HomeMy WebLinkAboutCS 52-05004
PICKERING
REPORT TO
AUDIT COMMITTEE
Report Number: CS 52-05
Date: June 15, 2005
From:
Gillis A. Paterson
Director, Corporate Services & Treasurer
Subject: 2004 Year-End Audit
Recommendation:
2a)
b)
That Report to Council CS 52-05 of the Director, Corporate Services & Treasurer
be received and referred to Council for information; and that:
the Auditor's Report to the Audit Committee as submitted by Deloitte & Touche
be received for information;
the Management Letter from the Auditor be referred to the Director, Corporate
Services & Treasurer for any further action deemed necessary and report back to
the Committee; and,
the 2004 draft Audited Financial Statements for the City of Pickering be received
and forwarded to Council for information.
Executive Summary: Not applicable
Background: The Audit for the year 2004 has been completed. Attached are the
Auditor's Report to the Audit Committee, which includes the Independence Letter and
the Management Letter from the Auditor and the draft Audited Financial Statements.
The Auditor's report prepared by Deloitte & Touche summarizes the results of the
December 31,2004 audit. Nothing of significance was noted.
The draft Financial Statements are the responsibility of management and have been
prepared by City accounting staff under the direction of the Director, Corporate
Services & Treasurer. Deloitte & Touche is responsible to express an opinion on these
Financial Statements based on their audit. An unqualified opinion has been provided.
I am pleased to advise the Committee there were no problems or questionable items I
have to report to you at this time. However I would like to summarize some financial
highlights.
Report CS 52-05
2004 Year-End Audit
Date: June 15, 2005
Page 2
Overall net assets increased by approximately $5.2 million over prior year due to an
increase in the cash and investment balances which was offset partly by an increase in
the Accounts Payable and Accrued Liabilities, Deferred Revenue and Long -term
Liabilities.
The increase in the cash balance at the end of the year resulted from timing of
investments. Interest rates earned on our money market account were comparable to
shod-term interest rates. As a result the funds could be kept quite liquid in the money
market account to meet cash requirements in January for the refund to OPG for
settlement of some of their earlier outstanding assessment appeals, settlement of the
due/to from accounts for the School Board and the Region and for operating cash at
the beginning of the year until the first tax due date. The increase in the investment
balance results from the timing of receipt of debenture financing for ongoing capital
projects, timing of supplementary taxes billed and collected, the overall increase in the
Reserve Fund balances, primarily Development Charges Reserve Fund and lastly the
City's share of taxes from OPG for properties that are still under assessment appeal.
The increase in Accounts Payable corresponds to the increase in the cash balance for
the reasons noted above. The increase in deferred revenue is primarily due to the
overall increase in the obligatory Reserve Funds which are made up of the following:
Development Charges, Parkland, Third Party/Developer's Contribution, Ontario Transit
Renewal and Provincial Gas Tax. The increase in the Development Charges Reserve
Fund resulted from a large amount of Development Charges collected versus those
required in the year to fund capital expenditures. In addition the Third
Party/Developer's Contribution Reserve Fund also contributed to the increase. In
compliance with financial statement reporting guidelines, these restricted funds are to
be reported as deferred revenue. The post-employment benefits obligation balance is
higher than reported in prior years with a corresponding restatement to the prior year
figure. As explained in the notes to the Financial Statements this is attributed to a
requirement under PSAB effective for 2004 to report the sick leave liability. Although
sick leave is not vested at the City, PSAB requires the liability to be recognized as
earned versus when paid.
Current revenues and expenditures are comparable with the budget. Taxation from
other governments which are more commonly referred to as payments-in-lieu (PIL) of
taxes are higher than budget. This arises due to the returned assessment roll providing
higher assessment amounts, which must be billed, for the OPG properties currently
under appeal. Again this year, a transfer of the City's share of these revenues ($1.1 M)
was made to the Contingencies Reserve until such time as the appeal is settled.
As you are aware capital expenditures for projects may be incurred over multiple years
and often are not comparable to budget. As you can see capital expenditures incurred
were significantly lower than those budgeted. This is a direct result in timing of
approval in the budget and completion of the project. For example, a large amount was
budgeted in 2004 for external subdivision works of which approximately 9% of budget
amount was incurred in 2004. This timing also impacts on the revenue reported for the
Report CS 52-05
2004 Year-End Audit
Date: June 15, 2005
Page 3
capital projects being much lower than compared to budget. Specifically government
grants are lower as a result of the 401 Pedestrian Bridge project not proceeding as
planned. This project has been broken into phases and the design phase has been
rebudgeted in the 2005 Capital Budget.
In conclusion, positive financial results in 2004 are once again assisting in maintaining
the City's financial position. However, a steady increase in debt together with
increasing demands on the City's limited financial resources may prove challenging in
the future.
