HomeMy WebLinkAbout2009 Financial StatementsKneehill County
Financial Statements
For the year ended December 31, 2009
Contents
Auditors' Report
Financial Statements
Consolidated Statement of Financial Position
3
Consolidated Statement of Financial Activities
4
Consolidated Statement of Changes in Net Financial Assets
6
Consolidated Statement of Cashflows
7
Schedule of Tangible Capital Assets
8
Schedule of Net Taxes for Municipal Purposes
9
Schedule of Operating Expenses by Object
10
Schedule of Consolidated Segment Disclosure
11
Schedule of Government Transfers
12
Consolidated Notes to Financial Statements
13-33
Tel: 403 342 2500 BDO Canada LLP
JBDO Fax: 403 343 3070 Millennium Centre
www,bdo.ca 600, 4909 - 49th Street
Red Deer AB T4N iV1 Canada
To the Reeve and Council of
Kneehill County
We have audited the consolidated statement of financial position of Kneehill County as at December 31,
2009 and the consolidated statements of financial activities, consolidated statement of changes in net
financial assets and consolidated statement of cash flaws for the year then ended. These financial
statements are the responsibility of the municipal administration. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with Canadian generally accepted auditing standards. Those
standards require that we plan and perform an audit to obtain reasonable assurance whether the financial
statements are free of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by the municipal administration, as well as
evaluating the overall financial statement presentation.
In our opinion, these financial statements present fairly, in all material respects, the financial position of
Kneehill County as at December 31, 2009 and the results of its financial activities and the changes in its
financial position for the year then ended in accordance with Canadian generally accepted accounting
principles.
Chartered Accountants
Red Deer, Alberta
April 19, 2010
BDO Canada LLP, a Canadian limited ha OfIity partnership, Is a member of BDO Inlemattona; Lfm l led, a UK company Omited by gra ranted. and torme part of the ,ntafral.bal 600
oe[wo,P of fodependent mdmbe, firms.
Kneehill County
Consolidated Statement of Financial Position
As at December 31, 2009
Liabilities
Accounts payable and accrued liabilities
3,341,139
Restated
Deposit liabilities
2009
2008
Deferred revenue (Note 7)
($)
M
Financial Assets
461,580
395,185
Cash and temporary investments (Note 3)
26,467,428
16,342,005
Investments (Note 3)
-
12,000,000
Taxes receivable (Note 4)
315,608
271,199
Trade and other accounts receivable (Note 5)
2,225,527
2,328,454
Tax sale trust
7,235
7,235
Trochu recreation trust
1,769
-
Other assets (Note 6)
121
121
14,404,022
29.017.688
30.949.014
Liabilities
Accounts payable and accrued liabilities
3,341,139
2,724,371
Deposit liabilities
185,000
205,250
Deferred revenue (Note 7)
2,794,323
2,581,941
Employee benefit obligations (Note 8)
461,580
395,185
Provision for landfill closure and postclosure costs (Note 9)
66,000
57,000
Tax sale trust
7,235
7,235
Trochu recreation trust
18,101
Long term debt (Note 10)
9,638,299
10,555,909
16,493,576
16,544, 992
Net Financial Assets
12,524,112
14,404,022
Non Financial Assets
Prepaid expenses
171,387
172,092
Tangible capital assets (Note 12)
74,843,391
63,398,775
Inventory of supplies (Note 13)
2,741,718
2,495,036
77,756,496 66,065,903
Accumulated Equity 90,280,608 80,469,925
Commitments (Note 19), Contingent Liabilities (Note 20)
Reeve CAO
3
Kneehill County
Consolidated Statement of Financial Activities
For the year ended December 31, 2009
258,632
269,225
1,725,068
1,414,400
Budget
261,660
Restated
194,792
2009
2009
2008
REVENUE
($)
($)
($)
Net taxes for municipal purposes (Schedule 2)
18,338,900
18,337,619
16,288,303
Sales and user charges
482,130
822,547
877,362
Sales to other governments
-
33,567
11,201
Drilling licenses
80,000
157,851
218,432
Fees, licenses, permits, fines
156,550
172,753
243,856
Interest and patronage dividends
405,000
245,079
629,259
Rentals
50,700
59,255
31,374
Penalties and interest on taxes
82,000
63,713
51,194
Provincial government transfers
3,619,647
1,950,705
3,989,463
Local government transfers
258,220
266,212
223,615
Local improvement charges
82,000
342,171
81,666
Gain on disposal of assets
-
100,210
138,564
Other
68,408
115,455
194,304
Total Revenue
Expenses
Legislative
Administration
Assessment
Fire services and safety program
Enforcement
Disaster services
Ambulance
Transportation
Bridges
Water
Sewer
Garbage and recycling
Community support services
Health services and cemetery
Planning
Agricultural service board
Parks, recreation and culture
Other
Total Expenses
Excess of Revenue Over Expenses Before Other
112
23,623,555 22,667,137 22,978,593
613,500
258,632
269,225
1,725,068
1,414,400
1,379,911
261,660
207,627
194,792
699,455
704,368
587,178
235,157
208,619
178,683
11,500
15,015
2,875
144,500
122,858
314,793
8,853,777
7,654,279
7,766,659
540.351
589,111
579,993
2,203,323
1,339,613
995,600
178,720
139,874
78,167
337,716
345,475
379,678
679,241
886,882
849,575
44,422
58,893
12,940
376,309
319,752
264,917
424,923
388,864
380,900
579,845
436,090
402,507
-
116,795
12,736
17, 909, 467
15,207,147
14,651,129
5,714,088
7,459,990
8,327,464
Kneehill County
Consolidated Statement of Financial Activities
(Continued)
For the year ended December 31, 2009
Excess of Revenue Over Expenses
Accumulated Equity, Beginning of Year
Accumulated Equity, End of Year
5
11,744,088 9,810,683 9,122,547
80,469,925 80,469,925 71,347,378
92,214,013 90,280,608 80,469,925
Budget
Restated
2009
2009
2008
M
M
M
Excess of Revenue Over Expenses Before Other
5,714,088
7,459,990
8,327,464
(continued)
Other Revenue (expense)
Provincial capital transfers
6,030,000
2,289,533
1,150,356
Local government capital transfers
-
154,604
(39,754)
Transfers to local governments for capital purposes
(93,444)
(315,519)
Excess of Revenue Over Expenses
Accumulated Equity, Beginning of Year
Accumulated Equity, End of Year
5
11,744,088 9,810,683 9,122,547
