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MUNICIPALITY OF ( jlarincfton ONTARIO AUDITORS' REPORT To the Members of Council, Inhabitants and Ratepayers of the Corporation of the Municipality of Clarington (formerly the Corporation of the Town of Newcastle): We have audited the consolidated balance sheet of the Corporation of the Municipality of Clarington as at December 31, 1993 and the consolidated statement of operations for the year then ended. These financial statements are the responsibility of the Municipality's management. 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 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 management, 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 Municipality as at December 31. 1993 and the results of its operations for the year then ended in accordance with accounting principles disclosed in Note 1 to the financial statements. Deloitte & Touche Chartered Accountants April 29, 1994 MUNICIPALITY OF CLARINGTON CONSOLIDATED STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31.1993 Actual 1993 Actual 1992 SOURCES OF FINANCING Taxation and user charges Residential and farm taxation $44,999,163 $41,686,737 Commercial, industrial and business taxation 10,340,751 10.407,361 Taxation from other governments 2.178,360 1,710.763 User charges 2,825,658 2,828,624 Deduct - Amounts received or receivable receivable for region and school boards (Note 2) (41,908,961) (39,537,328) Grants Government of Canada 5.103 3,801 Province of Ontario 3,861,232 3,895,054 Other Municipalities 5.836 -- Other Contributions from developers 2.113,334 2,930,336 Investment income 1,394,022 1,842,945 Sale of land and equipment -- 20,098 Penalty and interest on taxes 1,121,954 ' 908,018 Fines 5,252 2,424 Recreational land - cash-in-lieu 82,258 127,718 Donations and contributions from others 7,715,282 575,977 Proceeds from issue of long term liabilities 400,000 -- MUNICIPAL FUND BALANCES, BEGINNING OF YEAR (Note 7) To be used to offset taxation or user charges 2,350,652 2,484,907 Unexpended capital financing 92,183 85,930 TOTAL FINANCING AVAILABLE DURING THE YEAR $37,582,079 $29,973,365 APPLIED TO Current operations (Note 9 and 11) General government $3,536,676 $3,500,096 Protection to persons and property 2,705,302 2,698,131 Transportation services 5.623,961 5,087,654 Environmental services 1,182,219 1,167,253 Health services 104,191 121,060 Recreation and cultural services 4,576,897 4,447,980 Planning and development 1.525,463 1,469,999 19,254,709 18,492,173 Corporation of the Municipality of Clarington Consolidated 1993 Financial Report (a) (i) Basis of Consolidation These consolidated financial statements reflect the assets. assets. liabilities, sources of financing and expenditures of the revenue fund, capital fund, reserve funds and reserves reserves and include the activities of all committees of Council and the following local boards, which are under the control of Council: - Clarington Public Library Board - Clarke Museum and Archives - Bowmanville Museum Board - Board of Management for the Bowmanville Central Business District Improvement Area - Board of Management for the Newcastle Central Business District Improvement Area - Board of Management for the Orono Central Business District Improvement Area - Orono Arena and Community Centre Board - Newcastle Arena Board - Newcastle Community Hall Board All interfund assets and liabilities and sources of financing financing and expenditures have been eliminated with the exception exception of loans or advances between the reserve funds and any other fund of the municipality and the resulting interest income and expenditures. (ii) Non-consolidated Entity These consolidated financial statements do not include the assets, liabilities, sources of financing and expenditures expenditures of the Clarington Hydro Electric Commission. (iii) Accounting for Region and School Board transactions The taxation and other revenues, expenditures, assets and liabilities with respect to the operations of the school boards and the Region of Durham are not reflected in the "Municipal Fund Balances" of these financial statements. Overlevies (underlevies) are reported on the "Consolidated "Consolidated Balance Sheet" as "other current liabilities" ("other current current assets"). (iv) Trust funds and their related operations administered by the