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Home My WebLink About1999 Financial Statements10 KNEEHILL COUNTY FINANCIAL STATEMENTS DECEMBER 31, 1999 Q ABLETT KOLKE Box 1207, 110 - 4 Avenue North Three Hills, AB TOM 2AO B L E TT (403) 443-5343 K O L K E 187-6581 Fax (403) 403) 4443-7107 E-mail: akcaCtelusplanet.net Chartered Accountants James H.Ablett, B.Comm., C.A. Kevin M. Kolke, B.Comm., C.A. jPk 161 AUDITORS' REPORT To the Reeve, Council and Ratepayers Kneehill County We have audited the balance sheets of Kneehill County as at December 31, 1999 and 1998 and the statements of municipal equity and operating fund activities for the years 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. AMA We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform our 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, 1999 and 1998 and the results of its financial activities for the years then ended in accordance with the accounting principles described in Note 2. avo_&~ 2(~~ CHARTERED ACCOUNTANTS April 18, 2000 Three Hills, Alberta ~AlAembers of the Institute of Chartered Accountants of Alberta RNEEHILL COUNTY _--BALANCE SHEET DECEMBER 31, 1999 ASSETS 1999 1998 CURRENT Cash $ 476,684 $ - Term deposits 10,000,000 9,000,000 Taxes receivable 275,484 219,324 Trade and other accounts receivable 583,968 4,524,164 Inventories (Note 3) 1,149,761 579,684 Prepaid expenses 62,986 50,026 12,548,883 14,373,198 ^APITAL (Note 4) 15,350,164 14,540,273 OTHER (Note 5) 12,956 29,166 TAX SALE TRUST ACCOUNT 15,008 8,852 $ 27,927,011 $ 28,951,489 LIABILITIES CURRENT Bank overdraft $ - $ 155,789 Accounts payable and accrued liabilities 516,135 675,874 Vested sick leave benefits 251,669 289,057 Deferred revenue (Note 6) 78,318 73,993 Current portion of debenture debt 11_757 1 0497 857,879 1,205,210 ~EBENTURE DEBT (Note 7) 13,167 24,924 TAX SALE TRUST ACCOUNT 15,008 8,852 886,054 1,238,986 MUNICIPAL EQUITY ACCUMULATED SURPLUS 4,696,814 4,692,623 EQUITY IN CAPITAL ASSETS 15,321,000 14,500,612 RESERVES (Note 8) 7,023,143 8,519,268 27,040,957 27,712,503 CONTINGENT LIABILITIES (Note 9) $ 27,927,011 $ 28,951,489 10 ABLETT KOLKE RNEEEILL COUNTY STATEMENT OF MUNICIPAL EQUITY YEAR ENDED DECEMBER 31, 1999 1999 1998 ACCUMULATED SURPLUS Balance, beginning of year Net surplus from operations $ 4,692,623 4,191 $ 4,696,814 $ 4,572,546 Balance, end of year EQUITY IN CAPITAL ASSETS Balance, beginning of year Add (deduct): Repayment of debenture debt Proceeds from sale of capital assets Contributions from operating fund Proceeds from Provincial capital grants Acquisitions of land held for resale Development levies Transfers from capital reserves Transfers to capital reserves Original cost of capital asset disposals Write-down of Village of Torrington assets Contribution to Town of Three Hills arena Cost of land held for resale disposals Balance, end of year RESERVES OPERATING Balance, beginning of year Transfer to operating fund Transfer from operating fund Balance, end of year CAPITAL Balance, beginning of year Transfer to capital fund Transfer from capital fund Balance, end of year ® TOTAL RESERVES 120,077 $ 4,692,623 $ 14,500,612 $ 14,513,980 10,497 459,036 1,025,699 4,000 598 137,727 (1,502) (812,399) (3,268) 820,388 $ 15,321,000 9,372 261,839 1,085,625 5,812 1,065 17,675 (379,465) (501,890) (448,422) (59,675) (5,304) (13,368) $ 14,500,612 $ 8,131,226 (1,359,900) 6,771,326, 388,042 (137, 727) 1,502 251,817 $ 7,023,143 $ 7,020,000 (20,000) 1,131,226 8,131,226 26,252 (17,675) 379,465 388,042 $ 8,519,268 ABLETT KOLKE RNEEHILL COUNTY r' STATEMENT OF OPERATING ACTIVITIES YEAR ENDED DECEMBER 31, 1999 1999 1998 PROPERTY TAXES $ 10,008,800 $ 