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1 I i The Canadian Statesman. Bowmanville. August 3. 1988 15 Corporation of The Town of Newcastle Consolidated 1987 Financial Statements AUDITORS' REPORT To the Members of Council, Inhabitants and Ratepayers of the Corporation of theTown of Newcastle: We have examined the consolidated balance sheet of the Corporation of the Town of Newcastle as at December 31, 1987 and the consolidated statement of operations for the year then ended. Our examination was 1 made in accordance with generally accepted auditing standards, and accordingly accordingly included such tests and other procedures as we considered necessary necessary in the circumstances. In our opinion, these consolidated financial statements present fairly the financial position of the Corporation of the Town of Newcastle as at De- cember31,1987 and the results of its operations for the year then ended in accordance with the accounting principles disclosed in Note 1 to the financial financial statements applied on a basis consistent with that of the preceding preceding year. Deloitte, Haskins, & Sells Chartered Accountants April 24,1988 Licence No. 1113 CONSOLIDATED STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31. 1987 Actual 1987 Actual 1988 SOURCES OF FINANCING Taxation and ueer chargee Residential and farm taxation $18,717,503 $16,224,454. Commercial, industrial 1 business taxation 5,542,493 5,141,818 Taxation from other governments 682,859 640,694- User charges 2,298,394 1,768,399 Deduct amounts received or receivable for Region end school boards (Note 2) (18,426,942) (16,259,852). Grants Government of Canada 46,622 37,625; Province of Ontario 3,542,473 3,093,652- Other municipalities 200 17,421 Other Contributions from developers 3,124,528 1,073,053 Investment income 802,860 826,290 Sale of land and equipment 2,617 10,476, Penalty and Interest on taxes 293,117 274,586 Fines 1,174 1,215 Recreational land cash-in-lieu 81,792 65,507' Donations 4 contributions from others 96,805 120,928 MUNICIPAL FUND BALANCES, BEGINNING OF YEAR (Note?) To be used to offset taxation or user charges 605,206 684,356 Unexpended capital financing 42.965 542 TOTAL FINANCING AVAILABLE DURING THE YEAR $17,454,666 $13,721,262 APPLIED TO Current operations (Note 9) General government $ 1,336,533 $ 1,249,363 Protection to persons and property 1,053,156 951,525 Transportation services 3,551,525 3,509,418 Environmental services 385,861 ■ 328,981 Health services 107,171 90,076 Recreation and cultural services 2,532,023 2,391,276 Planning and development 450.019 396.075 9,416,288 8,916,714. Capital General government 3,209,038 702,513 Protection to persons and property 240,914 43,497 Transportation services 2,111.565 1.484.596 Environmental services 211,392 360,486 Health services 1,196 909 Recreation and cultural services 838,813 542,118 Planning and development 19.794 7.844 6,632.702 NET APPROPRIATIONS TO RESERVES AND RESERVE FUNDS 1,857,108 1,014,414 MUNICIPAL FUND BALANCES, END OF YEAR (Note 7) To be used to offset taxation or user charges 743,513 605,206 (Capital operations not yet perma- nentiy financed) unexpended capi- (1,194,945) 42,965 tal financing TOTAL APPLICATIONS DURING THE YEAR $17.454.666 $13.721.262 CONSOLIDATED BALANCE SHEET DECEMBER 31. 1987 1987 1986 ASSETS UNRESTRICTED Cash and Investments $1,178,970 $2,771,814. Taxes receivable 1,953,895 1,656,406 User charges receivable 303,299 127,915 Accounts receivable 955,822 512,129 Other current assets 420.249 358.036 4.812.235 5.426.300 RESTRICTED Cash and Investments 6,430,420 4,200,223 Accounts receivable 92.935 155.846 6.523.355 4.356.069: CAPITAL OUTLAY FINANCED BY LONG-TERM LIABILITIES , AND TO BE RECOVERED IN FUTURE YEARS (Note 1(b)) 1.068.141 1.291.793 $12,403,731 $11.074.162 LIABILITIES CURRENT LIABILITIES Temporary bank loan -- capital $ 984,948 $ ---- Accounts payable and accrued liabilities 1,915,426 1,688,353 Other current liabilities 521.865 938.170 NET LONG-TERM 3 ' 422,23 "- " C2C -- 3 LIABILITIES (Note 6) 1,068,141 1,291,793 FUND BALANCES, END OF YEAR To be used to offset taxation or user charges (Note 7) (Unfinanced capital outlay) unexpended capital financing (Note?) Reserves (Note 8) Reserve funds (Note 8) 743,513 (1,194,945) 1,841,428 6.523.355 $12,403,731 605,206 42,965 2,151,606 4 356 069 $11,074,162 Hie uuvumpanying notes are an Integral part of these financial statements. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31.1987 1. ACCOUNTING POLICIES The consolidated financial statements of the Corporation are the , representation of management prepared in accordance with accounting accounting policies prescribed for Ontario municipalities by the Ministry Ministry of Municipal Affairs. Since precise determination of many assets and liabilities is dependent upon future events, thd preparation of periodic financial statements necessarily involves the uso of estimates estimates and approximations. Those have been made using careful judgments. a) (I) Basis of consolidation Those consolidated financial statements reflect the assets, liabilities, liabilities, sources of financing and expenditures of the revenue fund, capital fund, reserve funds and reserves and Include the activities of all committoos of Council and the following local boards, which are under the control of Council: ■ Newcastle Public Ubraiy 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 • Baseline Community Centre Board ■ Burkoton Community Park Board ■ Orono Arena and Community Centro Board • Newcastle Arena Board • Orono Town Hall Board • Brownsdalo Community Centro Board ■ Nowtonville Community Hall Board • Newcastle Community Hall Board • Haydon Community Hall Board • Tyrone Community Centre Board • Zion Park Board • Sollna Community Centre Board • Hampton Community Hall Board All interfund assets and liabilities and sources of financing and expenditures expenditures have been eliminated with the exception of loans or advances advances between the reserve funds and any other fund of the municipality municipality and the resulting interest income and expenditures. (II) Non-consolldated entity These consolidated financial statements do not include the assets, liabilities, sources of financing and expenditures of the Newcastle Hydro Electric Commission. (III) Accounting for Region and school board transactions The taxation and other revenues, expenditures, assets and liabilities liabilities with respect to the operations of the school boards and the Region Region of Durham are not reflected in the "Municipal Fund Balances" of these financial statements. Overlevies (underlevies) are reported on the "Consolidated Balance Sheet* as "Other current liabilities" ("Other current assets") (Iv) Trust funds and related operations Trust funds and their related operations administered by the municipality municipality are not consolidated, but are reported separately on the Trust Funds Consolidated Statement of Continuity and Consolidated Consolidated Balance Sheet". ■(b) Basis of accounting (accrual) (I) Sources of financing and expenditures are reported on the accrual accrual basis of accounting with the exception of 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 become available and measurable; expenditures are recognized as they are incurred and measurable as a 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 reported as an expenditure on the "Consolidated Statement of Operations" Operations" in the year of acquisition. (Iv) Capital outlay to be recovered In future yeare •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, organizations, is reported on the "Consolidated Balance Sheet*. 2. OPERATIONS OF SCHOOL BOARDS AND THE REGION OF DURHAM Further to Note 1(a) (ill), the taxation, grants, other revenues, expenditures expenditures and overlevies (underlevies) of the school boards and the Region of Durham are comprised of the following: School Boards Region $13,946,420 $4,480,971 13-981.734 4.460.986 (35,314) 19,985 38.977 2.104 $ 3.663 $ 22.089 1,447,850 (672,107) (765,734, Net long-term liabilities, end of year $1,068,141 (295,340) $1.291.793 (b) From general municipal revenues From benefitting landowners 1988 to 1992 $425,568 344.889 MUNICIPAL FUND BALANCES AT END OF THE YEAR The balances on the "Consolidated Statement of Operations" of municipal municipal (defidtjequity of $(451,432) (1986 - $648,171) at the end of the year is comprised of the following: For general reduction of taxation For general reduction of user charges For benefitting landowners related to special charges and special areas Funds available for the acquisition of fixed assets Acquisition of fixed assets to be financed from proceeds of long-term liabilities 1987 1986 $503,032 $446,839 180,514 163,891 59,967 (5,524) 59,586 42,965 (1.254.531) $(451,432) $648,171 11 The balance of the funds, including interest earned less payments mado to the Town of Newcastle to date, amounted to approximately $2,800,000 in Account "A" and $1,100,000 in Account "B" at December December 31,1987 (1986 - Account "A" - $2,500,000; Account "B": - $1,500,000). BUDGET FIGURES Budgets established for capital funds, reserves and reserve funds are based on a project-oriented basis, the costs of which may be carried out over one or more years. As such, they are not directly comparable with current year actual amounts and budgets have, therefore, not been reflected on the "Consolidated Statement of Operations". Operations". CONSOLIDATED STATEMENT OF CURRENT OPERATIONS YEAR ENDED DECEMBER 31. 