80,469,925 80,469,925 71,347,378
92,214,013 90,280,608 80,469,925
Kneehill County
Consolidated Statement of Changes in Net Financial Assets
For the year ended December 31, 2009
Excess of Revenues Over Expenses
Acquisition of tangible capital assets
Proceeds on disposal of tangible capital assets
Amortization of tangible capital assets
Gain on disposal of tangible capital assets
Acquisition of supplies inventories
Acquisition of prepaid expenses
Use of supplies inventories
Use of prepaid expenses
Decrease in Net Financial Assets
Net Financial Assets, Beginning of Year
Net Financial Assets, End of Year
0
Budget
(2,628,957)
Restated
2009
2009
2008
2,553,000
2,382,275
2,451,076
11,744,088
9,810,683
9,122,547
(20,720,800)
(15,635,227)
(13,886,217)
1,058,000
273,498
684,556
-
4,017,325
3,637,129
(100,210)
(138,564)
(19 662,800) (11,444,614) (9 703 096)
(2,553,000)
(2,628,957)
(3,365,566)
(150,000)
(149,366)
(172,092)
2,553,000
2,382,275
2,451,076
150,000
150,069
189,736
(245,979) (896,846)
(7,918,712) (1,879,910) (1,477,395)
14,404, 022 14,404,022 15, 881,417
6,485, 310 12,524,112 14,404, 022
Kneehill County
Consolidated Statement of Cashflows
For the year ended December 31, 2009
10,125,423
672,427
Restated
16,342,005
2009
2008
Cash and equivalents, end of year
M
M
Operating
Represented by:
Cash flows from operating activities
Cash
18,383,086
Excess/(shortfall) of revenues over expenses
9,810,683
9,122,547
Non cash items included in shortfall of revenues over expenses:
26,467,428
Amortization of tangible capital assets
4,017,325
3,637,129
Gain on disposal of tangible capital assets
(100,210)
(138,564)
Non cash charges to operations:
Decrease (increase) in taxes and grants in lieu receivable
(44,409)
197,680
Decrease (increase) in trade and other receivables
102,928
1,478,200
Decrease (increase) in other assets
(19,871)
1
Decrease (increase) in prepaid expenses
705
19,903
Decrease (increase) in inventory of supplies for consumption
(246,682)
(1,017,113)
Increase (decrease) in accounts payable and accrued liabilities
616,768
1,167,582
Increase (decrease) in deposit liabilities
(20,250)
205,250
Increase (decrease) in employee benefit obligations
66,395
395,185
Increase (decrease) in provisions for landfill closure and postclosure
9,000
57,000
Increase (decrease) in deferred revenue
212,381
193,379
14,404,763
15,318,179
Capital
Acquisition of tangible capital assets
(15,635,227)
(13,886,217)
Proceeds on disposal of tangible capital assets
273,498
684,556
(15,361,729)
(13,201,661)
Investing
Decrease (increase) in investments
12,000,000
(12,000,000)
Financing
Long term debt issued 11,000,000
Long term debt repaid (917,611) (444,091)
(917,611) 10,555,909
Change in cash and equivalents during the year
10,125,423
672,427
Cash and equivalents, beginning of year
16,342,005
15,669,578
Cash and equivalents, end of year
26,467,428
16,342,005
Represented by:
Cash
18,383,086
4,342,005
Temporary investments
8,084,342
12,000,000
26,467,428
16, 342, 005
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For the year ended December 31, 2009
Property Taxes
Farmland
Residential
Commercial
Linear property
Machinery and equipment
Railway
Minimum tax
Grants in lieu
Special Benefit Levy - Linden North
Special Benefit Levy - Water Service Area
Less: Requisition Transfers
Alberta School Foundation
Kneehill Foundation
Net Taxes For Municipal Purposes
Kneehill County
Schedule 2 - Net Taxes for Municipal Purposes
Budget
2009
2008
1,417, 914
1,418,009
1,479, 786
2,209,993
2,217,546
2,119,971
1, 656, 334
1,635,555
1,381,809
12, 386,627
12,407,513
10,756, 717
4,183,399
4,166,476
4,006,861
12,995
14,499
12,910
7,500
9,383
-
2,705
3,100
2,613
61,990
64,793
57,632
1,136, 756
1,138,007
1,002,913
23,076,213
23,074,881
20,821,212
(4,729,365)
(4,729,362)
(4,525,109)
(7,948)
(7,900)
(7,800)
18, 338, 900
18, 337, 619
16, 288, 303
For the year ended December 31, 2009
Kneehill County
Schedule 3 - Consolidated Expenses by Object
2009
2008
Budget
2009
Restated
Consolidated Expenses By Object
Salaries, wages and benefits
4,705,256
4,462,325
4,135,205
Contract and general services
3,789,520
2,860,280
2,865,538
Purchases from other governments
229,000
231,736
231,475
Materials, goods, supplies, utilities
2,352,055
2,355,138
2,518,527
Transfers to other governments
233,779
222,824
218,598
Transfers to local boards and agencies
38,000
38,327
38,238
Transfers to individual and organizations
572,402
472,902
609,459
Bank charges
-
5,972
9,406
Interest on debenture
1,379,130
451,369
260,250
Amortization expense
4,017,325
4,017,325
3,637,129
Property taxes cancelled
-
3,189
240
Other
593,000
85,760
127,064
17, 909,467 15,207,147 14,651,129
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Kneehill County
Schedule 5 — Schedule of Government Transfers
For the year ended December 31, 2009
Transfers For Operating:
Provincial Government
Local Government
Transfers For Capital:
Provincial Government
Local Government
2009
Budget 2009 2008
3,619,647 1,950,705 3,989,463
258,220 266,212 223,615
3,877,867 2,216,917 4,213,078
6,030,000 2,289,533 1,150,356
- 154,604 (39,754)
6,030,000 2,444,137 1,110,602
Kneehill County
Notes to Financial Statements
For the year ended December 31, 2009
1. Significant Accounting Policies
The financial statements of Kneehill County (the "County') are the representations of management
prepared in accordance with generally accepted accounting principles for local governments
established by the Public Sector Accounting Board of the Canadian Institute of Chartered
Accountants. Significant aspects of the accounting policies adopted by Kneehill County are as
follows:
(a) Reporting Entity
The financial statements reflect the assets, liabilities, revenues and expenditures, changes in
fund balances and changes in cash flows of the reporting entity. The financial statements
include all organizations that are accountable for the administration of their financial affairs and
resources to the County and are controlled by the County.