9,500,533 REQUISITION TRANSFERS 4,519,140 4,388,954 NET TAXES FOR MUNICIPAL PURPOSES - Schedule 1 5,489,660 5,111,579 REVENUE Provincial government transfers 1,119,584 5,744,103 Interest and patronage dividends 550,771 506,992 Sales and user charges 191,932 170,192 Land sales 3,268 5,329 Drilling licences 22,945 42,261 Fees, licences, permits and fines 30,696 31,765 Rentals 21,194 26,559 Penalties and costs on taxes 55,260 54,277 Local government transfers 46,422 40,222 Local improvement charges 36,505 46,665 other 16,502 74,007 2,095,079, 6,742,372 TOTAL REVENUE 7,584,739 11,853,951 EXPENDITURES Salaries, wages and benefits 2,047,591 1,931,671 Contracted and general services 3,795,060 6,003,999 Materials, goods, supplies and utilities 1,683,887 1,101,671 Transfers to other governments 123,497 141,851 Transfers to local boards and agencies 39,297 127,308 Transfers to individuals and organizations 196,492 187,351 Debenture principle 10,497 9,372 Debenture interest 4,251 5,375 Bank charges and interest 4,229 5,013 Property taxes cancelled 9,948 17,580 Other 20 TOTAL EXPENDITURES - Schedule 2 7,914,749 9,531,211 EXCESS (DEFICIENCY) OF REVENUE OVER EXPENDITURES (330,010) 2,322,740 TRANSFERS FROM (TO) OTHER FUNDS Capital fund (1,025,699) (1,091,437) Operating reserves 1,359,900, (1,111,226) 334,201 (2,202,663) NET SURPLUS FROM OPERATIONS $ 4,191 $ 120,077 ABLETT KOLKE RNEEHILL COUNTY .rte SCHEDULE OF NET TAXES FOR MUNICIPAL PURPOSES YEAR ENDED DECEMBER 31, 1999 Schedule 1 1999 1998 PROPERTY TAXES Farmland $ 2,562,447 $ 2,587,873 Residential 828,113 7011625 Industrial 390,711 395,472 Commercial 193,723 71,496 Linear property 4,915,181 4,718,697 Machinery and equipment 1,094,539 1,000,740 Railway 20,710 21,301 Grants in lieu 3,376 3,329 10,008,800 9,500,533 REQUISITION TRANSFERS Alberta School Foundation Fund 4,480,335 4,350,264 Kneehill Foundation 38,805 38,690 4,519,140 4,388,954 NET TAXES FOR MUNICIPAL PURPOSES $ 5,489,660 $ 5,111,579 ABLETT KOLKE RNEEHILL COUNTY SCHEDULE OF FUNCTIONAL OPERATING EXPENDITURES YEAR ENDED DECEMBER 31, 1999 Schedule 2 1999 1998 Legislative $ 184,640 $ 189,360 Administrative 689,648 605,161 Fire protection 110,062 95,136 Disaster services 2,552 1,178 Utility and development 46,637 29,709 Transportation and bridge inspection 5,645,750 7,758,839 Water supply and distribution 52,557 32,846 Sewer services 15,684 29,329 AWN Waste management 194,138 179,739 Family and community support services 269,194 201,108 Cemetery 14,056 5,387 Planning and development 100,517 116,782 Agricultural services 421,268 110,814 Parks and recreation 168,046 175,823 $ 7,914,751 $ 9,531,211 ABLETT KOLKE RNEEHILL COUNTY SCHEDULE OF FUNCTIONAL CAPITAL ASSET EXPENDITURES YEAR ENDED DECEMBER 31, 1999 Schedule 3 1999 1998 Administrative Fire protection Ambulance services Transportation and bridge inspection Water supply and distribution Agricultural services Land for resale Parks and recreation Capital acquisitions were funded by: Proceeds from sale of capital assets Proceeds from provincial capital grants Transfers from capital reserves Contributions from operating fund $ 11,136 $ 16,658 104,591 60,745 113,830 - 1,331,385 845,462 - 4,199 34,931 - - 5,812 29,685 - $ _1,625,558 $ 932,876 $ 458,132 $ 261,839 4,000 137,727 - 1-025,699 671.037 $ 1,625,558 $ 932.876 V AM% ABLETT KOLKE RNEEHILL COUNTY NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1999 1. DISSOLUTION OF THE VILLAGE OF TORRINGTON On December 10, 1997, by Order in Council of the Lieutenant Governor of Alberta in accordance with Section 133 of the Municipal Government Act of Alberta, the Village of Torrington was dissolved effective the end of December 