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HomeMy WebLinkAbout2012 Financial StatementsKNEEHILL COUNTY W i DECEMBER i CONSOLIDATED STATEMENT OF FINANCIAL POSITION CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES CONSOLIDATED STATEMENT OF CHANGES IN NET FINANCIAL ASSETS CONSOLIDATED STATEMENT OF CASH FLOW SCHEDULE 1 -TANGIBLE CAPITAL ASSETS SCHEDULE - 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 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, 2012; and the consolidated statements of financial activities, consolidated statement of changes in net financial assets and consolidated statement of cash flows for theyearthen 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 public sector accounting standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment; including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose ofexpressingan 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, 2012 and its results of operations and its cash flows for the year then ended in accordance with Canadian public sector accounting standards. Red Deer, Alberta April 23, 2013 Chartered Accountants BUD Canada LLP,a Canadian limited t ability partnership, is member of SDO b,tcmational LBnited, x UK company Umited by duaiandee,. and forms pal t of the intarnadenat EDD network of radependent memEer fins. Tel. 403 342 2500 6DQ Canada LLP JBDO Fax. 403 343 3070 Mittenn um Centre www.bdo.ca 600, 4909 - 49th Street Red Deet AB T 4N 1V1 Canada 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, 2012; and the consolidated statements of financial activities, consolidated statement of changes in net financial assets and consolidated statement of cash flows for theyearthen 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 public sector accounting standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment; including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose ofexpressingan 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, 2012 and its results of operations and its cash flows for the year then ended in accordance with Canadian public sector accounting standards. Red Deer, Alberta April 23, 2013 Chartered Accountants BUD Canada LLP,a Canadian limited t ability partnership, is member of SDO b,tcmational LBnited, x UK company Umited by duaiandee,. and forms pal t of the intarnadenat EDD network of radependent memEer fins. -Kneehill County a a a. •r •a a i.�, 'a a As at December 31, 2012 FINANCIAL ASSETS Gash and temporary investments (Note 3) Receivables Taxes and grants in place of taxes (Note 4) Trade and other receivables (Note 5) Other assets (Note 6) Trochtrrecreation'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 postclosure costs (Note 9) Tax sale trust Trochu recreation trust Long term debt (Note 10) NOIR-FINANCIAL ASSETS Inventory for consumption (Note 12) Tangible capital assets (Note 13) Prepaidexpenses CONTINGENT ILITIES (NOTE 19) Co 9II G S (N fE 20) �! , ve e.. ICAO'' 2012 2011 25;136,766 20,978;213 320,666 370;468 1,524,447 3,229,350 122 122 11,894 10,235 75,904 75,900 27,069,799 1,548;737 55,000 628,194 645,016 96,515 11,894 26,332 9,884,758 12,896,446 14,173,353 5,168,684 104,743,538 178,648 110,090,871 124,264,224 24,664,288 1,455,025 81,205 788,199 551,357 88,792 10,235 18,270 12,173,091 15,166,175 9,498,113 4,290,184 101,779,420 157,464 106,227;069 115,725,181 Kneehill County Consolidated Statement Of Financial Activities For the year ended December 31, 2012 EXPENSES Budget 2012 2011 Legislative $ S 320,457 REVENUE 1;677,001 1,573,290 1,541,509 Net municipal taxes (Schedule 2 20,297,754 20,311,675 18,040,145 User fees and sales of goods 716,801 828,449 813,044 Sales to other governments 49;600 72,196 80,810 Drilling licenses 90,000 44,248 168,045 Fees, licenses, permits; fines 150;120 146,523 173,428 Interest and patronage dividends 205,000 219,372 243,256 Rentals 54,550 63,529 65,768 Penalties and interest on taxes 65,000 66;651 73,450 Provincial government transfers (Schedule 3) 2,832,541 2,247;953 1;709,132 Local government transfers (Schedule 3) 310;290 323,887 304,587 Local improvement charges 558,700 846;015 697,998 Gain on sale of capital assets - _ 32,632 Other 480,180 168;538 535;798 Agricultural services board 25,810,536 25;339,036 22,905,460 EXPENSES Legislative 346,175 334;002 320,457 Administration 1;677,001 1,573,290 1,541,509 Assessment 269,950 364;500 268,259 Fire services