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Home My WebLink About1997 Financial Statementsw MUNICIPAL DISTRICT OF KNBBHILL # 48 FINANCIAL STATEMENTS DECEMBER 31, 1997 ABLETT KOLKE Q Box 1207 110-4th Avenue North AB LETT THREE HILLS, Alberta TOM 2A0 443-5343 Fax 443-7107 KO LKE akca@telusplanet.net Chartered Accountants James H. Ablett, B.Comm., C.A. Kevin M. Kolke, B.Comm., C.A. AUDITORSI REPORT To the Reeve, Council and Ratepayers Municipal District of Kneehill # 48 We have audited the balance sheets of the Municipal District of Kneehill # 48 as at December 31, 1997, 1996 and 1995 and the statements of equity and operating fund activities for the years then ended. These financial statements are the responsibility of the Municipal District'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 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 the Municipal District of Kneehill # 48 as at December 31, 1997, 1996 and 1995 and the results of its financial activities for the years then ended in accordance with the accounting principles described in Note 1. lko&ylo-~ CHARTERED ACCOUNTANTS March 26, 1998 Three Hills, Alberta \ I& Members of the Institute of Chartered Accountants of Alberta ICIPAL DISTRICT OF KNEEHILZ # 48 BALANCE SHEET DECEMBER 31, 1997 ASSETS 1997 1996 1995 CURRENT Cash Term deposits Taxes receivable Trade and other accounts receivable Inventories (Note 2) Prepaid expenses CAPITAL (Note 3) OTHER (Note 4) TAX SALE TRUST ACCOUNT S 257,691 $ 391,242 $ - 10,250,000 7,500,000 7,750,000 176,249 232,438 225,481 645,844 1,710,295 1,513,472 854,311 870,586 1,483,064 50.838 49,194 62.445 12,234,933 10,753,755 11,034,462 12,795,762 12,559,052 12,307,337 32,386 15,060 24,322 8.593 2.778 5.289 $ 25,071,674 $ 23.330,645 $ 23,371,410 LIABILITIES CURRENT Bank overdraft Accounts payable and accrued liabilities Vested sick leave benefits Deferred revenue (Note 5) TAX SALE TRUST ACCOUNT S - $ - $ 463,987 378,823 337,272 365,585 303,488 305,387 293,866 13,372 28,721 70,211 695,683 671,380 1,193,649 8.593 2,778 5,289 704,276 674,158 1,198,938 EQUITY ACCUMULATED SURPLUS EQUITY IN CAPITAL ASSETS RESERVES (Note 6) 4,567,299 4,498,889 4,264,404 12,791,522 12,554,570 12,306,659 7.008.577 5,603,028 5,601,409 24,367,398 22,656,487 22,172,472 S 25,071,674 S 23,330,645 $ 23,371,410 APPROVED ON BEHALF OF COUNCIL: ABLETT KOLKE MUNICIPAL DISTRICT OF KNEEHIA"k 48 STATEMENT OF EQUITY YEAR ENDED DECEMBER 31, 1997 ACCUMULATED SURPLUS 1997 1996 1995 Balance, beginning of year $ 4,498,889 $ 4,264,404 $ 4,201,262 Net surplus from operations 68,410 234,485 63,142 Balance, end of year $ 4,567.299 $ 4,498,889 $ 4.264.404 EQUITY IN CAPITAL ASSETS Balance, beginning of year Add (deduct): Proceeds from sale of capital assets Contributions from operating fund Acquisitions of land held for resale Development Levies Transfer to capital reserves original cost of capital asset disposals Cost of land held for resale disposals Equity water system recoveries Provincial capital grant accrued Provincial capital grant received short of 1995 amount accrued Balance, end of year $ 12,554,570 $ 12,306,659 $ 12,934,660 204,375 343,974 730,151 528,888 798,713 (5,551) 3,250 10,650 2,000 5,549 1,619 4,859 (5,549) (1,619) (1,409) (497,203) (896,102) (1,523,051) (2,600) (5,520) - 242 - - - - 165,000 - (3,804) 236,952 247,911 (628,001) $ 12,791.522 $ 12.554,570 $ 12,306,659 RESERVES OPERATING Balance, beginning of year Transfer from operating fund Balance, end of year CAPITAL Balance, beginning of year Transfer from capital fund Balance, end of year Total reserves $ 5,600,000 $ 5,600,000 $ 4,500,000 1,400,000 - 1,100,000 7,000,000 5,600,000 5,600,000 3,028 1,409 - 5,549 1,619 1,409 8,577 3,028 1,409 $ 7,008,577 $ 5,603,028 $ 5,601,409 ABLETT KOLKE MUNICIPAL DISTRICT OF