31, 1997. The responsibility for the area of the village, and all assets and liabilities of the Village, were assumed by Kneehill County, effective January 1, 1998. On dissolution, the assets and liabilities of the Village of Torrington were added to those of Kneehill County, effective January 1, 1998. These can be summarized as follows: AMN ASSETS CURRENT Cash $ 67,408 Taxes receivable 25,929 Accounts receivable 5,555 Prepaid expenses 3,140 102,032 CAPITAL 1,767,251 OTHER 10 $ 1,869,293 LIABILITIES CURRENT Accounts payable $ 59,120 DEBENTURE DEBT 44.793 103,913 MUNICIPAL EQUITY ACCUMULATED SURPLUS 5,247 EQUITY IN CAPITAL ASSETS 1,722,458 RESERVES 37,675 1,765,380 $ 1,869,293 ABLETT KOLKE KNEEHILL COUNTY NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1999 2. SIGNIFICANT ACCOUNTING POLICIES Kneehill County follows generally accepted accounting principles in accordance with the local government accounting standards established by the Public Sector Accounting and Auditing Board of the Canadian Institute of Chartered Accountants. Significant accounting policies include: a) Fund accounting Kneehill County prepares its financial statements using the accrued basis of accounting, with the exception of capital assets (Note 1(c)). 0 For financial reporting purposes, established funds consist of the operating, capital and reserve funds. The operating and capital funds are further segregated by functions which relate to specific areas of activity. b) Government transfers Government transfers are recognized in the financial statements as revenues in the period that the events giving rise to the transfer occurred, providing the transfers are authorized, eligibility criteria have been met by the municipality, and the amounts can be reasonably determined. c) Inventory Gravel inventories are valued at pit cost (including crushing, stripping and royalties) plus applicable trucking costs when stockpiled. All other material and supply inventory is valued at the lower of cost and net realizable value, cost being determined on a specific identification basis. d) Capital assets Capital assets are recorded at cost; cost is not reduced by any applicable government assistance. No depreciation or amortization is charged to operations. Proceeds on disposition of capital assets are recorded as revenue of the capital fund with the assets removed from the accounts at cost; no gain or loss on dispositions are recognized. Road building costs, including road allowances purchased, are recorded as an operating fund expenditure. Minor and major machinery and equipment is segregated in that minor machinery and equipment consists only of those assets with an original cost of less than $ 10,000. Land held for resale is recorded at cost. Proceeds from the sale of such lands are recorded as operating fund revenue. ABLETT KOLKE RNEEHILL COUNTY NOTES TO FINANCIAL STATEMENTS 2. SIGNIFICANT ACCOUNTING POLICIES e) Interest on debenture debt DECEMBER 31, 1999 Interest on long-term debt is recorded as an expenditure as payment is made; no accrual for interest payable on long-term debt is made at the year end. Principle repayments are charged as an expenditure of the operating fund with a corresponding increase in equity in capital assets. f) Reserves Reserves are established at future operating and capital reserves are reflected as a an to and/or from the capital capital assets. g) Equity in capital assets the discretion of Council to set aside funds for expenditures. Transfers to and/or from operating adjustment to the operating fund while transfers reserves are shown as an adjustment to equity in Equity in capital assets represents the County's