and safety program 871,327 829,243 846,491 Enforcement 395;448 375;482 358,727 Disaster services 17,000 18,018 2;654 Ambulance - Transportation 13;816,041 10,181,237 9,129,978 Bridges 166;463 431;816 417,182 Water supply and distribution 2;205,392 2,129,728 1,957,253 Sewer 151,338 138,150 121,906 Garbage and recycling 442;692 447;763 421,320 Community support services 930,626 872,969 888,060 Health services and cemetery 102;430 106,446 32,632 Planning 569,338 347,880 246,856 Agricultural services board 638,471 557;647 476,900 Parks, recreation and culture 710,565 675;435 664,023 Loss on disposal of assets - 430,292 340,950 Other 470,000 49;199 272;259 23,780,259 19,863,098 18,307,415 EXCESS OF REVENUES OVER EXPENSES -BEFORE OTHER 2;030,277 5,475;938 4,598,045 Kneehill County For the year ended December 31, 2012 Budget 2012 2011 $ $ EXCE55 "K REVENUi 3 OVER EXPENSES -BEFORE OTHER (Cont'd) OTHER Provincial capital transfers Federal capital transfers Local government capital transfers Contributed assets Transfers to local governments for capital Other A XVA ON M DM V MOM t 1' f 2;030,277 5,475,938 4,598,045 2;450;000 2;816,271 3,867,746 - - 155,038 246,861 151,772 - (5,500) (27) 3,773 4,480,277 8;539,042 8;770,874 115,725,181 115;725;181 106,954,307 120,205,458 124,264,224 115;725,181 Kneehill County For the year ended December 31,:2012 Budget 2012 2011 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 Acquisition of supplies inventory Acquisition of prepaid assets Use of supplies inventories Use of prepaid assets 4,480;277 8,539,042 8,770,874 (7,409,495) (9,265,273) (15,743,748) - (246,861) (151,772) 1,010,500 1;247,177 870,120 4,870,547 4;870;547 4,655;827 - 430;292 340,950 (1,528,448) (2;964,118) (10,028,624) (5;256,720) (3;993;692) (4,235,078) (150,000) (174,466) (153,065) 3;093,720 3;115,191 2,973,116 150,000 153;282 151,614 (2,163,000) (899;685)(1,263,414} 788,829 4,675,239 (27521,163) 9,498,113 9;498;113 12,019,276 10,286;942 14,173,353 9,498,113 For the vear ended December 31.2012 aI'M 11111,11 , iir a OPERATING Excess (deficiency) of revenues over expenditures Non-cash items included in excess(deficiency) 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/postclosure 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 Decrease (increase) in restricted cash and temp. investments Cash provided by (applied to) investing transactions FINANCING Long -tern debt issued Long -tern debt repaid Cash provided by (applied to) financing transactions 2012 2011 8,539,042 8,770,874 (246,861) (151,772) 4,870,547 4,655;827 430,292 340;950 49,802 (35,001) 1,704;903 4,245;894 8,057 6;110 (878;501) (1,261,960) (21,184) (1;452) 93,712 (2,867,137) (26,205) 5,205 93,658 40,792 7;723 13,366 (160,005) 587,857 14,464,981 14;349,553 (9,265,273) (15,743,748) 1,247,177 870,120 (8,018,096) (14,873,628) (2,288,333) (2,212,554) (2,288,333) (2,212,554) CHANGE IN CASA AND EQLIVALENTS IN THE YEAR 4,158,552 (2,736,629) the year ended December 31 IM S CHANGE IN CASH AND EQUIVALENTS IN THE YEAR 4,158 552 (2;736;629) CASH AND GASH EQUIVALENT'S AT BEG.OF YEAR 20;978,213 23,714,842 CASH AND GASH EQUIVALENTS AT END OF YEAR 25,136,766 20,978,213 W W � V h W W � C h h V h M b h r W h � v} N G M h 'n o r m M m m m M ry M V lD a W � M 4 y ® z G m W W � V h W W � C h h V h M b h r W h � v} N G M h 'n o r m M m m m M ry M a W � M 4 y ® z G m U C f O Q z N eehlil County Schedule 2 - Net 'Taxes %runicilaal Purposes For the year ended December 31, 2012 Budget 2012 2011 TAXATION Farmland Residential Commercial Linear property Machinery and equipment Railway Minimum tax Grants in lieu Local improvement tax (rural) Local improvement tax (non residential) EQUISITIONS Alberta School Foundation Fund Kneehill Foundation 1,417,330 1,425;293 1,392;430 2,532,569 2,535,952 2,392,516 2,104,276 2,093,216 1,588,231 14,744,689 14,765,515 12,884;121 4,073,688 4,070,146 4,028;047 13;000 13,975 13,394 10,977 - _ 1,812 3,207 2,634 74;792 75,358 72,987 1,269;653 1,270;024 1,110,547 26,242,786 26;252,685 23,484,907 5,925,032 5,925;032 5;432,689 20,000 15;978 12,073 20,297,754 20,311,675 18,040,145 For the year ended December 31, 2012 TRANSFERS FOR OPERATING Provincial government Other local governments TRANSFERS FOR CAPITAL Provincial goverment Local government Federal government Budget 2012 2011 $ $ $ 2,832;541 2,247,953 1,709,132 310;290 323,887 304,587 3,142,831 2,571,840 2,013,718 2,450,000 2,816,271 