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HomeMy WebLinkAbout2010 Financial StatementsKNEEHllL COUNTY Financial Statements Year Ended December 31,2010 KNEEHILL COUNTY INDEX TO THE FINANCIAL STATEMENTS DECEMBER 31,2010 AUDITORS'REPORT CONSOLIDATED STATEMENT OF FINANCIAL POSITION CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES CONSOLIDATED STATEMENT OF CHANGES IN NET FINANCIAL ASSETS CONSOLI DATED STATEM ENT OF CASH FLOW SCHEDULE 1 -TANGIBLE CAPITAL ASSETS SCHEDULE 2 -NET TAXES FOR MUNICIPAL PURPOSES SCHEDULE 3 -SCHEDULE OF GOVERNMENT TRANSFERS SCHEDULE 4 -CONSOLIDATED EXPENSES BY OBJECT SCHEDULE 5 CONSOLIDATED SCHEDULE OF SEGMENT DISCLOSURE NOTES TO FINANCIAL STATEMENTS BOO INDEPENDENT AUDITOR'S REPORT To the Reeve and Council of Kneehill County We have audited the accompanying consolidated financial statements of Kneehill County,which comprise the statement of financial position as at December 31,2010,and the consolidated statements of financial activities,consolidated statement of changes in net financial assets and consolidated statement of cash flows for the year then ended,and a summary of significant accounting policies and other explanatory information. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian generally accepted accounting principles,and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement,whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opInion on these financial statements based on our audit.We conducted our audit in accordance with Canadian generally accepted auditing standards.Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. ;n'!,,,h,,,,,,",,,1ff'fr,,,';n,.,prcicedUl'es to obtain audit evidence about the amounts and disclosures in financial statements.The procedures selected depend on the auditor's jUdgment,including the assessment of the risks of material misstatement of the financial statements,whether due to fraud or m;1,"'".,n Ulose risk assessments,the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances,but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control.An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management,as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion,the financial statements present fairly,in all material respects.the financial position of Kneehill County as at December 31,2010 and its results of operations and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles. Red April Alberta 2011 Chartered Acc..ountants Kneehill County Consolidated Statement of Financial Position As at December 31,2010 2010 2009 FINANCIAL ASSETS Cash and temporary investments (Note 3) Receivables Taxes and b'Tants in place of taxes (Note 4) Trade and other receivables (Note 5) Other assets (Note 6) Trochu recreation trust Tax sale trust Land held for resale LIABILITIES Accounts payable and accrued liabilities Deposit liabilities Deferred revenue (Note 7) Employee benefit obligations (Note 8) Provision for landfill closure and post closure costs (Note 9) Tax sale trust Trochu recreation trust Long tenn debt (Note 10) NET FINANCIAL ASSETS NON-I;'INANCIAL ASSETS Inventory for consumption (Note 12) Tangible capital assets (Note 13) Prepaid expenses ACClJl\UTLATED SURPLUS (Note 16) CONTINGENT UABILIITES (NOTE 19) COMMITMENTS (NOTE 20) CAD 23,714,842 26,467,428 335,467 315,608 7,475,245 2,225,527 122 12] 1,769 7,235 7,235 75,894 75,894 31,608,805 29,093,582 4,322,162 3,34],139 76,000 185,000 200,341 2,794,323 510,566 461,580 75,426 66,000 7,235 7,235 12,153 14,385,646 9,638,299 19,589,529 ]6,493,576 12,019,276 ]2,600,006 3,028,224 2,665,824 91,750,794 74,843,391 156,013 171,387 94,935,031 77,680,602 106,954,307 90,280,608 Kneehill County Consolidated Statement of Financial Activities For the year ended Decem ber 31,2010 11 258,632 1,414,400 207,627 704,368 208,619 15,015 122,858 7,654,279 589,111 1,339.613 139.874 345.475 886.882 58,893 31 388.864 2009 $ 18,337,619 822,547 33,567 157,851 172,753 245,079 59,255 63,713 1,950,705 266,212 342,171 100,210 115,455 22,667,137 15,207,147 Budget 2010 $$ 18,332,604 18,298,704 732,730 970,379 16,000 45,367 80,000 292,161 149,450 224,469 155,000 212,249 44,200 56,468 57,000 74,851 