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Home My Public Portal About2017 Financial StatementsCORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2017 Welch LLP' An Independent Member of BKR International 1 CORPORATION OF THE MUNICIPALITY OF TWEED FINANCIAL STATEMENTS DECEMBER 31, 2017 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 1 - Consolidated Statement of Tangible Capital Assets 18 Schedule 2 - Consolidated Statement of Continuity of Reserves and Reserve Funds 19 Schedule 3 - Consolidated Schedule of Segment Disclosure Statement of Operations 20-22 Schedule 4 - Consolidated Schedule of Reconciliation of Financial Plan to the Budget 23 Trust Funds: Management's Responsibility for the Trust Fund Financial Statements 25 Independent Auditor's Report 26 Statement of Financial Position 27 Statement of Continuity 28 Notes to Financial Statements 29 Welch LLP" An Independent Member of BKR International The "corporation .of the MUNICIPALITY OF TWEED 255 Metcalf St., Postal Bag 729 Tweed, ON . KOK 3J0 Tel:: (613) 478-2535 Fax: (613) 478-6457 Management's Responsibility for the Consolidated Financial Statements Email info@twp.tweed.on.ca Website: www.tweed.ea facebook.coinftweedontario 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 forlocal governments established by the Public Sector AccountingBoard 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 regulatoryrequirements, 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: OP, Jo- ne Albert Mayor " Betty Gallagher CAO/Clerk-Treasurer ..f2 INDEPENDENT AUDITOR'S REPORT To the Members of Council, of the CORPORATION OF THE MUNICIPALITY OF TWEED elch LLP® 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, 2017 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, 2017 and the results of its operations and its cash flows for the year then ended in accordance with Canadian public sector accounting standards. odef1/4 LAP Belleville, Ontario CHARTERED PROFESSIONAL ACCOUNTANTS November 14, 2018 LICENSED PUBLIC ACCOUNTANTS ...13 Welch LIP - Chartered Professional Accountants 525 Dundas Street East, Belleville, ON KGN 1G4 T: 613 966 2844 F: 613 966 2206 W: welchllp.com An Independent Member of BKR International CORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED STATEMENT OF FINANCIAL POSITION DECEMBER 31, 2017 FINANCIAL ASSETS Cash - note 3 and 18 Investments - note 4 Taxes receivable Accounts receivable Long-term receivable - note 5 LIABILITIES Accounts payable and accrued liabilities Accrued liability - Waste disposal closure - note 7 Deferred revenue - note 8 Long-term debt- note 9 NET FINANCIAL ASSETS NON -FINANCIAL ASSETS Tangible Capital Assets - note 1, schedule 1 Inventories of supplies Prepaid expenses ACCUMULATED SURPLUS - note 10 and 18 Contingent liabilities - note 14 (See accompanying notes) 2017 2016 $ 3,567,005 $ 2,584,050 747,493 726,819 996,004 1,005,900 555,367 766,715 23,540 28,616 5,889,409 5,112,100 796,159 693,973 970,000 689,000 507,538 581,266 23,540 28,616 2,297,237 1,992,855 3,592,172 3,119,245 27,190,374 6,272 4,089 27,200,735 $ 30,792,907 28,148,040 9,441 2,918 28,160,399 $ 31,279,644 .14 Welch LLP° An independent Member o€ BKR International CORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED STATEMENT OF OPERATIONS AND ACCUMULATED SURPLUS YEAR ENDED DECEMBER 31, 2017 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 (loss) Donations Other User charges - water and sewer INTEREST EARNED ON RESERVE FUNDS ANNUAL SURPLUS (DEFICIT) ACCUMULATED SURPLUS, beginning of year ACCUMULATED SURPLUS, end of year 2017 Budget (note 13) $ 3,532,265 21,660 2,007,670 791,977 21,717 138,000 95,950 6,609,239 898,372 1,592,798 3,421,912 