3,867,746 155,038 2,450,000 2,816,271 4;022,784 5,592,831 5,388,111 6,036,502 For the year ended December 31, 2012 CONSOLIDATED EXPENSES BY OBJECT Salaries, wages and benefits Contracted and general services Purchases from other governments Materials, goods, supplies and utilities Transfer to other governments Transfers to individuals and organizations Bank charges and interest Interest on debenture Amortization expense: Loss on disposal of assets Property taxes cancelled Other Kneehfll County Budget 2012 2011 6,672;637 6,322;647 5,299,902 3;631,381 3,715,574 2,112,035 280;550 286,983 274,456 6,529;201 2,859,916 3,926,683 296;940 363;131 288;036 588,715 524,896 604,581 2,555 1,256 1,398 433,233 429,946 505,840 4,870;547 4,870,547 4,655;827 - 430,292 340;950 4;500 749 208 470,000 57,163 297,500 23;780,259 19;863,098 18,307,41.5 Vl h b \9 W 6\ M .-�9ti.O 0•, bP C4 NVV. Ch McF.ti OiQC � n�5 eQv M N b M ' N e c�roHrn o mN � my Gti O CFS:W �G V W M # m h� M� h N N l ov ISI n� tr ry N l N of h P 01 � h AU r' W M W N Oi C- G v t: A -Y v a W v� to b N b M J; oN. n'.r-� V cn v� N l N of h P 01 � h AU r' W M W N Oi C- G O N G v t: A -Y v a W G O N 11%.-neehill County Ila ,m r r. The financial statements of Kneehili 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 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 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) Baais of Accountine 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 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 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. eehill County Notes to Financial Statements i1 1 •11.1. �•, V; �.. 1. Significant Accou1Policies c) Use of Estimates The preparation of financial statements in conformity with Public Sector Accounting Board 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) Temporgy 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. (c) Investments Investments are recorded at cost and represent short-term bank notes and deposits that have effective: 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 such as water and waste water services, roads, sidewalks and street lighting are recorded as tangible capital assets under their respective function. eehill County Notes to Financial Statements For the year ended December 31, 2012 1. Significant AccounVn—g Toli—des (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. 0) Requisition Over -levy and Under -ley 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 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. For the year ended December 31, 2412 103 (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 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 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 10-20 Buildings 25-50 Engineered structures: Water system 15-75 Wastewater system 25-60 Other engineered structures 6-100 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 are also recorded as revenues. Kneehill County Notes to Financial Statements For the year ended December 31, 2012 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 inflows for the period must be equal to 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 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 itemsincludedin 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 2012 25,810;536 Notes to Financial Statements 2. Compliance to Budget Requirements 25,339,036 Exnenses Financial Plan Amortization Reclass Capital Fiscal Plan Per Legislative 346;175 By -Law Allocation Expenditures Financial Stmts. Actual Revenue 1,631,544 45,457 1,677;001 Net taxes for municipal purposes 20,297;754 20,297,754 20;311;675 Government transfers 2:832;541 2,832,541 2;247;953 Interest and patronage dividends 205,000 205,000 219;372 Sales and user charges 716,801 716;801 828;449 Sales to governmentsandagencies 49,600 49,600 72;196 Drilling licenses 90,000 90,000 44,248 Fees, licenses, permits, fines 150,120 150,120 146;523 Rentals 54,550 54,550 63;529 Penalities and interest 65;000 65,000 66;651 Local government transfers 310,290 310,290 323;887 Local improvement charges 558,700 558,700 846,015 Gain on sale of assets - - 435;655 Other 480,180 480,180 168;538 Total revenue 25,810;536 25,810,536 25,339,036 Exnenses Legislative 346;175 - 346,175 334,002 Administration 1,631,544 45,457 1,677;001 1,573,290 Assessment 269,950 - 269,950 364;500 Fire services and safety program 671,420 199,907 