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HomeMy Public PortalAbout2022 Tweed Consolidated FSCORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022 CORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022 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 - 17 Schedule of Tangible Capital Assets 18 Schedules of Segment Disclosure 19 - 20 TRUST FUNDS Independent Auditor's Report 21 Statement of Financial Position 23 Statement of Continuity 23 Notes to the Financial Statements 24 LOCAL BOARD Tweed Public Library Board 25 - 35 The Corporation of the MUNICIPALITY OF TWEED 255 Melcalf St.. Postal Bag 729 "I\~eed. ON K0K 3J0 I-el.: (6131478-2535 Fax: (613) 478-6457 Entail: inlb iit~ p.t\~ eed.on.ca Website: ~ \~ \~.t~ eed.ca faccbook.com/t\~ eedontario 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, 2022, 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, 2022, 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. Chartered Professional Accountants Licensed Public Accountants Peterborough, Ontario March 29, 2023 CORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED STATEMENT OF FINANCIAL POSITION At December 31, 2022 2022 2021 $$ FINANCIAL ASSETS Cash 818,702 2,181,728 Investments (note 2)2,813,326 1,817,362 Accounts receivable 912,461 1,584,947 Taxes receivable 691,922 662,127 TOTAL FINANCIAL ASSETS 5,236,411 6,246,164 LIABILITIES Accounts payable and accrued liabilities 1,253,633 1,479,421 Deferred revenue - obligatory reserve funds (note 4)65,550 420,265 Deferred revenue - other (note 6)31,329 19,588 OILC temporary loan -1,530,000 Long term debt (note 8)2,207,429 - Landfill closure and post-closure liability (note 9)1,540,567 1,595,993 TOTAL LIABILITIES 5,098,508 5,045,267 NET FINANCIAL ASSETS 137,903 1,200,897 NON-FINANCIAL ASSETS Tangible capital assets (note 11)34,634,917 34,132,724 Inventories of supplies 205,957 118,958 Prepaid expenses 54,377 35,663 TOTAL NON-FINANCIAL ASSETS 34,895,251 34,287,345 ACCUMULATED SURPLUS (note 12)35,033,154 35,488,242 The accompanying notes are an integral part of these financial statements 1 CORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED STATEMENT OF OPERATIONS AND ACCUMULATED SURPLUS For the Year Ended December 31, 2022 Budget Actual Actual 2022 2022 2021 $$$ (Unaudited) REVENUES Property taxation 4,417,438 4,439,489 4,308,751 User charges 1,670,779 1,548,182 1,700,343 Government of Canada 451,300 122,067 1,254,103 Province of Ontario 2,854,817 2,515,077 3,462,683 Other municipalities -90,000 28,500 Penalties and interest on taxes 100,000 87,569 98,747 Investment income 67,400 86,016 36,486 Donations 13,024 98,343 56,778 Other grants 316,530 39,308 24,327 Canada Community-Building Fund amounts earned 741,517 741,517 419,000 Gain/(loss) on disposal of tangible capital assets 155,095 33,673 277,132 TOTAL REVENUES 10,787,900 9,801,241 11,666,850 EXPENSES General government 1,598,405 1,514,507 1,274,548 Protection services 1,789,056 1,687,368 1,626,738 Transportation services 3,820,681 4,048,884 3,742,560 Environmental services 1,422,701 1,430,767 1,930,447 Recreation and cultural services 1,242,167 1,237,244 1,166,812 Planning and development 338,510 337,559 229,542 TOTAL EXPENSES 10,211,520 10,256,329 9,970,647 ANNUAL SURPLUS/(DEFICIT)576,380 (455,088)1,696,203 ACCUMULATED SURPLUS - beginning of year 35,488,242 33,792,039 ACCUMULATED SURPLUS - end of year 35,033,154 35,488,242 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, 2022 Budget Actual Actual 2022 2022 2021 $$$ (Unaudited) ANNUAL SURPLUS/(DEFICIT)576,380 (455,088)1,696,203 Amortization of tangible capital assets 2,283,520 2,154,920 2,058,196 Purchase of tangible capital assets (4,118,237)(2,899,243)(6,400,223) Gain on disposal of tangible capital assets (155,095)(33,673)(277,132) Proceeds on sale of tangible capital assets 350,000 275,803 341,387 Change in inventories of supplies -(86,999)(38,058) Change in prepaid expenses -(18,714)(4,115) DECREASE IN NET FINANCIAL ASSETS (1,063,432)(1,062,994)(2,623,742) NET