KNEEHILr# 48 STATEMENT OF OPERATING ACTIVITIES YEAR ENDED DECEMBER 31, 1997 1997 1996 1995 PROPERTY TAXES REQUISITION TRANSFERS NET TAXES AVAILABLE FOR MUNICIPAL PURPOSES - Schedule 1 REVENUE Provincial government transfers Federal government transfers Interest and patronage dividends Sales and user charges Land sales Drilling Licences Fees, permits and fines Rentals Penalties and costs on taxes Local government transfers Local improvement charges Other TOTAL REVENUE EXPENDITURES Salaries, wages and benefits Contracted and general services Materials, goods, supplies and utilities Transfers to other governments Transfers to local boards and agencies Transfers to individuals and organizations Bank charges and interest Property taxes cancelled other TOTAL EXPENDITURES - Schedule 2 EXCESS OF REVENUE OVER EXPENDITURES TRANSFERS FROM (TO) OTHER FUNDS Capital fund Operating reserves NET SURPLUS FROM OPERATIONS $ 10,089,972 S 9,879,457 $ 9,661,625 4,910,344 4,935,578 4.752.770 5.179.628 4,943.879 4.908.855 2,536,531 3,548,717 3,701,723 2,884 9,357 - 352,567 401,992 516,023 117,773 169,825 315,613 1,300 3,500 - 61,234 30,142 51,366 53,108 31,196 28,365 34,237 40,989 69,150 48,446 49,904 53,573 74,247 37,260 36,654 47,913 98,429 11,999 _ 24,526 50.853 31,404 3,354,766 4,472.164 4,815,870 8,534,394 9,416,043 9.724.725 1,997,847 1,980,138 2,063,526 2,746,852 4,765,190 5,076,230 1,469,631 1,371,425 1,200,294 90,879 101,284 33,904 144,102 130,914 133,469 27,093 10,546 8,750 2,853 2,553 8,519 .54,226 10,145 40,422 363 - - 6.533.846 8,372,195 8,565,134 2.000.548 1.043.848 1,159,591 (532,138) (809,363) 3,551 (1.400.000) - (1.100.000) (1.932,138) (809.363) (1,096.449) S 68,410 S 234.485 S 63.142 ABLETT KOLKE M?NICIPAL DISTRICT OF KNEEHILL # 48 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997 1. SIGNIFICANT ACCOUNTING POLICIES The Municipal District of Kneehill # 48 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 The Municipal District of Kneehill # 48 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. 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. ABLETT KOLKE XICIPAL DISTRICT OF KNEEHILL # 48 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997 1. SIGNIFICANT ACCOUNTING POLICIES (CONT'D) d) Capital assets (cont' d) 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) Reserves Reserves are established at the discretion of Council to set aside funds for future operating and capital expenditures. Transfers to and/or from operating reserves are reflected as an adjustment to the operating fund while transfers to and/or from the capital reserves are shown as an adjustment to equity in capital assets. f) Equity in capital assets Equity in capital assets represents the municipality's net investment in capital assets and land held for resale, after deducting any long-term or other capital liabilities. g) 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 municipality. 2. INVENTORIES Gravel other transportation amounts other functions 1997 1996 1995 S 566,581 $ 592,497 $ 1,174,626 261,066 235,224 278,896 26,664 42.865 29.542 $ 854.311 $ 870.586 $ 1,483.064 ABLETT KOLKE MITNICIPAL DISTRICT OF KNEEHILL 48 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997 3. CAPITAL ASSETS 1997 Land held for own use $ 270,146 Buildings 1,772,359 Engineering structures 2,125,383 Minor machinery and equipment 712,852 Major machinery and equipment 5,528,628 Vehicles and power equipment 2,371,444 12,780,812 Land held for resale 14.950 S 12.795,762 1996 1995 $ 242,512 $ 242,512 1,772,359 1,772,359 2,130,848 2,149,758 712,677 740,972 5,404,861 5,126,063 2,281,495 2.266.503 12,544,752 12,298,167 14.300 9.170 $ 12,559,052 $ 12,307,337 During the year, capital assets in the amount of $ 736,513 (1996 - $ 1,153,337) were acquired, and assets with an original cost of $ 499,803 (1996 - $ 901,622) were disposed of. . 