The URL can be used to link to this page

Home My WebLink About1998 Financial StatementsO Q c KNEEHILL COUNTY FINANCIAL STATEMENTS DECEMBER 31, 1998 C ABLETT KOLKE 0 ® Box 1207, 110 - 4 Avenue North Three Hills, AB TOM 2Ap jA B L ETT (403) 443-5343 1-800-387-6581 K O L K E Fax (403) 443-7107 E-mail: akca®telusplanet.net Chartered Accountants James H.Ablett, B.Comm., C.A. Kevin M. Kolke, B.Comm., C.A. C AUDITORS' REPORT To the Reeve, Council and Ratepayers Kneehill County We have audited the balance sheets of the Kneehill County as at December 31, 1998, 1997 and 1996 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. 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 su~,lcrting 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, 1998, 1997 and 1996 and the results of its financial activities for the years then ended in accordance with the accounting principles described in Note 2. 10 The 1997 and 1996 financial statements, schedules and notes to the financial statements of Kneehill County, presented for comparative purposes, have been restated to reflect the dissolution and subsequent combination of the Village of Torrington on a retroactive basis (Note 1). March 11, 1999 Three Hills, Alberta CIA a &V~~ CHARTERED ACCOUNTANTS %Jfl Members of the Institute of Chartered Accountants of Alberta KNEEHILL COUNTY BALANCE SHEET DECEMBER 31, 1998 CORENT Cash Term deposits Taxes receivable Trade and other accounts receivable Inventories (Note 3) Prepaid expenses APITAL (Note 4) OTHER (Note 5) TAX SALE TRUST ACCOUNT CURRENT Bank overdraft Accounts payable and accrued liabilities Vested sick leave benefits eferred revenue (Note 6) Current portion of debenture debt DEBENTURE DEBT (Note 7) TAX SALE TRUST ACCOUNT ACCUMULATED SURPLUS EQUITY IN CAPITAL ASSETS RESERVES 4Note 8) CONTINGENT LIABILITIES (Note 9) VED BEHALF OF COUNCIL: 142$ 1997 1996 S $ 325,099 S 455,395 9,000,000 10,250,000 7,500,000 219,324 202,178 256,191 4,524,164 651,399 1,721,365 579,684 854,311 870,586 50,026 53.978 52.173 14,373,198 12,336,965 10,855,710 14,540,273 14,563,013 14,344,897 29,166 32,396 15,070 8.852 8.593 2.778 $ 2$,951.489 $ 26,940,967 $ 25.218,4 55 LIABILITIES $ 155,789 $ - $ - 675,874 437,943 345,699 289,057 303,488 305,387 73,993 13,372 28,721 10.497 9.372 8.368 1,205,210 764,175 688,175 24,924 35,421 44,793 8.852 8,593 2.778 1.238.986 808,189 735.746 MUNICIPAL EQUITY 4,692,623 4,572,546 4,554,752 14,500,612 14,513,980 14,287,254 8.519.268 7.046.252 5.640.703 27.712.503 26.132.778 24,482.709 $ 28.951.489 $ 26.940,967 25.218.455 $ ABLETT KOLKE C V KNEEHILL COUNTY doft STATEMENT OF MUNICIPAL EQUITY YEAR ENDED DECEMBER 31, 1998 1998 1427 199 ACCUMULATED SURPLUS C Balance, beginning of year Net surplus from operations Balance, end of year $ 4,572,546 $ 4,554,752 $ 4,319,790 120.077 17.794 234.962 $ 4.692.623 $ 4.572.546 $ 4.554.752 EQUITY IN CAPITAL ASSETS Balance, beginning of year Add (deduct): Repayment of debenture debt Proceeds from sale of capital assets Contributions from operating fund 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 sph~ Cost of land held for resale disposals Equity water system recoveries Provincial capital grant received short of 1995 amount accrued Balance, end of year S 14.513.980 $ 14.287.254 $ 14.012.896 9,372 8,368 7,472 261,839 204,375 343,974 1,085,625 533,358 817,688 5,812 3,250 10,650 1,065 5,549 1,619 17,675 - (1,619) (379,465) (5,549) - (501,890) (520,267) (896,102) (448,422) - (59,675) - (5,304) (2,600) (5,520) - 242 - (3.804) (13.368) 226.726 274.358 $ 14.500.612 $ 74.513,980 14.287.254 $ RESERVES OPERATING Balance, beginning of year Transfer to operating fund Transfer from operating fund Balance, end of year CAPI TAL Balance, beginning of year Transfer to capital fund Transfer from capital fund Balance, end of year TOTAL RESERVES $ 7,020,000 $ 5,620,000 $ 5,630,000 (20,000) - (10,000) 1.131.226 1.400.000 8,131,226 7.020.000 5.620.000 26,252 20,703 19,084 (17,675) - - 379.465 5.549 1.619 388.042 26.252 20.703 $ 8.519.268 $ 046 $ _5.640.703 ABLETT KOLKE 0 KNEEHILL COUNTY W STATEMENT OF OPERATING ACTIVITIES YEAR ENDED DECEMBER 31. 