municipality are not consolidated, but are reported separately on the "trust Funds Consolidated Statement of Continuity and Consolidated Balance Sheet". (b) Basis of Accounting (i) Sources of financing and expenditures are reported on the accrual basis of accounting with the exception of principal principal charges on long-term liabilities which are charged against operations in the periods in which they are paid. (ii) The accrual basis of accounting recognizes revenues as they become available and measurable; expenditures are recognized as they are incurred and measurable as a result result of receipt of goods or services and the creation of a legal obligation to pay. (iii) Fixed Assets The historical cost and accumulated depreciation for fixed assets are not recorded for municipal purposes. Fixed assets are reported as an expenditure on the "Consolidated "Consolidated Statement of Operations" in the year of acquisition. acquisition. (iv) Capital Outlay to be Recovered in Future Years "Capital outlay to be recovered in future years," which represents the outstanding principal portion of unmatured long-term liabilities for municipal expenditures or capital funds transferred to other organizations, is reported on the "Consolidated Balance Sheet" 2. OPERATIONS OF SCHOOL BOARDS AND THE REGION OF DURHAM Further to Note 1 (a) (iii), the taxation, grants, other revenues, expenditures and overlevies (underlevies) of the school boards and the Region of Durham are comprised of the following: Taxation and user charges School Boards $31,806,942 Region $10,102,019 Requisitions . 31.798.648 11.29?,90? Overlevies (Underlevies) for current year $ 8,294 $(1,184,789) Overlevies, beginning of year 7,352 1,343,951 Overlevies, end of year $ 15,646 $ 159,162 3. TRUST FUNDS Trust funds administered bv the municioalitv amountino to (b) Of the net long-term liabilities reported in (a) of this note, $2,230,157 in principal payments are payable from 1994 to 1998; $2,842,176 from 1999 to 2003; 1994 1999 to to From general 1998 2003 municipal revenues $2,063,490 $2,775,510 From benefitting landowners ' 166.667 66.666 $2,230,157 $2,842,176 (c) Included in "Net long-term liabilities" on the "Consolidated Balance Sheet" is an amount of $32,869 (1992 - $47,249) payable in United States dollars, which was converted into Canadian dollars at the rate of exchange prevailing when the liability was incurred. If the liability is converted into Canadian dollars at the exchange rate prevailing at December 31, 1993, the liability would be increased by $9,713 (1992-$11,295). (d) The long-term liabilities in (a) issued in the name of the municipality municipality have received approval of the Ontario Municipal Board for those approved on or before December 31, 1992. Those approved after January 1, 1993 have been approved by by-law. The annual principal and interest payments required required to service these liabilities are within the annual debt repayment limit prescribed by the Ministry of Municipal Affairs. Affairs. (e) The municipality is contingently liable for long-term liabilities with respect to tile drainage and shoreline property assistance assistance loans, and for those for which the responsibility for the payment of principal and interest has been assumed by other other municipalities, school boards and the Clarington Hydro Electric Commission. The total amount outstanding as at December 31, 1993 is $1,673,377 (1992 - $1,108,256) and is not recorded on the "Consolidated Balance Sheet". (f) Included in "Net long-term liabilities" on the "Consolidated Balance Sheet" is a loan of $163,333 (1992 - $186,667) payable to Ministry of Municipal Affairs, and a loan of $70,000 (1992 - $80,000) payable to Ontario Hydro under the Ontario Housing Action Program. These loans which relate relate to the Courtice Storm Water Facilities-Project, are interest interest free and repayable over fifteen years. Payments commenced commenced in 1986. The funds to repay these loans are to be provided from a Prescribed Plan Annuity held by the Town, issued by the developers, pursuant to a development agreement. agreement. 