3,701,635 3,909,876 270,220 318,994 348,000 499,409 71,708 78,402 23,958,547 24,981,329 290,700 268,676 1,845,234 1,580,690 233,512 225,464 792,430 766,202 344,693 313,740 7,500 10,587 20,820 20,470 10,021,160 7,990,237 868,558 659,080 2,579,289 1,706,249 124,492 109,944 344,775 397,205 642,911 872,727 136.633 88,087 398,594 333,320 409,871 623,707 919,471 134,056 17,429,783 EXPENSES Legislative Administration Assessment Fire services and safety program Enforcement Disaster services Ambulance Transportation Bridges Water supply and distribution Sewer Garbage and recycling Community support services Health services and cemetery Planning Agricultural services board recreation and culture I ~oss on of assets Other REVENUE Net municipal taxes (Schedule 2) User fees and sales of goods Sales to other governments Drilling licenses Fees,licenses,permits,fines Interest and patronage dividends Rentals Penalties and interest on taxes Provincial government transfers (Schedule 3) Local government transfers (Schedule 3) Local improvement charges Gain on sale of capital assets Other EXCESS OF REVENUES OVER EXPENSES-BEFORF.OTHER 7,551,546 Kneehill County Consolidated Statement of Financial Activities For the year ended December 3 1,2010 EXCESS OF REVENUES OVER EXPENSES-BKFORE OTHER (Cont'd) OTHER Provincial capital transfers (Schedule 3) Federal capital transfers (Schedule 3) Local government capital transfers (Schedule 3) Contributed assets Transfers to local governments for capital EXCESS OF REVENUE OVER EXPENSES ACCUM.SURPLUS,BEG.OF YEAR ACCUM.SURPLUS,END OF YEAR Budget $ 4,228,044 4,621,743 3,000,000 11,849,787 90,280,608 102,130,395 2010 $ 7,551,546 5,981,678 2,847,990 1,000 291,485 16,673,699 90,280,608 106,954,307 2009 $ 7,459,990 2,289,533 154,604 (93,444) 9,810,683 80,469,925 90,280,608 Kneehill County Consolidated Statement of Changes in Net Financial Assets For the year ended December 31,2010 Budget $ 2010 $ 2009 $ 16,673,699 9,810,683 (23,061,995)(15,635,227) (291,485) 1,258,263 273,498 4,268,324 4,017,325 919,471 (100,210) (16,907,422)(11,444,614) (3,006,158)(2,628,957) (167,204)(149,366) 2,643,777 2,382,275 182,578 150,069 (347,007)(245,979) (580,730)(1,879,910) 12,600,006 14,479,916 12,019,276 12,600,006 392,500 4,268,324 6,653,773 (5,946,233) (2,670,000) (160,000) 2,670,000 160,000 12,600,006 (17,796,020) 11,849,787 (22,456,844) Acquisition of supplies inventory Acquisition of prepaid assets Use of supplies inventories Use of prepaid assets Acquisition of tangible capital assets Contributed assets Proceeds on disposal of tangible capital assets Amortization of tangible capital assets (Gain)loss on disposal of tangible capital assets ----- NET FINANCIAL ASSETS,END OF YEAR EXCESS OR REVENUE OVER EXPENSES DECREASE IN NET FINANCIAL ASSETS NET FINANCIAL ASSETS,BEG OF YEAR Kneehill County Consolidated Statement of Cashflows For the year ended December 3 t,2010 NET INFLOW (OUTFLOW)OF CASH RELATED TO THE FOLLOWING ACTIVITIES: OPERATING Excess of revenues over expenditures Non-cash items included in excess of revenue over expenses: Contributed assets Amortization of tangible capital assets (Gain)loss on disposal of tangible capital assets Non-cash charges to operations (net change): Decrease (increase)in taxes and grants in place of taxes Decrease (increase)in trade and other receivables Decrease (increase)in other assets Decrease (increase)in inventory for consumption Decrease (increase)in prepaid expenses Increase (decrease)in accounts payable and accrued liabilities Increase (decrease)in deposit liabilities Increase (decrease)in employee benefit obligations Increase (decrease)in provision for landfill closure/post closure Increase (decrease)in deferred revenue Cash provided by (applied to)operating transactions CAPITAL Acquisition of tangible capital assets Sale of tangible capital assets Cash provided by (applied to)capital transactions INVESTING Decrease (increase)in restricted cash and temp,investments Cash prclva!ed by (applied to)mvestUllZ transactions FINANCING LOltH!:-[erm debt issued LOlnll-term debt 2010 16,673,699 2009 9,810,683 Cash prClVl(led by (applied fimmcing transactions CHANGE IN CASH AND