Attachments:
1. Auditor's Report to the Audit Committee
2. 2004 draft Audited Financial Statements
Prepared By:
I~is[tine Senior
Manager, Accounting Services
Approved / Endorsed By:
Gillis A. Paterson
Director, Corporate Services & Treasurer
GAP/vw
Attachments
Copy: Chief Administrative Officer
Recommended for the consideration of
Pickering C~ouncil ~
Thc('n~.~ J. euin~/Chie~dmin~
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ATTACHMENT #:2.L TO REPORT #~f;~;2 ~ c"J.f:
Consolidated Financial Statements of
THE CORPORATI
CITY OF PICKE
December 31,2004
MN Document in 2210 CIty of Pickering 81117: 6/15/05: 3:42 PM draft
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FOR DISCUSSION PURPOSES ONL. Y
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Auditors' Report
Deloitte & Touche LL
5140 Yonge Street
Suite 1700
Toronto ON M2 6L7
Canada
To the Members of Council, Inhabitants and
Ratepayers of the Corporation of the City of Pickering
We have audited the consolidated statement of fInancial p
Pickering as at December 31, 2004 and the consolidated st e
in financial position for,the year then ended. These finane' 1 s
management. Our responsibility is to express an opinio on thes
We conducted our audit in accordance with Can ilian generally cepted auditing standards. Those
standards require that we plan and perform an a t to obtain rea able assurance whether the financial
statements are free of material misstatement. f\.n audit includ examining, on a test basis, evidence
supporting the amounts and disclosures in th ~te . nts. An audit also includes assessing the
accounting principles used and signifIcan es' e y management, as well as evaluating the
overall financial statement presentation.
In our opinion, these consolidated cial statements resent fairly, in all material respects, the financial
position of the City as at Decem er 31, 2004 and e results of its operations and the changes in its
fmaneial position foc the year t ~d ~ ace cdanee with Canadian generally accepted accounting
principles.
Chartered Accoun ~~
Tnrnntn Ont$l n (n)
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MY Document in 2210 Cltv of Pickering 81117.~ 6/15/05: 3:42 Pl.i
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THE CORPORATION OF THE CITY OF PICKERING
Table of Contents
December 31, 2004
Consolidated Statement of Financial Position
Consolidated Statement of Financial Activities
Consolidated Statement of Changes in Financial Position
Notes to the Consolidated Financial Statements
Consolidated Schedule of Reserves and Reserve
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4-18
19
20
21
2004
THE CORPORATION OF THE CITY OF PICKERING
Consolidated Statement of Financial Position
December 31, 2004
~PROVED BY;
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Worksh~ in 2211 City of Pickering 81117/6/1512005/3:41 PM
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FINANCIAL ASSETS
Cash $ $ 3,481, 09
Short~enninvesttnen~ 22, 3,572
Taxes receivable , 74,077
Accounts receivable 3,267,074
Other current assets 502,959
Investment in Veridian Corporation (Note 5) 30,875,298
Promissory notes receivable (Note 6) 25,069,000
95,429,289
LIABILITIES
Accounts payable and accrued liabilities 6,950,937
Other current liabilities 405,722
Deferred revenue (Note 7) 19,876,543
Long-term liabilities (Note 10) 4,026,000
Post-employment benefit liability (Note 9(a)) 2,219,981
wsm benefit liabilities (Note 9(b)) 634,973
34,114,156
NET FINANCIAL ASSETS 66,431,226 61,315,133
NON-FINANCIAL ASSETS
Inventory 448,207 403,810
NET ASSETS $ 66,879,433 $ 61,718,943
88,944
7,043,941
19,224,908
58,443,431
RA RIl1 ??,t
'-'""T'_v....,..._....
$ 32,208
612,984
18,267,188
56,581,438
'7c:. L10~ Sll R
'-, "_....'~.......
(13,774,875)
$ 61,718,943
$
(17,921,791)
66,879,433
Page 1 of21
THE CORPORATION OF THE CITY ,OF P1CKERING
Consolidated Statement of Financial Activities
Year ended December 31, 2004
REVENUES
Residential and fann taxation
Commercial and industrial taxation
Taxation from other governments
User charges
Government grants and fees
Developer contributions and donations
Development charges and
developer contributions earned
Investment income
Penalties and interests on taxes
Fines
Interest on promissory notes
Other
Total revenues
EXPENDITURES (Note 15)
Current
General government
Protection to persons and property
Transportation services
Environmental services
Social and :fumily services
Recreational and cultural services
Plannin and develo ment
2004
Bud2et Actual
(Note 18)
$ 24,595,135
5,785,433
7,335,095
9,120,471
1,417,326
419,100
995,135
586,950
6,909,953
22,100
2,784,125
11 298,263
61,646,373
(4,166,360
(89,500)
2,212,000
INCREA IN NON-FINANCIAL ASSETS
CHAN0E IN FUND BALANCES
,
~2" a~ .f""",",,,, 8m, __ "'''= '.<HM
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$ (3.393,041)
FOR DiSCUSSION PURPOSES ONLY
10,250,908
12,486,523
10,490,626
13,745
358,140
14,581,546
1,776,151
49,957 639
516,495
189,459
2,562,144
6,244
21,472
2,545,732
5,841,546
55,799,185
1,861,993
5,116,093
(11,631)
(3,187)
5,031,000
267,000
(32,617)
(1.103,649
4,146,916
