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Home My WebLink About1996 Financial StatementsG loow~ lv~ MUNICIPAL DISTRICT OF RNEEHILL # 48 FINANCIAL STATEMENTS DECEMBER 31, 1996 A S■ ABLETT KOLKE Chartered Accountants James H. Ablett, B.Comm., C.A. Kevin M. Kolke, B.Comm., C.A. AUDITORS' REPORT To the Reeve, Council and Ratepayers Municipal District of Kneehill # 48 Box 1207 110-4th Avenue North THREE HILLS, Alberta TOM 2AO 443-5343 Fax 443-7107 1-800-387-6581 a koa®teluspla net. net We have audited the balance sheets of the Municipal District of Kneehill # 48 as at December 31, 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 material respects, the financial of Kneehill # 48 as at December of its financial activities for with the accounting principles statements present fairly, in all 1 position of the Municipal District 31, 1996 and 1995 and the results the years then ended in accordance described in Note 1. CHARTERED ACCOUNTANTS February 27, 1997 Three Hills, Alberta Memtwrs of the Institute of Chartered Accountants of Alberta IPAL DISTRICT OF KNEEHILA.J 48 BALANCE SHEET DECEMBER 31, 1996 ASSETS 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 LIABILITIES CURRENT 1996 $ 391,242 7,500,000 232,438 1,710,295 870,586 48,195 10,752,756 12,559,052 16,059 2,778 $ 23,330,645 337,272 305,387 28,721 671,380 2,778 674,158 Bank overdraft $ Accounts payable and accrued liabilities vested sick leave benefits Deferred revenue (Note 5) TAX SALE TRUST ACCOUNT EQUITY ACCUMULATED SURPLUS EQUITY IN CAPITAL ASSETS RESERVES (Note 6) APPROVED ON BEHALF OF COUNCIL: 4,498,889 12,554,570 5.603,028 22,656,487 $ 23,330,645 1995 7,750,000 225,481 1,513,472 1,483,064 62,445 11,034,462 12,307,337 24,322 5,289 $ 23,371,410 $ 463,987 365,585 293,866 70,211 1,193,649 5,289 1,198,938 4,264,404 12,306,659 5,601,409 22,172,472 $ 23,371,410 AM =TM srn l ar= IPAL DISTRICT OF KNEEHIL&wd 48 STATEMENT OF EQUITY YEAR ENDED DECEMBER 31, 1996 1996 ACCUMULATED SURPLUS Balance, beginning of year Net surplus from operations Balance, end of year EQUITY IN CAPITAL ASSETS Balance, beginning of year Add (deduct): Proceeds from sale of capital assets Contributions from (to) 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 Provincial capital grant accrued Provincial capital grant received short of 1995 amount accrued Balance, end of year 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 $ 4,264,404 234,485 $ 4,498,889 $ 12,306,659 343,974 798,713 10,650 1,619 (1,619) (896,102) (5,520) (3,804) 247,911 $ 12,554,570 $ 5,600,000 5,600,000 1,409 1,619 3,028 $ 5,603,028 1995 $ 4,201,262 63,142 $ 4,264,404 $ 12,934,660 730,151 (5,551) 2,000 4,859 (1,409) (1,523,051) 165,000 (628 , 001) $ 12,306,659 $ 4,500,000 11100,000 5,600,000 1,409 1,409 $ 5,601,409 A ES■ !_TT l/A■ ■/w- MtJLpCIPAL DISTRICT OF KNEEHIL64 48 STATEMENT OF OPERATING ACTIVITIES YEAR ENDED DECEMBER 31, 1996 1996 PROPERTY TAXES $ 9,879,457 REQUISITION TRANSFERS NET TAXES AVAILABLE FOR MUNICIPAL PURPOSES - Schedule 1 REVENUE Provincial 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 TOTAL EXPENDITURES - Schedule 2 EXCESS OF REVENUE OVER EXPENDITURES TRANSFERS FROM (TO) OTHER FUNDS Capital fund operating reserves NET SURPLUS FROM OPERATIONS 4,935,578 4,943,879 3,558,074 401,992 169,825 3,500 30,142 31,196 40,989 49,904 37,260 98,429 50,853 4,472,164 9,416,043 1,980,138 4,765,190 1,371,425 101,284 130,914 10,546 2,553 10,145 8.372.195 1,043,848 (809,363) (809,363) $ 234,485 1995 $ 9,661,625 4,752,770 4,908,855 3,701,723 516,023 315,613 51,366 28,365 69,150 53,573 36,654 11,999 31,404 4,815,870 9,724,725 2,063,526 5,076,230 1,200,294 33,904 133,469 8,750 8,519 40,442 8,565,134 1,159,591 3,551 (1,100 , 000) (1,096,449) $ 63,142 N IPAL DISTRICT OF KNEEHIL 48 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 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 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. IPAL DISTRICT OF KNEEHILI~d 48 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 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 1996 1995 Gravel $ 592,497 $ 1,174,626 Other transportation amounts 235,224 278,896 Other functions 42,865 29,542 $ 870,586 $ 1,483,064 AJoRk dCIPAL DISTRICT OF KNEEHILDr/# 48 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 3. CAPITAL ASSETS 1996 1995 Land held for own use $ 242,512 $ 242,512 Buildings 1,772,359 1,772,359 Engineering structures 2,130,848 2,149,758 Minor machinery and equipment 712,677 740,972 Major machinery and equipment 5,404,861 5,126,063 Vehicles and power equipment 2,281,495 2,266,503 12,544,752 12,298,167 Land held for resale 14,300 9,170 $ 12,559,052 $ 12,307,337 During the year, capital assets in the amount of $ 1,153,337 (1995 - $ 895,728) were acquired, and assets with an original cost of $ 901,622 (1995 - $ 1,523,051) were disposed of. 4. OTHER ASSETS Trochu Recreation Loan Alberta Municipal Financing Corporation