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HomeMy Public PortalAbout2016 Financial StatementsCORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2016 Welch LLP' CORPORATION OF THE MUNICIPALITY OF TWEED FINANCIAL STATEMENTS DECEMBER 31, 2016 Management's Responsibility for the Consolidated Financial Statements Independent Auditor's Report Consolidated Statement of Financial Position Consolidated Statement of Operations and Accumulated Surplus Consolidated Statement of Change in Net Financial Assets Consolidated Statement of Cash Flows Notes to Consolidated Financial Statements Schedule I - Consolidated Statement of Tangible Capital Assets Schedule 2 - Consolidated Statement of Continuity of Reserves and Reserve Funds Schedule 3 - Consolidated Schedule of Segment Disclosure Statement of Operations Schedule 4 - Consolidated Schedule of Reconciliation of Financial Plan to the Budget 3 4 5 6 7 8-17 18 19 20-22 23 Trust Funds: Management's Responsibility for the Trust Fund Financial Statements Independent Auditor's Report Statement of Financial Position Statement of Continuity Notes to Financial Statements 25 26 27 28 29 The Corporation of the MUNICIPALITY OF TWEED 255MetcalfSt.. Postal Bag 729 T~eed. ON K0K 3J0 Te1.:(613)478-2535 Fax:(613)478-6457 Emai[: in fora~twp.tweed.on.ca Website: wv,\~.tweed.ca facebook.com/lweedontario Management's Responsibility for the Consolidated Financial Statements The consolidated financial statemeuts 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 I 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 canuot 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 t'or 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 exa~nination and their opinion on the Corporation's consolidated financial statements. Jo-~¢nne Ali~ert .... Mayor Betty Gal~agher CAO/Clerk-Treasurer -~" Welch LLP 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, 2016 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, 2016 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 26, 2017 CHARTERED PROFESSIONAL ACCOUNTANTS LICENSED PUBLIC ACCOUNTANTS 525 Dundas Street East. Belleville. ON KSN 1G4 T: 613 966 2844 F: 6~-3 966 2206 W: welcbllp.com An Independent Member of BKR International CORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED STATEMENT OF FINANCIAL POSITION DECEMBER 31, 2016 FINANCIAL ASSETS Cash - note 3 Taxes receivable Accounts receivable Long-term receivable - note 4 2016 2015 $3,029,539 $4,176,140 1.005.900 930,583 766,715 272,296 28,616 46,569 4,830,770 5,425,588 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 I, schedule 1 Inventories of supplies Prepaid expenses ACCUMULATED SURPLUS - note 9 Contingent liabilities - note 13 693,973 469,966 689.000 658.000 581.266 890.126 28,616 46,569 1,992,855 2,064,661 2,837,915 3,360,927 28,148,040 26,470.888 9,441 26,830 2,918 3,011 28,160,399 26,500,729 $ 30~9981314 $ 29~861,656 (See accompanying notes) Welch CORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED STATEMENT OF OPERATIONS AND ACCUMULATED SURPLUS YEAR ENDED DECEMBER 31, 2016 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 2016 2016 2015 Budget Actual Actual (note 12) 3,449,915 $3,453,638 $2,933,291 21,960 21,639 21,270 1,872,782 1,909,778 1,800,034 804,106 913.683 1,069,408 22,900 20,877 20,440 138,000 135,284 140,614 72,63Q 138,985 154,033 6,382,293 6,593,884 6,139,090 827,675 928,910 888,792 1,586,822 1,575,772 1,381,200 3,432,700 3,457,184 3,018,462 1,133,444 1,159,456 1,119,998 912,342 922,893 889,041 166,710 171,523 l 82,065 8,059,693 8,215,738 7,479,558 NET REVENUE (EXPENDITURES)1,677,400)( 1,621,854)(t,340,468) OTHER INCOME AND EXPENSES RELATED TO CAPITAL Municipal taxation for capital purposes Government transfers: Canada Ontario Tangible capital assets gain Donations User charges - water and sewer 398,150 398,150 832,903 684,699 651,083 452,061 1,437,400 1,437.171 49,186 3,324 358,135 207,809 194,986 2,728,058 2,733,900 1,643,099 INTEREST EARNED ON RESERVE FUNDS 24,612 25,784 ANNUAL SURPLUS 1,050,658 1,136,658 328,415 ACCUMULATED SURPLUS, beginning of year 29,861,656 29,861,656 29,533,241 ACCUMULATED SURPLUS, end of year $301912~314 $ 30,9981314 $ 29~861,656 (See accompanying notes) CORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED STATEMENT OF CHANGE IN NET FINANCIAL ASSETS YEAR ENDED DECEMBER 31, 2016 2016 2016 2015 ~Actual Actual (note 12) ANNUAL SURPLUS $1,050,658 $1,136,658 Amortization of tangible capital assets 1,979,917 1,979,917 Acquisition of tangible capital assets (3,454,122)(3,401,317) Changes in assets under construction (284,237) Loss (Gain) on sale of tangible capital assets (49,186) Proceeds on sale of tangible capital assets 77,671 Change in inventories of supplies 17,389 Change in prepaid expense 93 CHANGE IN NET ASSETS NET FINANCIAL ASSETS, beginning of year NET FINANCIAL ASSETS, end of year (423,547)(523,012) 3,360,927 3,360,927 $219371380 $ 2~837~915 $ 328,415 1,814,807 (1,818,289) (36,621) 33,025 (2,483) 318,854 3,042,073 $ 313601927 (See accompanying notes) Welch I.LP CORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED STATEMENT OF CASH FLOWS YEAR ENDED DECEMBER 31, 2016 OPERATING Annual surplus Non-cash charges to operations: Amortization Loss (Gain) on sale of tangible capital asset Waste disposal closure Changes in non-cash financial assets and liabilities: 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 2016 $ 1,136,658 1,979,917 (49,186) 31,000 3,098,389 (75,317) (494,419) 17,389 93 17,953 224,007 (3O8,860) 2,479,235 (3,685,554) 77,671 (3,607,883) 2015 $ 328,415 1,814,807 12,000 2,155,222 140,177 628,258 33,025 (2,483) 8,003 165,136 (39,914) 3,087,424 (1,854,910) (1,854,910) 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 (17,953) (1,146,601) 4,176,140 310291539 (8,003) 1,224,511 2,951,629 $ 4,176,140 (See accompanying notes) Welch IA P CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2016 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. I.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 and 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 resuR 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. Welch LLP CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2016 I.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 muke 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. Welch CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2016 SIGNIFICANT ACCOUNTING POLICIES (continued) Contaminated Sites Liability Contaminated sites are a result of contamination being introduced into air, soil, water or sediment of a chemical, organic or radioactive material or live organism that exceeds an environmental standard. The liability is recorded net of any expected recoveries. A liability for remediation of a contaminated site is recognized when, as at the financial repoaing date, atl of the following criteria are met for a site or a portion of a site which is no longer in productive use: ~) ii) iii) iv) an environmental standard exists; contamination exceeds environmental standard; the Corporation is directly responsible or accepts responsibility: and a reasonable estimate of the amount can be made. 