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Home My WebLink About2005 Financial StatementsNow Ad Yrl L L L 6 L L fir L I" im Kneehill County Financial Statements For the year ended December 31, 2005 Contents Auditors' Report Financial Statements 2 Balance Sheet 3 Statement of Financial Activities - Operating Fund 4 Statement of Financial Activities - Capital Fund 5 Notes to Financial Statements 6-12 Schedule of Net Taxes for Municipal Purposes Schedule of Functional Operating Expenditures Schedule 1 2 w JBDO DDriving growth BDO Dunwoody LLP 1900, 801 - 6 Avenue S.W. Chartered Accountants Calgary Alberta Canada T2P 3W2 and Advisors Telephone: (403) 266-5608 Fax: (403) 233-7833 wwwbdo.ca Auditors' Report To the Reeve, Council and Ratepayers Kneehill County We have audited the balance sheet of the Kneehill County as at December 31, 2005 and the statement of municipal equity and operating fund activities for the year then ended. These financial statements are the responsibility of the County's 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 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, 2005 and the results of its financial activities for the year then ended in accordance with Canadian generally accounting principles. 'ea~~ Chartered Accountants Calgary, Alberta April 24, 2006 2 BDO Dunwoody LLP is a Limited Liability Partnership registered in Ontario Kneehill County Balance Sheet December 31 2005 2004 v rr1 id Assets Current Cash Term deposits Taxes receivable Trade and other accounts receivable Inventories (Note 2) Prepaid expenses Capital assets (Note 3) Other assets (Note 4) Tax Sale Trust Account $ 696,811 $ 2,803,817 13,015,614 9,500,000 300,750 318,351 3,512,795 2,290,108 1,078,755 989,774 141.623 148,751 18,746,348 16, 050, 801 22,950,798 18, 548, 360 2,301 1,121 331 331 41,699.778 $ 34 6~OOL6 3 13 Liabilities Current Accounts payable and accrued liabilities Vested sick leave benefits Deferred revenue (Note 5) Other current Trochu Recreation Trust Tax Sale Trust Account Municipal Equity $ 1,373,955 $ 657,073 289,930 258,391 1,265,542 146,406 16.332 - 2,945,759 1,061,870 22,236 331 331 2.968.326 1,062,201 Operating Fund - Page 4 5,772,982 5,737,283 Capital Fund - Page 5 (417,481) 291,027 Reserves (Note 6) 10,425,153 8,961,742 Equity in Capital Assets (Note 14) 22.950.798 18,548.360 38.731.452 33,538.412 $ 41,699,778 $__346-00-613 On behalLof the Council: - Reeve 3 The accompanying notes are an integral part of these financial statements. Kneehill County Statement of Financial Activities - Operating Fund For the year ended December 31 2005 2004 Property Taxes $ 12,131,896 $ 10,605,745 Requisition Transfers (4,113,553) (4127,422) I N T et axes For Municipal Purposes - Schedule 1 8,018,343 6,478,323 Revenue Government transfers 1,492,086 3,187,612 Interest and patronage dividends 316,548 281,066 Sales and user charges 826,407 242,264 Sales to other governments 5,100 - Drilling licenses 147,391 59,948 Fees, licenses, permits and fines 111,791 56,171 Rentals 67,252 40,036 Insurance proceeds 25,982 812 Penalties and costs on taxes 22,133 49,197 Local government transfers 180,329 167,492 Local improvement charges 33,197 33,197 Other 102,680 111.601 3,330,896 4,229,396 Total Revenue 11,349,239 10.707.719 Expenditures Salaries, wages and benefits 3,129,268 2,629,932 Contracted and general services 1,603,469 4,630,779 Purchases from other governments 174,420 34,074 Materials, goods, supplies and utilities 2,373,604 2,064,360 Transfers to other governments 136,330 135,315 Transfers to local boards and agencies 28,885 147,694 Transfers to individuals and organizations 484,399 314,616 Bank charges and interest 1,090 1,529 L Property taxes cancelled - 10,160 Other 51.775 34,901 Total Expenditures - Schedule 2 7,983,240 10,003,360 Excess (deficiency) of revenue over expenditures 3,365,999 704.359 Transfers from (to) other funds Net transfers to capital fund (2,272,043) (1,227,075) Pq Net transfers from (to) operating reserves (1,058.257) 527.200 (3.330,300) (699.875) Net surplus from operations 35,699 4,484 O r ti F d b i i f pe a ng un , eg nn ng o year 6,737,283 5,732,799 e, Operating Fund, end of year $ 55 772,982 $ 5.737.283 310 The accompanying notes are an integral part of these financial statements. 4 Kneehill County 04 Statement of Financial Activities - Capital Fund L For the year ended December 31 2005 2004 Revenue Government transfers Proceeds from disposal of capital property Expenditures General Government Fire services Bylaws Enforcement Roads and Streets Water supply and distribution Agricultural Service Board Other Excess (deficiency) of revenue over expenditures Net inter-fund transfers Transfers from operating fund Transfers from (to) capital reserves Change in fund balance L Capital fund, beginning of year Capital fund, end of year $ 2,241,202 $ 93,910 450.958 182.804 2.692.160 276.714 122,415 444,934 30,858 901,868 3,722,471 45,013 5.267.559 56,962 496,850 607,195 94,064 15,773 200 1.271.044 (2,575,399) (994,330) 2,272,043 1,227,075 1405.152) 58.282 (708,508) 291,027 291.027 - $ 1417.481) $ 291.027 JBDO The accompanying notes are an integral part of these financial statements. 