EQUIVALEN'rS IN THE YEAR Kneehill County Consolidated Statement of Cashflows For the year ended December 31,2010 CHANGE IN CASH AND EQUIVALENTS IN THE YEAR CASH AND CASH EQUIVALENTS AT BEG.OF YEAR CASH AND CASH EQUIVALENTS AT END OF YEAR CASH A."D CASH EQUIV;\LENTS ARE MADE UP OF: Cash Temporary investments 2010 (2,752,586) 26,467,428 23,714,842 23,714,842 23,714,842 2009 $ 10,125,423 16,342,005 26,467,428 18,383,086 8,084,342 26,467,428 Kneehill County Schedule I -Tangible Capital Assets De,;cn'lbcr 31,2010 Vehicles 2010 2009 $$ 7,236,405 135,125,232 120,326,663 1,269,773 18,999,681 13,935,713 (771,812)(4,322,127)(836,658) 4,828,799 1,703,114 (475,000)(475,000)(3,600; 7,259,366 154,156,585 135,125,232 787,252 3,344,957 112,590,992 9,850,342 720,047 38,000 15,596,940 1,320,698 (159,467) (188,540)(672,098)(2,530,210) 2,319,929 2,508,870 1,347,832 5,514,346 130,024,704 8,640,830 Land Land Buildings Engineered Machinery & Improvements Structures Equipment 1,315.284 1,369,507 assets assets progress additions m progress dl,;pclsals END OF YEAR COST: BEGINNING OF YEAR ACCUMULATED A:MORTIZA nON: BALANC'E,BEGINNING OF YEAR 663,876 1,629,105 51,537,588 3,416,654 3,034,618 60,281,841 56,927,889 amortization Accumulated amortization on disposal END OF YEAR 49,262 83,711 3,117,469 494,070 523,812 (23~67)(92,944)__(303,019)(1,199,789)(525,155) 689,671 1,619,872 54,352,038 2,710,935 3,033,274 4,268,324 (2,144,374) 62,405,791 4,017,325 (663,373) 60,281,841 NET BOOK VAum OF TANGIBLE CAPITAL ASSETS I 658,161 3,894,474 75,672,666 5,929,895 4,226,092 91,750,794 74,843,391 BOOK \lArUE OF TANGIBLE Al i\SSETS 1,31 123,376 1,715,852 61,053,404 6,433,688 4,20I,787 74,843,391 Kneehill County Schedule 2 -Net Taxes for Municipal Purposes For the year ended December 31,2010 Budget 2010 2009 TAXATION Farmland 1,371,780 1,371,886 1,418,009 Residential 2,296,854 2,293,951 2,217,546 Commercial 1,687,261 1,666,651 1,635,555 Linear property 12,745,740 12,744,117 12,407,513 Machinery and equipment 4,019,368 4,034,109 4,166,476 Railway 13,000 13,749 14,499 Minimum tax 10,718 11,044 9,383 Grants in lieu 1,812 2,890 3,100 Local improvement tax (rural)76,467 73,989 64,793 Local improvement tax (non residential)1,147,263 1,123,977 1,138,007 23,370,263 23,336,363 23,074,881 REQUISITIONS Alberta School Foundation Fund 5,029,682 5,029,682 4,729,362 Kneehill Foundation 7,977 7,977 7,900 NET MUNICIPAL TAXES 18,332,604 18,298,704 18,337,619 Kneehi nCounty Schedule 3 -Schedule of Goven1illent Transfers For the year ended December 3 1,2010 Budget $ 2010 $ 2009 $ TRANSFERS FOR OPERATING Provincial government Other local governments TRA1~SFERS FOR CAPITAL Provincial government Local government Federal government 3,701,635 3,909,876 270,220 318,994 3,971,855 4,228,870 4,621,743 5,981,678 1,000 3,000,000 2,847,990 7,621,743 8,830,668 11,593,598 13,059,538 1,950,705 266,212 2,216,917 2,289,533 154,604 2,444,137 4,661,054 Kneehill County Schedule 4-Consolidated Expenses by Object For the year ended December 31,2010 Budget 2010 2009 CONSOLIDATED EXPENSES BY OBJECT Salaries,wages and benefits 5,334,631 4,939,490 4,462,325 Contracted and general services 8,118,991 1,993,363 2,860,280 Purchases from other governments 247,210 248,306 231,736 Materials,goods,supplies and utilities 3,580,310 3,448,239 2,355,138 Transfer to other governments 275,470 281,439 261.151 Transfers to individuals and organizations 534,363 566,751 472,902 Bank charges and interest 8,500 1,054 5,972 Interest on debenture 1,370,591 498,158 451,369 Amortization expense 4,268,324 4,017,325 Loss on disposal of assets 919,471 Property taxes cancelled 3,200 4,990 3,189 Other 257,237 260,198 85,760 19,730,503 17,429,783 15,207,147 Kneehill County Schedule 5 -Consolidated Schedule of Segment Disclosure year ended December 31,2010 General Protective Operations Environmental Social,Health Planning &Agricultural Parks &2010 Government Services (Roads/Bridges)Services Community Development Services Recreation Total Revenues: Taxation 990,270 8,601,447 5,676,302 107,964 286,627 221,252 595,764 18,293,277 of services and 63,756 421,393 386,319 4,300 37,164 33,021 1,015,746 Government transfers 8,700 2,869,703 