net investment in capital assets and land held for resale, after deducting any long-term or other capital liabilities. h) Use of estimates The preparation of financial statements in accordance with 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 amount of revenues and expenses during the reporting period. These estimates are reviewed periodically, and, as adjustments become necessary, they are reported in earnings in the period in which they become known. i) Statement of changes in financial position A statement of changes in financial position has not been presented as the financial statements already adequately present the operating, financing and investing activities of the County. 3. INVENTORIES Gravel other transportation amounts Other functions 1999 1998 $ 820,398 $ 306,218 230,521 246,235 98,842 27,231 $ 1,149,761 $ 579,684 ABLETT KOLKE NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1999 4. CAPITAL ASSETS 1999 1998 0 KNEEEILL COUNTY Land held for own use $ 390,603 $ 369,239 Buildings 1,870,327 1,869,689 Engineering structures 3,149,191 3,149,191 Minor machinery and equipment 746,274 739,146 Major machinery and equipment 5,962,628 5,690,372 Vehicles and power equipment 3,214,647 2,702,874 Land held for resale 15,333,670 16,494 $ 15,350,164 14,520,511 19,762 $ 14,540,273 During the year, capital assets in the amount of $ 1,685,559 (1998 - $ 932,876) were acquired, and assets with an original cost of $ 812,399 (1998 - $ 955,616) were disposed of or written off. 5. OTHER ASSETS Loans Three Hills Municipal Airport Commission Trochu Recreation Area (overpayment) Alberta Municipal Financing Corporation, shares, at cost Kneehill Regional Water Commission trust Mt. Vernon Water Co-op Association Ltd. membership $ 10,000 (3,019) 120 5,854 1 $ 12,956 1998 $ 22,500 2,871 120 3,674 1 $ 29,166 The loan to the Three Hills Municipal Airport Commission, advanced to assist in the purchase of an aviation fuel system, is to be repaid from a surcharge levied on the sale of each litre of fuel. The loan to the Town of Trochu is being repaid from the proceeds of an annual tax levy on the Trochu Recreation Area, less the yearly operating deficiency of the Town of Trochu swimming pool. Over-levies are carried forward. 1999 ABLETT KOLKE KNEEHILL COUNTY NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1999 6. DEFERRED REVENUE 1999 1998 Family and Community Support Services grants $ 42,208 $ 37,439 Agricultural Services grant 16,856 19,490 Bleriot Ferry grant 13,390 13,390 Kneehill Regional Water Commission trust 5,854 3,674 Other 10 $ 78,318 $ 73,993 7. DEBENTURE DEBT 1999 1998 Alberta Municipal Financing Corporation, repayable in annual instalments of $ 14,747 including interest at 12.OW, matures September, 2001. $ 24,924 $ 35,421 Less: Current portion 11 ,757 10, 497 $ 13, 167 $ 24, 924 Scheduled debenture debt service is as follows: Principal Interest Total 2000 $ 11,757 $ 2,990 $ 14,747 2001 13,167 11580 14.747 $ 24,924 $ 4,570 $ 29,494 Debenture debt is issued on the credit and security of Kneehill County at large. The Province provides interest stabilization grants dependent on rates and dates of debentures. During the year, interest stabilization grants of $ 322 (1998 - $ 406) were received from the Province of Alberta. Accrued and unrecorded interest as at December 31, 1999 was $ 877 (1998 - $ 1,246). ABLETT KOLKE KNEEHILL COUNTY NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1999 8. RESERVES 1999 1998 Operating reserves Contingency $ 6,271 326 $ 7,631,226 Transportation 500,000 500,000 6,771,326 8,131,226 Capital reserves Torrington 241,577 273,809 Fire - 104,591 Planning 10,240 9,642 251, 817 388 ,042 $ 7,023, 143 $ 8,519, 268 9. 