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HomeMy Public PortalAbout2019 Financial StatementsCORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2019 CORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2019 TABLE OF CONTENTS Page Number MANAGEMENT REPORT INDEPENDENT AUDITOR'S REPORT CONSOLIDATED FINANCIAL STATEMENTS Statement of Financial Position 1 Statement of Operations and Accumulated Surplus 2 Statement of Change in Net Financial Assets 3 Statement of Cash Flows 4 Notes to the Financial Statements 5 - 15 Schedule of Tangible Capital Assets 16 Schedules of Segment Disclosure 17 - 18 TRUST FUNDS Independent Auditor's Report 19 Statement of Financial Position 21 Statement of Continuity 22 Notes to the Financial Statements 23 LOCAL BOARD Tweed Public Library Board 24 - 34 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 CORPORATION OF THE MUNICIPALITY OF TWEED For The Year Ended December 31, 2019 MANAGEMENT REPORT Email: info@twp.tweed.on.ca Website: www.tweed.ca facebook.com/tweedontario The accompanying 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 by management in accordance with Canadian Public Sector Accounting Standards. Financial statements are not precise since they include certain amounts based on estimates and judgements. When alternative accounting methods exist, management has chosen those it deems most appropriate in the circumstances, in order to ensure that the financial statements are presented fairly, in all material respects. The Municipality maintains systems of internal accounting and administrative controls of high quality, consistent with reasonable cost. Such systems are designed to provide reasonable assurance that the financial information is relevant, reliable and accurate and the Municipality's assets are appropriately accounted for and adequately safeguarded. The Municipality's Council is responsible for ensuring that management fulfills its responsibilities for financial reporting and is ultimately responsible for reviewing and approving financial statements. Council reviews and approves the Municipality's financial statements for issuance to the members of Council, inhabitants and ratepayers of the Corporation of the Municipality of Tweed. Council meets periodically with management, as well as the external auditor, to discuss internal controls over the financial reporting process, auditing matters and financial reporting issues, to satisfy themselves that each party is properly discharging their responsibilities and to review the financial statements and the independent auditor's report. The consolidated financial statements have been audited by Baker Tilly KDN LLP in accordance with Canadian generally accepted auditing standards on behalf of the Municipality. Baker Tilly KDN LLP has full and free access to Council. MAO Mayor C /Treasurer July 28, 2020 INDEPENDENT AUDITOR'S REPORT To the Members of Council, Inhabitants and Ratepayers of the Municipality of Tweed Baker Tilly KDN LLP 272 Charlotte St. Peterborough, ON Canada K9J 2V4 T: (705) 742-3418 F: (705) 742-9775 www.bakertilly.ca Opinion We have audited the consolidated financial statements of the Corporation of the Municipality of Tweed and its local board (the Municipality), which comprise the consolidated statement of financial position as at December 31, 2019, the consolidated statements of operations and accumulated surplus,change in net financial assets and cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies. In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Municipality as at December 31, 2019, and the results of its consolidated operations and its consolidated cash flows for the year then ended in accordance with Canadian Public Sector Accounting Standards. Basis for Opinion We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Municipality in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of the 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 consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, management is responsible for assessing the Municipality's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Municipality or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Municipality's financial reporting process. Auditor's Responsibilities for the Audit of the Consolidated Financial Statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit 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 Municipality's internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Municipality's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Municipality to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. Obtain sufficient appropriate audit evidence regarding the consolidated financial information of the entities or business activities within the Municipality to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Baker Tilly KDN LLP Chartered Professional Accountants Licensed Public Accountants Peterborough, Ontario July 28, 2020 CORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED STATEMENT OF FINANCIAL POSITION At December 31, 2019 2019 2018 $$ FINANCIAL ASSETS Cash 5,012,166 4,160,740 Investments (note 2)788,332 758,462 Accounts receivable 438,877 1,091,504 Taxes receivable 900,113 884,313 Long term loans (note 9)10,000 18,159 TOTAL FINANCIAL ASSETS 7,149,488 6,913,178 LIABILITIES Accounts payable and accrued liabilities 845,756 1,941,709 Deferred revenue - obligatory reserve funds (note 4)633,306 382,549 Deferred revenue - other (note 6)37,532 86,542 Long term debt (note 9)10,000 18,159 Landfill closure and post-closure liability (note 10)1,329,572 826,000 TOTAL LIABILITIES 2,856,166 3,254,959 NET FINANCIAL ASSETS 4,293,322 3,658,219 NON-FINANCIAL ASSETS Tangible capital assets (note 12)27,484,347 28,070,808 Inventories of supplies 57,786 14,114 Prepaid expenses 23,156 691 TOTAL NON-FINANCIAL ASSETS 27,565,289 28,085,613 ACCUMULATED SURPLUS (note 13)31,858,611 31,743,832 The accompanying notes are an integral part of these financial statements 1 CORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED STATEMENT OF OPERATIONS AND ACCUMULATED SURPLUS For the Year Ended December 31, 2019 Budget Actual Actual 2019 2019 2018 $$$ (Unaudited) REVENUES Property taxation 4,124,907 4,159,619 4,027,588 User charges 1,419,239 1,517,384 1,575,461 Government of Canada 7,625 4,557 35,406 Province of Ontario 2,845,876 2,989,963 3,511,818 Penalties and interest on taxes 