44,397
$ 9,307.406
2003
Actual
(Restated - Nate
$ 22,324 54
5,5 ,336
9 87,998
,853,936
1,925,024
672,770
990,515
737,583
1,369,228
493,672
2,138,345
2,375,502
56 545,363
8,869,339
11,873,089
10,015,997
1,644,738
287,836
13,452,146
1 885,203
48,028,348
416,056
3]6,177
5,231,771
223,819
7,215
3,530,447
22,2'14
9,747,699
57,776047
1 350,678
119,994
54,790
526,951
$
Page 2 of21
THE CORPORATION OF THE CITY OF PICKERING
Consolidated Statement of Changes in Financial Position
Year ended December 31, 2004
NET INFLOW (OUTFLOW) IN CASH RELATED
TO THE FOLLOWING ACTIVITIES
OPERATING
Net expenditure revenue
Chan e in e uity in Veridian Co oration
Uses
Increase in other current assets
Increase in taxes receivable
Increase in accounts receivable
Decrease in accounts payable and accrued liabilities
Decrease in, WSIB benefit liabilities
Sources
Decrease in other current assets
Decrease in accounts receivable
Increase in accounts payable and ac
Increase in other current liabilities
Increase in deferred revenue
Increase in post-employment nefits obligatio
Increase in WSIB benefit Ii ilities
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FOR DISCUSSION PURPOSES ONLY
2004
$
119,994
(1,350,678)
(1,230,684)
(249,368)
(251,519)
(556,879)
(1,320,963)
(2,378,729)
222,510
11,572
4,073,700
7,682 282,517
4,237,289 1,445,269
77,869 144,290
526,951
8,630,622 2,399,027
11,764,805 (1,210,386)
(11 ,865,752) 2,511,115
5,031,000
(266,000) (252,000)
437,880 227,140
r~ -LL:"'I O~1'\ ,.., AOL' rJJ:C
\ u,uU""',o I"'" J ...,......ou,......J.J
5,101,933 1,275,869
3,487,309 2,211,440
$ 8,589,242 $ 3,487,309
Page 3 of21
The consolidated financial statements of The Corporation of the City of Picke ng (the "City") e
the representations of management prepared in accordance with generall accepted acco ing
principles for local governments as established by the Public Sector Acco mg Board ("PS ") of
the Canadian Institute of Chartered Accountants. Significant account' policies adopt by the
City are as follows:
(a) Reporting entity
(i) Consolidated statements
THE CORPORATION OF THE CITY "OF PICKERING
Notes to the Consolidated Financial 'Statements
December 31, 2004
1. SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial statements reflect e assets, liab' Ities, revenues and
expenditures of the operating fund, capital nel, reserve fu s and reserves. The
reporting entity is comprised of the activitie of all committee of Council and tbe City
of Pickering Public Library Board which is ~~d by the ity.
All material inter-fund transactions and alan~er . ated on consolidation.
(ii) Proportionate consolidation
The consolidated financial state ents reflect the
liabilities, revenues and expe itures of the Aj
(see Note 3). ~
All inter-entity transa 'ons an bal ces
consolidated.
ty's proportionate share of the assets,
Pickering Transit Authority (APTA).
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~rporation is accounted for on a modified equity
accepted accounting principles as recommended by
in go rnment business partnerships. Under the modified equity
basis, Ve dian Corp io s accounting policies are not adjusted to conform with tbose
of the ity and inter-or izational transactions and balances are not eliminated. The
City ,-cognizes its eq . y interest in the annual income or loss of Veridian Corporation
in . s statement of fi ancial activities with a corresponding increase or decrease in its
. as t asset ccount. Dividends that the City may receive from Veridian
ora' and ther capital transactions are reflected as adjustments in the investment
a acco t.
Op~ f school boards and the Region of Durham
are eliminated when proportionately
(ill)
The ta tion, other revenues, expenditures, assets and liabilities with respect to the
oper ons of the school boards and the Region of Durham are not reflected in these
co olidated financial statements.
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M~"'e:nt in 2210 Ciiyof Pickering 81117: 6/15/05: 3:42 PM
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Trust funds and their related operations administered by the municipality are not
consolidated, but are reported separately on the Trust Funds Statement of Financial
Activities and Statement of Financial Position.
Page 4 of 21
FOR DISCUSSION PURPOSES ONLY
THE CORPORATION OF THE CITY OF PICKERING
Notes to the Consolidated Financial Statements
December 31. 2004
1. SIGNIFICANT ACCOUNTING POLICIES (continued)
(b) Basis of accounting
(i) Short-term investments
Short-term investments are comprised of highly liquid guar eed investment
and are recorded at the lower of cost plus accrued interest m.~ket value.
Tangible capital assets ~
Tangible capital asset expenditures incurred du . g the year are
expenditures in the consolidated statement offin cial activities.
(ii)
capital
(iii)
Ontario Fair
Ii)
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the property taxes were levied.
Consolidated Statement of Finan
tion of the capping provisions
Activities as the full amount of
wever, the capp' g adjustments are reported on the
al Position as a I: eivable from the Region.