FINANCIAL ASSETS - beginning of year 1,200,897 1,200,897 3,824,639 NET FINANCIAL ASSETS - end of year 137,465 137,903 1,200,897 The accompanying notes are an integral part of these financial statements 3 CORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED STATEMENT OF CASH FLOWS For the Year Ended December 31, 2022 2022 2021 $$ CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES Annual surplus/(deficit)(455,088)1,696,203 Items not involving cash Amortization of tangible capital assets 2,154,920 2,058,196 Gain on disposal of tangible capital assets (33,673)(277,132) Change in landfill closure and post-closure liability (55,426)328,190 Change in non-cash assets and liabilities Accounts receivable 672,486 278,797 Taxes receivable (29,795)204,561 Inventories of supplies (86,999)(38,058) Prepaid expenses (18,714)(4,115) Accounts payable and accrued liabilities (225,788)631,666 Deferred revenue - obligatory reserve funds (354,715)330,631 Deferred revenue - other 11,741 12,297 Net change in cash from operating activities 1,578,949 5,221,236 CAPITAL ACTIVITIES Purchase of tangible capital assets (2,899,243)(6,400,223) Proceeds on disposal of tangible capital assets 275,803 341,387 Net change in cash from capital activities (2,623,440)(6,058,836) INVESTING ACTIVITIES Redemption of investments 500,000 1,602,506 Purchase of investments (1,495,964)(1,201,199) Net change in cash from investing activities (995,964)401,307 FINANCING ACTIVITIES OLIC temporary loan received (repayment)(1,530,000)1,530,000 Debt principal repayments (18,432)(5,000) Long term debt issued 2,225,861 - Long term loan receipts -5,000 Net change in cash from financing activities 677,429 1,530,000 NET CHANGE IN CASH (1,363,026)1,093,707 CASH - beginning of year 2,181,728 1,088,021 CASH - end of year 818,702 2,181,728 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, 2022 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. Initial costs for tangible capital assets that were acquired or developed prior to 2009 were obtained using historical cost information or using current fair market values discounted by a relevant inflation factor to the point of acquisition. 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. 5 CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2022 1.SIGNIFICANT ACCOUNTING POLICIES, continued (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. (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. Canada Community-Building Fund 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. 6 CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2022 1.SIGNIFICANT ACCOUNTING POLICIES, continued (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. (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 of tangible capital assets are based on estimates of useful life and residual values; 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 2022 Actual 2021 $$$ One Fund Investments - Bond Fund 993,940 1,120,188 1,102,580 One Fund Investments - High Interest Savings 1,564,245 1,564,245 587,108 Guaranteed investment certificates, maturity dates from March 20, 2023 to October 5, 2026, interest rates ranging from 0.35% to 0.85% per annum 128,893 128,893 127,674 2,687,078 2,813,326 1,817,362 7 CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2022 3.CREDIT FACILITY AGREEMENT The Municipality has a revolving credit facility agreement with its main financial institution. The amount available at any time is limited to $500,000 via an operating loan. Any balance borrowed will accrue interest at the bank’s prime lending rate plus 0.50% per annum. At December 31, 2022 there was no balance outstanding (2021 - $Nil). 