125,000 118,031 124,732 Investment income 45,000 110,339 74,208 Donations 15,250 54,737 20,647 Other grants 52,500 50,000 5,000 Parkland fees earned --5,935 Federal gas tax earned 693,845 525,008 458,575 TOTAL REVENUES 9,329,242 9,529,638 9,839,370 EXPENSES General government 979,146 1,078,563 1,225,144 Protection services 1,658,499 1,639,129 1,668,043 Transportation services 3,913,542 3,737,215 3,773,745 Environmental services 1,216,898 1,731,938 988,451 Recreation and cultural services 1,002,653 962,883 1,006,239 Planning and development 247,190 265,131 226,823 TOTAL EXPENSES 9,017,928 9,414,859 8,888,445 ANNUAL SURPLUS 311,314 114,779 950,925 ACCUMULATED SURPLUS - beginning of year 31,743,832 30,792,907 ACCUMULATED SURPLUS - end of year 31,858,611 31,743,832 The accompanying notes are an integral part of these financial statements 2 CORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED STATEMENT OF CHANGE IN NET FINANCIAL ASSETS For the Year Ended December 31, 2019 Budget Actual Actual 2019 2019 2018 $$$ (Unaudited) ANNUAL SURPLUS 311,314 114,779 950,925 Amortization of tangible capital assets 2,005,418 2,246,329 2,005,418 Purchase of tangible capital assets (2,959,649)(1,722,705)(2,925,863) Loss on disposal of tangible capital assets -62,837 - Proceeds on sale of tangible capital assets --40,011 Change in inventories of supplies -(43,672)(7,842) Change in prepaid expenses -(22,465)3,398 INCREASE/(DECREASE) IN NET FINANCIAL ASSETS (642,917)635,103 66,047 NET FINANCIAL ASSETS - beginning of year 3,658,219 3,658,219 3,592,172 NET FINANCIAL ASSETS - end of year 3,015,302 4,293,322 3,658,219 The accompanying notes are an integral part of these financial statements 3 CORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED STATEMENT OF CASH FLOWS For the Year Ended December 31, 2019 2019 2018 $$ CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES Annual surplus 114,779 950,925 Items not involving cash Amortization of tangible capital assets 2,246,329 2,005,418 Loss on disposal of tangible capital assets 62,837 - Change in landfill closure and post-closure liability 503,572 (144,000) Change in non-cash assets and liabilities Accounts receivable 652,627 (536,137) Taxes receivable (15,800)111,691 Inventories of supplies (43,672)(7,842) Prepaid expenses (22,465)3,398 Accounts payable and accrued liabilities (1,095,953)1,145,550 Deferred revenue - obligatory reserve funds 250,757 (75,232) Deferred revenue - other (49,010)36,785 Net change in cash from operating activities 2,604,001 3,490,556 CAPITAL ACTIVITIES Purchase of tangible capital assets (1,722,705)(2,925,863) Proceeds on disposal of tangible capital assets -40,011 Net change in cash from capital activities (1,722,705)(2,885,852) INVESTING ACTIVITIES Redemption of investments 6,716 8,594 Purchase of investments (36,586)(19,563) Net change in cash from investing activities (29,870)(10,969) FINANCING ACTIVITIES Debt principal repayments (8,159)(5,381) Long term loans receipts 8,159 5,381 Net change in cash from financing activities -- NET CHANGE IN CASH 851,426 593,735 CASH - beginning of year 4,160,740 3,567,005 CASH - end of year 5,012,166 4,160,740 The accompanying notes are an integral part of these financial statements 4 CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2019 The Municipality of Tweed is a lower tier municipality in the Province of Ontario, Canada. It conducts its operations guided by the provisions of provincial statutes such as the Municipal Act, Municipal Affairs Act and related legislation. 1. SIGNIFICANT ACCOUNTING POLICIES These consolidated financial statements have been prepared in accordance with the standards in the Chartered Professional Accountants Canada Public Sector Accounting (PSA) Handbook. Significant aspects of the accounting policies are as follows: (a) Reporting Entity These consolidated financial statements reflect the assets, liabilities, revenues and expenses and accumulated surplus of the reporting entity. The reporting entity is comprised of all organizations, committees and local boards accountable for the administration of their financial affairs and resources to the Municipality and which are owned and controlled by the Municipality. These consolidated financial statements include: Tweed Public Library Board All interfund assets and liabilities and revenues and expenses are eliminated. (b) Trust Funds Trust funds and their related operations administered by the Municipality are not included in these consolidated financial statements but are reported on separately on the Trust Funds Statement of Continuity and Statement of Financial Position. (c) 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, if any, of tangible capital assets is amortized on a straight-line basis, over the expected useful life of the asset, as follows: Land improvements 20 years Buildings 40-50 years Roads 7-50 years Bridges and other structures 20-75 years Underground and other networks 50-75 years Vehicles 5-10 years Machinery and equipment 4-20 years Tangible capital assets received as contributions are recorded at their fair value at the date of receipt and are also recorded as revenue. Tangible capital assets categorized as assets under construction are not amortized until they are put into service. (d) Inventories of Supplies Inventories of supplies are recorded at the lower of cost, as determined by the first-in, first out method, and market. 5 CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2019 1.SIGNIFICANT ACCOUNTING POLICIES, continued (e) Recognition of Revenues and Expenses Revenues and expenses are reported on the accrual basis of accounting. The accrual basis of accounting recognizes revenues in the period in which the transactions or events occurred that give rise to the revenue; expenses are recognized in the period the goods or services are acquired and a legal liability is incurred or transfers are due. Taxation Property tax billings are prepared by the Municipality based on assessment rolls issued by the Municipal Property Assessment Corporation (MPAC) and in accordance with the provisions of the Municipal Act, 2001. The Municipality's Council establishes the tax rates annually, incorporating amounts to be raised for local services, and amounts the Municipality is required to collect on behalf of the County and School Boards. From time to time property assessments are adjusted by MPAC through