(iv)
(v)
(vi)
d at the lower of cost and net realizable value. Cost is determined on a
Gove ent transfers are recognized in the financial statements in the period in which
vents giving rise to the transfer occur, eligibility criteria are met, and reasonable
tes of the amount can be made.
(vii', Use of estimates
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. rDcumenf in Z210 C;ty of Pickering 81117.. 6/15/05; 3:42 PM
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The preparation of financial statements in conformity with Canadian generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts in the fmaneial statements and accompanying notes. Aetual
results could differ from these estimates.
Page 5 of21
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THE CORPORATION OF THE CITY OF PICKERING
Notes to the Consolidated Financial. Statements
December 31 2004
2. CHANGE IN ACCOUNTING POLICY
In 2004, the City adopted fully the local government accounting standards . sued by the Pu c
Sector Accounting Board of the Canadian Institute of Chartered Acco ants related to ost-
Employment Benefits, Compensated Absences and Termination Benefits. reviously, the sts of
providing the sick bank program were recorded when paid. These c are now reco . ed as
employees earn these entitlements through service. This change' ccounting poli has been
applied retroactively and the comparative figures included in these ~~i~l stateme s have been
restated to conform with the accounting policies adopted for the c ~
The adoption of these standards has resulted in the follow' g significant c amounts
previously reported in the 2003 fmancial statements:
"Post-employment benefits obligation" and "amOli s to be recover a from future revenues"
reported on the statement of financial position e c~cr ased by 628,837 at December 31,
2002.
"Employment benefits expenditures" and "i crease in am n to be recovered" reported on the
statement of financial activities and fund alance each mer ased by approximately $60,244 for
the year ended December 31, 2003.
.
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In addition, the adoption of these stan d~esulted the following changes to the amounts
reported for the year ended December 1, 20 I\"V'/
· "Post-employment benefits 0 igation" an ounts to be recovered in future years" reported
in the statement of ial position ha e each increased by a cumulative amount of
approximately $755,000.
· "Employment bene..fi ~s" d "increase in amounts to be recovered in future years"
reported in the stat e~li1l1/l ctivities have each increased by approximately $66,000.
AJAX PICKE ~RANSIT A RORITY
3.
Effective Sept ber 4,2001, aj mt Board of Management was established by the City of Pickering
and the To ~AjaX by y of a Merger Agreement for operating a transit system across
Pickering d~ The erations were combined effective January 1, 2002. These :financial
stateme s i ~de ~. k mg's proportionate share (50%) of assets, liabilities, revenues and
expen 's ofth~t uthority.
o Febrnaty 17, 2 5 it was unanimously agreed by a vote of the Councillors of the area
unicipalities an the Region or Durham to transfer the operation of the Transit Authority to the
Region ofDurh .. This will be effective as at January 1, 2006.
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Financial position:
Financial assets
Non-financial assets
Liabilities
Net liabilities
THE CORPORATION OF THE CITY OF PICKERING
Notes 10 the Consolidated Financial Statements
December 31 2004
3. AJAX PICKERING TRANSIT AUTHORITY (continued)
The following table provides condensed supplementary financial in:fi
Authority for the year ended December 31:
Fund balance
Amounts to be recovered
Transit Authority Position
$ 842,691
357,968
(1,562,670)
(362,011)
$ (170,849)
(191,162)
$ (362,011)
Financial activities:
Revenue
Operating expenditures
Ca ital ex enditures
Net ex enditures
11,574,369
(10,300,066)
(1,309,065)
(34,762)
$ 12,703,908
(9,307,449)
(3,626,197)
$ (229,738)
4.
Fund balance, beginning of year $ (170,849) $
Net expenditures (34,762)
Increase in amounts to be covered 15,938
Increase in non-fmancia ass 132,149
Fund balance, end ofye $ (57,524) $
k AND THE REGION OF DURHAM
(26,486)
(229,738)
17,008
68,367
(170,849)
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Region Schooi Board
$ 58,209,242 $ 38,572,609
5,463,002 452,180
$ 63,672,244 $ 39,024,789
Page 70f21
FOR DISCUSSION PURPOSES ONLY
(a) Veridian Corporation is owned by the City of Pickering, Town of ax, Municipalit of
Clarington and the City of Belleville. Veridian Corporation, as government b mess
partnership, is accounted for on the modified equity basis in se financial sta ents.
Veridian Corporation serves as the electrical distribution utility fi a number of c unities
including the four noted above and conducts non-regulated Utili&S . ce ventur through its
subsidiaries.