The schedule of taxes levied also includes requisitions for education, health, social and other
external organizations that are not part of the municipal reporting entity.
The statements exclude trust assets that are administered for the benefit of external parties.
Interdepartmental and organizational transactions and balances are eliminated.
(b) Basis of Accounting
Revenues are accounted for in the period in which the transactions or events occurred that gave
rise to the revenues.
Funds from external parties and earnings thereon that are restricted by agreement or
legislation are accounted for as deferred revenue until used for the purpose specified.
Government transfers are recognized in the financial statements as revenues in the period that
the events giving rise to the transfer occurred, providing the transfers are authorized, the County
has met any eligibility criteria, and reasonable estimates of the amounts can be made.
Expenditures are recognized in the period the goods and services are acquired and a liability is
incurred or transfers are due.
(c) Use of Estimates
The preparation of financial statements in conformity with Canadian generally accepted
accounting principles requires management to make estimates and assumptions that affect the
reported amount of assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements, and the reported amounts of revenues and expenditures
during the period. Where measurement uncertainty exists, the financial statements have been
prepared within reasonable limits of materiality. Actual results could differ from those
estimates.
13
Kneehill County
Notes to Financial Statements
For the year ended December 31, 2009
1. Significant Accounting Policies (Continued)
(d) Temporary Investments
Temporary investments are recorded at cost and represent short-term bank
deposits with original maturities of 90 days or less. The short-term bank deposits
earn interest at a rate of 0.5% per annum.
(e) Investments
Investments are recorded at cost and represent short-term bank notes and deposits that have
an effective interest rates of .75% to 2.0% and mature in less than one year but after 90 days.
(f) Inventories for Consumption
Inventories of materials and supplies for consumption are valued at the lower of cost or
replacement value with cost determined by the average cost method. Inventory of gravel is as
determined by perpetual records and is recorded in the accounts to the extent of royalties, land
costs, crushing costs incurred, hauling, and rental equipment costs.
Land held for resale is recorded at the lower of cost or net realizable value. Cost includes costs
for land acquisition and improvements required to prepare the land for servicing such as
clearing, stripping and leveling charges. Related development costs incurred to provide
infrastructure such as water and wastewater services, roads, sidewalks and street lighting are
recorded as physical assets under their respective function.
(g) Pension Expenditure
The County participates in a multi-employer defined benefit pension plan. This plan is accounted
for as a defined contribution plan.
(h) Landfill closure and post -closure liability
Pursuant to the Alberta Environmental Protection and Enhancement Act, the town is required to
fund the closure of its landfill site and provide for post -closure care of the facility. Closure and
post -closure activities include the final clay cover, landscaping, as well as surface and ground
water monitoring, leachate control, and visual inspection. The requirement is being provided for
over the estimate of the estimated remaining life of the landfill site based on usage.
(i) Government Transfers
Government transfers are the transfer of assets from senior levels of government that are not the
result of an exchange transaction, are not expected to be repaid in the future, or as a result of a
direct financial return.
Government transfers are recognized in the financial statements as revenue in the period in
which events giving rise to the transfer occur, providing the transfers are authorized, any
eligibility criteria have been met, and reasonable estimates of the amounts can be determined.
Kneehill County
Notes to Financial Statements
For the year ended December 31, 2009
1. Significant Accounting Policies (Continued)
(il Recuisition Over -levy and Under -levy
Over -levies and under -levies arise from the difference between the actual property
tax levy made to cover each requisition and the actual amount requisitioned.
If the actual levy exceeds the requisition, the over -levy is accrued as a liability and
property tax revenue is reduced. Where the actual levy is less than the requisition
amount, the under -levy is accrued as a receivable and as property tax revenue.
Requisition tax rates in the subsequent year are adjusted for any over -levies or
under -levies of the prior year.
W Non-financial Assets
Non-financial assets are not available to discharge existing liabilities and are held for use in the
provision of services. They have useful lives extending beyond the current year and are not
intended for sale in the normal course of operations. The change in non-financial assets during
the year, together with the excess of revenues over expenses, provides the consolidated
Change in Net Financial Assets for the year.
i. Tangible Capital Assets
Tangible capital assets are recorded at cost which includes all amounts that are directly
attributable to acquisition, construction, development or betterment of the asset. The
cost, less residual value, of the tangible capital assets is amortized on a straight-line
basis over the estimated useful life as follows:
Years
Land improvements 10-20
Buildings 25-50
Engineered Structures
Water system 15-75
Wastewater system 25-60
Other engineered systems 6-50
Machinery and equipment 5-45
Vehicles 5-20
Assets under construction are not amortized until the asset is available for productive
use.
ii. Contributions of Tangible Capital Assets
Tangible capital assets received as contributions are recorded at fair value at the date of
receipt and also are recorded as revenues.