the reconsideration process or by the Assessment Review Board through the appeal process. Additional assessments, referred to as supplementary and omitted assessment can also be issued by MPAC in accordance with the Assessment Act. These adjustments and additional assessments are reported in the financial statements when amounts can be reasonably determined. The Municipality is entitled to collect interest and penalties on overdue taxes. These revenues are recorded in the period the interest and penalties are levied. Government funding Government funding is recognized in the financial statements as revenues in the period in which events giving rise to the transfers occur, providing the transfers are authorized, any eligibility criteria have been met, and reasonable estimates of the amounts can be made. Other revenue User charges are recognized as revenue in the year the goods and services are provided. Investment income is recorded when earned. Federal gas tax and parkland fees are recognized in the period in which the related expenditures are recorded. Donations are recognized when received. (f) Non-Financial Assets Tangible capital and other non-financial assets are accounted for as assets by the Municipality because they can be used to provide services in future periods. These assets do not normally provide resources to discharge the liabilities of the Municipality unless they are sold. (g) Reserves and Reserve Funds Certain amounts, as approved by Council, are set aside in reserves and reserve funds for future operating and capital purposes. Transfers to and/or from reserves and reserve funds are an adjustment to the respective fund when approved. 6 CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2019 1.SIGNIFICANT ACCOUNTING POLICIES, continued (h) Deferred Revenue Deferred revenue represents grants, user charges and fees which have been collected but for which the related services have yet to be performed. These amounts will be recognized as revenues in the fiscal year the services are performed. (i) Use of Estimates Certain items recognized in the consolidated financial statements are subject to measurement uncertainty. The recognized amounts of such items are based on the Municipality's best information and judgment. By their nature, these estimates are subject to measurement uncertainty and the effect on the consolidated financial statements or changes in such estimates in future periods could be significant. The Municipality's significant estimates include: The amounts recorded for landfill closure and post-closure care depend on estimates of usage, remaining life and capacity. The provision for future closure and post-closure costs also depends on estimates of such costs; The amounts recorded for amortization and opening costs of tangible capital assets are based on estimates of useful life, residual values and valuation rates; and The amount recorded as allowance for doubtful accounts receivable is based on management's estimate of future payments on receivable account balances. 2.INVESTMENTS Investments are recorded at cost and consist of the following: Market Value Actual 2019 Actual 2018 $$$ One Fund Investments 601,619 653,877 640,330 Guaranteed investment certificates, maturity dates from March 16, 2020 to November 2, 2021, interest rates ranging from 0.80% to 3.00% per annum 134,455 134,455 118,132 736,074 788,332 758,462 3.CREDIT FACILITY AGREEMENT The Municipality has a revolving credit facility agreement with its main financial institution. The amount available at any time is limited to $500,000 via an operating loan. Any balance borrowed will accrue interest at the bank’s prime lending rate plus 0.50% per annum.. At December 31, 2019 there was no balance outstanding (2018 - $Nil). 7 CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2019 4.DEFERRED REVENUE - OBLIGATORY RESERVE FUNDS A requirement of the Chartered Professional Accountants Canada Public Sector Accounting Handbook, is that obligatory reserve funds be reported as deferred revenue. This requirement is in place as legislation and external agreements restrict how these funds may be used and under certain circumstances these funds may possibly be refunded. The balances in the obligatory reserve funds of the Municipality are summarized below: 2019 2018 $$ Federal gas tax 564,768 323,513 Parkland 68,538 59,036 633,306 382,549 The continuity of deferred revenue - obligatory reserve funds is as follows: 2019 2018 $$ Balance - beginning of year 382,549 457,781 Add amounts received: Federal gas tax 759,733 368,304 Parkland 8,250 12,750 Interest 7,782 8,224 775,765 389,278 Less transfer to operations: Federal gas tax 525,008 458,575 Parkland -5,935 525,008 464,510 Balance - end of year 633,306 382,549 5.PENSION AGREEMENTS Certain employees of the Municipality are eligible members of the Ontario Municipal Employees Retirement System (OMERS), a multi-employer pension plan. The Actuarial Opinion contained in the 2019 Annual Report disclosed total actuarial liabilities of $107,687 million in respect of benefits accrued for service with actuarial assets of $104,290 million indicating an actuarial deficit of $3,397 million. Because OMERS is a multi-employer plan, any pension plan surpluses or deficits are a joint responsibility of Ontario municipal organizations and their employees. As a result, the Municipality does not recognize any share of the OMERS pension surplus or deficit. The Municipality's required contributions to OMERS in 2019 were $108,227 (2018 -$102,320). 8 CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2019 6.DEFERRED REVENUE - OTHER Included in deferred revenue - other are the following amounts: 2019 2018 $$ Government transfers -22,124 Other 31,832 26,426 Association of Municipalities of Ontario 5,700 37,992 37,532 86,542 The continuity of deferred revenue - other is as follows: 2019 2018 $$ Balance - beginning of year 86,542 49,757 Add amounts received: Association of Municipalities of Ontario -42,992 Other 26,511 - 26,511 42,992 Less transfer to operations: Association of Municipalities of Ontario 32,292 5,000 Other 21,105 1,207 Government transfers 22,124 - 75,521 6,207 Balance - end of year 37,532 86,542 7.TRUST FUNDS Trust funds administered by the Municipality amounting to $10,989 (2018 -$11,011) have not been included in the Consolidated Statement of Financial Position nor have their operations been included in the Consolidated Statement of Operations and Accumulated Surplus. As such balances are held in trust by the Municipality for the benefit of others, they are not presented as part of the Municipality's financial position or operations. 