4. OTHER ASSETS 1997 1996 1995 Loans Trochu Recreation Area $ 9,765 $ 14,939 $ 24,202 Three Hills Municipal Airport Commission 22,500 - - Alberta Municipal Financing Corporation, shares, at cost 120 120 120 Mt. Vernon Water Co-op Association Ltd. membership 1 1 - $ 32.386 $ 15.060 $ 24.322 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. 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. 5. DEFERRED REVENUE Family and community support services grants Water project study deposits 1997 1996 1995 $ 13,372 $ 28,721 $ 64,961 - - 5,250 $ 13.372 $ 28.721 $ 70.211 ABLETT KOLKE ®ICIPAL DISTRICT OF KNEEHILL 48 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997 6. RESERVES operating reserves Contingency Transportation Capital reserves Planning 7. SALARY AND BENEFITS DISCLOSURE 1997 1996 1995 $ 6,500,000 $ 5,100,000 S 5,100,000 500,000 500,000 500,000 7,000,000 5,600,000 5,600,000 8,577 3,028 1,409 $ 7,008,577 $ 5.603,028 $ 5,601,409 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: 1997 1996 1995 Salary Benefits & Fees & Allowances Total Total Total (1) (2) (3) Councillor/Division Lowen, Marylea - 1 $ 18,960 $ 3,931 $ 22,891 S 22,745 S 18,750 Hoff, Otto - 2 19,900 2,712 22,612 17,843 16,544 Boake, Robert - 3 17,280 3,123 20,403 20,467 21,276 Marz, Richard - 4 7,880 289 8,169 22,311 25,433 Vetter, Marjorie - 4 10,410 1,270 11,680 - - Hanger, James - 5 14,240 1,439 15,679 11,455 14,430 Vickery, Richard - 6 21,640 4,769 26,409 20,242 19,430 Wagstaff, Glen - 7 16,480 2,298 18,778 16,547 14,428 Municipal Administrator Jeffery, John C. $ 73,492 S 9,062 S 82,554 $ 77,583 $ 75,730 (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 allowances includes the employer's share of travel and car allowances. ABLETT KOLKE 1 RCIPAL DISTRICT OF KNEEHIL0 # 48 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997 8. UNFUNDED PENSION LIABILITY All permanent, full time employees of the Municipal District of Kneehill # 48 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 Municipal District to the Local Authorities Pension Plan in 1997 were $ 58,861 (1996 - $ 56,828). Total current and past service contributions by the employees to the Local Authorities Pension Plan in 1997 were $ 52,347 (1996 - $ 50,932). An actuarial valuation of the Local Authorities Pension Plan was carried out as at December 31, 1996, by William M. Mercer Limited. The resulting actuarial report disclosed an unfunded liability of $ 224.2 million. The Municipal District of Kneehill's share of this amount has been calculated as $ 12,566, based on pensionable salaries as at December 31, 1996. An actuarial valuation has been requested as at December 31, 1997, but the results are not as yet available. Based on information available to January 21, 1998, the Local Authorities Pension Plan has provided an estimate to indicate that the Municipal District of Kneehill # 48 share of the unfunded liability to now be $ 13,346, based on pensionable salaries as at December 31, 1997. The provisions of the legislation relating to the Plan require that the unfunded liability must be eliminated on or before December 31, 2036. Additional contributions are to be paid annually by the Crown in the aggregate amount of 30% of the total required, and 35% each by the employers and employees based on the pensionable salaries of the employees, to eliminate the unfunded liability. 9. 