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 Waste and wastewater networks Underground networks - not amortized - 40 to 50 years - 5 to 10 years - 4 to 20 years -20 to 75 years -10 to 70 years - 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. ¯../I0 Welch CORPORATION OF TIlE MUNICIPALITY OF TWEED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2016 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. CASH The balance of cash consists of the following: Market Value 2016 2015 Undesignated cash Petty cash and chequing accounts Guaranteed Investment Certificates Mutual and segregated funds Tweed Public Library Board Designated cash Federal gas tax agreement - chequing account Planning Act - Parkland - chequing account 1,731,000 $1,731,000 $2,642,326 113,201 113,201 105,358 578,449 613,619 599,685 38,955 38,955 24,994 2,461,605 2,496,775 3,372,363 475,028 475,028 745,780 57,836 57,736 57,997 532,864 532,764 803,777 $2,994,469 $ 3,029,539 $ 4,176,140 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. LONG-TERM RECEIVABLE The balance of long-term receivable consists of the following: 2016 2015 Tile drainage and shore-line prope~y assistance loans receivable 28,616 $461569 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. .../I 1 Welch CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2016 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 iraraediately. The estimated liability for the Marlbank and Hunt Road waste disposal sites is $689,000 based on the present value of closure and post-closure costs estimated at $1,170,983 The Marlbank Road Waste Disposal site has an estimated remaining capacity of 45% and is expected to provide capacity for 20 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 40 years based on current waste generation rates. A reserve fund of $1,057,850 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. DEFERRED REVENUE The balance of deferred revenue consists of the following: Balance Balance December 31,Transferred to December 31, 2015 Additions income 2016 Obligatory Reserve Funds: Federal gas tax Parkland Other Government transfers 37,306 Miscellaneous 45,310 Tweed Public Library __3 7_.,.~33 $745,780 $365,148 $635,900 $475,028 57,997 4,704 4,966 57,735 15,182 22,124 420 23,600 22,130 4 900 4.384 ¯../12 Welch CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2016 LONG-TERM DEBT The balance of long-term debt consists of the following: 2016 2015 Debentures $28,616 $46,569 Outstanding debentures of $28,616 (2015 - $46,569) are recoverable through special charges levied directly on ratepayers. Outstanding debentures have a maturity date of December 31, 2017 October 1, 2021, bearing interest at 6%. Principal repayments over the next five years are estimated to be as follows: 2017 $5,076 2018 5,381 2019 5,704 2020 6,046 2021 6.409 ACCUMULATED SURPLUS The accumulated surplus position is comprised of the following: 2016 2015 Equity in tangible capital assets Reserves and reserve funds - schedule 2 Unfunded capital projects Amounts to be recovered Landfill closure and post-closure costs Unrestricted surplus Municipality of Tweed Municipality of Tweed Public Library Board $28,148,040 $26,470,888 3,166,801 3,791,489 (68.828) (689,000)(658,000) 358,188 306,810 14,285 19~297 301998~314 $ 29,8611656 ¯../13 Welch LEE CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2016 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, comnussioning 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. The Municipality of Tweed and the Township of Stirling-Rawdon have entered into an agreement for joint fire department administration services which came into effect in 2016. The By-law enforcement is comnutted 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-taws 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. ¯. ¯/14 Welch LLP CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2016 10.