8.COMPARATIVE FIGURES Certain comparative figures were restated, where required, to conform with the current year presentation. 9 CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2019 9.LONG TERM DEBT 2019 2018 $$ Tile drainage loans due August 1, 2021 10,000 18,159 (a)The Municipality acts as a collection agency for the Province of Ontario for tile drainage loans for individual ratepayers. The value of these loans outstanding at December 31, 2019 is $10,000 (2018 -$18,159). (b)Interest paid during the year on long term debt amounted to $1,793 (2018 -$1,412). (c)The long term debt reported in (a) of this note is repayable as follows: Principal Interest Total $$$ 2020 5,000 1,794 6,794 2021 5,000 1,794 6,794 10,000 3,588 13,588 10.LANDFILL CLOSURE AND POST-CLOSURE LIABILITY The estimated liability for landfill closure and post-closure costs for both of the sites the Municipality operates is $1,329,572 (2018 -$826,000). The closure costs include final cover, vegetation and additional monitoring wells. Post-closure costs include monitoring, maintenance of control systems and consulting fees for 25 years after the site is closed.The landfill closure and post-closure liability will be funded from taxation and a reserve fund.A reserve fund of $1,146,853 (2018 - $1,157,084) has been established to provide for this liability. The reported liability is based upon estimates and assumptions with respect to events extending over the remaining life of the landfill. The total discounted future cash flows for closure and post- closure cost is estimated at $2,048,167 as at December 31, 2019 (2018 -$1,329,769). The remaining capacity of the solid waste landfill sites is estimated at 180,598 m3 (2018 -195,101 m3) which is 32.2% (2018 -34.7%) of the site’s total capacity. The total discounted future cash flows for closure and post-closure cost is estimated at $1,329,769 (2018 -$1,592,383) as at December 31, 2019 using an inflation rate of of 2.19% (2018 - 2%) and a discount rate of 2.76% (2018 - 4%).The landfills are expected to reach capacity in 2037 and 2055. 11.CONTINGENT LIABILITIES The Municipality, in the course of its operations, has been named in several lawsuits the outcomes of which are indeterminable at this time. No amounts in connection with these items have been reflected in these financial statements. 10 CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2019 12.TANGIBLE CAPITAL ASSETS The net book value of the Municipality's tangible capital assets are: 2019 2018 $$ General Land and land improvements 1,930,353 2,024,293 Buildings 2,712,175 2,786,599 Vehicles 1,369,891 1,601,240 Machinery and equipment 971,774 641,267 Infrastructure Buildings 1,097,597 1,207,372 Roads 8,891,913 9,203,718 Underground and other networks 3,803,727 3,937,920 Bridges and other structures 6,147,864 6,242,444 26,925,294 27,644,853 Assets under construction 559,053 425,955 27,484,347 28,070,808 For additional information, see the Consolidated Schedule of Tangible Capital Assets. During the year there were no write-downs of assets (2018 -$Nil) and no interest capitalized (2018 -$Nil). Tangible capital assets allocated by segment are as follows: 2019 2018 $$ General government 1,517,361 1,532,821 Protection services 874,723 947,418 Transportation services 16,646,416 16,753,299 Environmental services 5,667,228 5,865,947 Recreation and cultural services 2,770,755 2,971,323 Planning and development 7,864 - 27,484,347 28,070,808 11 CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2019 13.ACCUMULATED SURPLUS Accumulated surplus consists of the following: 2019 2018 $$ Surplus/(Deficit) Operating -472,442 Unfunded landfill closure and post-closure costs (1,329,572)(826,000) Library board 2,260 (4,268) (1,327,312)(357,826) Invested In Capital Assets Tangible capital assets - net book value 27,484,347 28,070,808 Surplus 26,157,035 27,712,982 Reserves Working funds 1,170,315 319,147 General government 581,178 79,032 Protection services 185,572 103,742 Transportation services 659,279 789,386 Water and sewer 1,209,407 989,115 Recreation services 369,091 252,876 Community improvement plan 71,945 53,780 Total Reserves 4,246,787 2,587,078 Reserve Funds Transportation services 137,236 118,132 Water 170,700 168,556 Landfill 1,146,853 1,157,084 Total Reserve Funds 1,454,789 1,443,772 31,858,611 31,743,832 14.BUILDING SERVICES CONTRACTUAL AGREEMENT The Municipality of Tweed, the Township of Stirling-Rawdon, the Town of Deseronto, the Township of Tyendinaga and the Township of Madoc have entered into an agreement for joint building services to be provided by the Township of Stirling-Rawdon. The joint building services agreement came into effect April 1, 2005. No revenues or expenses have been included in the Consolidated Statement of Operations and Accumulated Surplus. 12 CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2019 15.EXPENSES BY OBJECT The expenses for the year reported on the Consolidated Statement of Operations and Accumulated Surplus by object are as follows: Budget Actual Actual 2019 2019 2018 $$$ (Unaudited) Salaries and benefits 2,368,170 2,304,212 2,340,104 Interest charges -1,793 1,412 Materials 2,543,303 2,739,959 2,383,149 Contracted services 1,724,076 1,725,434 1,704,141 Rents and financial 75,710 48,079 169,382 External transfers 301,251 286,217 284,839 Amortization 2,005,418 2,246,329 2,005,418 Loss (gain) on disposal of tangible capital assets -62,836 - 9,017,928 9,414,859 8,888,445 16.OPERATIONS OF SCHOOL BOARDS AND THE COUNTY OF HASTINGS During 2019, requisitions were made by the County of Hastings and School Boards requiring the Municipality to collect property taxes and payments in lieu of property taxes on their behalf. The amounts collected and remitted are as follows: School Boards County $$ Property taxes 1,270,173 1,715,547 Taxation from other governments 1,679 6,607 Amounts requisitioned and remitted 1,271,852 1,722,154 These amounts have not been included in the Consolidated Statement of Operations and Accumulated Surplus. 