1998 1998 19977 7996 COPERTY TAXES $ 9,500,533 $ 10,213,563 $ 10,002,220 REQUISITION TRANSFERS 4.388.954 4.963.899 4,991.259 NET TAXES AVAILABLE FOR MUNICIPAL PURPOSES - Schedule 1 5.111.579 5.249.664 5.010.961 REVENUE Provincial government transfers 5,744,103 2,553,299 3,566,601 Federal government transfers _ 9,357 Interest and patronage dividends 506,992 352,826 404,747 Sales and user charges 170,192 167,990 222,393 Land sales 5,329 1,300 3,500 Drilling licences 42,261 61,234 30,142 Fees, Licences, permits and fines 31,765 57,131 36,066 Rentals 26,559 34,362 42,883 Penalties and costs on taxes 54,277 54,949 56,463 Local government transfers 40,222 76,975 41,893 Local improvement charges 46,665 47,913 98,429 Other 74.007 25.458 51.442 6.742.372 3.433.437 4.563.916 TOTAL REVENUE 11.853.951 8.683.101 9.574.877 PENDITURES Salaries, wages and benefits 1,931,671 2,112,047 2,049,446 Contracted and general services 6,003,999 2,779,541 4,801,728 Materials, goods, supplies and utilities 1,101,671 1,493,654 1,398,038 Transfers to other governments 141,851 90,879 101,284 Transfers to local boards and agencies 127,308 146,260 131,948 Transfers to individuals and organizations 187,351 32,093 10,546 Debenture principle 9,372 8,368 7,472 Debenture interest 5,375 6,379 7,275 Bank charges and interest 5,013 2,853 2,553 Property taxes cancelled 17,580 54,226 10,145 Other 20 2.399 1.142 TOTAL EXPENDITURES - Schedule 2 9.531.211 6.728,699 8.521.577 EXCESS OF REVENUE OVER EXPENDITURES 2.322.740 1.954.402 1.053.300 TRANSFERS FROM (TO) OTHER FUNDS Capital fund (1,091,437) (536,608) (828,338) Operating reserves (1.111.226) (1.400.000) 10.000 (2.202.663) (1.936.608) (818,338) NET SURPLUS FROM OPERATIONS $ 120.077 $ 17.794 $ 234,962 10 ABLETT KOLKE look, KNEEHILL COUNTY id NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 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. The December 31 amounts can be summarized as follows: ASSETS C CURRENT Cash Taxes receivable Accounts receivable Prepaid expenses CAPITAL OTHER LIABILITIES 4; CURRENT Accounts payable DEBENTURE DEBT 1997 $ 67,408 25,929 5,555 3,140 102,032 1,767,251 10 $ 1,869,293 $ 59,120 44,793 103,913 1996 $ 64,153 23,753 11,070 2.979 101,955 1,785,845 10 $ 1,887,810 8,427 53,161 61,588 MUNICIPAL EQUITY ACCUMULATED SURPLUS 5,247 55,863 EQUITY IN CAPITAL ASSETS RESERVES 1,722,458 37,675 1,765,380 $ 1,869,293 1,732,684 37,675 1,826,222 1,887.E10 ABLETT KOLKE 0 KNEEHILL COUNTY 0 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 1. DISSOLUTION OF THE VILLAGE OF TORRINGTON (CONT'D) ~,mr The 1997 and 1996 statements of operating fund activities of the Village of Torrington can be summarized as follows: PROPERTY TAXES REQUISITION TRANSFERS NET TAXES REVENUES NET REVENUES EXPENDITURES 1997 $ 123,591 53,555 70,036 78.671 148,707 194.853 (46, 146) (4.470) $ (50,616) 1996 $ 122,763 55.681 67,082 91,752 158,834 149,382 9,452 (8.975) $ 477 NET TRANSFER TO OTHER FUNDS NET OPERATING DEFICIT The 1997 and 1996 financial statements, schedules and notes to the financial statements of Kneehill County, presented for comparative purposes, have been restated to reflect the dissolution and subsequent combination of the Village of Torrington on a retroactive basis. 2. SIGNIFICANT ACCOUNTING POLICIES 4; 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)) . 