5 -0 Kneehill County Notes to Financial Statements December 31, 2005 1. Significant Accounting Policies The financial statements of Kneehill 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, and changes in fund balances of the reporting entity. This entity is comprised of all the organizations that are owned or controlled by the Municipality and are therefore accountable to the Council for the administration of their financial affairs and resources. 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) Fund Accounting Management funds consist of the operating, capital and reserve funds. Transfers between funds are recorded as adjustments to the appropriate equity account. Proceeds from land sales are recorded as operating fund revenues. po (c) 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 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 occured, providing the transfers are authorized, the municipality 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 . (d) Pension Expenditure The County participates in a multi-employer defined benefit pension plan. This plan is accounted for as a defined contribution plan. (e) Investments Investments are recorded at cost. J6 r 1W Kneehill County Notes to Financial Statements i December 31, 2005 1. Significant Accounting Policies - (Continued) (f) Inventories Inventories of materials and supplies for consumption are valued at the lower of cost or net realizable value with cost determined by the average cost method. 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 capital assets under their respective function. (g) Capital Assets Capital assets are reported as expenditures in the period they are acquired. Capital assets are reported at cost except for donated assets which are reported at estimated fair value. Government contributions for the acquisition of capital assets are reported as capital revenue and do not reduce the related capital asset costs. Capital assets for government purposes are not depreciated. (h) Reserves for Future Expenditures Reserves are established at the discretion of Council to set aside funds for future operating and capital expenditures. Transfers to and/or from reserves are reflected as an adjustment to the respective fund. ij) Equity in Capital Assets Equity in capital assets represents the County's net investment in capital assets after deducting any long-term or other capital liabilities. Q) 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 revenue and expenditure 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. (k) Statement of Cash Flows A statement of cash flows has not been presented as the financial statements already adequately present the operating, financing and investing activities of the county. JBDO 7 Kneehill County Notes to Financial Statements December 31, 2005 2. Inventories 2005 2004 Gravel $ 759,490 $ 675,368 Other transportation amounts 242,905 241,909 Other 22,004 56,003 Land held for resale 54,356 16,494 $__1 078 755 $ 989,774 3. Capital Assets 2005 2004 Land held for own use $ 462,507 $ 437,507 Buildings 2,244,587 2,225,585 Engineering structures Machinery and equipment 7,064,766 8,114,260 3,400,364 8,077,237 Vehicles and power equipment 5,064,678 4.407.667 $ 22,950,798 $ 18.548,360 During the year, capital assets in the amount of $5,267,559 (2004 - $1,270,844) were acquired, and assets with an original cost of $865,121 (2004 - $537,538) were disposed of or written off. 4. Other Assets 2005 2004 Miscellaneous $ 2,180 $ - Three Hills Water Waste Pipeline Alberta Municipal Financing Corporation, shares, at cost - 120 1,000 120 Mt. Vernon Water Co-op Association Ltd. membership 1 1 $ 2,301 $ 1.121 5. Deferred Revenue 2005 2004 Public Health - K.C.R.P. $ 119,614 $ 5,240 Public Health - F.C.S.S. 3,711 - Transportation 1,120,217 50,000 Disaster Services - Flood 22,000 19,545 Prepaid property taxes - 70,631 L Tax certificates - 915 Assessment appeal fees 75 $ 1.265.542 $ 146,406 J8 r MW Kneehill County Notes to Financial Statements December 31, 2005 6. Reserves 2005 2004 Operating reserves Contingency $ 7,802,537 $ 7,833,395 Administration 17,082 39,513 Assessment - 16,000 Fire - 5,355 Transportation 1,500,623 369,979 Sewer 44,632 25,000 Garbage 113,853 145,000 FCSS 250 5,861 Kneehill Community Resource Program 40,080 20,030 Agricultural Service Board 79,922 89,921 Parks 49.335 40.000 9.648.314 8,590,054 Capital Reserves Torrington 53,800 53,800 Administration 156,543 6,543 Fire 225,660 229,485 Assessment 818 - Water 57,745 57,745 Planning 12,429 11,929 Agricultural Service Board 19,844 12,186 Transportation 225,000 - Parks 25.000 - 776.839 371.688 $ 10.425.153 $ 8.961.742 7. 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. It is the opinion of management that the exposure to any potential liability will be fully covered by the insurance in place for such events. b) Kneehill County is a member of the Alberta Municipal Insurance Exchange (MUNIX). Under the j 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. JBDO 9 t c E 6 C C L 1 E L L C F L L E C C Kneehill County Notes to Financial Statements December 31, 2005 8. 