871;327 829;243 Enforcement 351;641 43,807 395,448 375,482 Disaster services 17,000 - 17;000 18;018 Ambulance - - Transportation 10,717,693 3,267,263 (168;915) 13,816,041 10,181,237 Bridges 1,837,362 349,834 (2,020,733) 166,463 431;816 Water 1,395,300 810,092 2,205,392 2,129;728 Sewer 97,044 54;294 151,338 138,150 Waste disposal and recycling 435;655 7,037 442;692 447,763 Community support services 930,626 - 930,626 872,969 Health services and cemeteries 94,561 7,869 102,430 106,446 Planning 569;338 - 569,338 347,880 Agriculund services board 603;668 34,803 638,471 557,647 Parks, recreation, and culture 660,383 50,182 710,565 675,435 Loss on disposal of assets - - - 430,292 Other 470,000 470,000 49,199 Total expenses 21,099,360 4,870,547 (2,189,648) 23,780,259 19,863,098 Excess of revenue over expenses before other 4,711,176 (4,870,547) 2,189;648 2,030,277 5,475,938 eehill County Notes to Financial Statements Financial Plan Amortization Reclass Capital Fiscal Plan Per By-Law Allocation Expenditures Financial Shpts. Actual Excess of revenue over expenses before other 4,711,176. (4,870,547) 2,189,648 2,030;277 5,475,938 Other Provincial capital transfers 2;450,000 2;490,000 2,816,271 Federal capital transfers - - Local government capital transfers - Contributed. assets - 246,861 Transfers to local governments - - Other - (27) Excess of revenue over expenses 7,161,176 (4,870,547) 2,189;648 4,480;277 8,539,042 Reconciling:. Debenture debt - - - Sale of assets 1,010,500 1;010,500 1,247,177 Capital expenditures (7,409,495) (2,189,648) (9,599,143) (9,265,273) Contributed Assets - - (246,861) Interfund transfers 1,526,152 1,526,152 (2,321,894) Debt repayment (2,288,333) (2,288,333) (2,288;333) (0) (4,870,547) (4,336,142) Add back non cash items Amortization 4,870,547 Net ope ati ng budge transfer to acqui re gravel (857,30 Loss on disposad of ams 430,292 • t: For the year ended December 31, 2012 3. Cash and Temporary Investments 2012 2011 Gash 25,136,766 25,136,766 20,978,21.3 20,978;213 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 $628,194 {2011 - $788,199) received from the Province of Alberta restricted for future projects (Note 7). 4. Taxes Receivable 2012 2011 t$) Current taxes and grants in place of taxes 250;882 274,945 Tax arrears and grants in place of taxes 139;097 151,263 389,979 426,208 Less; Allowance for doubtful tax accounts -69,313 -55.740 320;666 370,468 5. Trade and Other Accounts Receivable 2012 2011 Provincial and Federal grants GST Receivable Trade and other 714,288 2,270,066 179,484 291,613 630,675 667,671 1,524,447 3,229,350 For the year ended December 31, 2012 6. Other Assets Alberta Capital Finance Shares,. at cost Servus Credit Union Membership Share, at cost 7. Deferred Revenue Federal Gas Tax Funds Municipal Sustainability Initiative KCRP`- Golden Hills School FCSS PLC Public Health - CBI i 2012 2011 121 121 1 1 2012 2011 M M 276,261 23,000 1,339 16,086 20,709 122 581,598 174;685 23,000 768 1,338 6,810 628,194 788,199 8. Employee Benefit Obligations 2012 2011 M M Accrued sick benefits 446,908 358,006 Accrued vacation 190,108 193,351 645,016 551,357 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. For the -year ended December 31, 2012 9. Provision For Landfill Closure and Postelosure Costs Alberta environmental law requires closure and postclosure 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 postclosure activities for 25 years after closure using a discount rate of 4.4% and assuming annual inflation of 3%. Theaccruedliability 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 EM 89,033 125;415 2011 M 92,951 120,12,9 213,080 58.33% 117;933 124,288 45.01% 41.67%u 96,515 88,792 101MIMIMI For the year ended December 31, 2012 10. Long Term Debt 2012 2011 Total tax supported debentures 9,884,758 12,173,091 The current portion of long-term debt amounts to $2,266,894 (2011 - $2;288,373) Principle and interest repayment are as follows: 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 Junel5, 2010, in the amount of $6.3 million, repayable semi annually at a fixed interest rate of 2.575%, maturing June 15, 2015. Debenture debt is issued on the credit and security of Kneehill County at large. Interest on debenture debt amounted to $433;233 (2011 = $509,011) Principal Interest Total ($) ($) ($) 2013 2,366,894 354;652 2,721,546 2014 2;448;343 273,222 2,721,565 2015 1,857,328 188,769 2,046,097 After 3,212,193 