7. MUNICIPAL FUND BALANCES AT THE END OF THE YEAR (a) The .balances on the "Consolidated Statement of Operations" Operations" of municipal equity of $2,537,092 (1992 - $2,442,835) at the end of the year is comprised of the following: 1993 1992 - for general reduction of taxation - for general reduction of user $2,410,479 $2,327,004 charges - for benefitting landowners related to special charges and 112,314 107,209 special areas - funds available for the ( 4.097) 2.518.706 (99.991) 2.350.652 acquisition of fixed assets 18.386 $2,537,092 92.183 $2,442,835 (b) Approval of the Ontario Municipal Board has been 'obtained for those pending issues of long-term liabilities and commitments commitments to be financed by revenues beyond the term of council council and approved on or before December 31, 1992. Those approved after January 1, 1993 have been approved by bylaw. bylaw. The principal and interest payments required to service these pending issues and commitments are within the debt repayment limit prescribed by the Ministry of Municipal Affairs. Affairs. (c) The balance available for the general reduction of taxation for the fiscal year ending December 31, 1993 has been reduced reduced by an amount of $160,173 (1992 - $112,017) transferred transferred to the Reserves and Reserve Funds as authorized by Report #TR-32-94, dated June 1994, as follows: - Name of Reserve/Reserve Fund Amount of Transfer Professional Fees Reserve $ 52,290 General Capital Reserve 9,958 Tax Write off Reserve 7,300 Reserve Fund for Main Library 50,000 Reserve Fund for Courtice Library 5,625 Reserve Fund for Economic Development 35,000 $ 160,173 Had this reduction not been made, the balance available for the general reduction of taxation would have shown a surplus surplus of $2,570,652 (1992 - $2,439,021). 13. SOCIAL CONTRACT The Social Contract Act requires municipalities to reduce expenditures by a specified amount in each of the years 1993, 1994 and 1995. Unconditional grants will be reduced by a corresponding amount each year. The sectoral agreement between the provincial government and the municipal sector, however, provides for the automatic deferral of 25% of the-1993 social contract target amount and the corresponding reduction of unconditional grants until 1996. For the Municipality of Clarington the target amount for each year is $312,289 and the amount deferred is $78,072. 14. CHANGE OF NAME During the year, the Corporation of the Town of Newcastle officially changed its name to the Corporation of the Municipality of Clarington. CONSOLIDATED STATEMENT OF CURRENT OPERATIONS YEAR ENDED DECEMBER 31. 1993 Budget 1993 Actual 1993 Actual 1992 SOURCES OF FINANCING Net municipal taxation $15,209,703 $15,609,313 $14,267,53 User charges Grants 2,656,638 2,707,688 2,725,455 Government of Canada 100 . 5,103 3,801 Province of Ontario 2,517,802 2,220,655 2,545,949 Other Municipalities Other -- 5,836 . Investment income Penalty and interest on 620,172 514,303 , 797,995 taxes 600,000 1,121,954 908,018 Donations 4,217 4,268 3,220 Other 1,000 . 5,252 2,424 21,609,632 22,194.372 21,254,395 MUNICIPAL FUND BALANCES AT BEGINNING OF YEAR, TO BE USED TO OFFSET (TO BE RECOVERED FROM) TAXATION OR USER CHARGES Town 1,000,000 2,327,004 2,424,337 Library 11,900 14,695 (985) Special areas Recreation, community (83,560) (83,561) (35,853) centres and arena boards 81,811 81,811 72,769 Central business district improvement areas 11,384 11,384 9,070 Museums (681) (681) 15,519 TOTAL FINANCING AVAILABLE DURING THE YEAR $22,630,486 $24,545,024 $23,739,302 APPLIED TO General government $ 4,041,131 $ 3,536,676 $ 3,500,096 Protection to persons and property 2,721,562 2,705,302' 2,698,131 Transportation services 5,545,514 5,623,961 5,087,654 Environmental services 1,126,384 1,182,219 1.167,253 Health services 122,122 104,191 121,060 Recreation and cultural services 4,694,013 4,576,897. 4,447,980 Planning and development 1.466.412 1.525.463 1.469.999 19,717,138 19,254,709 18,492,173 NET APPROPRIATIONS TO OTHER FUNDS 2,808,031 2,771,609 2,896,477 MUNICIPAL FUND BALANCES AT END OF YEAR, TO BE USED TO OFFSET (TO BE RECOVERED FROM) TAXATION OR USER CHARGES Town Library Special areas i 2,410,479 6,997 (4,087) 2,327,004 14,695 (83,561) Recreation, community centre and arena boards 94,461 94,461 81,811 Central business district improvement areas 15,987 15,987 11,384 Museums (.5,131) ( 5,131) ( 681) TOTAL APPLICATIONS DURING THE YEAR $22,630,486 $24,545,024 $23,739,302 AUDITORS' REPORT 3 04 O S 3 to £ to g _ cr w e o o o • <£ ■"t H--< ►--* - ,--• ao O 3 J3 - •• £ O e . . 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