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% (2015 - 9.0%) for earnings up to the annual maximum pensionable earnings of $54,900 (2015 - $53,600) and at a rate of 14.6% (2015 - 14.6%) 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 9.2% (2015 - 9.2%) for earnings up to the annual maximum pensionable earnings of $54,900 (2015 - $53,600) and at a rate of 15.8% (2015 - 15.8%) for earnings greater than the annual maximum pensionable earnings. The amount contributed to OMERS for 2016 was $99,567 (2015 - $89,344) 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, 2016 indicated a deficit of $2,341,000,000 (2015 - $5,259,000,000) 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. Welch I~I~P' CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2016 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 comnutting it to payments in future years. The following agreements existed at December 31, 2016: An agreement with the Province of Ontario for policing services. Costs will be charged on the basis of services used. Base charges for the 2016 year were $1,075,163 An agreement with David Moore & Son for the collection of household waste. Base charges for the 2016 year were $34,272. An agreement with Quinte Waste Solutions for the collection of recycling. Base charges for the 2016 year were $80,953. An agreement with Ontario Clean Water Agency for the operating, maintaining and managing of the water and waste water systems. Base charges for the 2016 year were $262,181. Agreements with Larry Palmateer for winter road maintenance to 2017. .../16 CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2016 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: 2016 2015 School School Boards Count2 Boards Count~ Taxation $1,321,527 Taxation from other governments 5,609 Amounts received or receivable 1,327,136 Requisition 1,327,136 $1,593,596 $1,312,632 $1,537,208 12,621 5,422 12,452 1,606,217 1,318,054 1,549,660 1,606,217 1,318,054 1,549,660 . . ./17 Welch I.I.P CORPORATION OF THE MUNICIPALITY OF TWEED SCHEDULE 1 - CONSOLIDATED STATEMENT OF TANGIBLE CAPITAL ASSETS YEAR ENDED DECEMBER 31, 2016 COST Balance. beginning of year Additions during the year Disposals during the year GENERAL INFRASTRUCTURE Vehicles ~Oth¢~r Under Facilities Roads Nelworks 2,141~365 $ 4,029.564 $ 2,936,944 $1,181,831 $262.097 $36,621 $2,870,631 $ 21,495,795 $5,807,653 23,816 84,983 589,538 95,295 12.187 284,237 18,067 2,475,160 50,368 183 207 60 956 18 420 __1,0110.399 1 621 TOTALS ACCUMULATED AMORTIZATION Balance, beginning of year Amordza6on during the year Othe~r 201~6 Balance, end of year 51,903 3,685,554 1.264.603 2 165 181 4 114h547 3.343,275 1,216.170 255.804 320.858 2 888098 22 9711556 5~56 400 9 341~13 5 ~ ~ 3 198,134 1,286,743 1,899,222 580,416 152,389 1,425.036 14,152.233 1,589,275 72,999 105,951 218.300 92,551 22,701 103,932 1,092.990 119,460 164631 51 047 18420 1 (KIO 399 I 621 2,297,475 23,580,923 151,027 1,979,917 271.133 1,392.694 I 952 891 021 920 156 670 1,528.968 14,244.824 1 707 120 2.448.502 24.324.722 NelBookValueofTangibleCapitalAssets ~ ~ ~ ~ ~ 99.194 $ 320.858 $ 1359.730 $ 8.725.732 $ 4.149.280 6.892.711 $ 2gl48.0411 COST Balance. beginning of )ear Addi0ons during the year Disposals during the year ACCUMULATED AMORTIZATION Balance, beginning of yem Amortization during the year Balance. end of year Net Book Value of Tmlgible Capital Asscls YEAR ENDED DECEMBER 31, 2015 GENERAL Laud Buihlmg .Vehicles INFRASTRUCTtJRE TOTALS Assets Planl and and Other ~ Ot he_.._.