13 CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2019 17.BUDGET FIGURES The budget, approved by the Municipality, for 2019 is reflected on the Consolidated Statement of Operations and Accumulated Surplus and the Consolidated Statement of Change in Net Financial Assets. The budget established for capital investment in tangible capital assets are on a project- oriented basis, the costs of which may be carried out over one or more years and, therefore, may not be comparable with current year’s actual amounts. Budget figures have been reclassified for the purposes of these financial statements to comply with PSA reporting requirements. Budget figures are not subject to audit. The following is a reconciliation of the Council approved budget amounts to the PSA amounts: (Unaudited)(Unaudited) Revenue Expenses $$ Council approved budget: Operating 8,455,691 7,105,162 Capital 1,797,654 3,148,183 Total Council approved budget 10,253,345 10,253,345 Less: Tangible capital assets capitalized -(2,959,649) Add: Amortization of tangible capital assets -2,005,418 Less: Principal repayment of long term debt -(6,794) Less: Transfers to/from reserves and reserve funds (972,799)(316,088) Library Board budget 48,696 41,696 Adjusted budget per Consolidated Statement of Operations 9,329,242 9,017,928 18.SUBSEQUENT EVENT Subsequent to December 31, 2019, the COVID-19 outbreak was declared a pandemic by the World Health Organization and has had a significant financial, market and social impact. At the time of approval of these consolidated financial statements, the Municipality has experienced the following indicators of financial implications and undertaken the following activities in relation to the COVID-19 pandemic: - Additional costs for enhanced facility cleaning and acquisition of personal protective equipment; - Temporarily closed most facilities for walk-in access; - Property tax due dates have been deferred; and - Reduced revenues from user charges. The Municipality plans to mitigate any additional operating costs with committed Provincial government funding, costs savings in other budget items and tight controls over the operating expenses. At this time these factors present uncertainty over future cash flows, may cause significant changes to the assets or liabilities and may have a significant impact on future operations. 14 CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2019 19.SEGMENTED INFORMATION The Municipality of Tweed is a municipal government organization that provides a range of services to its residents. Municipality services are reported by function and their activities are separately disclosed in the segmented information. For each reported segment, revenues and expenses represent both amounts that are directly attributable to the segment and amounts that are allocated on a reasonable basis. Certain allocation methodologies are employed in the preparation of segmented financial information. Taxation, payments-in-lieu of taxes and certain unconditional government transfers are apportioned based on each segment’s net requirements. The accounting policies used in these segments are consistent with those followed in the preparation of the consolidated financial statements as disclosed in Note 1. For additional information see the Consolidated Schedule of Segment Disclosure. General Government General government consists of the activities of Council and general financial and administrative management of the Municipality and its programs and services. Protection Services Protection services include police, fire, conservation authority and protective inspection and control. The Municipality of Tweed and the Township of Stirling-Rawdon have entered into an agreement for joint fire services. The joint fire services agreement came into effect January 1, 2016. Transportation Services The activities of the transportation function include construction and maintenance of the Municipality's roads and bridges, winter control and street lighting. Water and Sewer This function is responsible for providing water and sewer services to the Municipality. Other Environmental Services This function is responsible for providing waste collection, waste disposal and recycling services to ratepayers. Recreation and Cultural Services The recreation and cultural services function provides indoor and outdoor recreational facilities and programs and library services. Planning and Development The planning and development services function manages commercial, industrial and residential development within the Municipality. 15 CORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED SCHEDULE OF TANGIBLE CAPITAL ASSETS For the Year Ended December 31, 2019 General Infrastructure Land and Land Improvement s Buildings Vehicles Machinery and Equipment Buildings Roads Underground and Other Networks Bridges and Other Structures Assets Under Construction Totals $$$$$$$$$$ COST Balance, beginning of year 2,462,880 4,373,626 3,687,389 1,537,034 2,947,125 24,169,929 5,843,130 8,750,940 425,955 54,198,008 Add: additions during the year 11,260 --510,062 -937,967 -90,318 173,098 1,722,705 Less: disposals during the year --132,477 23,215 -3,439,210 54,100 5,670 -3,654,672 Internal transfers -40,000 ------(40,000)- Balance, end of year 2,474,140 4,413,626 3,554,912 2,023,881 2,947,125 21,668,686 5,789,030 8,835,588 559,053 52,266,041 ACCUMULATED AMORTIZATION Balance, beginning of year 438,587 1,587,027 2,086,149 895,767 1,739,753 14,966,211 1,905,210 2,508,496 -26,127,200 Add: additions during the year 105,200 114,424 231,349 179,371 109,775 1,187,783 133,529 184,898 -2,246,329 Less: disposals during the year --132,477 23,031 -3,377,221 53,436 5,670 -3,591,835 Balance, end of year 543,787 1,701,451 2,185,021 1,052,107 1,849,528 12,776,773 1,985,303 2,687,724 -24,781,694 NET BOOK VALUE OF TANGIBLE CAPITAL ASSETS 1,930,353 2,712,175 1,369,891 971,774 1,097,597 8,891,913 3,803,727 6,147,864 559,053 27,484,347 16 CORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED SCHEDULE OF SEGMENT DISCLOSURE For the Year Ended December 31, 2019 General Government Protection Services Transportation Services Water and Sewer Other Environmental Services Recreation and Cultural Services Planning and Development Consolidated $$$$$$$$ Revenues Property taxation -1,602,853 1,317,396 -201,012 794,793 243,565 4,159,619 User charges 202,529 77,120 28,477 853,127 189,061 148,205 18,865 1,517,384 Government transfers - operating 657,009 817,376 673,807 -102,506 449,973 124,206 2,824,877 Government transfers - capital --169,643 ----169,643 Penalties and interest on taxes 118,031 ------118,031 Investment income 57,923 -10,618 3,402 38,396 --110,339 Donations -----54,737 -54,737 Other grants 50,000 ------50,000 Federal gas tax earned --525,008 ----525,008 Total revenues 1,085,492 2,497,349 2,724,949 856,529 530,975 1,447,708 386,636 9,529,638 Expenses Salaries and benefits 612,679 114,808 823,134 91,476 148,309 398,904 114,902 2,304,212 Interest charges ------1,793 1,793 Materials 272,488 144,049 1,135,329 103,507 633,510 311,418 139,658 2,739,959 Contracted services 51,175 1,095,401 180,766 315,369 82,723 --1,725,434 Rents and financial 32,066 -5,132 -2,469 12 8,400 48,079 External transfers 12,000 189,314 --77,206 7,697 -286,217 Amortization 35,319 95,557 1,592,854 277,369 -244,852 378 2,246,329 Loss (gain) on disposal of tangible capital assets 62,836 ------62,836 Total expenses 1,078,563 1,639,129 3,737,215 787,721 944,217 962,883 265,131 9,414,859 Net surplus/(deficit)6,929 858,220 (1,012,266)68,808 (413,242)484,825 121,505 114,779 17 CORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED SCHEDULE OF SEGMENT DISCLOSURE For the Year Ended December 31, 2018 General Government Protection Services Transportation Services Water and Sewer Other Environmental Services Recreation and Cultural Services Planning and Development Consolidated $$$$$$$$ Revenues Property taxation 441,529 1,058,454 1,700,525 -248,202 428,812 150,066 4,027,588 User charges 149,631 60,838 9,485 907,175 257,442 161,992 28,898 1,575,461 Government transfers - operating 233,872 559,260 876,666 -112,122 247,196 79,291 2,108,407 Government transfers - capital --1,407,817 --31,000 -1,438,817 Penalties and interest on taxes 124,732 ------124,732 Investment income 50,547 -1,635 22,026 ---74,208 Donations -----20,647 -20,647 Other grants --5,000 ----5,000 Parkland fees earned -----5,935 -5,935 Federal gas tax earned --458,575 ----458,575 Total revenues 1,000,311 1,678,552 4,459,703 929,201 617,766 895,582 258,255 9,839,370 Expenses Salaries and benefits 614,419 133,303 841,146 89,400 143,741 399,139 118,956 2,340,104 Interest charges ------1,412 1,412 Materials 388,594 165,438 1,312,023 81,659 (42,175)379,555 98,055 2,383,149 Contracted services 45,031 1,087,760 180,985 312,591 77,774 --1,704,141 Rents and financial 153,907 -4,749 -2,305 21 8,400 169,382 External transfers 3,400 194,616 -6,615 75,722 4,486 -284,839 Amortization 19,793 86,926 1,434,842 218,140 22,679 223,038 -2,005,418 Total expenses 1,225,144 1,668,043 3,773,745 708,405 280,046 1,006,239 226,823 8,888,445 Net surplus/(deficit)(224,833)10,509 685,958 220,796 337,720 (110,657)31,432 950,925 18 INDEPENDENT AUDITOR'S REPORT To the Members of Council, Inhabitants and Ratepayers of the Municipality of Tweed Baker Tilly KDN LLP 272 Charlotte St. Peterborough, ON Canada K9J 2V4 T: (705) 742-3418 F: (705) 742-9775 www.bakertilly.ca Opinion We have audited the financial statements of the Trust Funds of the Corporation of the Municipality of Tweed (the Trust Funds), which comprise the statement of financial position as at December 31, 2019, the statement of continuity for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Trust Funds as at December 31, 2019, and the continuity of the Trust Funds for the year then ended in accordance with Canadian Public Sector Accounting Standards. Basis for Opinion We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Trust Funds in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of the 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. In preparing the financial statements, management is responsible for assessing the Trust Funds' ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Trust Funds or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Trust Funds' financial reporting process. Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit 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 Trust Funds' internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Trust Funds' ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Trust Funds to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Baker Tilly KDN LLP Chartered Professional Accountants Licensed Public Accountants Peterborough, Ontario July 28, 2020 CORPORATION OF THE MUNICIPALITY OF TWEED TRUST FUNDS STATEMENT OF FINANCIAL POSITION At December 31, 2019 Recreation Associations Santa Claus Parade Fund 2019 Total 2018 Total $$$$ FINANCIAL ASSETS Cash -508 508 858 Investments (note 2)10,214 -10,214 10,153 Accounts receivable 17 500 517 - 10,231 1,008 11,239 11,011 LIABILITIES AND FUND BALANCES LIABILITIES Accounts payable -250 250 - FUND BALANCES 10,231 758 10,989 11,011 10,231 1,008 11,239 11,011 The accompanying notes are an integral part of these financial statements 21 CORPORATION OF THE MUNICIPALITY OF TWEED TRUST FUNDS STATEMENT OF CONTINUITY For the Year Ended December 31, 2019 Recreation Associations Santa Claus Parade Fund 2019 Total 2018 Total $$$$ BALANCES - beginning of year 10,153 858 11,011 10,566 RECEIPTS Donations -1,500 1,500 2,000 Interest 78 -78 45 78 1,500 1,578 2,045 EXPENSES Parade costs -1,600 1,600 1,600 BALANCES - end of year 10,231 758 10,989 11,011 The accompanying notes are an integral part of these financial statements 22 CORPORATION OF THE MUNICIPALITY OF TWEED TRUST FUNDS NOTES TO THE FINANCIAL STATEMENTS For the Year Ended December 31, 2019 1.SIGNIFICANT ACCOUNTING POLICIES These financial statements have been prepared in accordance with the standards in the Chartered Professional Accountants Canada Public Sector Accounting (PSA) Handbook. (a)Basis of Accounting Revenue and expenses are reported on the accrual basis of accounting which recognizes revenues as they become available and measurable; expenses are recognized as they are incurred and measurable as a result of receipt of goods or services and the creation of a legal obligation to pay. (b)Use of Estimates The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions. These estimates and assumptions 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 expenses during the period and are based on the Municipality's best information and judgment. Actual results could differ from these estimates. (c)Revenue Recognition Donations are recognized when they are received. Interest income is recognized when earned. 2.INVESTMENTS Investments consist of a GIC with interest rate of 1.3% and maturity of November 13, 2020. 