56,000 847,643 6,059 187,700 8,800 4,228,871 and fines 116,306 103,780 1,160 588,257 and interest 3,228 - - 215,477 Other 2,662 5,834 26,553 515,945 74,265 7.985 6,457 639,701 2,673,779 1,184,866 11,919,096 6,637,794 1,034,172 433,630 451,118 646,874 24,981,329 Expenses: Salaries,and benefits 1,174,223 381 1 2,024,907 419,655 476,000 205,755 43,917 4,939,490 Contracted and general services 501,860 387,973 951,428 299,056 211,505 126,489 43,110 2,556,946 supplies and utilities 182,060 124,747 2,596,297 368,537 27,931 456 1 22,840 3,448,237 on tcrm debt -498,158 --498,158 to others 7,000 108,434 237,507 1 848,190 disnosal of assets 733,134 50,338 135,999 919,471 interest and other 312,319 217,027 3,069,161 520,082 7,868 620 35,195 57,019 4,219,291 2,208,890 1,110,998 9,381,927 2,264,260 960,811 333,320 409,871 759,706 17,429,783 Net surplus (deficit)73,868 2,537,169 4,373,534 73,361 100,310 41,247 (l 7,551,546 Kneehill County Notes to Financial Statements For the ended December 3 2010 1.Significant Accounting Policies The financial statements of Kneehill County ("the County")are the representations of management prepared in accordance with Canadian generally accepted accounting principles for local governments established by the Public Sector Accounting Board of the Canadian Institute of Chartered Accountants.Significant aspects of accounting policies adopted by the County are as follows: (a)Reporting Entity The financial statements reflect the assets,liabilities,revenues and expenses,changes in fund balances and changes in cash flows of the reporting entity.The tinancial 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 and 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 revenues. Funds from external parties and earnings thereon that are restricted by a!:,Tfeement 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 that 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. Kneehill County Notes to Financial Statements For the ended December 2010 1.Significant Accounting Policies 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 expenses during the period.Where measurement uncertainty exists,the financial statements have been prepared with reasonable limits of materiality.Actual results could differ from those estimates. (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 earned interest at rates from 0.5%to 1.25%per annum. (e)Investments Investments are recorded at cost and represent short-term bank notes and deposits that have eflective interest rates of 1.25%to 2.55%and mature in less than one year but after 90 days. (f)Inventories for Consumption Inventories of materials and supplies for consumption are values at the lower of cost or replacement value with cost determined by weighted average cost method.Inventory of gravel is maintained by perpetual records and is recorded in the accounts to the extent of royalties,land costs,crushing costs incurred,hauling and equipment rental costs. Land held for resale is recorded at the lower of cost or net realizable value.Cost includes costs for acquisition and improvements required to prepare the land for servicing such as clearing, stripping,and leveling charges.Related development costs incurred to provide infrastructure as water and waste water services,roads,sidewalks and street lighting are recorded as tangible capital assets under their respective function. Kneehill County Notes to Financial Statements For the ended December 3 2010 1.Significant Accounting Policies (g)Pension Expenditure The County participates in a multi-employer defined benefit pension plan.The 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 County 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,but not limited to,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 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 amount can be determined. CD Requisition 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 is reduced.'Where the actual levy is 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 the year. Kneehill County Notes to Financial Statements For the ended December 2010 1.Significant Accounting Policies (k)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 