1,142,546 887,024 214,643 8,157,295 (1,548,056) TO CAPITAL 432,120 670,250 57,998 5,000 80,750 310,400 1,556,518 8,462 31,279,644 $ 31,288,106 (See accompanying notes) Actual $ 3,496,167 21,545 1,998,706 1,125,912 21,176 131,453 187,234 2017 2016 Actual (note 18) $ 3,419,859 21,639 1,909,778 913,683 20,877 135,284 143,950 6,982,193 6,565,070 954,345 1,582,909 3,287,604 1,393,922 916,648 181,436 8,316,864 8,181,959 895,131 1,575,772 3,457,184 1,159,456 922,893 171,523 (1,334,671) (1,616,889) 432,120 548,460 57,998 (410,067) 120,019 75,395 398,150 927,448 1,437,171 49,186 3,324 194,986 823,925 3,010,265 24,009 24,612 (486,737) 1,417,988 31,279,644 29,861,656 $ 30,792,907 $ 31,279,644 .I5 Welch LLPfa An Independent Member of IIKRlnternational 1.1 CORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED STATEMENT OF CHANGE IN NET FINANCIAL ASSETS YEAR ENDED DECEMBER M, 2017 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 Change in inventories of supplies Change in prepaid expense CHANGE IN NET ASSETS NET FINANCIAL ASSETS, beginning of year NET FINANCIAL ASSETS, end of year 2017 2017 Budget Actual (note 13) $ 8,462 $ 1,910,218 (1,570,120) (486,737) $ 1,910,218 (1,360,058) (16,968) 410,067 14,407 3,169 (1,171) 2016 Actual (note 18) 1,417,988 1,979,917 (3,401,317) (284,237) (49,186) 77,671 17,389 93 348,560 472,927 (241,682) 3,119,245 3,119,245 3,360,927 $ 3,467,805 $ 3,592,172 $ 3,119,245 (See accompanying notes) . , .l6 Welch LLP An Independent Member of BKR International CORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED STATEMENT OF CASH FLOWS YEAR ENDED DECEMBER 31, 2017 OPERATING ACTIVITIES Annual surplus (deficit) 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 ACTIVITIES Acquisition of tangible capital assets Proceeds on sale of tangible capital assets INVESTING ACTIVITIES Increase in Investments 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) 2017 $ (486,737) 1,910,218 410,067 281,000 2,114,548 9,896 211,348 3,169 (1,171) 5,076 102,186 (73,728) 2,371,324 2016 (note 18) $ 1,417,988 1,979,917 (49,186) 31,000 3,379,719 (75,317) (494,419) 17,389 93 17,953 224,007 (308,860) 2,760,565 (1,377,026) (3,685,554) 14,407 77,671 (1,362,619) (3,607,883) (20,674) (5,076) 982,955 (21,776) (17,953) (887,047) 2,584,050 3,471,097 $ 3,567,005 $ 2,584,050 .17 Welch LLP An Independent Member of BKR International CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2017 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 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 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 zaz�P° An Independent Niemer of I3KR International CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2017 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 d 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 UP' An Independent Member of BKR international CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2017 1. 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 reporting date, all of the following criteria are met for a site or a portion of a site which is no longer in productive use: i) an environmental standard exists; ii) contamination exceeds environmental standard; iii) the Corporation is directly responsible or accepts responsibility: and iv) 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 - 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 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. .110 Welch LLP An Independent Member of BKR International CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2017 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. 