23 CORPORATION OF THE MUNICIPALITY OF TWEED TWEED PUBLIC LIBRARY BOARD FINANCIAL STATEMENTS DECEMBER 31, 2019 INDEPENDENT AUDITOR'S REPORT To the Members of the Tweed Public Library Board, the Members of Council, Inhabitants and Ratepayers of the Municipality of Tweed Baker Tilly KDN LLP 272 Charlotte St. Peterborough, ON Canada K9J 2V4 T: (705) 742-3418 F: (705) 742-9775 www.bakertilly.ca Qualified Opinion We have audited the financial statements of the Tweed Public Library Board of the Corporation of the Municipality of Tweed (the Board), which comprise the statement of financial position as at December 31, 2019, the statements of operations and accumulated surplus, change in net financial assets/(net debt) and cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In our opinion, except for the possible effects of the matter described in the Basis for Qualified Opinion section of our report, the accompanying financial statements present fairly, in all material respects, the financial position of the Board as at December 31, 2019, and the results of its operations and cash flows for the year then ended in accordance with Canadian Public Sector Accounting Standards. Basis for Qualified Opinion In common with many Public Library Boards, the Board derives revenue from fines, other fees and donations, the completeness of which is not susceptible to satisfactory audit verification. Accordingly, verification of these revenues was limited to the amounts recorded in the records of the Board. Therefore, we were not able to determine whether any adjustments might be necessary to fines, other fees and donations revenue, annual deficit, assets and accumulated surplus. We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Board in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion. Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of the 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. In preparing the financial statements, management is responsible for assessing the Board's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Board or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Board's financial reporting process. Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit 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 Board's internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Board's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Board to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Baker Tilly KDN LLP Chartered Professional Accountants Licensed Public Accountants Peterborough, Ontario July 28, 2020 CORPORATION OF THE MUNICIPALITY OF TWEED TWEED PUBLIC LIBRARY BOARD STATEMENT OF FINANCIAL POSITION At December 31, 2019 2019 2018 $$ FINANCIAL ASSETS Cash 46,097 16,119 Accounts receivable 5,287 4,239 TOTAL FINANCIAL ASSETS 51,384 20,358 LIABILITIES Accounts payable and accrued liabilities 537 11,827 Due to Municipality (note 6)44,981 9,193 Deferred revenue 4,297 4,297 TOTAL LIABILITIES 49,815 25,317 NET FINANCIAL ASSETS/(NET DEBT)1,569 (4,959) NON-FINANCIAL ASSETS Tangible capital assets (note 4)756,566 787,448 Prepaid expenses 691 691 TOTAL NON-FINANCIAL ASSETS 757,257 788,139 ACCUMULATED SURPLUS (note 5)758,826 783,180 The accompanying notes are an integral part of these financial statements 27 CORPORATION OF THE MUNICIPALITY OF TWEED TWEED PUBLIC LIBRARY BOARD STATEMENT OF OPERATIONS AND ACCUMULATED SURPLUS For the Year Ended December 31, 2019 Budget Actual Actual 2019 2019 2018 $$$ (Unaudited) REVENUES Municipality of Tweed (note 6)151,000 151,000 147,382 Province of Ontario 19,876 17,427 16,216 Government of Canada 5,625 537 10,406 Other grants 2,500 -2,617 Donations 10,250 10,504 13,589 Fines and other fees 4,545 4,267 4,068 Other 5,900 1,581 1,941 TOTAL REVENUES 199,696 185,316 196,219 EXPENSES Salaries and benefits 147,435 126,413 140,949 Tapes, video and programs 3,671 3,517 3,099 Internet sustainability 1,500 1,242 1,177 Professional development 2,000 1,153 1,755 Supplies and maintenance 18,300 13,813 23,514 Office and administration 6,390 6,273 7,178 Specific projects -1,221 601 Utilities 13,400 11,144 9,511 Amortization 44,804 44,894 44,804 TOTAL EXPENSES 237,500 209,670 232,588 ANNUAL DEFICIT (37,804)(24,354)(36,369) ACCUMULATED SURPLUS - beginning of year 783,180 819,549 ACCUMULATED SURPLUS - end of year 758,826 783,180 The accompanying notes are an integral part of these financial statements 28 CORPORATION OF THE MUNICIPALITY OF TWEED TWEED PUBLIC LIBRARY BOARD STATEMENT OF CHANGE IN NET FINANCIAL ASSETS/(NET DEBT) For the Year Ended December 31, 2019 Budget Actual Actual 2019 2019 2018 $$$ (Unaudited) ANNUAL DEFICIT (37,804)(24,354)(36,369) Amortization of tangible capital assets 44,804 44,894 44,804 Acquisition of tangible capital assets -(14,012)(18,013) Change in prepaid expenses --2,469 CHANGE IN NET FINANCIAL ASSETS/(NET DEBT)7,000 6,528 (7,109) NET FINANCIAL ASSETS/(NET DEBT) - beginning of year (4,959)(4,959)2,150 NET FINANCIAL ASSETS/(NET DEBT) - end of year 2,041 1,569 (4,959) The accompanying notes are an integral part of these financial statements 29 CORPORATION OF THE MUNICIPALITY OF TWEED TWEED PUBLIC LIBRARY BOARD STATEMENT OF CASH FLOWS For the Year Ended December 31, 2019 2019 2018 $$ CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES Annual deficit (24,354)(36,369) Items not involving cash Amortization of tangible capital assets 44,894 44,804 Change in non-cash assets and liabilities Accounts receivable (1,048)7,745 Prepaid expenses -2,469 Accounts payable and accrued liabilities (11,290)6,257 Due to Municipality 35,788 4,631 Deferred revenue -(1,206) Net change in cash from operating activities 43,990 28,331 CAPITAL ACTIVITIES Acquisition of tangible capital assets (14,012)(18,013) NET CHANGE IN CASH 29,978 10,318 CASH - beginning of year 16,119 5,801 CASH - end of year 46,097 16,119 The accompanying notes are an integral part of these financial statements 30 CORPORATION OF THE MUNICIPALITY OF TWEED TWEED PUBLIC LIBRARY BOARD NOTES TO THE FINANCIAL STATEMENTS For the Year Ended December 31, 2019 1.SIGNIFICANT ACCOUNTING POLICIES These financial statements have been prepared in accordance with the standards in the Chartered Professional Accountants Canada Public Sector Accounting (PSA) Handbook. Significant aspects of the accounting policies adopted by the Board are as follows: (a)Recognition of Revenue and Expenses Revenue and expenses are