The following table provides condensed supplementary c olidated c. information for
the corporation and its subsidiaries for the year ended D ember 31:
THE CORPORATION OF THE CITY OF PICKERING
Notes to the Consolidated Financial Statements
December 31, 2004
5. INVESTMENT VERIDIAN CORPORATION
2003
~O'4 ,242 $ 58,357,713
1 66,690 123,962,633
,979,006 2,848,774
93,574,938 $ 185,169,120
27,446,398 $ 24,134,450
75,294,000 75,294,000
12,055,488 10,435,064
114,795,886 109,863,514
67,285,173 67,285,173
24,910 24,910
11,468,969 7,995,523
78,779,[)52 75,305,606
$ 193,574,938 $ 185,169,120
~'-''''T~ J:~i~iU-W -A~
$ 180,210,703 $ 168,329,147
'5,460,962 5,033,314
181,130,219 170,068,125
$ 4,541,446 $ 3,294,336
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rocumem in 2210 City of Pickering BllIT.. 6/15/05: 3:42 PM
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Financial Position:
Assets
Current
Capital and intangibles
Other
Total assets
Liabilities
Current
Long-term debt
Other
Total liabilities
Page 8 of21
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5. INVESTMENT VERIDIAN CORPORATION (continued)
THE CORPORATION OF THE CITY OF PICKERING
Notes to the Consolidated Financial Statements
December 31, 2004
(b) City of Pickering's equity represented by:
Promissory notes receivable (Note 6) $
Investments in Veridian Corporation
Initial investment in shares of the Corporation 30,496,196
Accumulated income (loss) (502,579)
Accumulated dividends received (227,140)
Increase in value of investments 1,108,821
Total investment $ 30 87$.298
(c) Equity in Veridian Corporation
2004 2003
Balance, beginning of year 56,581,438 $ 55,230,760
E uity share of net income for 1,861,993 1,350,678
Balance, end of year $ 58,443,431 $ 56,581,438
(d) Contingencies and gum;
statements are as folio
(i) Insurance clai ns~.
The Co ration, ill ber of the Municipal Electric Association Reciprocal
Insuran e Exchange (" ARlli"), which was created on January 1, 1987. A reciprocal
insur , ceexchange m be defined as a group of persons formed for the plli-pose of
exc anging reciproc contracts of indemnity or inter-insurance with each other.
provides eneralliability insurance to member electric utilities.
~ r ~ charged to .each me~ber u~ility. consist .of.a le~ p~~ $.l,O?O. of
se~7~~j e e subject to a credit or surCharge. based on each electnc utlllty'S claIms
experience, Insurance limits of up to $20,000,000 per occurrence are covered by
ME .
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Corporation as disclosed in their financial
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/7Document in 2210 City of Fickerrng 81117; 6/15/05; 3:42 PM. .
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Page 9 of21
FOR DISCUSSION PURPOSES ONLY
A class action claiming $500 million in restitutionary pa
on Toronto Hydro on November 18, 1998. The actio
Hydro-Electric Commission as the representative of
all municipal electric utilities in Ontario which hav charged la
overdue utility bills at anytime after April 1 , 1981,
THE CORPORATION OF THE CITY OF PICKERING
Notes to the Consolidated Financial Statements
December 31, 2004
5. INVESTMENT VERIDIAN CORPORATION (continued)
(d) (continued)
(ii) Other claims
The claim is that late payment penalties char ed prior to Mar 1 1, 2002 result in the
municipal electric utilities receiving interest ~e ective rates' excess of 60% per year,
which is illegal under Section 347(1)(b) of e ' 'nal Cod.
The Electricity Distributors Associati is un 'ng e defense of this class action.
At this time, it is not possible to qua ity the effect, If y, on the fmandal statements of
Veridian Corporation, and theref, re on the flnan '8.1 statements of the City for this
reason, no recognition of any otential liabilit has been recorded in the financial
statement of the City. .
(iii) Guarantees - Veridian Co necti~
The Corporation's r lated sU~iai participates in the competitive supply of
electricity market t procure a suppl of electricity for its customers. Based upon the
market participan s credit rating, e market participants are required to post security
prudentials wi e ependent ectricity System Operations (lESO).
At Decemb 31~, 'r quirement was satisfied by the posting of letters of credit
in the am t of $, 88,
(iv)
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V . dian Corporati under the tenus of the shareholder agreement with Enersource
~o~,req es security to meet credit security requirements of First Source
E~~~C9.Tf.~ __ .o~ .~~~ _Source) to power suppliers for power purchase agreement for
~l\jI em pUIJ1U:;C:S.
As at D ember 31, 2004, Veridian Corporation's proportionate share of guarantees
posted behalf of First Source by Enersource Corporation totalled $2,538,000.
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Page 10 of21
FOR DISCUSSION PURPOSES ONLY
THE CORPORATION OF THE CITY OF PICKERING
Notes to the Consolidated Financial Statements
December 31, 2004
5. INVESTMENT VERlDIAN CORPORATION (continued)
( e) Lease commitments
Future minimum lease payment obligations under operating leases ar
$
PROMISSORY NOTES RECEIVABLE If /}
Promissory notes are payable by Veridian Corpor tion a~i Connections Inc. in the amount
of $7,095,000 and $17,974,000 respectively, 1th an interest r e of 7.6% and maturity dates of
November 1, 2006. These promissory notes e convertible int common shares at the option of the
holder at the rate of 1 common share for ev: ry $1,000 of p. ipal then outstanding on or before the
maturity date.
2005
2006
2007
2008
Thereafter
6.
7. DEFERRED REVENUE
2004 2003
$ 19,496,777 $ 15,804,668
2,166,696 1,959,087
14,035 14,957
161,515
1,601,076 1 329785
23,440,099 19,108,497
673,733 768,046
$ 24,113,832 $ 19,876,543
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jt) Document in 2210 City of Pickering 81117: 6/15/05: 3:42 Pi!; .