1987 (b) $ 761,665 $ 905,017 Of the net long-term liabilities reported in (a) of this note, $770,457 In principal payments are payable from 1988 to 1992; $197,680 from 1993 to 1997; and $100,004 thereafter and are summarized as follows: follows: 1993 1998 to and 1997 Thereafter 197.680 100.004 $770,457 $197,680 $100,004 Approval of the Ontario Municipal Board has been obtained for the pending Issue of long-term liabilities and for those commitments to be financed from revenues beyond the term of Council. RESERVES AND RESERVE FUNDS The total balances of reserves and reserve funds of $1,841,428 (1986 - $2,151,606) and $6,523,355 (1986 - $4,356,069), respectively, respectively, are made up of the following: Taxation and user charges Requisitions (UNDERLEVIES) OVERLEVIES FOR THE YEAR OVERLEVIES, BEGINNING OF YEAR OVERLEVIES, END OF YEAR 3. TRUST FUNDS Trust funds administered by the municipality amounting to $223,958 (1986 - $214,343) have not been included in the "Consolidated Balance Balance Sheet" nor have their operations been included in the "Consolidated "Consolidated Statement of Operations". 4. PENSION AGREEMENTS The municipality makes contributions to the Ontario Municipal Employees' Employees' Retirement fund (OMERS), which is a multi-employer plan, on behalf of 123 members (1986 t 117 members) of its staff. The plan is a defined benefit plan which specifies the amount of the retirement retirement benefit to be received by the employees based on the length of service and rates of pay. The amount contributed to OMERS for 1987 was $180,726 (1986 - $160,988) for current service and is included as an expenditure on the "Consolidated Statement of Operations". 5. LIABILITY FOR VESTED SICK LEAVE BENEFITS Under the sick leave benefit plan, unused sick leave can accumulate accumulate and employees may become entitled to a cash payment when they leave the municipality's employment. The liability for these accumulated days, to the extent that they have vested and could be taken in cash by an employee on terminating, terminating, amounted to $522,472 (1986 - $449,998) at the end of the year. An amount of $24,857 (1986 - $35,637) has been provided for this past service liability and is reported on the "Consolidatedg lance lance Sheet", included in reserves. An amount of $10,781 (19(56 - $9,334) was transferred from the reserve to assist in financing payments payments made during the current year and is reported on the "Consolidated "Consolidated Statement of Operations" and Is Included in 'Net appropriations appropriations to reserves and reserve funds" 6. NET LONG-TERM LIABILITIES (a) The balance of net long-term liabilities reported on the "Consolidated Balance Sheet" is made up of the following: 1987 1986 Total long-term liabilities incurred by the municipality including those incurred on behalf of school boards, other municipalities and the Newcastle Hydro Electric Commission Commission and outstanding at the end of the year amount to In addition, the municipality has assumed assumed responsibility for the payment payment of principal and interest charges on certain long-term liabilities liabilities issued by other municipalities. At the end of the year, the outstanding outstanding principal amount of this li- abiliity Is 1,231,553 Of the long-term liabilities shown above, the responsibility for payment payment of principal and interest charges has been assumed by school boards, the Newcastle Hydro Hydro Electric Commission, and other municipalities. At the end of the year, the outstanding principal amount of this liability is Of the long-term liabilities shown above, the responsibility for payment payment of principal and interest charges for tile drainage and shoreline shoreline property assistance loans has been assumed by Individuals. At the end of the year, the outstanding principal amount of this liability is (252.9701 9. (c) Included In "Net long-term liabilities" on the "Consolidated Balance Sheet" is an amount of $393,034 ( 1986 - $491,778) payable In United United States dollars, which was converted into Canadian dollars at the rate of exchange prevailing when the liability was Incurred. If the liability liability is converted into Canadian dollars at the exchange rate prevailing prevailing at December 31,1987, the liability would be Increased by $91,605 (1986-$150,155). (d) Approval of the Ontario Municipal Board has been obtained for the long-term liabilities In (a) issued In the name of the municipality. (•) The municipality is