3. CASH The balance of cash consists of the following: 2017 2016 Undesignated cash Petty cash and chequing accounts Tweed Public Library Board $ 3,103,423 $ 2,012,331 5,801 38,955 3,109,224 2,051,286 Designated cash Federal gas tax agreement - chequing account 406,608 475,028 Planning Act - Parkland - chequing account 51,173 57,736 457,781 532,764 $ 3,567,005 $ 2,584,050 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. INVESTMENTS Investments consist of the following: Guaranteed Investment Certificates One Investment Program - bond fund Market Value 2017 2016 120,289 120,289 113,200 577,574 627,204 613,619 697,863 747,493 726,819 Guaranteed investment certificates have effective interest rates of 1% to 1.3% with maturity dates of September 24, 2018 to October 3, 2021. Investments held in the One Investment Program are managed by Local Authority Services, a affiliate of the Association of Municipalities of Ontario and are fully liquid. Welch LLP' An Independent Member of BKR international CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2017 5. LONG-TERM RECEIVABLE The balance of long-term receivable consists of the following: Tile drainage and shore -line property assistance loans receivable 6. 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. 7. ACCRUED LIABILITY - WASTE DISPOSAL CLOSURE 2017 2016 $ 23,540 $ 28,616 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 $970,000 based on the present value of closure and post -closure costs estimated at $1,592,383 The Marlbank Road Waste Disposal site has an estimated remaining capacity of 43% 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 38 years based on current waste generation rates. A reserve fund of $1,169,663 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. .112 Welch LLPe An Independent Member of BKR International CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2017 8. 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 9. LONG-TERM DEBT Balance December 31, 2016 $ 475,028 57,735 Transferred to Additions income $ 368,018 $ 436,438 6,600 13,162 Balance December 31, 2017 $ 406,608 51,173 22,124 22,124 22,130 - 22,130 4249 10,983 9,729 5,503 $ 581,266 $ 385,601 $ 459,329 $ 507,538 The balance of long-term debt consists of the following: 2017 2016 Debentures $ 23,540 $ 28,616 Outstanding debentures of $23,540 (2016 - $28,616) are recoverable through special charges levied directly on ratepayers. Outstanding debentures have a maturity date of October 1, 2021, bearing interest at 6%. Principal repayments over the next four years are estimated to be as follows: 2018 2019 2020 2021 10. 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 $ 5,381 5,704 6,046 6,409 2017 2016 $ 27,190,374 $ 28,148,040 3,781,501 3,166,801 (970,000) (689,000) 785,722 5,310 $ 30,792,907 358,188 14,285 $ 30,998,314 Welch ITT' An Independent Member of BKR International CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2017 11. 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 bymunicipal 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. 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 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. ...114 Welch LLPa An independent Member of BKR fntcrnationaf CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2017 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. 12. 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% (2016 - 9.0%) for earnings up to the annual maximum pensionable earnings of $55,300 (2016 - $54,900) and at a rate of 14.6% (2016 - 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% (2016 - 9.2%) for earnings up to the annual maximum pensionable earnings of $55,300 (2016 - $54,900) and at a rate of 15.8% (2016 - 15.8%) for earnings greater than the annual maximum pensionable earnings. The amount contributed to OMERS for 2017 was $102,320 (2016 - $99,567) 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, 2017 indicated a surplus of $605,000 (2016 - deficit of $2,341,000,000) 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. ...115 Welch LLP° An Independent Member of DICR International CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2017 13. 