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Page 11 of 21
7. DEFERRED REVENUE (continued)
Continuity of deferred revenue is as follows:
THE CORPORA.TION OF THE CITY OF PICKERING
Notes to the Consolidated Financial Statements
December 31, 2004
Balance, beginning of year - as previously reported
Ad' ustment for externally restricted contributions
As restated
$
Restricted funds received
Interest earned
4,275,077
786,732
5,061,809
Less
Revenue recognized in current operations
Revenue recognized in capital operations
General deferred revenues recognized
38,562
,419,973
94,313
1,652,848
24,113,832
555,454
990,515
2,070,571
3,616,540
$ 19,876,543
Balance, end of year
8. INTERFUND LO
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As a means of Cling various calt' aI acquisitions, funds are borrowed by the Capital Fund from
Development C arges and Parkland deferred revenue (obligatory reserve funds), These funds a..re
secured by te year promisso notes with interest rates of 5.8% and 5.2% and 5 year promissory
notes with '~er: es of 5. Yo. The financing arrangements and ultimate repayment are approved
by COUll . ugh c entbudget process. For the purpose of these financial statements, the
11"'uu.u"~"" ...,.,,,, .;..... ,"tiC" fA he:. ..,...oo"',...'(r~or1 ft\.Tnt~ 11'\ 'rh,o f"nllrn1't;nn- ~C' '.) 011T"ntl""n'OT"'(7 ,,-t thp .,.~lQtAA
.lvu..a......., ....1..1............ ~ ~~v '"''"'' ""'''' ..._""'-'.,........__ \4..V..... ....LJ. ....~.... .I.............._"l'..u.~E> AU - ...-...~J _... -.._ ............__
loans egotiated, ction:
2004
$ 3,647,747
2,081,757
515,868
134,783
$ 6,380,155
2003
Roads and str tlights
Community acilities, libraries and parks
Fire servi es
Transit ervices
Envir nmental Services
$ 4,007,974
2,200,477
590,575
36,648
147,747
$ 6,983,421
M Do~um.nt in 2210 City of Picker"'9 81117; 6/15/05; 3:42 PM
Page 12 of21
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FOR DISCUSSION PURPOSES ONLY
(a) Post employment benefit liability
The City makes available to qualifying employees who retire b ore the age of 5, the
opportunity to continue their coverage for such benefits as e ended health a drugs.
Coverage ceases at the age of 65. Dependent on eligibility, h ~eragemay. e a shared
financial responsibility between the City and the retired emp IJ . The City so provides
full time and permanent part-time employees a sick . e . ent d any unused
entitlement is accumulated year to year. This aCClllnU ted entitl t' not vested and
therefore does not get paid out at the time of retirement r termination. T e post-employment
benefits obligation at December 31, 2004 and the ch es in the accrue enefit obligation for
the 2004 fiscal year was determined by actuarial val ation prepared a at January 1,2004.
THE CORPORATION OF THE CITY OF PICKERING
Notes to the Consolidated Financial Statements
December 31, 2004
9. POST EMPLOYMENT BENEFITS LIABll.ITY
Information about the City's benefits liability is sf, 0
2004 2003
2,219,981 $ 2,075,691
133,500 130,166
72,800
115,500 98,324
(24,300) 2,800
(219,631) (87,000)
$ 2,297,850 $ 2,219,981
$ 1,930,700 $ 2,343,931
367,150 (123,950)
$ 2,297,850 $ 2,219,981
ns employed in the actuarial valuations are as follows:
Th current trend cost at January 1, 2004 was 4.5% per annum.
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Health costs were assumed to increase at 10% in 2005 and decrease by 1 % increments
per year to an ultimate rate of 5% per year in 2010 and thereafter.
Page 13 of21
Accrued WSIB liability, beginning of year
Expense for the period
Benefits aid durin the eriod
Accrued WSIB liability, end of year
~
2004
2003
THE CORPORATION OF THE CITY OF PICKERING
Notes to the Consolidated FinanCial Statements
December 31. 2004
9. POST EMPLOYMENT BENEFITS LIABILITY (continued)
(b) Workplace safety and insurance obligations (WSIB)
Effective January 1, 2001, the Corporation of the City of Pick ' g became a Sc
employer under the Workplace Safety & Insurance Act and follow a policy of self'
for all its employees.
Information about the City's wsm liability is as follows:
$ 108,022
754,959
(228,008)
$ 634,973
Management, using best estimates, iden' ed that the amo t provided in the liability account
at year-end of $ 631,786 (2003 - $63 ,973) is sufficie to cover the potential liability of all
existing claims granted by WSIB an outstanding as a ecember 31, 2004.
The outcome of any claims med ith ~ terminable at this time.
A WSIB Reserve Fund was stablished ~ool The Reserve Fund balance at December 31,
2004 was $ 378,731 (2003 - $181,023). In dition, the City purchased two insurance policies
that protect the City ag' t significant c ms to the Corporation. The occupational accident
insurance pays lOSS~ c' up to $300 00 per work related accident. The excess workers
compensation ind 't ance h a $300,000 deductible and will pay for claims up to
and including $25 0 r related accident or disease claim. .