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: 2005 2004 Salary Benefits & & Fees allowances Total Total (1) (2) (3) Councillor/Division Holsworth, Brian -1 $ 17,335 $ 3,491 $ 20,826 $ 21,876 Calhoun, Carol -2 18,053 3,524 21,577 23,701 Wittstock, Jerry -3 16,612 3,456 20,068 20,171 Woods, Murray -4 28,787 4,032 32,819 32,519 Crawford, Vern -5 20,247 3,628 23,875 23,667 Hoppins, Ken -6 13,666 3,244 16,910 31,651 Knievel, Ken -7 17,921 3,518 21,439 24,263 County Administrator and other designated Officers Kiviaho, Gene $ 97,600 $ 16,301 $ 113,901 $ 104,539 Other - designated officers 65,902 12,493 78,395 109,374 (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 and car allowances. IBDO 10 AN& i~ Kneehill County Notes to Financial Statements 7 December 31, 2005 E 9. Debt Limits 2005 2004 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 debt limit Total debt $ 17,716,493 $ 16,403,300 Amount of debt limit unused 17.716.493 $ 16.403.300 Debt servicing limit $ 2,952,749 $ 2,733,884 Debt servicing - - Amount of debt servicing limit unused $ 2.952.749 $ 2.733.884 The debt limit is calculated at 1.5 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. 10. Comparative Figures Certain comparative figures have been reclassified to conform with the current year's presentation. 11. Local Authorities Pension Plan Employees of Kneehill County participate in the Local Authorities Pension Plan (LAPP), which is one of the plans covered by the Alberta Public Sector Pension Plans Act. The LAPP serves about 133,000 people and 389 employers. The LAPP is financed by employer and employee contributions and investment earnings of the LAPP Fund. Contributions for current service are recorded as expenditures in the year in which they become due. Kneehill County is required to make current service contributions to the LAPP of 7.40% of pensionable earnings up to the year's maximum pensionable earnings under the Canada Pension Plan and 10.14% on pensionable earnings above this amount. Employees of the County are required to make current service contributions of 6.40% of pensionable salary up to the year's maximum pensionable salary and 9.14% on pensionable salary above this amount. Total current service contributions by Kneehill County to the LAPP in 2005 were $111,679 (2004 - $95,768). Total current service contributions by the employees of Kneehill County to the Local Authorities Pension Plan in 2005 were $97,572 (2004 - $81,878). At December 31, 2004, the Plan disclosed an actuarial deficiency of $1.411 billion. JBDO 11 Kneehill County Notes to Financial Statements December 31, 2005 RM VW 12. Approval of Financial Statements Council and Management approved these financial statements. rt 13. Financial Instruments The County's financial instruments consist of various assets and liabilities. It is management's opinion that the County is not exposed to significant interest, currency or credit risk ari sing from these financial statements. Unless otherwise noted, the fair value of these financial instruments approximates their carrying values. 14. Equity in Capital Assets 2005 2004 Acquisition of capital assets General Government $ 122,415 $ 56,962 Fire services 444,934 496,850 Roads and Streets 901,868 607,195 Water supply and distribution 3,722,471 94,064 Bylaw enforcement 30,858 - Agricultural services board 45.013 15.773 5,267,559 1,270,844 Original cost of capital asset disposals (865,121) (537.538) Change in equity balance 4,402,438 733,306 Equity balance, beginning of year 18.548.360 17.815.054 Equity balance, end of year $ 2 $ 18.548,360 Represented by: Capital assets - Note 3 $ 22.950.798 $ 18,548,360 J12 Schedule 1 Kneehill County Schedule of Net Taxes For Municipal Purposes For the year ended December 31 2005 2004 Property Taxes Farmland Residential Commercial Linear property Machinery and equipment Railway Grants in lieu Less: Requisition transfers Alberta School Foundation Fund Kneehill Foundation Requisition adjustments Net taxes for municipal purposes $ 2,024,132 $ 1,971,681 1,871,028 1,734,109 874,135 770,187 5,847,067 4,989,272 1,497,495 1,122, 712 14,835 14,677 3.204 3,107 12.131.896 10,605,745 (4,102,624) (4,108,506) (11,270) (18,916) 341 - (4.113.553) (4,127,422) $ 8.018.343 $ 6,478.323 JBDO 13 rir so i0i 0 I 0 c Schedule 2 Kneehill County Schedule of Functional Operating Expenditures For the year ended December 31 2005 2004 Legislative General Administration Other general Administration - Assessment Fire protection Disaster and Emergency Measures Ambulance Utility and Development Bridge inspection Transportation Water supply and distribution Sewer services Waste management Public Health - F.C.S.S. K. C. R. P. Parent Link - Building Initiative Cemetery Planning and development Agricultural Service Board Parks and recreation $ 186,896 $ 174,567 807,970 802,345 165,481 114,084 306,871 222,500 67,662 347,702 210,130 140,459 47,092 15,741 197,095 362,718 4,114,190 6,352,779 138,399 72,882 23,991 16,371 298,956 251,623 319,190 311,650 204,420 203,296 142,913 - 23,143 - 11,272 25,267 136,605 123,605 315,748 224,509 265,216 238,262 $ 7.983,240 $ 10.000.360 1,BDO 14