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. 14. 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. 15. CONTRACTUAL OBLIGATIONS AND COMMITMENTS The Corporation has contracts committing it to payments in future years. The following agreements existed at December 31, 2017: An agreement with David Moore & Son for the collection of household waste to July 31, 2018. The agreed charges for the August 1, 2017 to July 31, 2018 is $34,960 + HST. Charges for the 2017 year were $34,982. An agreement with YMCA of Central East Ontario to operate and manage a pool facility at 175 Alexander Street, Tweed. An agreement with Ontario Clean Water Agency for the operating, maintaining and managing of the water and waste water systems. Charges for the 2017 year were $254,498. Agreements with Larry Palrnateer for winter road maintenance to 2020. Fees are based on an hourly rate and $20,000 per season for standby. Charges for 2017 year were $123,265. .,.I16 Welch LLP' An Independent Member of BKR International CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2017 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: 2017 2016 Taxation Taxation from other governments Amounts received or receivable Requisition 17. COMPARATIVE FIGURES School Boards $ 1,290,837 3,981 County School Boards $ 1,618,338 $ 1,321,527 10,916 5,609 1,294,818 1,629,254 1,327,136 1,294, 818 1,629,254 1,327,136 $ - County $ 1,593,596 12,621 1,606,217 1,606,217 Certain comparative figures for 2016 have been reclassified to conform to the financial satement presentation adopted for 2017. 18. RESTATEMENT OF FINANCIAL STATEMENTS The Corporation has reclassified tax adjustments from general government expenditures and property tax payments on the Corporation owned properties to municipal taxation revenue to be consistent with the presentation required by the financial information return (FIR) by the Ministry of Municipal Affairs. As a result of the adjustment the following amounts decreased taxation revenue by $33,779, general government expenditures by $33,779 and this adjustment has no impact on annual surplus for 2016. The Corporation has also restated the 2016 comparative figures to correct accounting errors made in recording gas tax and parkland revenues. As a result cash and annual surplus increased by $281,330. The following summarizes these adjustments: Financial Assets Annual Surplus As previously reported $ 4,830,770 $ 1,136,658 Adjustment to cash 281,330 - Adjustment to other revenue 4,965 Adjustment to capital government transfers Canada 276,365 $ 5,112,100 $ 1,417,988 ...117 Welch LLP° An Independent Member of BKR International CORPORATION OF THE MUNICIPALITY OF TWEED SCHEDULE 1- CONSOLIDATE]) STATEMENT OF TANGIBLE CAPITAL ASSETS YEAR ENDED DECEMBER 31, 2017 COST Balance, beginning of year Additions during the year Disposals during the year Balance, end of year ACCUMULATED AMORTIZATION Balance, beginning of year Amortization during the year Accumulated amortization on disposals Balance, end of year Net Book Value of Tangible Capital Assets COST Balance, beginning of year Additions during the year Disposals during the year Balance, end of year ACCUMULATED AMORTIZATION Balance, beginning of year Amortization during the year Accumulated amortization on disposals Balance, end of year Net Book Value of Tangible Capital