1tly
Kneehill County
Notes to Financial Statements
For the year ended December 31, 2009
1. Significant Accounting Policies (Continued)
iii. Leases
Leases are classified as capital or operating leases. Leases which transfer substantially
all of the benefits and risks incidental to ownership of property are accounted for as
capital leases. All other leases are accounted for as operating leases and the related
lease payments are charged to expenses as incurred.
iv. Inventories
Inventories held for consumption are valued at the lower of cost or replacement value
with cost determined by the average cost method.
2. Compliance to Budget Requirements
The legislative requirements for the Budget are that cash inflows for the period must be equal cash
outflows. Cash inflows and outflows could include such items as: debt proceeds and debt payments,
transfers to and from reserves, and asset sale proceeds. These items are not recognized as
revenues or expenses in the Statement of Operations as they do not meet those definition in the
public sector accounting standard requirements.
The legislation does not require (but does preclude) the funding of the cash items as liability accruals
or amortization to provide for future cash requirements, thus, there is no requirement to include them
in the budget. However, these items are recognized as expenses in the Statement of Operations.
The financial items included in the legislative budget and the Public Sector Accounting Statement is
different. The purpose of this note is to explain the difference between the two requirements and
demonstrate how the requirements for a balanced budget have been met.
16
Kneehill County
Notes to Financial Statements
For the year ended December 31, 2009
2. Compliance to Budget Requirements (Continued)
Revenue
Net taxes for municipal purposes
Sales and user charges
Sales to governments
Drilling licenses
Fees, licenses, permits, fines
Interest and patronage dividends
Rentals
Penalties and interest
Provincial government transfers
Local government transfers
Local improvement charges
Gain on sale of assets
Other
Total revenue
Expenses
Legislative
Administration
Assessment
Fire services and safety program
Enforcement
Disaster services
Ambulance
Transportation
Bridges
Water
Sewer
Garbage and recycling
Community support services
Health services and cemetery
Planning
Agricultural service board
Parks, recreation and culture
Other
Total expenditures
Financial Plan Amortization Reallocating Fiscal Plan per
BCapital Financial
Bylaw Allocation
Expenditures Statements
$18,338,900 $
$ $18,338,900
$18,337,619
482,130 -
- 482,130
822,547
1,725,068
-
33,567
80,000
80,000
157,851
156,550 -
- 156,550
172,753
405,000 -
- 405,000
245,079
50,700
- 50,700
59,255
82,000 -
- 82,000
63,713
3,619,647 -
- 3,619,647
1,950,705
258,220 -
- 258,220
266,212
82,000 -
- 82,000
342,171
368,635 (1,030,000)
-
100,210
68,408 -
- 68,408
115,455
1,339,613
147,003
31,717
23,623,555 -
- 23,623,555
22,667,137
613,500
613,500
258,632
1,685,968
39,100
1,725,068
1,414,400
261,660
261,660
207,627
512,503
186,952
699,455
704,368
235,157
235,157
208,619
11,500
11,500
15,015
144,500
-
144,500
122,858
9,392,677
3,017,100 (3,556,000)
8,853,777
7,654,279
1,201,716
368,635 (1,030,000)
540,351
589,111
1,915,325
287,998
2,203,323
1,339,613
147,003
31,717
178,720
139,874
325,972
11,744
337,716
345,475
679,241
679,241
886,882
36,554
7,868
44,422
58,893
376,309
376,309
319,752
382,156
42,767
424,923
388,864
556,405
23,440
579,845
436,090
18,478,146 4,017,321 (4 586 000) 17,909,467 15,207 147
Excess (deficiency) of revenue over
expenses 5,145,409 (4 017 321) 4,586,000 5 714 088 7,459,990
irl
For the year ended December 31, 2009
Kneehill County
Notes to Financial Statements
2. Compliance to Budget Requirements (Continued)
Reallocating
Fiscal Plan Per
Financial Plan Amortization
Capital
Financial
Bylaw Allocation
Expenditures
Statements
Actual
Other
Provincial capital transfers
6,030,000
6,030,000
2,289,533
Local government capital transfers
-
-
154,604
Transfers to local governments for
capital purposes
- -
-
-
(93,444)
$ 11,175,409 $ (4,017,321)
$ 4,586,000
$ 11 744,088 $
9,810,683
Debenture Debt
6,300,000 -
-
6,300,000
Sale ofAssets
1,058,000 -
1,058,000
Capital Expenditures
(16,134,800) -
(4,586,000)
(20,720,800)
(15,635,227)
Inter -fund transfers
(1,480,998) -
(1,480,998)
(1,717,239)
Additional transfers
4,310,063
Proceeds
- -
-
-
273,498
Debt repayment
(917,611)
(917,611)
(917,611 )
(4,017,321)
(3,875,833)
Add Back:
Non-cash items
Amortization
4,017,321
Gain on sale of assets
(100,210)
41,278
1V
For the year ended December 31, 2009
3. Cash and Temporary Investments
Cash
Temporary investments
Investments
Kneehill County
Notes to Financial Statements
2009
($)
$18,383,086
8,084,342
26,467,428
$26,467,428
2008
($)
$4,342,005
12,000,000
16,342,005
12,000,000
$28,342,005
A line of credit of $3,000,000 is available to the County should the need arise at a floating rate of
prime rate minus 0.75%.
Included in cash and temporary investments is $2,794,323 (2008 — $2,581,941) received from the
province of Alberta restricted for future projects (Note 7).
Investments of $12,000,000 matured during the year and are now included in cash.