4.DEFERRED REVENUE - OBLIGATORY RESERVE FUNDS A requirement of the Chartered Professional Accountants Canada Public Sector Accounting Handbook, is that obligatory reserve funds be reported as deferred revenue. This requirement is in place as legislation and external agreements restrict how these funds may be used and under certain circumstances these funds may possibly be refunded. The balances in the obligatory reserve funds of the Municipality are summarized below: 2022 2021 $$ Canada Community-Building Fund 14,938 377,457 Parkland 50,612 42,808 65,550 420,265 The continuity of deferred revenue - obligatory reserve funds is as follows: 2022 2021 $$ Balance - beginning of year 420,265 89,634 Add amounts received: Canada Community-Building Fund 375,039 743,586 Parkland 6,750 4,500 Interest 5,013 1,545 386,802 749,631 Less transfer to operations: Canada Community-Building Fund 741,517 419,000 Balance - end of year 65,550 420,265 8 CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2022 5.PENSION AGREEMENTS Certain employees of the Municipality are eligible members of the Ontario Municipal Employees Retirement System (OMERS), a multi-employer pension plan. The Actuarial Opinion contained in the 2022 Annual Report disclosed total actuarial liabilities of $130,306 million in respect of benefits accrued for service with actuarial assets of $123,628 million indicating an actuarial deficit of $6,678 million. Because OMERS is a multi-employer plan, any pension plan surpluses or deficits are a joint responsibility of Ontario municipal organizations and their employees. As a result, the Municipality does not recognize any share of the OMERS pension surplus or deficit. The Municipality's required contributions to OMERS in 2022 were $138,225 (2021 -$123,374). Some of the employees of the Municipality, who are not members of OMERS, are eligible to be members of a contributory pension plan. Employer contributions to the plan by the Municipality during the year amounted to $23,056 (2021 - $28,102). These contributions which match the employees' contribution for current service, are expense during the year in which services are rendered and represent the total pension obligation of the Municipality. 6.DEFERRED REVENUE - OTHER Included in deferred revenue - other are the following amounts: 2022 2021 $$ Deposits and other 31,329 13,088 Library grants and donations -6,500 31,329 19,588 The continuity of deferred revenue - other is as follows: 2022 2021 $$ Balance - beginning of year 19,588 7,291 Deposits and other 31,329 13,088 Library grants and donations -6,500 31,329 19,588 Deposits and other 13,088 7,291 Library grants and donations 6,500 - 19,588 7,291 Balance - end of year 31,329 19,588 9 CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2022 7.TRUST FUNDS Trust funds administered by the Municipality amounting to $11,411 (2021 -$11,386) have not been included in the Consolidated Statement of Financial Position nor have their operations been included in the Consolidated Statement of Operations and Accumulated Surplus. As such balances are held in trust by the Municipality for the benefit of others, they are not presented as part of the Municipality's financial position or operations. 8.LONG TERM DEBT 2022 2021 $$ Debenture from Ontario Infrastrucutre and Lands Corporation (OILC). The loan is repayable, by the Municipality, in monthly blended principal and interest installments of $11,002, with interest at 4.29% per annum maturing on June 15, 2052.2,207,429 - (a)The long term debt in (a) issued in the name of the Municipality has been approved by by-law. The annual principal and interest payments required to service this liability is within the annual debt repayment limit prescribed by the Ministry of Municipal Affairs and Housing. (b)Interest paid during the year on long term debt amounted to $47,581 (2021 -$Nil). (c)The long term debt reported in (a) of this note is repayable as follows: Principal Interest Total $$$ 2023 38,069 93,956 132,025 2024 39,735 92,290 132,025 2025 41,473 90,552 132,025 2026 43,288 88,737 132,025 2027 45,182 86,843 132,025 2028 and subsequent years 1,999,682 1,234,928 3,234,610 2,207,429 1,687,306 3,894,735 10 CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2022 9.LANDFILL CLOSURE AND POST-CLOSURE LIABILITY The estimated liability for landfill closure and post-closure costs for the two landfill sites the Municipality operates is $1,540,567 (2021 -$1,595,993). 