~r Under Facilities Roads Networks Othe~r 201~5 $ 1,684.402 $ 3~998,780 $ 2.694.096 $ 456,963 30.784 242.848 2A41 365 4,029.564 2.936,944 1,088,358 $259,678 $-$2,870,631 $20,592,049 $5,792.770 $9.310,487 S 48.291,257 156,744 12,327 36,621 903,746 14.877 1.854,910 63.271 9 908 21.177 94.356 1.181.831 262.097 30621 2870631 21495795 5,807.653 9,289310 50~151 811 127,516 1,187,542 1,717,035 560,224 139,412 1,322.911 70.618 9%201 182,187 83,463 22,885 102.125 63,271 9,908 198.134 I 286743 1.899222 580416 152389 IA25 036 13,163,217 1,472,963 2,169,652 21,860,472 989,016 116,312 149,000 1,814,807 21,177 94.356 14.152.233 1.589.275 2.297.47...__.~5 23.580.923 7.343.562 g 4.218.378 $6.991.835 S 26.4711.888 (See accompanying notes) ¯../18 Roads Village intraswuclm~ CORPORATION OF THE MUNICIPALITY OF TWEED SCHEDULE 2 - CONSOLIDATED SCHEDULE OF CONTINUITY OF RESERVES AND RESERVE FUNDS DECEMBER 31, 2016 Balance, Interest on From Operations From Capital beginning of year Reserve Funds Total To Operatiolls To Capital Total Balance, end of 1,039~312 $22,070 $141.800 $$163,870 $145,332 $$145,332 $1,057,850 105.358 1,271 6,572 7,843 113,201 132,310 11271 12_~.71 5,957 5,957 127.624 11276.980 24.612 1481372 172.994 151.289 151.289 1.29g.675 Working capital Contingencies Water and sewer Municipal building expenditure Capitol acquisitions - Fire Capital acquisitions - Arena Arena - Building Fire - Overage wages Fire - Faluipment n~aintcnance Fli~ - Fire hall - Bay lor EMS Heritage Hamlets Parks Public works - O/T overage Public works - Equipnlent Public works - Equipment Contingency Public works ~ Winter maimenance Public works. Bridges Total 226,895 544,416 72,995 332,358 22.200 5,000 9,800 15,000 20,000 91,461 50,000 30,498 2.514.509 3.791,489 $24~612 S 45.b12 45,612 50,458 50,458 10.000 10.000 60,000 8,529 68.529 5,000 5,000 10,750 10,750 5,0~0 5,000 100,(RJO 31,688 131,688 20~000 20 000 261,208 __~347 037 409.580 $ 85829 ~ 520.021 15,214 65,505 80,719 138.096 13g,096 17,362 17,362 308,320 308,320 10,500 3.755 10,500 3,755 7,297 38,881 46,178 259.0{)0 259,000 14,490 14.490 115,000 191,788 150,000 456,778 65,633 92,567 27,200 5,000 9,800 4,500 151,766 841.654 993420 1,868,126 303,055 ~ 841,654 .~ 1.144,709 (See accontpanying notes) ¯../19 CORPORATION OF THE MUNICIPALITY OF TWEED SCHEDULE 3 - CONSOLIDATED SCHEDULE OF SEGMENT DISCLOSURE STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 2016 BUDGET 5544.225 15,0~10 2.000 625.791 26.700 2.0(KI 625.791 t.200 1.350 19.682 126.000 134+700 5.615 5.250 -5850 7.030 135 9t~8.750 164,927 CONSOLIDAT~c.D 2,550 1,870.232 775,200 218.040 235,900 77,300 112.773 ---2,900 1,053,L85 31 L,35i 331,710 78,110 38,177 8,400 1.993.713 2.900 2.341.233 1,630.040 58.900 52.990 L.979.917 8.059.693 (See accompanying notes) ¯../20 CORPORATION OF THE MUNICIPALITY OF TWEED SCHEDULE 3 - CONSOLIDATED SCHEDULE OF SEGMENT DISCLOSURE STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 2016 ACTUAL GENERAL PROTECTION TR&NSPORTATION ENVIRON~.IEN'I'AL RECREATION AND P[a~NNING TWEED PUBLIC ELD,IINATIONS GOVERNNIENT SERVICES SERVICES SERVICES CULTURAL DEVELOPKIENT LIBRARY BOARD SERVICES $$$$$$$3,453,638 21.639 1.886.461 21915 18.423 152.09434.049 19,137 681,711 2,454 8.376 -2.529 6 283 42425 19 137 681 711 157.343 8.737 CONSOIADA 1 ED $3,453,03g 1.419 2.619 20.698 -1.907.159 122.494 44,319 4.707.633 ~ H53334~1 }{3.4380471 $~4777451 ${680tJ85~ ~H62.786~ $137.4771S 2,154.925 2.454 2.329.432 55.148 8.215.738 (See accompanying notes) ¯..121 CORPORATION OF THE MUNICIPALITY OF TWEED SCHEDULE 3 - CONSOLIDATED SCHEDULE OF SEGMENT DISCLOSURE STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 2015 ACTUAL 2,933.291 $ 21,270 20,838 IL932 t0,999 881,246 138,912 140,614 4.949.328 926~5 ! 