nonnal 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 the 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,in years,as follows: Land improvements Buildings Engineered structures: Water system Wastewater system Other engineered structures Machinery and equipment Vehicles 10 -20 25 -50 15 -75 25 -60 6 -50 5 -45 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 are also recorded as revenues. Kneehill County Notes to Financial Statements For the ended December 2010 1.Significant Accounting Policies (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 relating 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 weighted average cost method. 2.Compliance to Budget Requirements The legislative requirements for the Financial Plan (Budget)are that cash int10ws for the period must be equal to cash outflows.Cash int10ws 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 Consolidated Statement of Operations,as they do not meet the 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 in the Consolidated Statement of Operations as an expense.The financial items included in the legislative budget and Public Sector Accounting Handbook 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. For the year ended December 31,201 0 Kneehill County Notes to Financial Statements 2.Compliance to Budget Requirements Financial Plan By-Law Amortization Allocation Reclass Capital Expenditures Fiscal Plan Per Financial Stmts.Actual Revenue Net taxes for municipal purposes Government transfers Interest and patronage dividends Sales and user charges Sales to governments and agencies Drilling licenses Fees,licenses,penuits,fines Rentals Penalities and interest 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 Waste disposal and recycling Community support serviccs Health services and cemeteries Planning Agriculural services board Parks,recreation,and culture Loss on disposal of assets Other $18,332,604 $ 3,701,635 155,000 732,730 16,000 80,000 149,450 44,200 57,000 270,220 348,000 71,708 23,958,547 290,700 1,788,380 233,512 601,207 318,889 7,500 20,820 10,872,828 1,304,453 2,112,826 92,776 333,031 642,911 128,764 398,594 393.550 593,438 56,854 191,223 25,804 2,995,332 389,105 466,463 31,716 11,744 7,869 35,195 57,019 $$18,332,604 $18,298,704 3,701,635 3,909,876 155,000 212,249 732,730 970~179 16,000 45,367 80,000 292,161 \49,450 224,469 44,200 56,468 57,000 74,851 270,220 318,994 348,000 499,409 71,708 78,402 23,958,547 24,981,329 290,700 268,676 1,845,234 1,580,690 233,512 225,464 792,430 766,202 344,693 313,740 7,500 10,587 20,820 20,470 (3,847,000)10,021,160 7,990,237 (825,000)868,558 659,080 2,579,289 1,706,249 124,492 109,944 344,775 397.205 642,911 872,727 136,633 88,087 398,594 333,320 428,745 409,871 650,457 623,707 919,471 134,056 Total expenses Excess of revenue over expenses before Kneehill County Notes to Financial Statements For the vear ended December 31,2010 Financial PI an By-Law 2.Compliance to Budget Requirements Excess of revenue over expenses before other Other: Provincial capital transfers Federal capital transfers Local government capital transfers Contributed assets 3,824,368 4,621,743 3,000,000 Amortization Allocation (4,268,324) Reclass Capital Expenditures 4,672,000 Fiscal Plan Per Financial Stmts. 4,228,044 4,621,743 3,000,000 Actual 7,551,546 5,981,678 2,847,990 1,000 Excess of revenue over expenses $11,446,111 $(4,268,324)$4,672,000 $11 ,849,787 $16,673,699 Reconciling: Debenture debt Sale of assets Capital expenditures Interfund transfers Debt repayment Add hack non cash items: Amortization Loss on disposal of assets Contributed Assets 6,300,000 392,500 (17,784,844) 604,491 (958,258) (4,672,000) 6,300,000 392,500 (22,456,844) 604,491 (958,258) (4,268,324) 6,300,000 1,258,268 (23,061,995) (4,480,376) (1,552,653) (4,863,057) 4,268,324 919,471 (291,485) 33,253 Kneehill County Notes to Financial Statements For the year ended December 31,2010 3.Cash and Temporary Investments Cash Temporary investments 2010 ($) 23,714,842 23,714,842 2009 ($) 18,383,086 8,084,342 26,467,428 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 $200,341 (2009 -$2,794,323)received from the Province of Alberta restricted for future projects (Note 7). 