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 $1,390,677 (2021 - $1,188,988) 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 $1,926,051 as at December 31, 2022 (2021 -$1,986,193). The remaining capacity of the solid waste landfill sites is estimated at 70,096 m3 (2021 -74,931 m3) which is 12.5% (2021 -13.3%) of the sites' total capacity. The total discounted future cash flows for closure and post-closure cost is estimated at $1,926,051 (2021 -$1,986,193) as at December 31, 2022 using an inflation rate of 2.20% (2021 - 1.67%) and a discount rate of 4.31% (2021 - 3.14%).The Municipality decided to close the Hunt Road site at December 31, 2021. The Marlbank Road site is expected to reach it's capacity in 2037. 10.CONTINGENT LIABILITIES The Municipality, in the course of its operations, is often named in lawsuits the outcomes of which are indeterminable at this time. No amounts in connection with these items have been reflected in these financial statements. 11 CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2022 11.TANGIBLE CAPITAL ASSETS The net book value of the Municipality's tangible capital assets are: 2022 2021 $$ General Land and land improvements 1,780,090 1,699,434 Buildings 3,365,857 2,955,465 Vehicles 981,381 1,116,006 Machinery and equipment 1,895,413 1,678,585 Infrastructure Buildings 768,273 878,048 Roads 9,721,723 9,536,859 Underground and other networks 8,165,031 3,585,169 Bridges and other structures 7,744,533 7,381,903 34,422,301 28,831,469 Assets under construction 212,616 5,301,255 34,634,917 34,132,724 For additional information, see the Consolidated Schedule of Tangible Capital Assets. During the year there were no write-downs of assets (2021 -$Nil) and no interest capitalized (2021 -$Nil). Tangible capital assets allocated by segment are as follows: 2022 2021 $$ General government 1,243,342 1,439,661 Protection services 847,238 925,494 Transportation services 19,300,052 18,628,269 Environmental services 10,174,932 10,039,791 Recreation and cultural services 3,056,318 3,083,926 Planning and development 13,035 15,583 34,634,917 34,132,724 12 CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2022 12.ACCUMULATED SURPLUS Accumulated surplus consists of the following: 2022 2021 $$ Surplus/(Deficit) Operating (344,369)- Unfunded landfill closure and post-closure costs (1,540,567)(1,595,993) Library board 10,646 10,162 (1,874,290)(1,585,831) Invested In Capital Assets Tangible capital assets - net book value 34,634,917 34,132,724 Long term debt (2,207,429)- Unfunded capital - Municipal building -(9,528) Unfunded capital - Fire hall -(58,900) Unfunded capital - Lagoon system upgrades -(2,151,403) Unfunded capital - Bridges and roads (110,022)- 32,317,466 31,912,893 Surplus 30,443,176 30,327,062 Reserves Working funds -531,167 General government 219,439 428,355 Protection services 351,566 285,841 Transportation services 596,779 773,171 Water and sewer 1,141,811 1,257,312 Recreation services 632,859 442,953 Community improvement plan 37,654 45,154 Total Reserves 2,980,108 3,763,953 Reserve Funds Transportation services 219,193 208,239 Landfill 1,390,677 1,188,988 Total Reserve Funds 1,609,870 1,397,227 35,033,154 35,488,242 13 CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2022 13.BUILDING SERVICES CONTRACTUAL AGREEMENT The Municipality of Tweed, the Township of Stirling-Rawdon, the Town of Deseronto, the Township of Tyendinaga, the Township of Madoc and the Municipality of Marmora and Lake 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. 14.