contingently liable lor long-term liabilities with respect to tile drainage and shoreline property assistance loans, and for those for which the responsibility for the payment of principal principal and Interest has boon assumed by other municipalities, school boards and the Newcastle Hydro Electric Commission. The total amount outstanding as at December 31, 1987 is $925,077 (1986- $1,061,074) and Is not recorded on the "Consolidated Balance Sheets. (f) Included In "Not long-term liabilities" on the "Consolidated Balance Shoot" Is a loan of $303,334 (1986 - $326,667) payable to the Ministry Ministry ot Municipal Affairs, and a loan of $130,000 (1986 - $140,000) payable to Ontario Hydro under the Ontario Housing Action Program. Program. Those loans which relate to the Courtice Storm Water Fadlll- tios Project, are Interest free and repayable over fifteen years, Payments Payments commenced In 1986. The funds to repay those loans are to bo provided from letters of credit hold by the Town, Issued by the developers, pursuant to a dovolopmont agreement. (g) Included In "Not long-term liabilities" on the "Consolidated Balance Shoot" Is a loan of $30,000 (1986 - $45,000) payable to Ontario Hydro Hydro under the Ontario Housing Action Program. This loan relates to the Courtice Storm Water Facilities Project, and Is repayable over four years, communclng In 1986. Funds to repay the loan are provided provided by the Courtice O.H.A.P. Rosorvo Fund. Reserves set aside for specific purpose by council for: Working capital Tax write-off Inventory and prepaid expense Sick leave Other cultural Acquisition of fixed assets Building and energy conservation and construction Technical services Reserve funds set aside for specific purpose by Council for: Courtice O.H.A.P. Rocroation programs 4 facilities Debenture repayment Industrial development Other cultural Acquisition of fixed assets Reserve funds set aside for specific specific purpose by legislation, regulation regulation or agreements: Park Purposes Lot levies and road contributions Parking facilities 1987 1986 $ 324,462 $ 753,035 226,699 187,297 - 161,680 24,857 35,637 34,738 31,428 1,143,475 982,113 7,197 416 80.000 -- $1.841.428 $2 151 606 $601,147 $578,089 1,454,339 88,195 73,907 30,076 182,874 325,545 73,631 69,176 178.286 713.585 2.564.184 1,804,666 BUDGET ACTUAL ACTUAL SOURCES OF FINANCING 1987 iasz 1986 Net municipal taxation $6,422,409 $6,515,913 $5,747,114 User charges Grants 1,800,939 2,246,848 1,724,176 Government of Canada 13,499 46,622 37,625 Province of Ontario Other 2,120,375 1,920,906 2,052,680 Investment income 286,525 347,520 389,765 Penalty and interest on taxes 330,000 293,117 274,586 Donations - 9,462. 15,443 Other 1.500 1.174 1.215 10.975.247 11.381.562 10.242.604 MUNICIPAL FUND BALANCES AT BEGINNING OF YEAR, TO BE USED TO OFFSET (TO TION OH USER CHARGES BE RECOVERED FROM) TAXA- Torn 450,993 446,839 552,619 Ubraiy - 3,790 9,627 Special areas Recreation, community centres (5,524) (7,346) and arena boards Central business district 143,551 143,551 116,717 improvement areas 16,208 16,207 16,385 Museums TOTAL FINANCING 3.151 343 (3646) AVAILABLE YEAR DURING THE $11,589,150 $11,986.768 .Cl 0,926,960 519,868 3,325,989 113.314 3.959.171 526,371 1,926,882 98.150 2,551,403 APPLIED TO General government Protection to persons and property Transportation services Environmental services Health services Recreation and cultural services Planning and development NET APPROPRIATIONS TO OTHER FUNDS $1,629,609 $1,336,533 $1,249,363 1,163,271 1,053,156 951,525 3,521,110 3,551,525 3,509,418 404,268 385,861 328,981 106,917 107,171 90,076 2,481,615 2,532,023 2,391,276 443,931 450,019 395,075 9,750,721 9,416,288 8,916,714 1,656,495 1,826,967 1,405,040 10. CHARGES FOR NET LONG-TERM LIABILITIES Total charges for the year for "Net long-term liabilities" which are reported reported on the "Consolidated Statement of Operations" are as follows: follows: 1987 1986 Principal payments $207,288 $248,050 Interest so 192 76n?q The charges for long-term liabilities assumed by the non- consolldated entities or by individuals in the case of tile drainage and shoreline property assistance loans are not reflected in these statements. AGREEMENT Ontario Hydro MUNICIPAL FUND BALANCES AT END OF YEAR, TO BE USED TO OFFSET (TO BE RECOVERED FROM) TAXATION OR USER CHARGES Town - 503,032 44b,839 Library - 3,114 3,793 Special areas - 59,967 (5,524) Recreation, community centre and arena boards Central business district improvement areas Museums TOTAL APPLICATIONS DURING THE YEAR 159,985 159,985 143,551 12,674 9.275 8,140 2J25 16,207 242 $11,589,150 $11,986,768 $10,926,960 In connection with the Darlington