4.Taxes Receivable Current taxes and grants in place of taxes Tax arrears and grants in place of taxes Less:Allowance for doubtful tax accounts 5.Trade and Other Accounts Receivable 2010 2009 ($)($) 232,280 275,294 148,082 116,889 380,362 392,183 (44,895)(76,575) 335,467 315,608 Provincial and Federal f:,'Tants GST Receivable Trade and other 2010 ($) 6,118,816 591,152 765.277 7,475,245 2009 (S) 1,482,020 360,914 2,225,527 Kneehill County Notes to Financial Statements For the year ended December 31,2010 6.Other Assets Alberta Capital Finance Shares,at cost Servus Credit Union Membership Share,at cost 7.Deferred Revenue Alberta Municipal Infrastructure Program New Deal For Cities And Communities Street Improvement Program Emergency Management Program Grant Municipal Sustainability Initiative KeRP -Golden Hills School FCSS Public Health -cm 8.Employee Benefit Obligations Accrued sick benefits Accrued vacation 2010 ($) 121 1 122 2010 ($) 174,685 23,000 2,656 200,341 2010 ($) 341,806 168,760 510,566 2009 ($) 121 121 2009 ($) 1,615,047 203,264 88,288 8,700 847,001 23,000 5,271 3,752 2,794,323 2009 ($) 301,293 160,287 461 The and berlefits li,a.billity is comprised of vacation and sick days that emnklvel~"are ,;pt"rr,nn to future years.Employees have either earned the benefits are or are to these benefits within the next year. Kneehill County Notes to Financial Statements For the year ended December 31,2010 9.Provision For Landfill Closure and Post closure 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 metres. 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 liability remaining to be recognized Estimated capacity used Accrued liability portion 2010 2009 ($)($) 78,000 78,000 110,000 110,000 188,000 188,000 62%65% 112,574 122,000 38%35% 75,426 66,000 Kneehill County Notes to Financial Statements For the year ended December 31,20 10 10,Long Term Debt Total tax supported debentures 2010 ($) 14,385,646 2009 ($) 9,638,299 The current portion oflong-terrn debt amounts to $2,212,554 (2009 -$958,258) Principle and interest repayment are as follows: Principal ($) 2011 2012 2013 2014 2015 After 2,212,554 2,288,333 2,366,894 2,448,343 1,857,328 3,212,194 14,385,646 Interest Total ($)($) 509,011 2,721,565 433,233 2,721,566 354,652 2,721,546 273,222 2,721,565 188,769 2,046,097 214,381 3,426,575 1,973,268 16,358,914 Debenture debt is repayable to Alberta Capital Finance Authority: Debenture one,issued June 16,2008,in the amount of $11 million,repayable semi annually at a fixed interest rate 4.3859%,maturing June 16,2018. Debenture two,issued June 15,2010,in the amount of $6.3 million,repayable semi annually at a lixed interest rate of2.575%,maturing June 15,2015. Debenture debt is issued on the credit and security of Kneehill County at large. Interest on debenture debt amounted to $498,158 ($2009 451,369) Kneehill County Notes to Financial Statements For the year ended December 31,2010 11.Debt Limits Section 276(2)of the Municipal Government Act requires that debt and service on debt limits as defined by Alberta Regulation 255/00 for the County be disclosed as follows: 2010 2009 ($)($) Total debt limit 33,222,807 32,749,341 Total debt limit 14,385,646 9,638,299 Amount of debt limit unused 18,837,161 23,111,042 Debt servicing limit 5,537,135 5,458,224 Debt servicing 2,010,812 1,370,630 Amount of debt servicing limit unused 3,526,323 4,087,594 The debt limit is calculated at 1.5 times the revenue of the Municipality (as defined in Alberta Regulation 255/00)and the debt service limit is calculated at 0.25 times such revenue.Incurring debt beyond these limitations requires approval by the Minister of Municipal Affairs.These thresholds are guidelines used by Alberta Municipal Affairs to identify municipalities that could be at financial risk if further debt is acquired.The calculation alone does not represent the financial stability of the municipality.Rather,the financial statements must be interpreted as a whole. 