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 2022 2022 2021 $$$ (Unaudited) Salaries and benefits 2,755,054 2,693,885 2,543,554 Interest charges 96,436 47,581 1,816 Materials 2,332,156 2,638,334 2,269,010 Contracted services 2,297,845 2,264,477 2,701,974 Rents and financial 66,590 75,155 64,327 External transfers 379,919 381,977 331,770 Amortization 2,283,520 2,154,920 2,058,196 10,211,520 10,256,329 9,970,647 15.OPERATIONS OF SCHOOL BOARDS AND THE COUNTY OF HASTINGS During 2022, requisitions were made by the County of Hastings and School Boards requiring the Municipality to collect property taxes and payments in lieu of property taxes on their behalf. The amounts collected and remitted are as follows: School Boards County $$ Property taxes 1,225,945 1,931,062 Taxation from other governments 1,608 8,430 Amounts requisitioned and remitted 1,227,553 1,939,492 These amounts have not been included in the Consolidated Statement of Operations and Accumulated Surplus. 16.COMPARATIVE FIGURES Certain comparative figures were restated, where required, to conform with the current year presentation. 14 CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2022 17.BUDGET FIGURES The budget, approved by the Municipality, for 2022 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 9,551,248 9,288,075 Capital 3,853,575 4,116,748 Total Council approved budget 13,404,823 13,404,823 Less: Tangible capital assets capitalized -(4,118,237) Add: Amortization of tangible capital assets -2,283,520 Less: Principal repayment of long term debt -(63,224) Less: Transfers to/from reserves and reserve funds (2,299,113)(1,293,872) Gain on disposition of tangible capital assets 155,095 - Proceeds on disposal of tangible capital assets (350,000)- Proceeds of long term debt (209,100)- Change in landfill closure -(19,257) Libary board budget 56,145 56,145 Change in unfunded capital -(68,428) Adjustments for presentation purposes 30,050 30,050 Adjusted budget per Consolidated Statement of Operations 10,787,900 10,211,520 15 CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2022 18.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. The Municipality of Tweed also entered into a joint services agreement on February 1, 2021 to provide for the joint enforcement and administration of By-Laws with the Town of Deseronto, Township of Madoc, Township of Stirling-Rawdon and Township of Tyendinaga. 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. 16 CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2022 19.OIL KINGS HOCKEY TEAM INFORMATION In 2021, the Municipality began operations of the Tweed Oil Kings, a men's hockey team that is a part of the Eastern Ontario Super Hockey League (EOSHL). The amounts presented below are also included in the Consolidated Statement of Operations and Accumulated Surplus. Various revenues and expenses related to the team are as follows: 2022 2021 $$ Revenue Ticket sales 22,367 12,211 Fundraising 20,834 8,858 Advertising 14,700 15,750 Donations 4,081 - Miscellaneous 1,512 202 63,494 37,021 Expenses Equipment and uniforms 15,112 22,674 Travel 12,707 4,393 Alcohol cost of sales and licence 7,634 3,475 Referees and time keepers 6,210 3,710 Merchandise for sale 2,883 5,939 League fees 2,472 2,000 Supplies 1,086 1,895 Ice rental 566 666 Logos -3,749 48,670 48,501 Annual surplus (deficit)14,824 (11,480) 17 CORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED SCHEDULE OF TANGIBLE CAPITAL ASSETS For the Year Ended December 31, 2022 General Infrastructure Land and Land Improvements Buildings Vehicles Machinery and Equipment Buildings Roads Underground and Other Networks Bridges and Other Structures Assets Under Construction Totals $$$$$$$$$$ COST Balance, beginning of year 2,450,940 4,905,477 3,549,804 2,928,420 2,947,125 22,137,207 5,811,623 10,392,265 5,301,255 60,424,116 Add: additions during the year 38,130 -48,622 427,666 -1,258,995 5,958 -1,119,872 2,899,243 Less: disposals during the year 183,733 5,951 111,971 107,808 -556,655 386 280,749 -1,247,253 Internal transfers 332,366 566,509 ----4,742,558 567,078 (6,208,511)- Balance, end of year 2,637,703 5,466,035 3,486,455 3,248,278 2,947,125 22,839,547 10,559,753 10,678,594 212,616 62,076,106 ACCUMULATED AMORTIZATION Balance, beginning of year 751,506 1,950,012 2,433,798 1,249,835 2,069,077 12,600,348 2,226,454 3,010,362 -26,291,392 Add: additions during the year 106,107 156,117 170,536 204,529 109,775 1,074,131 