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. ABLETT KOLKE 0 KNEEHILL COUNTY NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1998 `2. SIGNIFICANT ACCOUNTING POLICIES (CONT'D) C 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. ® e) Interest on debenture debt 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. ABLKTT KOLKE KNEEHILL COUNTY NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 3. INVENTORIES C Gravel Other transportation amounts other functions 4. CAPITAL ASSETS Land held for own use Buildings Engineering structures minor machinery and equipment Major machinery and equipment Vehicles and power equipment ]997 1496 $ 306,218 $ 566,581 $ 592,497 246,235 261,066 235,224 27,231 26.664 42.865 $ 579.684 $ _ 854.311 $ 8701586 1998 L 1226 $ 369,239 $ 357,241 $ 329,607 1,869,689 1,924,424 1,943,391 3,149,191 3,522,427 3,527,892 739,146 810,593 810,045 5,690,372 5,528,628 5,404,861 2.702.874 2.400.446 2.310.497 Land held for resale 14,520,511 14,543,759 14,326,293 19.254 $ 14.540.273 S 14.563.013 S ]4 4 $9 During the year, capital assets in the amount of $ 932,76 (1997 $ 736,513; 1996 - $ 1,172,312) were acquired, and assets with an original cost of $ 955,616 (1997 - $ 499,803; 1996 - $ 901,622) were disposed of or written off. 5. OTHER ASSETS 1928 1997 144fi C Loans Three Hills Municipal Airport Commission $ 22,500 $ 22,500 $ Trochu Recreation Area 2,871 9,765 14,939 Alberta Municipal. Financing Corporation, shares, at cost 120 130 130 Kneehill Regional Water Commission trust 3,674 - - Mt. Vernon Water Co-op Association Ltd. membership 1 1 1 $ 29,166 $ 32.396 $ 15.070 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. ABLETT KOLKE KNEEHILL COUNTY NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 6. DEFERRED REVENUE C Family and community support services grants Agricultural Services grant Bleriot Ferry grant Kneehill Regional Water Commission trust 7. DEBENTURE DEBT OWN Alberta Municipal Financing Corporation, repayable in annual instalments of $ 14,747 including interest at 12%, matures September, 2001 Less: Current portion 1998 1997 1241 S 37,439 $ 13,372 $ 28,721 19,490 - - 13,390 - - 3.674 $ 73.993 S 13.372 $ 28,721 1998 1997 1996 $ 35,421 $ 44,793 $ 53,161 10.497 9.372 8.368 $ 24,924 S 35.421 S 44.793 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 $ 406 (1997 - $ 481; 1996 - $ 547) were received from the Province of Alberta. Accrued and unrecorded interest as at December 31, 1998 was $ 1,246 (1997 - $ 1,576; 1996 - $ 1,870). 8. RESERVES 19998 1997 122¢ 0 Operating reserves Contingency $ 7,631,226 $ 6,520,000 $ 5,120,000 Transportation 500.000 500.000 500.000 8.131.226 7.020.000 5,620.000 Capital reserves Torrington 273,809 - - Fire 104,591 Planning 9,642 1,577 3,028 Contingency - 17.675 17,675 388,042 26.252 20.703 S 8.519.268 $ 7.046.252 5.640.703 $ ABLETT KOLKE C ® KNEEHILL COUNTY I%d NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 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. 10. 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:. 1998 1997 1996 Salary Benefits & Fees & Allowances Total Total Total (1) (2) (3) Councillor/Division Lowen, Marylea - 1 $ 19,440 $ 4,232 $ 23,672 $ 22,891 S 22,745 Hoff, Otto - 2 20,800 2,636 23,436 22,612 17,843 Boake, Robert - 3 20,000 2,901 22,901 20,403 20,467 Allan, Mary Jane - 3 4,580 566 5,146 - - Marz, Richard - 4 - - - 8,169 22,311 Vetter, Marjorie - 4 18,940 2,385 21,235 11,680 - Hanger, James - 5 16,320 1,724 18,044 15,679 11,455 Vickery, Richard - 6 24,080 5,054 29,134 26,409 20,242 Wagstaff, Glen - 7 17,680 2,655 20,335 18,778 16,547 Torrington (all) - - - 8,050 6,300 Municipal Administrator Jeffery, John C. $ 80,396 $ 9,213 $ 89,609 $ 82,554 $ 77,583 Torrington - - - 64,689 24,881 (1) Salary includes regular base pay, bonuses, overtime, 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 allowan ces includes the employers share of travel and car allowances. ABLETT KOLKE 0 loft& KNEEHILL COUNTY Q NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 11. UNFUNDED PENSION LIABILITY ♦rr All permanent, full time employees of Kneehill County participate in the Local Authorities Pension Plan. Current and past service pension benefit contributions are recorded as expenditures in the year in which they become due. Total current and past service