214,381 3,426;574 9,884,758 1,031,024 10,915,782 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 Junel5, 2010, in the amount of $6.3 million, repayable semi annually at a fixed interest rate of 2.575%, maturing June 15, 2015. Debenture debt is issued on the credit and security of Kneehill County at large. Interest on debenture debt amounted to $433;233 (2011 = $509,011) For the year ended December 31, 2012 11. Debt Limits Section 276(2) of the Municipal Government Act requires that debt and service on debt limits as defined by Alberta Regulation 255/00 for the County be disclosed as follows: Total debtlimit Total debt Amount of debt limit unused Debt servicing limit Debt servicing Amount of debt servicing limit unused R 37,199,724 2011 33,549,360 12,173,091 27,314,966 21,376,268 6,199,954 5;591,560 2,721,566 2,721,566 3,478,388 2,869,994 The debt limit is calculated at 1.5 times the revenue of the Municipality (as defined in Alberta Regulation 255/00) and the debt service limit is calculated at 6.25 times such revenue. Incurring debt beyond these limitations requires approval by the Minister of Municipal Affairs. These thresholds are guidelines used by Alberta Municipal Affairs to identify municipalities that could be at finanical risk if further debt is acquired. The calculation alone does not represent the financial stability of the municipality. Rather, the financial statements must be interpreted as a whole. 12. Inventory For Consumption 2012 2011 Gravel Other transportation amounts Other 4,718,703 3,861,335 351,567 350,107 98,415 78,742 Kneehill County For the year ended December 31, 2012 13. Tangible Capital Assets 2012 2011 Net Book Value ($) ($) Land 1,380,432 1,377,167 Land improvements 618,389 660,399 Buildings 6;302;518 6,140,164 Engineered Structures Water 46,927,831 43,553,132 Sewer 1,124,933 557,107 Towers 191,109 213,279 Dams 90,665 94,787 Transportation 0 15,789 Bridges 10,787,059 9,119,048 Roads 26,911,456 29,094,492 Machinery and equipment 5;406,235 6,390,745 Vehicles 5;002,912 4,563,313 104,743,538 101,779,420 14. Equity In Non Financial Assets 2012 2011 Tangible capital assets 173,495,864 166,994,133 Accumulated amortization -68,752,325 -65,214,712 Inventory of supplies 5,168,684 4,290,184 Prepaid expenses 178,648 157,464 Long term debt -9,884,758 -12,173;091 100,206,113 94,053,977 tKneehill County For the year ended December 31, 2012 15. Reserves Transfers Transfers 2011.In Out 2012 Operating Reserves (in D Contingency Information Technology Joint Community Summit Doctor Recruitment Fuel Stabilization Gravel Family & Community Support Services Kneehill Community Resource Program Parent Link Program Cemeteries Planning Parks Strat Plan Reserves Special Projects Capital 12eserves in $} Capital Equipment Replacement Buildings Bridges Roads Water Water Service Area Sewer Environmental Recreation and Leisure Funding Medical 667;636 293,619 67,156 894;099 161;853 82;948 33,442 211,359 52„275 20,000 20,000 52,275 90,260 175,410 5,098 260,572 245;032 58,128 - 303;160 3,590,303 - 857,368 2,732;935 72;915 185 - 73,100 44,514 11,841 - 56,355 121 6 - 127 36,874 20;000 - 56,874 26,563 4;212 - 30;775 46,123 25,000 19;557 51,566 - 329,760 79,760 250;000 43,200 136,101 11,000 168,301 5;077;669 1;157,210 1;093,381 5;141,498 309,517 2,865,616 2;083,586 1,091,547 3,097;320 1,127,482 337;267 3;887;535 1,131;075 619,649 - 1,750,724 3,476,526 1,600,000 123,634 4,952;892 183,088 62,500 16,469 229,119 6,214;644 3;659;881 5,169,732 4;704;793 166,356 _ 166,356 - 413,853 5,014 408;839 445;700 298,800 73,806 670,694 15,438,079 10,233,928 7,975,864 17,696,143 Total Reserves 20,515,748 11,391,138 9,069,245 22,837,641 For the year ended December 31, 2012 16. Accumulated Equity Residual Equity Equity in Non Financial Assets (Note 14) Reserves (Note 15) Kneehill County o 2012 2011 1,220;470 1,155;456 100,206,113 94;053;977 22,837,641 20, 515,748 124,264,224 115,725,181 17. Salary and Benefits Disclosure No, of Salary & Benefits -& 2012 No. of 2011 Councillor/Division Persons Fees Allowances Total Persons Total Division l 1 30,918 4;150 35,068 1 33,054 Division 2 1 26,570 4,150 30,721 1 39,336 Division 3 1 24;835 4,150 28,986 1 28,019 Division 4 1 26,027 4,150 30,178 1 30,058 Division 5 1 53,322 4,150 57;472 1 50,156 Division 6 1 27,809 3,677 31,486 1 28;260 Division.7 1 30,499 4,150 34,649 1 34;420 Chief Administrative Officer 1 238,213 22,781 260,995 