10. LONG-TERM L ILITIES
(al ~e b_~iS;~gZ_,~'ti,~_~ ~de~~~f ilie fullowmg
It; lUU~~.)'Y 1 It;liPUlllilUiC iUILllC P<1YIUCIH
of principaf ay a interest charges on long-term
liabilities i ued by the Region of Durham on the
municipa ty's behalf, At the end of the year, the
outsta . ng rincipal amount of this liability is
/ Long-t liabilities, end of year
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2004
2003
$ 8,791~OOO
$ 8,791,000
$ 4,026,000
$ 4,026,000
M . Do;ument in 2210 City of Pickering 81117: 6/15/05; 3:42 P!.i
Page 14 of21
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11. AMOUNTS TO BE RECO
THE CORPORATION OF THE CITY OF PICKERING
Notes to the Consolidated Financial Statements
December 31, 2004
10. LONG-TERM LIABILITIES (continued)
(b) The above long-term liabilities have maturity dates of November 1,20 , July 15,2014
December 23, 2014 with various interest rates ranging from 3.2500 to 5.6%.
repayments are summarized as follows: .
2005
2006
2007
2008
2009
Thereafter
C c) Long-term liabilities include a principal sum 0 $1,
may be raised by the issuance of debentures ver a
Cd)
(e)
se long-term liabilities is $277,609 (2003 -
REVENUES
2004
$ 2,118,850
631,786
6,380,155
8,791,000
$ 17,921,791
2003
$ 2,130,481
634,973
6,983,421
4,026,000
$ 13,774,875
12.
..ti..NCES AT THE END OF THE YEAR
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rocument in 2210 City of Pickering 81117: 6/15/05; 3:42 PM
/1 FOR DISCUSSION PURPOSES ONLY
2004
2003
88,944
$
32,208
Page 15 of2]
(b) Capital Fund Balance
Funds availab1eJor acquisition of
tangible capital assets $ $
Acquisition of tangible capital assets
expected to be
Financed by long-tenn liabilities (2,370,701)
Financed by taxation or user charges (330,436)
Financed by donations (616,793)
$ 612,984
(c) Reserves and Reserve Funds
2003
Reserves set aside for special purposes by C uncil
Working capital 400,000 $ 400,000
Self insurance 940,514 940,514
Replacement of capital equipment 758,175 730,713
Contingencies 9,053,320 7,813,558
Rate stabilization ~ 2,619,565 2,177,209
City's share for developmen charge 1,921,332 2,685,297
Transit 1,025,740 1,106,634
Continuing Studies 233,160 141,884
Vehicle Replacement 25,000
Total Reserves 16,976,806 15,995,809
THE CORPORATION OF THE CITY OF PICKERING
Notes to the Consolidated Financial Statements
December 31, 2004
12. MUNIClPALFUND BALANCES AT THE END OF THE YEAR (continued)
380,604 386,726
1,455,054 1,696,180
33,713 7,450
378,731 181,023
2,248,102 2,271,379
'$ 19,224,908 $ 18,267,188
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Due to significant surpluses, OMERS had declared a temporary contribution holiday effective
Au~ 1, 1998 through to December 31, 2002.-0MERS contributions, at a reduced rate,
co enced January 1,2003. Full contribution rates commenced January 1,2004.
~tributions on account of current service fctr 2004 were $ 1,400,257 (2003 - $421,221).
MY Dpcumentin 2210 City of Pickering 81117: 6/15/05; 3:42 PM Page 16 of 21
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14. TRUST FUNDS
Trust funds administered by the municipality amounting to $ 255,359 (2003 - 249,517) have ot
been included in the Consolidated Statement of Financial Position nor hav their operations een
included in the Consolidated Statement of Financial Activities 0
THE CORPORATION OF THE CITY OF PICKERING
Notes to the Consolidated Financial Statements
December 31 2004
15. CLASSIFICATION OF EXPENDITURES BY OBJECT
The Consolidated Statement of Financial Activities presents t
following classifies those same expenditures by object:
Salaries, wages and employee benefits
Operating materials and supplies
Contracted Services
Rents and financial expenses
External transfers to others
Tan Oble ca ital assets
Total expenditures by object
16. RELATEDPARTYTRANSACTI NS ~
Veridian Corporation
2003
$ 31,602,803
11,345,838
. 3,936,292
1,008,549
134,866
9,747,699
$ 57,776,047
ervices from Veridian Corporation, a corporation in
Veridian also provides streetlight and power line
Bal ces
ccounts payabl
Promissory no s receivable
2004 2003
$ 1,905,294 $ 2,138,345
$ 31,384 $ 38,393
$ 1 ;690,604 $ 1,613,073
$ 283,550 $ 255,014
$ 25,069,000 $ 25,069,000
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FOR DISCUSSION PURPOSES ONLY
(i) The City has provided indemnities under lease agreements for th se of various f; ilities or
land. Under the terms of these agreements the City agrees to in~the count arties for
various items including, but not limited to, all liabilities, 1 s, 'ts, and da ges arising
during, on or after the term of the agreement. The maxim 0 of any, otential future
payment cannot be reasonably estimated.