Generating Station Project, Onta- f; rio Hydro agreed to contribute approximately $3,000,000 plus accrued accrued interest towards the cost of roads, water, sewer services and other expenditures incurred by the municipality during the construction construction period. These funds are held by Ontario Hydro in two separate accounts; one account entitled Station Account "A* relating to the construction construction of water mains, sanitary sewers and storm sewers and one entitled entitled Station Account "B" relating to other financial obligations under the above agreement. The residual amount, if any, in Station Account Account "A" at the termination of this agreement shall not be paid to the Town. .The residual amount, if any. In Station Account "B" at the termination of this agreement shall be paid to the Town, suoject to certain specified conditions being met by the Town. AUDITORS' REPORT To the Members of Council, Inhabitants and Ratepayers of the Corporation of theTown of Newcastle: We have examined the balance sheet of the trust funds of the Corporation of the Town of Newcastle as at December 31,1987 and the statement of continuity of trust funds for the year then ended. Our examination was made in accordance with generally accepted auditing standards, and accordingly accordingly included such tests and other procedures as we considered necessary necessary in the circumstances. In our opinion, these financial statements present fairly the financial position position of the trust funds for the Corporation of the Town of Newcastle as at December 31,1987 and the continuity of trust funds for the year then ended ended in accordance with accounting principles disclosed in Note 1 to the financial financial statements applied on a basis consistent with that of the preceding preceding year. Deloitte, Haskins A Sells Chartered Accountants April 24,1988 Licence No. 1113 TRUST FUNDS STATEMENT OF CONTINUITY YEAR ENDED DECEMBER 31.1987 Bowmanville Bondhead Cemeteiy Cemeteiy Perpetual Perpetual Total Care Cara BALANCE, BEGINNING OF YEAR $.214,343 $ 120.804 $ 12.135 CAPITAL RECEIPTS Cemeteries 11,259 11,049 210 INTEREST EARNED 15.831 9.946 1.245 27,090 20.995 1,455 EXPENDITURES Contributions to Cemeteries 11,191 9,946 1,245 Other 6.284 17,475 9,946 1,245 BALANCE, END OF YEAR $223^!» $131,853 $12,345 Vanderveer Legacy $ 1.653 Montague Trust $ 15.643 1 299 1,299 $1,653 $16.942 Ontario Home Renewal Program $64,108 1241 3.341 6.284 6.284 $61,165 BALANCE SHEET Total Bowmanville Cemeteiy Perpetual Care Bondhead Cemeteiy Perpetual Care CASH ACCOUNTS RECEIVABLE LOANS RECEIVABLE INVESTMENTS - At Cost Provinclel Investment Certillcetee Vanderveer Legacy $ 653 Ontario Home Montague Renewal Trust Program $ 3,552 6,000 137 B99 176.247 117.623 123.127 $131.853 6,000 5886 1.000 13.390 11.991 1,000 13.390 $17.345 $1,653 $16.942 LIABILITIES AND FUND BALANCES DUE TO GENERAL FUND $-1.019 $ $ $ $ $ 1.019 FUND BALANCES Capital Income 223,958 131,853 12,345 1,653 16,942 61,165 223.958 131.853 12.345 1,653 16,942 $16.942 61,165 muiL $131,653 $12,345 $1,653 $6?,f 84 NOTES TO THE TRUST FUNDS FINANCIAL STATEMENTS DECEMBER 31, 1987 ACCOUNTING POLICIES Basis of Accounting Capital receipts and Income are reported on the cash basis of accounting. Expenditures are reported on the cash basis of accounting with the exception of administrative expenses which are reported on the accrual accrual basis of accounting, which recognizes expenditures as they are Incurred and measurable as a result of the receipt of goods or services and the creation of a leoal obligation to pay. ONTARIO HOME RENEWAL PROGRAM The Ontario Home Renewal Program was established by the Ontario Ministry of Housing In 1973 to provide grants for municipalities to make loans to assist owner occupants to repair, rehabilitate and Improve Improve their homes to local property standards. Individual loans are limited to $7,500 ol which the maximum forgivable portion Is $4,000. Ontario Homo Renewal Program loans receivable at December 31, 1987 comprise repayable loans of $14,206 (1986 - $9,390) and forgivable forgivable loans of $12,379 (1986 - $10,992). Loan forgiveness Is earned and recorded at a rate of up to $600 per year of continued ownership and occupancy. In the event of the sale or lease of the home or In the event ol the homeowner ceasing to occupy the homo, the balances of the repayable loan and the unearned forgivable forgivable loon immediately become duo and payable by the homeowner. INVESTMENTS The total for Investments by the trust funds of $143,899 (1986 - $138,691) reported on the "Balance Sheet" at cost have a market value of $143,149 (1986 -$137,691) at the end of the year.