shares, at cost Mt. Vernon Water Co-operative, membership 1996 1995 $ 14,939 $ 24,202 120 120 1,000 - $ 16,059 $ 24,322 5. DEFERRED REVENUE Family and community support services grants Water project deposits - Mt. Vernon 1996 1995 $ 28,721 $ 64,961 - 5,250 $ 28,721 $ 70,211 Aomk M UCIPAL DISTRICT OF KNEEHIL10 48 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 6. RESERVES 1996 Operating reserves Contingency $ 5,100,000 Transportation 500,000 5,600,000 Capital reserves Planning 3,028 $ 5,603,028 7. SALARY AND BENEFITS DISCLOSURE 1995 $ 5,100,000 500,000 5,600,000 1,409 $ 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: 1996 1995 Salary Benefits & Fees & Allowances Total Total (1) (2) (3) Councillor/Division Lowen, Marylea - 1 $ 19,200 $ 3,545 $ 22,745 $ 18,750 Hoff, Otto - 2 15,840 2,003 17,843 16,544 Boake, Robert - 3 16,960 3,507 20,467 21,276 Marz, Richard - 4 20,800 1,511 22,311 25,433 Hanger, James - 5 10,240 1,215 11,455 14,430 Vickery, Richard - 6. 17,040 3,202 20,242 19,430 Wagstaff, Glen - 7 14,800 1,747 16,547 14,428 Municipal Administrator Jeffery, John C. $ 68,856 $ 8,727 $ 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. ACil G'TT vn■ vg-- IPAL DISTRICT OF KNEEHILL 48 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 8. UNFUNDED PENSION LIABILITY All permanent, full time employees of the Municipal District of Kneehill 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 1996 were $ 56,828 (1995 - $ 60,858). Total current and past service contributions by the employees to the Local Authorities Pension Plan in 1996 were $ 50,932 (1995 - $ 55,452). An actuarial valuation of the Local Authorities Pension Plan was carried out as at December 31, 1995, by William M. Mercer Limited. The resulting actuarial report disclosed an unfunded liability of $ 716.8 million. The Municipal District of Kneehill's share of this amount has been calculated as $ 99,896, based on pensionable salaries as at December 31, 1995. An actuarial valuation has been requested as at December 31, 1996, but the results are not as yet available. Based on information available to February 27, 1997, the Local Authorities Pension Plan has provided an estimate to indicate that the Municipal District of Kneehill's share of the unfunded liability to now be $ 100,832, based on pensionable salaries as at December 31, 1996. 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 271 of the Municipal Government Act requires that debt and service on debt limits as defined by Provincial Regulation 375/94 for the Municipal District of Kneehill be disclosed as follows: Total debt limit Total debt Amount under total debt limit Service on debt limit Service on debt Amount under service on debt limit 1995 $ 14,587,088 1996 $ 14,124,065 $ 14,124,065 $ 2,354,011 $ 2,354,011 $ 14,587,088 $ 2,431,181 $ 2,431,181 ^ Ems .iw. .ice.. • IPAL DISTRICT OF KREEHILAd 48 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 10. CONTINGENT LIABILITY The Municipal District of Kneehill 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. 11. COMPARATIVE FIGURES Certain comparative figures have been reclassified to conform with the presentation and accumulation format adopted for the current year. /►p@ CTT vw■ vM-- MUAW&PAL DISTRICT OF KNEEHILL 48 SCHEDULE OF NET TAXES AVAILABLE FOR MUNICIPAL PURPOSES YEAR ENDED DECEMBER 31. 1996 Schedule 1 1996 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 $ 2,670,534 582,447 353,085 84,998 1,648,689 4,506,341 32,127 1.236 9,879,457 4,897,433 38,145 4,935,578 $ 4,943,879 1995 $ 2,828,812 533,189 322,644 104,889 1,612,740 4,207,160 50,801 1,390 9,661,625 4,703,370 49,400 4,752,770 $ 4,908,855 AWN • MU6kIPAL DISTRICT OF KNEEHILL~A*d 48 SCHEDULE OF FUNCTIONAL OPERATING EXPENDITURES YEAR ENDED DECEMBER 31, 1996 Schedule 2 1996 1995 Legislative $ 154,587 $ 148,938 Administrative 563,324 595,854 Fire protection 80,093 87,085 Ambulance 26,702 26,600 Utility and development 98,235 100,191 Transportation and bridge inspection 6,759,209 7,110,339 Water supply and distribution 84,993 18,754 Sewer services 1,419 1,686 Waste management 203,578 153,452 Family and community support services 121,229 103,960 Cemetery 10,056 9,490 Planning and development 38,859 33,348 Agricultural services 106,607 116,535 Parks and recreation 123,304 58,902 $ 8,372,195 $ 8,565,134 ApI C7'T vw• RiM- MUIWIPAL DISTRICT OF KNEEHILL 48 SCHEDULE OF FUNCTIONAL CAPITAL ASSET EXPENDITURES YEAR ENDED DECEMBER 31, 1996 Schedule 3 1996 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: $ 63,585 67,850 1,001,750 3,090 6,412 10,650 $ 1,153,337 1995 $ 3,037 2,579 574,680 295,254 5,682 100 1,000 11,246 2,000 150 $ 895,728 Proceeds from sale of capital assets $ 343,974 $ 730,151 Contributions from (to) operating fund 809,363 (3,551) Development levies - 3,450 Provincial capital grant (adjustment) (3,804) 165,000 1,149,533 895,050 Over-expenditure 3,804 678 $ 1,153,337 $ 895,728