Assets GENERAL Land Building Vehicles Equipment Other INFRASTRUCTURE TOTALS Assets Plant and Under Facilities Roads Construction $ 2,165,181 $ 4,114,547 $ 3,343,275 $ 1,216,170 $ 255,864 $ 179,128 210,683 40,110 58,443 19,979 320,858 $ 2,888,698 $ 22,970,556 16,968 58,427 759,759 606,977 28.188 308,241 37,185 60.135 41.402 2.344,309 4,297,042 3,075.144 1237,428 215,708 337.826 2,947,125 23,123.338 Underground and Other Networks Bridges and Other Structures $ 5,856,400 $ 9,341,213 33,529 623.802 2017 $ 52,472,762 1,377,026 1.705.930 5.814.998 8.750,940 52,143,858 271,133 1,392,694 1,952,891 621,920 156,670 - 1,528,968 14,244,824 1,707,120 2,448,502 24,324,722 73,000 107,785 213,540 85,146 19,661 103,932 1,048,223 119,465 139,466 1,910,218 28,188 294,737 37.185 53.394 - - 606,977 41.402 219,573 1,281.456 344,133 1.472,291 1,871,694 669.881 122,937 1,632.900 14.686.070 1,785,183 2,368,395 24.953.484 S 2,000.176 $ 2,824.751 $ 1,203.450 $ 567.547 $ 92.771 $ 337.826 S, 1.314.225 $ 8.437.268 $ 4.029.815 $ 6.382.545 $ 27.190.374 YEAR ENDED DECEMBER 31, 2016 GENERAL INFRASTRUCTURE Underground and Other Roads Networks TOTALS Land Building Vehicles Equipment Other $ 2,141,365 $ 4,029,564 $ 2,936,944 $ 1,181,831 $ 262,097 23,816 84,983 589,538 95,295 12,187 - 183.207 60.956 18.420 2.165.181 4.114.547 3.343,275 1.216,170 255,864 198,134 1,286,743 1,899,222 580,416 152,389 72,999 105,951 218,300 92,551 22,701 - 164,631 51,047 18.420 271,133 1.392.694 1.952,891 621.920 $ 1.894.048 $ 2.721.853 $ Assets Plant and Under Facilities Construction $ 36,621 $ 2,870,631 $ 284,237 18,067 21,495,795 2,475,160 1.000.399 Bridges and Other Structures $ 5,807,653 $ 9,289,310 50,368 51,903 1.621 - 2016 $ 50,051,811 3,685,554 1,264.603 320,858 2,888,698 22.970,556 5,856,400 9.341.213 52.472,762 1,425,036 103,932 14,152,233 23,580,923 1,092,990 1,979,417 1,000.399 1.236.118 1,589,275 119,466 1.621 2,297,475 151,027 156.670 1.528.968 14,244.824 1.707,120 2,448.502 24.324.722 1.390,384 $ 594.250 $ 99.194 $ 320.858. $_.,__1.359.730 § 8,725,732 $ 4.149.280 $ 6,892.711 $ 28.148.040 (See accompanying notes) ./18 CORPORATION OF THE MUNICIPALITY OF TWEED SCHEDULE 2 - CONSOLIDATED SCHEDULE OF CONTINUITY OF RESERVES AND RESERVE FUNDS DECEMBER 31, 2017 Revenue Contributions Transfers Balance, Interest on From Operations From Capital Total To Operations To Capital Total Balance, end of beginning of year Reserve Funds Acquisitions year Reserve Funds Waste site reclamation $ 1,057,850 $ 20,479 $ 171,476 $ $ 191,955 $ 80,142 $ $ 80,142 $ 1,169,663 Roads 113,201 1,952 5,136 - 7,088 - - 120,289 Villageinfrastructure 127.624 1.578 - 1,578 30 30 129.172 1,298.675 24.009 176.612 - 200,621 80.172 80.172 1,419,124 Reserves Working capital 191,788 - - - - 11,414 28,956 40,370 151,418 Contingencies 150,000 - - 150,000 Water and sewer 456,778 254,716 - 259,716 - - 716,494 Municipal building expenditure 65,633 39,800 39,800 15,604 15,604 89,829 Capital acquisitions - Fire 92,567 40,000 4,104 44,104 19,584 19,584 117,087 Capital acquisitions - Arena 27,200 5,000 42,429 47,429 74,629 Community improvement plan 5,000 25,000 - 25,000 30,000 Arena - Building 9,800 - - 9,800 Fire -Overage wages 4,500 10,500 10,500 15,000 Fire - Equipment maintenance 20,000 20,000 Fire - Fire hall - Bay for EMS 87,706 18,394 18,394 69,312 Heritage 50,000 - 7,000 7,000 43,000 Hamlets 41,248 - 9,694 9,694 31,554 Parks 127,949 5,000 21,051 26,051 1,728 1,728 152,272 Public works - O/T overage 15,000 - - - 15,000 Public works - Equipment 39,447 80,000 2,535 82,535 121,982 Public works - Equipment Contingency 510 14,490 - 14,490 15,000 Public works - Winter maintenance 13,000 - - - 13,000 13,000 - Public works - Bridges 470.000 70.000 - . 