168,654 165,071 -2,154,920 Less: disposals during the year -5,951 99,260 101,499 -556,655 386 241,372 -1,005,123 Balance, end of year 857,613 2,100,178 2,505,074 1,352,865 2,178,852 13,117,824 2,394,722 2,934,061 -27,441,189 NET BOOK VALUE OF TANGIBLE CAPITAL ASSETS 1,780,090 3,365,857 981,381 1,895,413 768,273 9,721,723 8,165,031 7,744,533 212,616 34,634,917 18 CORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED SCHEDULE OF SEGMENT DISCLOSURE For the Year Ended December 31, 2022 General Government Protection Services Transportation Services Water and Sewer Other Environmental Services Recreation and Cultural Services Planning and Development Consolidated $$$$$$$$ Revenues Property taxation 271,050 1,103,968 1,973,728 -258,818 654,318 177,607 4,439,489 User charges 145,837 39,278 27,910 881,961 241,962 181,428 29,806 1,548,182 Government transfers - operating 152,022 534,494 940,831 -96,710 416,237 142,213 2,282,507 Government transfers - capital Other municipalities - 90,000 - - 321,327 - 33,310 - - - - - - - 354,637 90,000 Penalties and interest on taxes 87,569 ------87,569 Investment income 59,808 -2,961 -23,247 --86,016 Donations 2,743 61,242 ---34,358 -98,343 Other grants 33,808 ----5,500 -39,308 Canada Community-Building Fund amounts earned --741,517 ----741,517 Gain/(loss) on disposal of tangible capital assets 92,070 -(52,088)--(6,309)-33,673 Total revenues 934,907 1,738,982 3,956,186 915,271 620,737 1,285,532 349,626 9,801,241 Expenses Salaries and benefits 675,142 97,822 927,579 95,500 197,038 542,157 158,647 2,693,885 Interest charges ---47,581 ---47,581 Materials 535,487 126,081 1,361,601 172,406 13,943 343,469 85,347 2,638,334 Contracted services 199,125 1,121,026 318,029 304,666 172,395 79,514 69,722 2,264,477 Rents and financial 57,713 -4,265 1,143 3,068 566 8,400 75,155 External transfers 8,500 264,184 --96,398 -12,895 381,977 Amortization 38,540 78,255 1,437,410 326,629 -271,538 2,548 2,154,920 Total expenses 1,514,507 1,687,368 4,048,884 947,925 482,842 1,237,244 337,559 10,256,329 Net surplus/(deficit)(579,600)51,614 (92,698)(32,654)137,895 48,288 12,067 (455,088) 19 CORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED SCHEDULE OF SEGMENT DISCLOSURE For the Year Ended December 31, 2021 General Government Protection Services Transportation Services Water and Sewer Other Environmental Services Recreation and Cultural Services Planning and Development Consolidated $$$$$$$$ Revenues Property taxation 254,922 1,089,998 1,990,118 -256,209 551,065 166,439 4,308,751 User charges 152,592 91,410 45,403 879,369 351,611 142,158 37,800 1,700,343 Government transfers - operating 152,180 547,236 1,005,656 -110,359 615,302 84,979 2,515,712 Government transfers - capital Other municipalities - 15,000 - - 134,136 - 2,066,938 - - - - 13,500 - - 2,201,074 28,500 Penalties and interest on taxes 98,747 ------98,747 Investment income 15,053 -1,639 -19,794 --36,486 Donations -18,511 ---38,267 -56,778 Other grants 15,181 6,000 ---3,146 -24,327 Canada Community-Building Fund amounts earned --419,000 ----419,000 Gain/(loss) on disposal of tangible capital assets 294,722 -(17,590)----277,132 Total revenues 998,397 1,753,155 3,578,362 2,946,307 737,973 1,363,438 289,218 11,666,850 Expenses Salaries and benefits 663,866 83,121 885,690 95,721 191,656 485,773 137,727 2,543,554 Interest charges ------1,816 1,816 Materials 379,591 115,996 1,209,352 106,337 20,219 368,826 68,689 2,269,010 Contracted services 149,151 1,101,232 251,291 621,235 529,169 44,916 4,980 2,701,974 Rents and financial 38,355 -4,328 9,472 3,102 670 8,400 64,327 External transfers 8,000 227,638 --88,614 -7,518 331,770 Amortization 35,585 98,751 1,391,899 264,922 -266,627 412 2,058,196 Total expenses 1,274,548 1,626,738 3,742,560 1,097,687 832,760 1,166,812 229,542 9,970,647 Net surplus/(deficit)(276,151)126,417 (164,198)1,848,620 (94,787)196,626 59,676 1,696,203 20 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, 2022, 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 financial