0.999 881.246 144.271 $2,933,291 21,270 26A31 -1,790,930 5.481 1,0~9,408 3.274 20,440 6.378 6,378 5.885 5528 ~147.655 CURREN I - EXPIaNI)ITURES Salimcs. wages aad en~flo~ce bct~eflts 474,397 135.770 746.542 215.907 229.387 81.827 118,578 2.002.408 Interest on long-term dgbt .....3.274 -3.274 Materials and supplies 348,287 165.488 805,750 321.405 313,963 88.564 41.062 2.084.519 Contracted ~et~,ices and general se~ices -9~4.683 149.830 356.161 1.470.674 (See accompanying notes) ¯../22 CORPORATION OF THE MUNICIPALITY OF TWEED SCHEDULE 4 - CONSOLIDATED SCHEDULE OF RECONCILIATION OF FINANCIAL PLAN TO THE BUDGET YEAR ENDED DECEMBER 31, 2016 6,343.30~6 3.449.915 21.960 1,350 2,550 19,682 -1.870,232 EXPENDITURES NET REVENUES (EXPENHITURES) OTHER INCOME AND EXPENSES RELATED TO CAPITAL C~mda O~hcr 23.225 97582 1,434.315 149,130 827,675 1.586.822 3.432.700 912,342 166.710 308,0~ 2.483,745 414.800 -158600 ~054.826 3A4OI45 1,504,880 398.150 684,699 1.437,400 207.809 2.728.058 398,150 684.699 1.437,400 207.809 2.728058 712.087 8 (See accompanyb~g Jtoles) ¯../23 CORPORATION OF THE MUNICIPALITY OF TWEED TRUST FUNDS FINANCIAL STATEMENTS December 31, 2016 Welch The Corporation of the MUNICIPALITY OF TWEED 255MetcalfSt.. Postal Bag 729 Y\~eed, ON K0K 3J0 Te1.:(613)478-2535 Fax:(613)478-6457 Email: in fo@t\s p.twccd.on.ca Website: w\sss .tweed.ca lhcebook.com/tweedonlario 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 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. Jo-~nne Albert Mayor Bett' her ~. CAO/Clerk-Treasurer - 25 Welch LLP 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, 2016 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, 2016 in accordance with the cash receipts and disbursements basis of accounting described in the notes to financial statements. Belleville, Ontario September 26, 2017 CHARTERED PROFESSIONAL ACCOUNTANTS LICENSED PUBLIC ACCOUNTANTS Welch LL!' Chartered Professional Accountants 26 CORPORATION OF THE MUNICIPALITY OF TWEED TRUST FUNDS STATEMENT OF FINANCIAL POSITION DECEMBER 31, 2016 ASSETS Cash Investments Recreation Associations $ 10,057 $ 10,057 Santa Claus Parade Fund $ 1,058 Total 1,058 10,057 $ 1,058 $ 11,115 FUND BALANCE Fund balances $ 10,057 $ 1,058 $ 11,115 (See accompanying notes) 27 Welch LLP' CORPORATION OF THE MUNICIPALITY OF TWEED TRUST FUNDS STATEMENT OF CONTINUITY YEAR ENDED DECEMBER 31, 2016 Santa Claus Recreation Parade Associations Fund Total FUND BALANCES, beginning of year $9,997 $1,658 $i1,655 RECEIPTS Donations Interest earned 1,000 1,000 60 60 60 1,000 1,060 1,600 1,600 EXPENDITURES Parade expenses FUND BALANCES, end of year $10,057 $ 1,058 $ 11,115 (See accompanying notes) 28 Welch LLP' CORPORATION OF THE MUNICIPALITY OF TWEED TRUST FUNDS NOTES TO FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2016 l.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. Use of Estimates The preparation of financial statements in conformity with Canadian public sector accounting standards requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenditures during the period. Actual results could differ from those estimates. STATEMENT OF CASH FLOWS A statement of cash flows has Not been included in these financial statements as the information is readily determinable. 29 Welch ixm