70,000 - 540.000 1.868.126 509,706 109,919 619,625 42.836 82.538 125.374 2,362,377 Total $ 3,166.801 $ 24.009 $ 686,318 $ 109.919 $ 820.246 $ 123.008 $ 82,538 $ 205.546 $ 3,781,501 [euotaeu taatq N) 9 (See accompanying notes) .119 CORPORATION OF THE MUNICIPALITY OF TWEED SCHEDULE 3 - CONSOLIDATED SCHEDULE OF SEGMENT DISCLOSURE STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 2017 REVENUES Municipal taxation Taxation from other governments Government Transfers Government of Canada Province of Ontario Other Municipalities User charges Investment income Penalty and interest on taxes Donations Miscellaneous CURRENT -EXPENDITURES Salaries, wages and employee benefits 54I,124 113,900 826,950 228,800 239,995 107,258 107,348 Interest on long term debt - - - - - 1,717 - Materials and supplies 310,778 245,755 1,040,829 306,542 292,576 97,168 60,875 Contracted services and general services - 1,077,440 178,205 376,191 Rents and financial expenses 23,600 - - 8,500 - External transfers - 62,526 - 126,000 Amortization 22.870 93.177 1.375.928 231.013 143.258 - 43.972 BUDGET GENERAL PROTECTION TRANSPORTATION ENVIRONMENTAL RECREATION AND PLANNING TWEED PUBLIC ELIMINATIONS CONSOLIDATED GOVERNMENT SERVICES SERVICES SERVICES CULTURAL DEVELOPMENT LIBRARY BOARD SERVICES $ 3,532,265 $ - $ S $ - $ S $ S 3,532,265 21,660 - 21,660 - - - 1,200 4,415 5,615 1,986.400 - - - 15,655 2,002,055 - - - - 127,000 (127,000) - 21,800 15,000 2,000 606,900 140,662 - 5,615 - 791,977 20.000 - - - 1,717 21,717 138,000 - - - 138,000 4,000 6,250 10,250 58.600 8.200 - 1.000 11.000 6.900 85.700 5.778.725 23.200 2.000 606.900 146,862 12.717 165.835 (127.000) 6.609 239 898.372 1.592.798 3.421.912 (127,000) 2,165,375 1,717 2,354,523 1,631,836 32,100 61,526 1.910.218 1.142.546 801.829 214-643 212.195 (127.000) 8.157.295 $ 4.880.353 $ (1.569.598) $ (3.419.912,) $ (535.646 „_ ;9 $ (201.926) $ 146.360) $ - $ (1.548.056) (See accompanying notes) ..120 CORPORATION OF THE MUNICIPALITY OF TWEED SCHEDULE 3 - CONSOLIDATED SCHEDULE OF SEGMENT DISCLOSURE STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 2017 ACTUAL GENERAL PROTECTION TRANSPORTATION ENVIRONMENTAL RECREATION AND PLANNING TWEED PUBLIC ELIMINATIONS CONSOLIDATED GOVERNMENT SERVICES SERVICES SERVICES CULTURAL DEVELOPMENT LIBRARY BOARD SERVICES REVENUES Municipal taxation $ 3,496,167 $ - $ $ - $ $ $ - $ $ 3,496,167 Taxation from other governments 21,545 - 21,545 Government Transfers Government of Canada - - - 1,200 - 13.266 14,466 Province of Ontario 1,964,941 19,299 - 1,984 240 Other Municipalities - - - 126,000 (126,000) User charges 21,145 18,038 7,477 943,206 131,568 4,478 - 1,125,912 Investment income 19,459 - - 1,717 - 21.176 Penalty and interest on taxes 131,453 - - - - 131,453 Donations - - - - 5,665 - 8,297 13,962 Miscellaneous 139.982 6.670 5.644 14.463 6.513 - 173.272 5.794.692 24.708 7.477 941206 144,077 16.180 177,853 (126.000) 6.982.193 CURRENT - EXPENDITURES Salaries, wages and employee benefits 586,057 105,335 806,294 224,310 234,775 106,042 135,059 - 2,197,872 Interest on long-term debt - - - - - 1,717 - 1,717 Materials and supplies 321,666 239,966 927,547 573,416 315,728 65,277 43,856 2,487,456 Contracted services and general services - 1,076,129 177,835 365,183 - - - 1,619,147 Rents and financial expenses 23,752 - - - - 8,400 - 32,152 External transfers - 68,302 - - 126.000 - (126,000) 68,302 Amortization 22.870 93.177 1.375.928 231.013 143.258 43.972 - 1.910.218 954.345 1.582.909 3.287.604 1:393.922 819.761 181.436 222.887 (126.000) 8.316.864 4.840.347 $ (1.558.201) $ (3.280.127 $ (450.716) $ 5675.684 $ (165.256) $ (45.034) $ $ (1.334.671) (See accompanying notes) ..121 CORPORATION OF THE