4. Taxes Receivable
2009
2008
($)
($)
Current taxes and grants in place of taxes
$275,294
$219,688
Tax arrears and grants in place of taxes
116,889
73,886
392,183
293,574
Less: allowance for doubtful tax accounts
(76,575)
(22,375)
$315,608
$271,199
5. Trade and Other Accounts Receivable
2009
2008
($)
($)
Provincial grants
$1,482,020
$1,518,931
GST Receivable
360,914
316,058
Trade and other
382,593
493,465
$2,225,527
$2,328,454
19
Kneehill County
Notes to Financial Statements
For the year ended December 31, 2009
6. Other Assets
2009 2008
Alberta Capital Finance Authority, shares, at cost 121 121
7. Deferred Revenue
The vacation and sick benefits liability is comprised of vacation and sick days credits that
employees are deferring to future years. Employees have either earned the benefits (and are
vested) or are entitled to these benefits within the next budget year.
20
2009
2008
($)
($)
Alberta Municipal Infrastructure Program
$1,615,047
$920,807
New Deal for Cities and Communities
203,264
-
Street Improvement Program
88,288
64,648
Emergency Management Program Grant
8,700
-
Municipal Sustainability Initiative
847,001
1,578,231
Kneehill Community Resource Program
23,000
-
F.C.S.S.
5,271
14,524
Public Health - C.B.I.
3,752
3,731
$ 2,794,323
$2,581,941
8. Employee Benefit Obligations
2009
2008
($)
($)
Accrued sick benefits
$301,293
$256,928
Accrued vacation
160,287
138,257
$461,580
$395,185
The vacation and sick benefits liability is comprised of vacation and sick days credits that
employees are deferring to future years. Employees have either earned the benefits (and are
vested) or are entitled to these benefits within the next budget year.
20
Kneehill County
Notes to Financial Statements
For the year ended December 31, 2009
9. Provision for Landfill Closure & Postclosure Costs
Alberta environmental law requires closure and post closure care of landfill sites, which includes
final covering and landscaping, pumping of ground water and leachates from the site, and ongoing
environmental monitoring, site inspections and maintenance.
The estimated total liability is based on the sum of discounted future cash flows for closure and
post -closure activities for 25 years after closure using a discount rate of 4.4% and assuming annual
inflation of 3%.
The accrued liability portion is based on the cumulative capacity used at year end compared to the
estimated total landfill capacity. The total capacity of the site is estimated at 47,520 cubic meters.
The existing landfill site is expected to reach capacity in approximately the year 2030.
The county has not designated assets for settling closure and post -closure liabilities.
Estimated closure costs
Estimated post -closure costs
Estimated total liability
Estimated capacity remaining
Portion of total liability remaining to be recognized
Estimated capacity used
Accrued liability portion
21
2009
2008
$78,000
$78,000
110,000
110,000
$188,000 $188,000
65% 70%
122,000 131,000
35% 30%
66,000 57,000
Kneehill County
Notes to Financial Statements
For the year ended December 31, 2009
10. Long Term Debt
2009 2008
Tax supported debentures $9,638,299 $10,555,909
The current portion of long-term debt amounts to $958,298 (2008 - $917,611)
Principal and interest repayments are as follows:
Principal Interest Total
2010
$958,298
$412,332
$1,370,630
2011
1,000,788
369,842
1,370,630
2012
1,045,163
325,467
1,370,630
2013
1,091,506
279,124
1,370,630
2014
1,139,903
230,727
1,370,630
Thereafter
4,402,641
394,565
4,797,206
$9,638,299
$2,012,057
$11,650,356
Debenture debt is repayable to the Alberta Municipal Financing Corporation and
bears interest at a fixed rate of 4.3859% per annum, before Provincial subsidy,
and matures on June 16, 2018. Debenture debt is issued on the credit and
security of Kneehill County at large.
Interest on debenture debt amounted to $451,369 (2008 - $260,250)
Total cash payments for interest in 2009 were $453,019 (2008 - $241,224).
22
Kneehill County
Notes to Financial Statements
For the year ended December 31, 2009
11. Debt Limits
Section 276(2) of the Municipal Government Act requires that debt and service on
debt limits as defined by Alberta Regulation 255/00 for the County be disclosed as
follows:
2009
2008
Total debt limit
32,749,341
32,533,158
Total debt
9,638,299
10,555,909
Amount of debt limit unused
23,111,042
21,977,249
Debt servicing limit
5,458,224
5,422,193
Debt servicing
1,370,630
1,370,630
Amount of debt servicing limit unused
4,087,594
4,051,563
The d ebt I imit i s calculated at . 5 times revenue of the municipality (as defined in Alberta
Regulation 255/00) and the debt service limit is calculated at 0.25 times such revenue. Incurring
debt beyond these limitations requires approval by the Minister of Municipal Affairs. These
thresholds are guidelines used by Alberta Municipal Affairs to identify municipalities that could be
at financial risk if further debt is acquired. The calculation taken alone does not represent the
financial stability of the municipality. Rather, the financial statements must be interpreted as a
whole.