1 186,333 Other Designated Officers 3 229,146 24;321 253,467 3 287;426 (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 term 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. For the year ended December 31, 2012 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 9.91 % of pensionable payroll up the the year's maximum pensionable earnings under the Canada Pension Plan (CPP) and 13.74% of pensionable earnings above this amount. Employees of the County are required to make current service contributions of 8.91 % of pensionable salary up to the year's maximum salary and 12.74% on pensionable salary above this amount. Total employer contributions by Kneehill County to LAPP in 2012 were $354,943 ($315;685 in 2011). Total current contributions by the employees of Kneehill County to LAPP in 2012 were $$322,413.21 ($285,110 in 2011). At December 31, 2011 the Plan disclosed an actuarial deficiency of $4.64 billion. 19. Contingent Liabilities (a) Kneehill County has been named in a lawsuit relating to a private company contractor and sub contractor for which the private company is seeking damages for. No provision has been made on the statement of financial position. 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 terms of membership, Kneehill County could be liable for its proportinate share of any claim losses in excess of the funds held by the exchange. Kneehill County For the year ended December 31, 2012 20. Commitments (a) Kneehill County is part of a Master Fire Protection Agreement with the following Municipalities to provide fire protection services to rural residents in the County from 2012 to 2014 inclusive. The County's 2013 commitment is indexed by the cost of living index as established by the Province of Alberta for October of the previous calendar year: 2013 2012 Town of Three Hills 48,178 47,891 Town of Troche 30,806 30,622 Village of Acme 39,545 39;310 Village of Carbon 39;545 39,310 Village of Linden 42,783 42,527 (b) Kneehill County has contracts for 2013 to provide peace officer and by-law enforcement services at a cost recovery for the following Municipalities: Town of Three Hills Village of Linden Village of Acme Town Of Trochu Village of Carbon (c) In 2010; Kneehill County became the managing partner of the Kneehill Regional Water Service Commission for a three year term. The County receives $21,218 administration fees to provide support services to the Commission. (d) Kneehill County is a partnering member of the Drumheller and District Solid Waste Management Association. In 2012, Kneehill County paid requisition of $186,961 and is expected to pay $178,140 in 2013. Kneehill County kotevelkMANUMI For ,., 31, 2012 Reports21. Segmented Information for Annual Financial General Situated in the heart of central Alberta, KneehilI 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 Iandowners 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 CPS, Records management, Information Technology and Human Resources. The goal of the Corporate Services team is the delivery of customer service in friendly, courteous and helpful manner guided by integrity and fairness. 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 modem response equipment. Kneehill County support operating contracts with each of the six urban fire departments in addition to major contributions emergency response vehicles. Kneehill County FAROM=02m, -ti, 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 infrastructureandthe need to enhance public safety. Our Peace Officers enhance some services provided by the local RCMP in addition to the protection of municipal infrastructure andenforcement 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, livablecommunitiesand 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 theareaof 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 he 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. Ll— hmeehill County For the year ended December 31, 2012 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 centres in Kneehill County. Social and Community Services Kneehill Regional FESS is partnership between the Province and the six municipalities located within the boundaries of Knechill 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 FOSS Director include the Knechill 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. Anuroval of Council and Managementhave approved these financial statements.