12.Inventory For Consumption Gravel Other transportation amounts Other 2010 ($) 2,658,631 295,209 74,384 3,028,224 2009 ($) 2,347,569 255,342 62,913 2,665,824 For the year ended December 31,2010 13.Tangible Capital Assets Net Book Value Land Land improvements Buildings Engineered Structures Water Sewer Towers Dams Transportation Bridges Roads Machinery and equipment Vehicles Kneehill County Notes to Financial Statements 2010 2009 ($)($) 1,369,507 1,315.284 658,161 123,376 3,894,474 1,715,852 36,262,676 24,255,288 560,547 592,263 228,394 228,727 98,907 103,028 18,946 22,104 8,719,917 8,386,394 29,783,278 27,465,600 5,929,895 6,433,688 4,226,092 4,201,787 91,750,794 74,843,391 14.Equity In Non Financial Assets Tangible capital assets Accumulated amortization Inventory of supplies Prepaid expenses term debt 2010 ($) 154,156,585 (62,405,791) 3,028,224 156,013 (14,.385,646) 80,549,385 2009 ($) 135.125,232 (60,281,481 ) 2,665,824 171,387 (9,638,299) Kneehill County Notes to Financial Statements For the year ended December 31,2010 15.Reserves Transfers Transfers 2009 In Out 2010 Operating Reserves (in $) Contingency 313,964 458,746 (21,334)751,376 Information Technology 164,909 72,745 (93,710)143,944 Joint Community Summit 102,525 (50,250)52,275 Doctor Recruitment 59,675 167,435 (108,588)118,522 Fuel Stabilization 369,383 21,405 390,788 Gravel 3,590,303 3,590,303 Family &Community Support Services 53,598 53,598 Kneehill Community Resource Probrram 48,846 (7,803)41,043 Parent Link Program 121 121 Cemeteries 0 20,000 (2,026)17,974 Planning 14539 3,173 17,712 Parks 16,466 25,000 (12,503)28,963 Special Projects 19,278 (5,728)13,550 4,753,607 768,504 (301,942)5,220,169 Capital Reserves (in $) Capital Equipment Replacement 410,578 2,390,6lO (1,797,568)1,003,620 Buildings 5,715,117 555 (1,313,124 )4,402,548 Bridges 693,617 159,673 853,290 Roads 3,766,141 891,693 (1,507,934)3,149,900 Water 417,858 151,183 (385,953)183,088 Water Service Area 2,978,178 10,077,375 (4,586,638)8,468,915 Sewer 194,632 194,632 Environmental 413,853 413,853 Recreation and Leisure Funding 74,000 (12,256)61,744 Torrington 53,800 (53,800) 14,717,774 13,671,089 (9,657,273)18,731,590 Total Reserves 23,951,759 Kneehill County Notes to Financial Statements For the year ended December 31,2010 16.Accumulated Equity Residual Equity Equity in Non Financial Assets (Note 14) Reserves (Note 15) 2010 ($) 2,453,163 80,549,385 23,951,759 106,954,307 2009 ($) 2,766,564 68,042,663 19,471,381 90,280,608 17.Salary and Benefits Disclosure No.of Salary &Benefits &2010 No.of 2009 Councillor/Division Persons Fees Allowances Total Persons Total Division 1 1 19,799 3,916 23,715 25,999 Division 2 1 30,747 3,916 34,663 32,891 Division 3 1 17,529 3,916 21,445 18,617 Division 4 1 20,778 3,916 24,694 23,708 Division 5 1 33,032 3,916 36,948 30,261 Division 6 1 19,912 3,677 23,589 24,641 Division 7 1 25,629 3,916 29,545 26,303 Chief Administrative Officer 1 145,371 20,105 165,476 1 139,950 Other Designated Omcers 3 211,358 32,386 243,744 3 228,022 (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 tenn 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. Kneehi 11 County Notes to Financial Statements For the year ended December 31,2010 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 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 salary and 10.66%on pensionable salary above this amount.Total employer contributions by Kneehill County to LAPP in 2010 were $287,401 ($240,982 in 2009).Total current contributions by the employees of Kneehill County to LAPP in 2010 were $258,lSI ($216,175 in 2009).At December 31,2009 the Plan disclosed an actuarial deficiency of $4.0 billion. 19.Contingent Liabilities (a)Kneehill County is from time to time a defendant in various actions seeking damages for actions by,and events occurring in the County.No provision has been made on the statement of financial position for the various lawsuits and legal claims filed against the County.It is the opinion of management that the County has minimal exposure to these actions or the potential liability will be fully recovered by insurance in place for such events. (b)The County is a member of Alberta Municipal Insurance Exchange (MUNIX).Under the ternlS of membership,Kneehill County could be liable for its proportionate