23
Kneehill County
Notes to Financial Statements
For the year ended December 31, 2009
12. Tangible Capital Assets
2009 2008
Net Book Value
Land $1,315,284 $1,102,767
Land improvements
123,376
108,782
Buildings
1,715,852
1,754,048
Engineered Structures
78,280
75,894
Water
24,255,288
14,542,435
Sewer
592,263
623,981
Towers
228,727
197,011
Dams
103,028
107,375
Transportation
22,104
25,262
Bridges
8,386,394
8,181,338
Roads
27,465,600
27,671,096
Machinery and equipment
6,433,688
5,012,458
Vehicles 4,201,787 4,072,222
$74,843,391 $63,398,775
13. Inventory of Supplies
Gravel
Other transportation amounts
Other
Land held for resale
24
2009
2008
$2,347,569
$2,094,872
255,342
245,990
62,913
78,280
75,894
75,894
$2,741,718
$2,495,036
0
25
Operating Reserves
Contingency
Information Technology
Administration
Joint Community Summit
Doctor Recruitment
Fuel stabilization
Gravel
Water
Sewer
FCSS
Kneehill Community Resource Program
Planning
Agricultural Service Board
Special Projects
Parent Link
Parks
$7,834,407
141,888
67,120
Kneehill County
-
Notes to Financial Statements
For the year ended December 31, 2009
54,940
57,330
14. Equity in Non Financial Assets
369,383
2,060,175
1,530,128
2009
2008
Tangible capital assets
$135,125,232
$120,326,663
Accumulated amortization
(60,281,841)
(56,927,888)
Inventory of supplies
2,741,718
2,495,036
Prepaid expenses
171,387
172,092
Long term debt
(9,638,299)
(10,555,909)
$ 68,118,197
55,509,994
15. Reserves
2008
Transfers Transfers 2009
(Restated)
In Out
25
Operating Reserves
Contingency
Information Technology
Administration
Joint Community Summit
Doctor Recruitment
Fuel stabilization
Gravel
Water
Sewer
FCSS
Kneehill Community Resource Program
Planning
Agricultural Service Board
Special Projects
Parent Link
Parks
$7,834,407
141,888
67,120
163,782
-
44,700
57,825
54,940
57,330
-
369,383
2,060,175
1,530,128
49,934
-
44,632
-
43,348
10,250
48,637
209
42,772
1,767
75,922
-
19,278
- 121
39,174 25,000
10, 644, 311 2,138,411
$7,520,443
44,100
163,782
52,595
49,934
44,632
30,000
75,922
47,706
8,029,114
$313,964
164,908
102,525
59,675
369,383
3,590,303
53,598
48,846
14,539
19,278
121
16,468
4,753,607
For the year ended December 31, 2009
15. Reserves (Continued)
Capital Reserves
Administration
Assessment
Capital Equipment Replacement
Building Reserve
Bridges
Roads (formerly transportation)
Water
WSA
Sewer
Planning
Agricultural Service Board
Environmental (formerly garbage)
Recreation and Leisure Funding
Torrington
16. Accumulated Equity
Notes to FinaKneehill Count
ncial Statements
2008
(Restated)
Transfers
Transfers
2009
In
76,792
4,818
76,792
_
1,036,33411819,968
4,818
2.445,723
348,567
5,530,128
163,578
410,578
407,000
286,617
5,715,117
1,815,623
1,986,123
35,604
693,617
22,424
395,434
3,766,142
7, 507, 291
3, 575,152
_
8,104,265
417,858
194.632
2,978,178
13,525
194,632
19,845
13,525
113, 85319,
300,000
845
74,000
413,853
53,800
74,000
11,419,872
—�
— 4
14,162,054
�—
10,850
53,800
14,7
22, 064,183
—�
16,300,465
—�
18,8— 9�
19,4_71,383
Accumulative equity consists of unrestricted amounts and equity in non financial assets as
follows:
2009 2008
Residual Equity M (g)
Equity in Non Financial Assets (Note 14) 2,691,028 2,895,748
Reserves (Note 15) 68,118,197 55,509,994
19� 2-
90,280,608 80,469 925
26
Kneehill County
Notes to Financial Statements
For the year ended December 31, 2009
17. Salary and Benefits Disclosure
Required disclosure of salaries and benefits for elected municipal officials, the chief administrative
officer and designated officers, as required
by Alberta Regulation
313/2000, is as follows:
No. of
Salary &
Benefits &
No. of
2008
Councilor/Division Persons
Fees
Allowances
2009 Total
Persons
Total
Division 1 1
$22,562
$3,437
$25,999
1
$27,593
Division 2 1
29,454
3,437
32,891
1
34,009
Division 3 1
15,180
3,437
18,617
1
18,881
Division 4 1
20,271
3,437
23,708
1
21,917
Division 5 1
26,824
3,437
30,261
1
29,129
Division 6 1
21,204
3,437
24,641
1
22,511
Division 7 1
22,866
3,437
26,303
1
25,026
Chief Administrative Offioer 1 $123,053 $16,897 $139,950 1 $133,278
Other Designated Officers 3 200,744 27,278 228,022 3 164,719
(1) Salary includes regular base pay, bonuses, overtime, lump sum payments, gross honoraria
and any other direct cash remuneration.
(2) Employer's share of all employee benefits and contributions or payments made on behalf of
employees including pension, health care, dental coverage, vision coverage, group life
insurance, accidental disability and dismemberment insurance, long and short term
disability plans, professional memberships and tuition.
(3) Benefits and allowances includes the employer's share of travel, cell phone and car
allowances.
18. Local Authorities Pension Plan
Employees of Kneehill County participate in the Local Authorities Pension Plan (LAPP), which is
administered in compliance with the Public Sector Pension Plans Act. The Plan is financed
by employer and employee contributions and by investment earnings of the LAPP Fund.
Kneehill County is required to make current service contributions to the Plan of 8.46% of
pensionable payroll up to the year's maximum pensionable earnings under the Canada
Pension Plan (CPP) and 11.66% of pensionable earnings above this amount. Employees of the
County are required to make current service contributions of 7.46% of pensionable salary up to
the year's maximum pensionable salary and 10.66% on pensionable salary above this amount.
Total employer contributions by Kneehill County to the LAPP in 2009 were $240,982 (2008
$210,282). Total current contributions by the employees of Kneehill County to the LAPP in
2009 were $216,175 (2008 - $189,282). At December 31, 2008, the Plan disclosed an actuarial
deficiency of $4.4 billion.