statements present fairly, in all material respects, the financial position of the Trust Funds as at December 31, 2022, 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. Chartered Professional Accountants Licensed Public Accountants Peterborough, Ontario March 29, 2023 CORPORATION OF THE MUNICIPALITY OF TWEED TRUST FUNDS STATEMENT OF FINANCIAL POSITION At December 31, 2022 Recreation Associations Santa Claus Parade Fund 2022 Total 2021 Total $$$$ FINANCIAL ASSETS Cash -953 953 1,008 Investments (note 2)10,458 -10,458 10,373 Accounts receivable ---5 10,458 953 11,411 11,386 FUND BALANCES 10,458 953 11,411 11,386 TRUST FUNDS STATEMENT OF CONTINUITY For the Year Ended December 31, 2022 Recreation Associations Santa Claus Parade Fund 2022 Total 2021 Total $$$$ BALANCES - beginning of year 10,378 1,008 11,386 11,108 RECEIPTS Donations -1,000 1,000 250 Interest 80 -80 28 80 1,000 1,080 278 EXPENSES Parade costs -1,050 1,050 - Bank charges -5 5 - -1,055 1,055 - BALANCES - end of year 10,458 953 11,411 11,386 The accompanying notes are an integral part of these financial statements 23 CORPORATION OF THE MUNICIPALITY OF TWEED TRUST FUNDS NOTES TO THE FINANCIAL STATEMENTS For the Year Ended December 31, 2022 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 3.35% and maturity of November 15, 2023. 24 CORPORATION OF THE MUNICIPALITY OF TWEED TWEED PUBLIC LIBRARY BOARD FINANCIAL STATEMENTS DECEMBER 31, 2022 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, 2022, the statements of operations and accumulated surplus, change in net financial assets 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, 2022, 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. Chartered Professional Accountants Licensed Public Accountants Peterborough, Ontario March 29, 2023 CORPORATION OF THE MUNICIPALITY OF TWEED TWEED PUBLIC LIBRARY BOARD STATEMENT OF FINANCIAL POSITION At December 31, 2022 2022 2021 $$ FINANCIAL ASSETS Cash 25,168 52,769 Accounts receivable 1,665 3,168 TOTAL FINANCIAL ASSETS 26,833 55,937 LIABILITIES Due to Municipality (note 6)17,035 40,123 Deferred revenue (note 5)-6,500 TOTAL LIABILITIES 17,035 46,623 NET FINANCIAL ASSETS 9,798 9,314 NON-FINANCIAL ASSETS Tangible capital assets (note 3)672,957 698,213 Prepaid expenses 848 848 TOTAL NON-FINANCIAL ASSETS 673,805 699,061 ACCUMULATED SURPLUS (note 4)683,603 708,375 The accompanying notes are an integral part of these financial statements 28 CORPORATION OF THE MUNICIPALITY OF TWEED TWEED PUBLIC LIBRARY BOARD STATEMENT OF OPERATIONS AND ACCUMULATED SURPLUS For the Year Ended December 31, 2022 Budget Actual Actual 2022 2022 2021 $$$ (Unaudited) REVENUES Municipality of Tweed (note 6)157,080 157,080 163,591 Province of Ontario 15,776 15,373 15,859 Government of Canada 2,300 4,029 1,296 Other grants 23,280 5,500 3,146 Donations 11,024 16,631 16,316 Fines and other fees 3,765 2,859 1,670 Other -123 17 TOTAL REVENUES 213,225 201,595 201,895 EXPENSES Salaries and benefits 161,640 148,996 151,476 Electronic and other resources 1,500 4,834 3,666 Internet sustainability 1,500 1,489 1,460 Professional development 1,500 629 132 Supplies and maintenance 9,950 7,634 7,301 Office and administration 6,135 4,569 3,907 Specific projects 1,000 2,319 673 Utilities 15,000 9,829 8,317 Amortization 46,495 46,068 46,495 TOTAL EXPENSES 244,720 226,367 223,427 ANNUAL DEFICIT (31,495)(24,772)(21,532) ACCUMULATED SURPLUS - beginning of year 708,375 729,907 ACCUMULATED SURPLUS - end of year 683,603 708,375 The accompanying notes are an integral part of these financial statements 29 CORPORATION OF THE MUNICIPALITY OF TWEED TWEED PUBLIC LIBRARY BOARD STATEMENT OF CHANGE IN NET FINANCIAL ASSETS For the Year Ended December 31, 2022 Budget Actual Actual 2022 2022 2021 $$$ (Unaudited) ANNUAL DEFICIT (31,495)(24,772)(21,532) Amortization of tangible capital assets 46,495 46,068 46,495 Acquisition of tangible capital assets (15,000)(20,812)(16,402) Change in prepaid expenses --(25) INCREASE IN NET FINANCIAL ASSETS -484 8,536 NET FINANCIAL ASSETS - beginning of year 9,314 9,314 778 NET FINANCIAL ASSETS - end of year 9,314 9,798 9,314 The accompanying notes are an integral part of these financial statements 30 CORPORATION OF THE MUNICIPALITY OF TWEED TWEED PUBLIC LIBRARY BOARD STATEMENT OF CASH FLOWS For the Year Ended December 31, 2022 2022 2021 $$ CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES Annual deficit (24,772)(21,532) Items not involving cash Amortization of tangible capital assets 46,068 46,495 Change in non-cash assets and liabilities Accounts receivable 1,503 1,136 Prepaid expenses -(25) Due to Municipality (23,088)8,371 Deferred revenue (6,500)6,500 Net change in cash from operating activities (6,789)40,945 CAPITAL ACTIVITIES Acquisition of tangible capital assets (20,812)(16,402) NET CHANGE IN CASH (27,601)24,543 CASH - beginning of year 52,769 28,226 CASH - end of year 25,168 52,769 The accompanying notes are an integral part of these financial statements 31 CORPORATION OF THE MUNICIPALITY OF TWEED TWEED PUBLIC LIBRARY BOARD NOTES TO THE FINANCIAL STATEMENTS For the Year Ended December 31, 2022 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 of tangible capital assets are based on estimates of useful life and residual values. (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. Initial costs for tangible capital assets that were acquired or developed prior to 2009 were obtained using historical cost information or using current fair market values discounted by a relevant inflation factor to the point of acquisition. 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. 32 CORPORATION OF THE MUNICIPALITY OF TWEED TWEED PUBLIC LIBRARY BOARD NOTES TO THE FINANCIAL STATEMENTS For the Year Ended December 31, 2022 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 2022 is reflected on the Statement of Operations and Accumulated Surplus and the Statement of Change in Net Financial Assets. 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. 33 CORPORATION OF THE MUNICIPALITY OF TWEED TWEED PUBLIC LIBRARY BOARD NOTES TO THE FINANCIAL STATEMENTS For the Year Ended December 31, 2022 3.TANGIBLE CAPITAL ASSETS The net book value of the Board's tangible capital assets are: Buildings Equipment Computers Books 2022 Totals 2021 Totals $$$$$$ COST Balance, beginning of year 876,450 149,130 13,691 83,859 1,123,130 1,118,579 Add: additions during the year --4,935 15,877 20,812 16,402 Less: disposals during the year ---12,327 12,327 11,851 Balance, end of year 876,450 149,130 18,626 87,409 1,131,615 1,123,130 ACCUMULATED AMORTIZATION Balance, beginning of year 262,887 116,435 8,823 36,772 424,917 390,273 Add: additions during the year 21,911 7,944 3,726 12,487 46,068 46,495 Less: disposals during the year ---12,327 12,327 11,851 Balance, end of year 284,798 124,379 12,549 36,932 458,658 424,917 NET BOOK VALUE OF TANGIBLE CAPITAL ASSETS 591,652 24,751 6,077 50,477 672,957 698,213 4.ACCUMULATED SURPLUS Accumulated surplus consists of the following: 2022 2021 $$ Surplus Operations 10,646 10,162 Invested In Capital Assets Tangible capital assets - net book value 672,957 698,213 683,603 708,375 34 CORPORATION OF THE MUNICIPALITY OF TWEED TWEED PUBLIC LIBRARY BOARD NOTES TO THE FINANCIAL STATEMENTS For the Year Ended December 31, 2022 5.DEFERRED REVENUE Included in deferred revenue are the following amounts: 2022 2021 $$ Kimberley Foundation grant -4,000 Specified donation for books -2,500 -6,500 6.INTER-ENTITY TRANSACTIONS During the year, the Board entered into transactions with the Municipality of Tweed. As part of the budgeting process, the Municipality approves a contribution to the Board which is identified on the Statement of Operations and Accumulated Surplus. Details of the inter-entity expense transactions are as follows: 2022 2021 $$ Unallocated costs: Water and sewer 903 651 903 651 In addition, the following services are provided to the Board by the Municipality at no cost: Payroll services Rental of land Building insurance 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. 35