share of any claim losses in excess of the funds held by the exchange. (c)Kneehill County operates several gravel pits to supply raw materials used in the ongoing maintenance of roads.The County is responsible for the costs of reclaiming gravel pits at the end of production in accordance with provincial legislation.As of the reporting date, these costs are not determinable. Kneehill County Notes to Financial Statements For the year ended December 31,2010 20.Commitments (a)Kneehill County is part of s Master Fire Protection Agreement with the following Municipalities to provide fire protection services to rural residents in the County from 2009 to 2011 inclusive.The County's 2011 commitment is indexed by the cost of Jiving index as established by the Province of Alberta for October of the previous calendar year: 2011 2010 ($)($) Town of Three Hills Town of Trochu Village of Acme Village of Carbon Village of Linden 46,313 29,385 38,015 38,015 41,127 45,765 29,036 37,565 37,565 40,640 (b)Kneehill County has contracts for 2011 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 6 hours/week service Village of Carbon 2 hours/week service (c)In 2010,Kneehill County became the managing partner of the Kneehill Regional Water Service Commission for a three year term.The County receives $20,000 administration fees to provide support services to the Commission. (d)Kneehill County has committed resources in 2011 to the Sunnyslope Water Service Area projects,which includes upgrades to the reservoir,and distribution lines for the residents of that area.The total estimated cost is approximately $8.5 million.The project is also being financially supported through the Provincial Grants under Alberta Municipal Water and Wastewater Program as well as Municipal Sustainability Initiative. Kneehill County Notes to Financial Statements For the ended December 2010 21.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 ofland 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 govemment 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 infonnation,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 fanners 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 conceming 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,lnfomlation Teclmology 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 faimess. Protective Services Kneehill County's Protective Services Section includes that of both Fire Services and Enforcement (Peace Officer)Services.Fire Services provides emergency tire protection and preventative services that mitigate loss ofJi fe and property with professionally trained volunteers and modem response equipment.Kneehill County support operating contracts with each of the urban departments in addition to major contributions emergency response vehicles. Kneehill County Notes to Financial Statements For the year ended December 31,2010 21.Segmented Information for Annual Financial Reports (Continued) Emergency preparedness planning is also led by Kneehill County through the implementation of a regional with all urban centers within our boundaries. KneehiH 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 Inter-municipal 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. 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 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 distribution is expected to be completed in 2012.Other water distribution systems located throughout the County are part this operation.The wastewater needs of our hamlets are also met by department.a member of the Drumheller and District Solid \Vaste Management ASSO(;laltloll1,vmious transfer sites provide for the collection and disbursement of solid waste. Kneehill County Notes to Financial Statements For the year ended December 31,2010 21.Segmented Information for Annual Financial Reports 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 centers 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. 22.Comparative Figures Some of the comparative figures have been reclassified to conform to the current year's presentation. 23.Approval of Financial Statements Council and Management have approved these financial statements.