contributions by the County to the Local Authorities Pension Plan in 1998 were $ 56,585 (1997 - $ 58,861; 1996 - $ 56,828). Total current and past service contributions by the employees to the Local Authorities Pension Plan in 1998 were $ 45,869 (1997 - $ 52,347; 1996 - $ 50,932). An actuarial valuation of the Local Authorities Pension Plan was carried out as at December 31, 1997, by William M. Mercer Limited. The resulting actuarial report disclosed an unfunded liability of $ 48.2 million. Kneehill County's share of this amount has been calculated as $ 8,008, based on pensionable salaries as at December 31, 1997. An actuarial valuation has been requested as at December 31, 1998, but the results are not as yet available. Based on information available to January 25, 1999, the Local Authorities Pension Plan has provided an estimate to indicate that the Kneehill County share of the unfunded liability to now be $ 8,038 based on pensionable salaries as at December 31, 1998. 12. 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 Municipal District disclosed as follows: 1998 Total debt limit Total debt Amount under total debt limit 10 Service on debt limit Service on debt Amount under service on debt limit 1927 1996 $ 17,780,927 $ 13,024,652 $ 14,362,316 35.421 44.793 53.161 $ 17.745.506 $ _12.979.859 $ 74.309.155 $ 2,963,488 $ 2,170,776 $ 2,393,720 14.747 14.747 14.747 $ 2.948.741 $ 2.156.029 $ 2.378.973 ABLETT KOLKE KNEEHILL COUNTY rr/ NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 13. 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. 14. COMPARATIVE FIGURES Certain comparative figures have been reclassified to conform with the presentation and accumulation format adopted for the current year. C 4; ABLETT KOLKE KNEEHILL COUNTY SCHEDULE OF NET TAXES AVAILABLE FOR MUNICIPAL PURPOSES YEAR ENDED DECEMBER 31, 1998 Schedule 1 ]997 1996 PROPERTY TAXES Farm Land $ 2,587,873 $ 2,677,660 $ 2,670,843 Residential 701,625 675,485 637,603 Industrial 395,472 419,822 410,299 Commercial 71,496 89,960 84,998 Linear property 4,718,697 4,730,060 4,516,425 Machinery and equipment 1,000,740 1,592,186 1,648,689 Railway 21,301 27,225 32,127 Grants in Lieu 3.329 1.165 1.236 9.500.533 10.213.563 10.002.220 REQUISITION TRANSFERS 8 Alberta School Foundation Fund 4,350,264 4,925, 99 4,952,689 KneehiLL Foundation 38.690 38.000 38.570 4.388.954 4.963.899 4.991.259 NET TAXES AVAILABLE FOR MUNICIPAL PURPOSES $ 5.111.579 $ 5.249.664 $ 5 010 61 C ABLETT KOLKE C KNEEHILL COUNTY SCHEDULE OF FUNCTIONAL OPERATING EXPENDITURES YEAR ENDED DECEMBER 31, 1998 C Legislative Administrative Fire protection Disaster services Ambulance Utility and development Transportation and bridge inspection Water supply and distribution Sewer services Waste management Family and community support services Cemetery Planning and development Agricultural services Parks and recreation C Adpk Schedule 2 IM 1997 im $ 189,360 $ 176,841 S 161,805 605,161 731,727 618,412 95,136 90,177 83,349 1,178 - - - 211590 26,999 29,709 88,441 99,435 7,758,839 4,979,353 6,777,984 32,846 52,866 96,219 29,329 16,891 17,282 179,739 176,968 213,582 201,108 112,025 121,481 5,387 13,001 10,056 116,782 36,483 39,344 110,814 101,506 106,607 175.823 130.830 149.022 $ 531 11 $ 6.728.699 $ 8.521.577 ABLETT KOLKE C KNEEHILL COUNTY SCHEDULE OF FUNCTIONAL CAPITAL ASSET EXPENDITURES YEAR ENDED DECEMBER 31, 1998 Schedule 3 C Administrative Fire protection 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 Contributions from operating fund Provincial capital grant adjustment Equity water system recoveries Under (over) expenditure C 1998 7997 1996 $ 16,658 $ 21,436 $ 63,585 60,745 - 67,850 845,462 712,199 1,004,141 4,199 - 3,090 - - 6,412 51812 3,250 10,650 4,098 16.584 $ __232-M $ 740.983 $ 1.172.312 $ 261,839 $ 204,375 $ 343,974 671,037 536,608 828,338 - - 242 (3,804) 932,876 741,225 1,168,508 - (242) 3,804 $ 932,876 $ 740,983 $ 1.172.312 ABLETT KOLKE