27
Kneehill County
Notes to Financial Statements
For the year ended December 31, 2009
19. Commitments
(a) Kneehill County has entered into a Master Fire Protection Agreement with the following
Municipalities to provide fire protection services to rural residents in the County, from 2009 to
2011 inclusive. The County's 2011 commitment will be indexed by the cost of living index
established by the Province of Alberta for October of the previous calendar year:
(b) Kneehill County has entered into contracts for 2010 to provide peace officer and by-law
enforcement services at a cost recovery rate of $65/hour for the following Municipalities:
Town of Three Hills - 8 hours/week service
Village of Acme - 4 hours/week service
Village of Carbon - 2 hours/week service
(c) In 2010, Kneehill County became the managing partner of the Kneehill Regional Water
Services Commission for a three year term. The County will receive $20,000 for administration
fees to provide support services to the Commission.
(d) Kneehill County has committed resources in 2010 to the Selkirk and Kirkpatrick Water Service
Area projects which includes construction of a new water reservoir for Selkirk, and distribution
lines for the residents in those water service areas. The total estimated cost is $11,726,000 and
is being financially supported by the Provincial and Federal Governments under the Building
Canada Fund and Municipal Sustainability Initiative.
20. Contingent Liabilities
(a) Kneehill County is from time to time a defendant in various actions seeking damages for
actions by, and events occurring in the County. No provision has been made on the
statement of financial position for the various lawsuits and legal claims filed against the
County. It is the opinion of management that the County has minimal exposure to these
actions or the potential liability will be fully covered by the insurance in place for such events.
(b) The County is a member of the Alberta Municipal Insurance Exchange (MUNIX). Under
the terms of membership, Kneehill County could become liable for its proportionate share of
any claim losses in excess of the funds held by the exchange.
(c) Kneehill County operates several gravel pits to supply raw materials used in the ongoing
maintenance of roads. The County is responsible for the costs of reclaiming the gravel pits at
the end of production in accordance with provincial legislation. As of the reporting date,
2010
2009
Town of Three Hills
$45,765
$ 45,720
Town of Trochu
29,036
29,006
Village of Linden
40,640
40,599
Village of Acme
37,565
37,527
Village of Carbon
$37,565
37,527
(b) Kneehill County has entered into contracts for 2010 to provide peace officer and by-law
enforcement services at a cost recovery rate of $65/hour for the following Municipalities:
Town of Three Hills - 8 hours/week service
Village of Acme - 4 hours/week service
Village of Carbon - 2 hours/week service
(c) In 2010, Kneehill County became the managing partner of the Kneehill Regional Water
Services Commission for a three year term. The County will receive $20,000 for administration
fees to provide support services to the Commission.
(d) Kneehill County has committed resources in 2010 to the Selkirk and Kirkpatrick Water Service
Area projects which includes construction of a new water reservoir for Selkirk, and distribution
lines for the residents in those water service areas. The total estimated cost is $11,726,000 and
is being financially supported by the Provincial and Federal Governments under the Building
Canada Fund and Municipal Sustainability Initiative.
20. Contingent Liabilities
(a) Kneehill County is from time to time a defendant in various actions seeking damages for
actions by, and events occurring in the County. No provision has been made on the
statement of financial position for the various lawsuits and legal claims filed against the
County. It is the opinion of management that the County has minimal exposure to these
actions or the potential liability will be fully covered by the insurance in place for such events.
(b) The County is a member of the Alberta Municipal Insurance Exchange (MUNIX). Under
the terms of membership, Kneehill County could become liable for its proportionate share of
any claim losses in excess of the funds held by the exchange.
(c) Kneehill County operates several gravel pits to supply raw materials used in the ongoing
maintenance of roads. The County is responsible for the costs of reclaiming the gravel pits at
the end of production in accordance with provincial legislation. As of the reporting date,
these costs are not determinable.
Kneehill County
Notes to Financial Statements
For the year ended December 31, 2009
21. Financial Instruments
The County's financial statements contain various financial instruments. It is management's
opinion that the County is not exposed to significant interest or currency risks arising from these
financial instruments.
The County is subject to credit risk with respect to taxes and accounts receivable. Credit risk arises
from the possibility that taxpayers and entities to which the County provides services may
experience financial difficulty and be unable to fulfill their obligations. The large number and
diversity of taxpayers and customers minimizes the credit risk
The County is exposed to concentration of credit risk, as all cash is held in one financial institution
thereby exposing the County to the risk of this institution.
The County is subject to risk related to its long term debt as the interest rate is fixed. Should
market interest rates vary significantly, the County could be paying interest at a rate either higher
or lower than market rates.
Unless otherwise noted, the fair value of these financial instruments approximates their carrying
values.
29
Kneehill County
Notes to Financial Statements
For the year ended December 31, 2009
22. Prior Period Adjustment
The County has restated its financial statements to comply with provisions of Section 3150 of the
Public Sector Accounting Handbook, which requires governments to record and amortize their
Tangible capital assets on their financial statements. In addition, revenue from contributed assets
and government grants and transfers relating to capital acquisitions has been included in income.
The County also recorded a liability for landfill closure costs previously not recorded and
increased the cost of inventory to reflect the cost of hauling the inventory to stock piles. These
adjustments are as follows:
2008
Adjustments to fund balances:
Fund balances previously reported 53,932,229
Adjustment to book value of tangible capital assets 26,362,984
Adjustment to landfill closure liability (57,000)
Adjustment to gravel inventory 231,712
80,469,925
Adjustments to capital assets:
Capital assets as previously reported 37,035,792
Adjustment to historical cost of capital assets 83,290,871
Adjustment to accumulated amortization of assets (56,927,888)
63,398,775
Adjustments to excess(deficiency) of revenue over expenses:
Deficiency of revenue over expenses as previously reported
(672,530)
Adjustment to consolidated expenses
13,903,663
Adjustment to amortization
(3,637,129)
Adjustment to loss on disposal of assets
138,564
Adjustment to proceeds from disposal of assets
(684,556)
9,048,012
Adjustment to gravel inventory expenses
131,535
Adjustment to landfill postclosure expense
(57,000)
9,122, 547
30
Kneehill County
Notes to Financial Statements
For the year ended December 31, 2009
23. Segmented Information for Annual Financial Reports
General
Situated in the heart of central Alberta, Kneehill County is a progressive rural municipality
comprised of approximately 815,000 acres of land and 2,000 kilometers of developed roads.
