 $ 1,908 $ 2,401 Investments 9,918 9,918 Loans receivable - 936 - 936 $ 9,918 $ 1,429 $ 1,908 $ 13,255 FUND BALANCE Fund balances $ 9,918 $ 1,429 $ 1,908 $ 13,255 (See accompanying notes) 27 Welch IIT Au Independent u1emb1r of ERR Intcrualional CORPORATION OF THE MUNICIPALITY OF TWEED TRUST FUNDS STATEMENT OF CONTINUITY YEAR ENDED DECEMBER 31, 2014 Ontario Santa Home Claus Recreation Renewal Parade Associations Plan Fund Total FUND BALANCES, beginning of year $ 9,839 $ 1,424 $ 2,108 $ 13,371 RECEIPTS Donations - 1,500 1,500 Interest earned 79 5 84 EXPENDITURES Parade expenses 79 5 1,500 1,584 1,700 1,700 1,700 1,700 FUND BALANCES, end of year $ 9,918 $ 1,429 $ 1,908 $ 13,255 (See accompanying notes) 28 Welch UP An Independent member of ]1ICR into/11.60 ,! CORPORATION OF THE MUNICIPALITY OF TWEED TRUST FUNDS NOTES TO FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2014 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, 2014 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 u:t3 e1n Independrnt XIen,6er of BLCR International