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 Local Authorities Reciprocal Insurance Exchange (ALARIE). Under the terms of membership, Kneehill County could become liable for its proportionate share of any claim losses in excess of the funds held by the exchange. Q0. SALARY AND BENEFITS DISCLOSURE Required disclosure of salaries and benefits for elected municipal officials, the chief administrative officer and designated officers, as per by Provincial Regulation 379/94, is as follows; 1999 1998 Salary Benefits & Fees & Allowances Total Total (1) (2) (3) Councillor/Division Lowen, Marylea - 1 $ 20,640 $ 794 $ 21,434 $ 20,158 Hoff, Otto - 2 24,000 400 24,400 21,136 Boake, Robert - 3 - - - 20,536 Allan, Mary Jane - 3 17,600 658 18,258 4,733 Vetter, Marjorie - 4 18,224 674 18,898 19,618 Hanger, James - 5 15,040 555 15,595 16,881 Vickery, Richard - 6 25,440 981 26,421 24,080 Wagstaff, Glen - 7 17,200 629 17,829 18,306 ABLETT KOLKE KNEEHILL COUNTY NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1999 10. SALARY AND BENEFITS DISCLOSURE (CONT'D) 1999 1998 Salary Benefits & Fees & Allowances Total Total (1) (2) (3) County Administrator Jeffery, John C. $ 188,960 $ 9,972 $ 198,932 $ 82,554 Aft (1) Salary includes regular base pay, bonuses, overtime, retiring allowances, early retirement incentives, lump sum payments and any other direct cash remuneration. (2) Employer's share of all benefits and contributions or payments made on behalf of employees including Local Authorities Pension, Canada Pension Plan, Unemployment Insurance, health care, dental, group life and other insurance, professional memberships and tuition. (3) Benefits and allowances includes the employer's share of travel and car allowances. 11. DEBT LIMITS Section 276(2) of the Municipal Government Act requires that debt and service on debt limits as defined by Provincial Regulation 375/94 for the County disclosed as follows: 1999 1998 Total debt limit $ 11,377,109 $ 17,780,927 bt l d T t 24.924 35.421 e o a Amount under total debt limit $ 11,352,185 $ 17,745.506 Service on debt limit $ 1,896,185 $ 2,963,488 debt i S 14,747 14,747 ce on erv Amount under service on debt limit $ 1,881.438 $ 2,948,741 12. NAME CHANGE On February 4, 1998, by Order in Council of the Lieutenant Governor of Alberta in accordance with Section 98 of the Municipal Government Act of Alberta, the Municipal District of Kneehill # 48 changed its name to Kneehill County. 0 ABLETT KOLKE KNEEHILL COUNTY NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1999 11. YEAR 2000 The year 2000 issue arises because many computerized systems use two digits rather than four to identify a year. Date-sensitive systems may recognize the year 2000 as 1900 or some other date, resulting in errors when information using year 2000 dates is processed. In addition, similar problems may arise in some systems which use certain dates in 1999 to represent something other than a date. The effects of the Year 2000 issue may be experienced before, on, or after January 1, 2000 and, if not addressed, the impact on operations and financial reporting may range from minor errors to significant systems failure which could affect an entity's ability to conduct normal business operations. It is not possible to be certain that all aspects of the Year 2000 issue affecting the entity, including those related to the efforts of customers, suppliers, or other third parties, will be fully resolved. 14. COMPARATIVE FIGURES Certain comparative figures have been reclassified to conform with the presentation and accumulation format adopted for the current year. ABLETT KOLKE