Agriculture remains the backbone of the local economy, complemented by a strong oil and gas
industry. Kneehill County is first and foremost a rural community that values safety and good
government for their citizens. Responsible development is encouraged that supports our
resource-based economy, while at the same time investing in and enhancing infrastructure and
services to citizens. Our municipality continues to promote environmental responsibility,
prosperity, and positive relationships with citizens, private sector and government partners.
A wide range of services are provided by departments and for management purposes, their
operations and activities are organized and reported by fund. Certain departments that have
been separately disclosed in the segmented information, along with the services they provide,
are as follows:
Agriculture Services
The Agriculture Services Department focuses on the need to maintain agricultural production
and profitability with an emphasis on helping farmers help themselves. It involves the
participation of ratepayers and the cooperation of Alberta Agriculture Food and Rural
Development. The key priorities and goals of the department are to advise landowners
concerning proper land utilization with a view of improving their economic well being. Priorities
include advising landowners of effective methods to control weeds, diseases, insects and
predators along with the prevention of soil and water degradation.
Corporate and Financial Services
The Corporate and Financial Services Department focuses on the delivery of quality services to
customers at a reasonable cost. Along with meeting all of the financial reporting requirements,
this department is also instrumental in ensuring legislative requirements are met associated
with assessment and taxation. Additional support services initiated by this department include
GPS. Records management, Information Technology and Human Resources. The goal of the
Corporate Services team is the delivery of customer service in a friendly, courteous and helpful
manner guided by integrity and fairness.
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Kneehill County
Notes to Financial Statements
For the year December 31, 2009
23. Segmented Information for Annual Financial Reports — 2010 (Continued)
Protective Services
Kneehill County's Protective Services Section includes that of both Fire Services and
Enforcement (Peace Officer) Services. Fire Services provides emergency fire protection and
preventative services that mitigate loss of life and property with professionally trained
volunteers and modern response equipment. Kneehill County support operating contracts with
each of the six urban fire departments in addition to major contributions emergency response
vehicles. Emergency preparedness planning is also led by Kneehill County through the
implementation of a regional with all urban centres within our boundaries.
Kneehill County identified a need for protection of municipal infrastructure and the need to
enhance public safety. Our Peace Officers enhance some services provided by the local
RCMP in addition to the protection of municipal infrastructure and enforcement of municipal
bylaws. Enforcement assistance is also provided to other County departments such as
Planning and Operations.
Planning and Development
The Planning and Development Department promotes the incorporation of progressive planning
and development practices into the organizations daily operations, along with orderly
development and land use practices benefitting residents and minimizing conflicting uses.
These practices centre around environmental stewardship, the notion of shared responsibilities
in a global community, quality, livable communities and public participation. Recent initiatives
of the department include the development of Intermunicipal Development Plans with
neighboring municipalities, an Environmentally Significant Areas Assessment and an Integrated
Community Sustainability Plan. Long-term planning is supported the Municipal Development
Plan and Land Use Bylaw which reflect the vision and expectations of County residents.
Operations
The Operations Department oversees many responsibilities including that of construction,
maintenance and dust control of roads. Kneehill County has over 200 bridge crossing sites that
are also maintained by this department. The oil and gas sector along with the development of
large feedlots and new grain elevators have had significant impacts on the growth of the
County and the resulting effects on our transportation corridors. In addition to the rural
transportation routes, the Operations Department also provides services in five major hamlets
located within our boundaries.
WA
Kneehill County
Notes to Financial Statements
For the year ended December 31, 2009
23. Segmented Information for Annual Financial Reports - 2010 (Continued)
Environmental, Water, Wastewater
Major infrastructure projects have taken place under the direction of Council in the area of
potable water distribution. As a member of the Kneehill Regional Water Commission, the
County has diligently worked to bring water to areas of the County where safe potable water is
not available through the traditional well systems. Major completion of these distribution lines is
expected to be completed in 2012. Other water distribution systems located throughout the
County are also part of this operation. The wastewater needs of our local hamlets are also met
by this department. As a member of the Drumheller and District Solid Waste Management
Association, various transfer sites provide for the collection and disbursement of solid waste.
Expansion to handle various recyclables at these stations along with initiatives in the areas of
agricultural plastic recycling have also been facilitated through this relationship.
Parks and Recreation
Under the direction of the Operations Department, the County is responsible for the
maintenance and operation of various municipal parks and campgrounds. Enhancements over
the past several years have increased the level of services available at various locations. A
Recreation Master Plan completed several years ago was the basis for the development of
both major annual operating and capital contributions towards the various recreational facilities
(arenas, swimming pools) located within our urban centres in Kneehill County.
Social and Community Services
Kneehill Regional FCSS is partnership between the Province and the six municipalities located
within the boundaries of Kneehill County. An elected officials board sets the direction for the
program and makes the funding decisions for preventative based programs. Other programs
that are administered under the FCSS Director include the Kneehill Community Resource
Program, Parent Link Program and Community Building Initiatives. Services provided care for
and strengthen the quality of life for all citizens, through volunteering, consulting and providing
services to meet needs where they exist.
24. Comparative Figures
Some of the comparative figures have been reclassified to conform to the current year's
presentation.
25. Approval of Financial Statements
Council and Management have approved these financial statements.
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