MUNICIPALITY OF TWEED SCHEDULE 3 - CONSOLIDATED SCHEDULE OF SEGMENT DISCLOSURE STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 2016 ACTUAL GENERAL PROTECTION TRANSPORTATION ENVIRONMENTAL RECREATION AND PLANNING TWEED PUBLIC ELIMINATIONS CONSOLIDATED GOVERNMENT SERVICES SERVICES SERVICES CULTURAL DEVELOPMENT LIBRARY BOARD SERVICES REVENUES Municipal taxation $ 3,419,859 $ $ $ $ $ - $ $ $ 3,419,859 Taxation from other governments 21,639 - 21,639 Government Transfers Government of Canada - 1.200 - 1,419 2,619 Province of Ontario 1,886,461 20,698 1,907,159 OiherMuzicipaiities - - - - 126,000 (126,000) User charges 21,915 34,049 19,137 681,711 152,094 - 4,777 - 913,683 Investment income 18,423 - 2,454 20,877 Penalty and interest on taxes 135,284 - - 135,284 Donations - - - 1,520 - 14,800 16,320 Miscellaneous 99.183 8.376 7.494 6.283 6.294 127.630 5.602.764 42.425 19.137 681.711 162.308 8.737 173.988 026.000) 6.565.070. CURRENT -EXPENDITURES Salaries, wages and employee benefits 537,576 122,891 801,447 227,456 248,660 94,401 122,494 - 2,154,925 Interest on long-term debt - - - - - 2,454 - 2,454 Materials and supplies 311,829 222,888 1,047,009 323,581 313,638 66,168 44,319 2,329,432 Contracted services and general services - 1,077,263 174,413 377,406 - - 1,629,082 Rents and financial expenses 22,501 - 8,500 - 31,001 External transfers - 55.148 - 126,000 (126,000) 55,148 Amortization 23.225 97.582 1.434.315 231.013 149.130 - 44.652 - 1.979.917 895.131 1.575.772 3.457.184 1.159.456 837.428 171.523 211.465 (126.000) 8.181.959 4.707.633 $ (1,533.347) $ (3.438.047) $ (477.745) $ (See accompanying notes) (675.120) $ (162.786) $ (37.477) $ $ (1.616.889) .../22 CORPORATION OF THE MUNICIPALITY OF TWEED SCHEDULE 4 - CONSOLIDATED SCHEDULE OF RECONCILIATION OF FINANCIAL PLAN TO THE BUDGET YEAR ENDED DECEMBER 31, 2017 OPERATING CAPITAL RESERVES AND TANGIBLE CAPITAL TWEED PUBLIC ELIMINATIONS PSAB BUDGET BUDGET BUDGET RESERVE FUNDS ASSET LIBRARY BOARD ADJUSTMENTS REVENUES Municipal taxation $ 3,532,265 $ - $ - $ $ $ - $ 3,532,265 Taxation from other governments 21,660 - - 2I,660 Government Transfers Government of Canada 1,200 - . 4,415 5,615 Province of Ontario 1,986,400 - 15,655 - 2,002,055 Other Municipalities - - - 127,000 (127,000) - User fees and sale of goods and services 786,362 - 5,615 - 791,977 Investment income 21,717 - - 2I,717 Penalty and interest on taxes 138,000 - - 138,000 Donations 4,000 - - 6,250 - 10,250 Miscellaneous 78.800 6.900 - 85.700 6.570.404 - 165.835 (127.000) 6.609.239 EXPENDITURES Current General government 875,502 - - 22,870 Protection services 1,499,621 - 93,177 Transportation services 2.045,984 - 1,375,928 Environmental services 911,533 - 231,013 Recreational and cultural services 658,571 - 143,258 Planning and development 214,643 - 212,195 Capital General government 54,000 (54,000) - - Protection services - 96,500 (96,500) - Transportation services 581,970 (581,970) - Environmental services - 310,400 (310,400) - Recreational and cultural services - 527.250 (527.250) NET REVENUES (EXPENDITURES) 6.205.854 1.570.120 364,550 (1,570,120) (127,000) 898,372 1,592,798 3,421,912 1,142,546 887,024 214,643 296.126 212.195 (127.000) 8.157.295 (296,126) (46,360) (1,548,056) OTHER INCOME AND EXPENSES RELATED TO CAPITAL Municipal taxation - 432,120 - - 432,120 Government transfers Canada 670,250 - - 670,250 Ontario - 57,998 - 57,998 Tangible capital assets gain(loss) 5,000 - - - 5,000 Other - 80,750 - - 80,750 User charges - water and sewer - 310.400 310.400 FINANCING AND TRANSFERS Debt repayment (6,435) - 6,435 Benefiting landowners principal repayments 6,435 - (6,435) - Transfers from (to) other funds (364.550) 13,602 350.948 - 364.550) 