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: 1997 1996 1995 Total debt limit Total debt $ 12,801,591 $ 14,124,065 $ 14,587,088 Amount under total debt limit Service on debt limit Service on debt Amount under service on debt limit $ 12,801,591 S 14.124.065 $ 14.587,088 $ 2,133,599 $ 2,354,011 $ 2,431,181 $ 2.133.599 $ 2,354,011 $ 2,431.181 ABLETT KOLKE 0 MUNICIPAL DISTRICT OF KNEEHILL # 48 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997 10. CONTINGENT LIABILITIES a) The Municipal District of Kneehill # 48 is a member of the Alberta Local Authorities Reciprocal Insurance Exchange (ALARIE). Under the terms of membership, the Municipal District could become liable for its proportionate share of any claim losses in excess of the funds held by the exchange. Any liability incurred would be accounted for as a current transaction in the year the losses are determined. b) The Municipal District of Kneehill # 48 is from time to time a defendant in various actions seeking damages for actions by, and events occurring in, the Municipal District. 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. 11. SUBSEQUENT EVENTS a) On December 10, 1997, by Order in Council of the Lieutenant Governor of Alberta, the Village of Torrington was dissolved effective the close of December 31, 1997. The responsibility for the area of the Village, and all assets and liabilities of the Village, were assumed by the Municipal District of Kneehill # 48, effective January 1, 1998. b) On February 4, 1998, by Order in Council of the Lieutenant Governor of Alberta, the Municipal District of Kneehill # 48 changed its name to Kneehill County. 12. COMPARATIVE FIGURES Certain comparative figures have been reclassified to conform with the presentation and accumulation format adopted for the current year. ABLETT KOLKE 0 ICIPAL DISTRICT OF KNEEHILL # 48 SCHEDULE OF NET TAXES AVAILABLE FOR MUNICIPAL PURPOSES YEAR ENDED DECEMBER 31, 1997 Schedule 1 PROPERTY TAXES Farmland Residential Industrial Commercial Machinery and equipment Linear property Railway Grants in Lieu REQUISITION TRANSFERS Alberta School Foundation Fund Kneehill Foundation NET TAXES AVAILABLE FOR MUNICIPAL PURPOSES 1997 1996 1995 $ 2,677,339 $ 2,670,534 $ 2,828,812 622,814 582,447 533,189 378,183 353,085 322,644 71,563 84,998 104,889 1,592,186 1,648,689 1,612,740 4,719,497 4,506,341 4,207,160 27,225 32,127 50,801 1,165 1,236 1,390 10,089,972 9,879,457 9,661,625 4,871,944 4,897,433 4,703,370 38,400 38,145 49,400 4,910,344 4,935,578 4,752,770 S 5,179,628 E 4,943,879 S 4,908,855 ABLETT KOLKE Auk a MUNICIPAL DISTRICT OF KNEEHILL 48 SCHEDULE OF FUNCTIONAL OPERATING EXPENDITURES YEAR ENDED DECEMBER 31, 1997 Schedule 2 Legislative Administrative Fire protection 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 1997 1996 1995 $ 168,106 $ 154,587 $ 148,938 635,969 563,324 595,854 86,473 80,093 87,085 21,159 26,702 26,600 87,341 98,235 100,191 4,955,137 6,759,209 7,110,339 34,759 84,993 18,754 1,042 1,419 1,686 163,276 203,578 153,452 111,152 121,229 103,960 13,001 10,056 . 9,490 35,628 38,859 33,348 101,506 106,607 116,535 119.297 123.304 58.902 $ 6,533,846 $ 8,372,195 $ 8,565,134 ABLETT KOLKE MUNICIPAL DISTRICT OF KNEEHIL # 48 SCHEDULE OF FUNCTIONAL CAPITAL ASSET EXPENDITURES YEAR ENDED DECEMBER 31, 1997 Schedule 3 Administrative Fire protection Disaster services Transportation and bridge inspection Water supply and distribution Waste management Cemetery Planning and development Agricultural services Land for resale Parks and recreation Capital acquisitions were funded by: Proceeds from sale of capital assets Contributions from operating fund Development Levies Equity water system recoveries Provincial capital grant (adjustment) Under (over) expenditure 1997 1996 1995 $ 21,436 S 63,585 $ 3,037 - 67,850 - - - 2,579 711,827 1,001,750 574,680 - 3,090 295,254 - - 5,682 - - 100 - - 1,000 - 6,412 11,246 31250 10,650 2,000 - 150 $ 736,513 $ 1.153,337 $ 895,728 $ 204,375 $ 343,974 $ 730,151 532,138 809,363 (3,551) - - 3,450 242 - - - (3,804) 165.000 736,755 1,149,533 895,050 (242) 3,804 678 S 736.513 S 1.153,337 S 895.728 ABLETT KOLKE