reported on the accrual basis of accounting. The accrual basis of accounting recognizes revenue in the period in which the transactions of events occurred that give rise to the revenue; expenses are recognized in the period the goods or services are acquired and a legal liability is incurred or transfers are due. Government funding is recognized in the financial statements as revenues in the period in which events giving rise to the transfers occur, providing the transfers are authorized, any eligibility criteria have been met, and reasonable estimates of the amounts can be made. Fines and other fees are recognized as revenue in the year the goods and services are provided. Donations and other revenue is recognized when the amounts are received. Contributions from the Municipality of Tweed are recognized as approved by the Municipality. (b)Use of Estimates Certain items recognized in the financial statements are subject to measurement uncertainty. The recognized amounts of such items are based on the Board's best information and judgment. By their nature, these estimates are subject to measurement uncertainty and the effect on the financial statements of changes in such estimates in future periods could be significant. The Board's significant estimates include: The amounts recorded for amortization and opening costs of tangible capital assets are based on estimates of useful life, residual values and valuation rates. (c)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, if any, of tangible capital assets is amortized on a straight-line basis, over the expected useful life of the asset, as follows: Buildings 40 years Equipment 15 years Computers 5 years Books 7 years Tangible capital assets received as contributions are recorded at their fair value at the date of receipt and are also recorded as revenue. 31 CORPORATION OF THE MUNICIPALITY OF TWEED TWEED PUBLIC LIBRARY BOARD NOTES TO THE FINANCIAL STATEMENTS For the Year Ended December 31, 2019 1.SIGNIFICANT ACCOUNTING POLICIES, continued (d)Deferred Revenue Deferred revenue represents grants, user charges and fees which have been collected but for which the related services have yet to be performed. These amounts will be recognized as revenues in the fiscal year the services are performed. (e)Non-Financial Assets Tangible capital assets and other non-financial assets are accounted for as assets by the Board because they can be used to provide services in future periods. These assets do not normally provide resources to discharge the liabilities of the Board unless they are sold. (f)Inter-Entity Transactions The Tweed Public Library Board is a Board of the Municipality of Tweed and is consolidated with the Municipality's financial statements. Allocated costs and recovery of costs are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties. Unallocated costs are measured at the carrying amount, which is the amount recorded in the records of the Municipality. 2.BUDGET FIGURES The operating budget, approved by the Board, for 2019 is reflected on the Statement of Operations and Accumulated Surplus and the Statement of Change in Net Financial Assets/(Net Debt). The budgets established for capital investment in tangible capital assets are on a project-oriented basis, the costs of which may be carried out over one or more years and, therefore, may not be comparable with current year’s actual expenditure amounts. Budget figures have been reclassified for the purposes of these financial statements to comply with PSA reporting requirements. Budget figures are not subject to audit. 3.COMPARATIVE FIGURES Certain comparative figures were restated, where required, to conform with the current year presentation. 32 CORPORATION OF THE MUNICIPALITY OF TWEED TWEED PUBLIC LIBRARY BOARD NOTES TO THE FINANCIAL STATEMENTS For the Year Ended December 31, 2019 4.TANGIBLE CAPITAL ASSETS The net book value of the Board's tangible capital assets are: Buildings Equipment Computers Books 2019 Totals 2018 Totals $$$$$$ COST Balance, beginning of year 876,450 147,979 9,255 78,232 1,111,916 1,108,288 Add: additions during the year --798 13,214 14,012 18,013 Less: disposals during the year ---12,583 12,583 14,385 Balance, end of year 876,450 147,979 10,053 78,863 1,113,345 1,111,916 ACCUMULATED AMORTIZATION Balance, beginning of year 197,154 86,840 2,623 37,851 324,468 294,049 Add: additions during the year 21,911 9,865 1,851 11,267 44,894 44,804 Less: disposals during the year ---12,583 12,583 14,385 Balance, end of year 219,065 96,705 4,474 36,535 356,779 324,468 NET BOOK VALUE OF TANGIBLE CAPITAL ASSETS 657,385 51,274 5,579 42,328 756,566 787,448 5.ACCUMULATED SURPLUS Accumulated surplus consists of the following: 2019 2018 $$ Surplus/(Deficit) Operations 2,260 (4,268) Invested In Capital Assets Tangible capital assets - net book value 756,566 787,448 758,826 783,180 33 CORPORATION OF THE MUNICIPALITY OF TWEED TWEED PUBLIC LIBRARY BOARD NOTES TO THE FINANCIAL STATEMENTS For the Year Ended December 31, 2019 6.INTER-ENTITY TRANSACTIONS During the year, the Board entered into transactions with the Municipality of Tweed. As part of the budgeting process, the Municipality approves a contribution to the Board which is identified on the Statement of Operations and Accumulated Surplus. Details of inter-entity expense transactions are as follows: 2019 2018 $$ Unallocated costs: Water and sewer 968 745 968 745 In addition, the following services are provided to the Board by the Municipality at no cost: Payroll services Rental of land Cooling system upgrades All balances with the Municipality of Tweed have been identified on the Statement of Financial Position.Due from (to) balances are unsecured, without interest and have no terms of repayment. 7.SUBSEQUENT EVENT On March 11, 2020, the World Health Organization categorized COVID-19 as a pandemic. The potential economic effects within the Board's environment and in the global markets, possible disruption in supply chains, and measures being introduced at various levels of government to curtail the spread of the virus (such as travel restrictions, closures of non-essential municipal and private operations, imposition of quarantines and social distancing) could have a material impact on the Board's operations. The extent of the impact of this outbreak and related containment measures on the Board's operations cannot be reliably estimated at this time. 34