13.602 350948 Ni7AL SURPLUS (DEFICIT) $ $ - S 350.948 $ (296.126) $ (46.360) $ - $ 8.462 (See accompanying notes) L_ O 1.556.518 - 1.556.518 ./23 4 CORPORATION OF THE MUNICIPALITY OF TWEED - TRUST FUNDS FINANCIAL STATEMENTS December 31, 2017 Welch LLP9 An Independent Member of BKR International The Corporation of the MUNICIPALITY OF TWEED 255 Metcalf St., Postal Bag 729 Tweed, ON KOK 3J0 Tel.: (613) 478-2535 Fax: (613) 478-6457 Email: info@twp.tweed.on.ca Website: www.tweed.ca facebook.eorn/tweedontario 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 2 to the Trust Fund financial statements. The preparation of Trust Fund financial statements necessarily involves the use of estimates based on management's judgment, particularly when transactions affectingthe 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. The Town 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 discussesany significant 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 IndependentAuditor'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 D_1( Betty Gc agher Acting CAO/Clerk-Treasurer INDEPENDENT AUDITOR'S REPORT To the Members of Council of the CORPORATION OF THE MUNICIPALITY OF TWEED elch LLp® We have audited the accompanying financial statements of CORPORATION OF THE MUNICIPALITY OF TWEED Trust Funds which comprise the statement of financial position as at December 31, 2017 and the statements of financial activities and changes in fund balances for the year ended, and a summary of significant accounting policies and other explanatory information. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of this financial statement in accordance with Canadian Public Sector accounting standards 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 entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimated made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, these financial statements present fairly, in all material respects, the financial position of CORPORATION OF THE MUNICIPALITY OF TWEED Trust Funds as at December 31, 2017 and the results of its operations in accordance with Canadian public sector accounting standards. WdeiL Belleville, Ontario CHARTERED PROFESSIONAL ACCOUNTANTS November 14, 2018 LICENSED PUBLIC ACCOUNTANTS Welch LLP - Chartered Professional Accountants 525 Dundas Street East, Belleville, ON K8N 1G4 T: 613 966 2844 F: 613 966 2206 W: welchllp.com An Independent Member of BKR International .126 CORPORATION OF THE MUNICIPALITY OF TWEED TRUST FUNDS STATEMENT OF FINANCIAL POSITION DECEMBER 31, 2017 ASSETS Recreation Santa Claus Associations Parade Fund Total Cash. $ - $ 458 $ 458 Investments 10,108 - 10,108 $ 10,108 $ 458 $ 10,566 FUND BALANCES Fund balances $ 10,108 $, 458 $ 10,566 (See accompanying notes) fZ7 Welch LLP" An Independent Member of BlfRinternational CORPORATION OF THE MUNICIPALITY OF TWEED TRUST FUNDS STATEMENT OF CONTINUITY YEAR ENDED DECEMBER 31, 2017 Recreation Santa Claus Associations Parade Fund Total FUND BALANCES, beginning of year $ 10,057 $ 1,058 $ 11,115 RECEIPTS Donations - 1,000 1,000 Interest earned 51 - 51 51 1,000 1,051 EXPENDITURES Parade expenses 1,600 1,600 FUND BALANCE, end of year $ 10,108 $ 458 $ 10,566, (See accompanying notes) ...128 Welch L,I,P" An Independent Member of BKR International CORPORATION OF THE MUNICIPALITY OF TWEED - TRUST FUNDS NOTES TO FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2017 1. ACCOUNTING POLICIES 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. 2. STATEMENT OF CASH FLOWS A statement of cash flows has not been included in these financial statements as the information is readily determinable. ...129 Welch LLP" An Independent Member of BKII International