THE CORPORATION OF THE CITY OF PICKERING
Notes 10 the 'Consolidated Financial Statements
December 31 2004
17. GUARANTEES
In the normal course of business, the City enters into agreements which co
City's primary guarantees are as follows:
(ii) The City indemnifies employees and elected officia for various ite s including, but not
limited to, all costs to settle suits or actions due to a ociation with th City, subject to certain
restrictions. The City has purchased liability ins~e to rnitigat the cost of any potential
future suits or actions. The term of the indemni ca' n' not ex citly defmed, but is limited
to the period over which the indemnified part se an em oyee or elected official of the
City. The maximum amount of any potenti future pa nt annot be reaso~ably estimated.
(iii) The City has entered into agreements t t may include' enmities in favour of third parties,
such as purchase and sale agreeme , confidentiali~ agreements, engagement letters with
advisors and consultants, outsourc' g agreements, 1 sing contracts, information technology
agreements and service agreem .~' fication agreements may require the City
to compensate counterparties Ii losses ed y the counterparties as a result of breaches
in representation and regular ns or as a sul of litigation claims or statutory sanctions that
may be suffered by the co terparty as a co equence of the transaction. The terms of these
indemnities are not e licitly defmed and the maximum amount of any potential
reimbursement cannot e reasonably esti ated.
The nature of these in e ~ements prevents the City from making a reasonable
estimate of the maxim mere due the difficulties in assessing the amount of liability which
stems from tbe predictabi '. o. future events and the unlimited coverage offered to
counterparties. H' tori cally, tbe City has not made any significant payments uIlder such or similar
indelIlllificatioD greeme~~~' an7refore no amount has been accrued in the balance sheet with
18. ~::~en/
The proved ~ and capital budgets for 2004 are reflected on the Consolidated Schedule of
Op ating Fund Fin cial Activities and Fund Balance, Consolidated Schedule of Capital Fund
F" cia! Activitie and Fund Balance, and the Consolidated Statement of Financial Activities. The
udgets establis d for the capital fund operations are on a project-oriented basis, the costs of which
j' may be carried/out over one or more years and, therefore, may not be comparable with the current
year ac~tul ounts. As well, the municipality does not have a budget for activity within Reserves
/ and Rese e Funds, with the exception being those transactions which flow through either the
operatin or capital fund budgets. Budget figures bave been reclassified for lhe purposes of lhese
/ state1.Ilt'nts to comply with PSAB reporting principles,
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MI Document in 2210 City of Pickering 81117: 6/15/05: 3:42 PM Page 18 of 21
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THE CORPORATION OF THE CITY OF PICKERING
Consolidated Schedule of Operating Fund Financial
Activities and Fund Balance
Year ended December 31, 2004
2004
Budget
REVENUES
Residential and farm taxation
Commercial and industrial taxation
Taxation from other governments
User charges
Government grants. and fees
Developer contributions and donations
Investment income
Penalties and interest on taxes
Fines
Interest on promissory notes
Other
Total revenues
$ 22 24,454
,576,336
9,087,998
8,853,936
751,024
409,186
646,104
] ,369,228
493,672
2,138,345
2,329 639
53,979,922
10,250,908 8,869,339
12,486,523 11,873,089
10,490,626 10,015,997
13,745 1,644,738
358,140 287,836
14,581,546 13,452,146
1,776,151 1,885,203
49,957,639 48,028,348
6,907,368 5,951,574
(5,069,137) (4,604,156) (4,987,257)
2,798,466 (1,163,779) ( 692,320)
(1,349,181 ) (1,103,649) (991,724)
(8,627)
(89,500) (11,631) 54,790
(3,187) 526,951
44,397 67,683
(3,709,352 (6.850,632 (6.021,877
(24,575) 56,736 (70,303)
24,575 32,208 102,511
$ $ 88,944 $ 32,208
EXPENDITURES
General government
Protection to persons and property
Transportation services
Environmental services
Social and family services
Recreational and cultural services
Plannin and develo ment
Total ex enditures
NET REVENUES
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GE IN OPERA T G FUND BALANCE
ERA TING FUN~ALANCE,
BEGINNING F YEAR
OPERATING D BALANCE,
END OF EAR
Page 19 of21
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THE CORPORATION OF THE ,CITY OF PICKERING
Consolidated Schedule of Capital Fund Financial Activities
and Fund Balance
Year ended December 31. 2004
2004 2003
Budget Actual Actual
(Restated
Note
REVENUES
Grants $ 1,233,001 $ $
Developer contributions and donations 336,100
Development charges and developer
contributions earned 990,515
Other 45,863
Total revenues 2,436,581
EXPENDITURES
General government 9 .~ 16,495 416,056
Protection to persons and property 86~9 189,459 316,177
Transportation services ,909,953 2,562,144 5,231,771
Environmental services 6,244 223,819
Social and family services 21,472 7,215
Recreation and cultural services 2,545,732 3,530,447
Planning and develo ment 22,214
Total ex enditures 5,841,546 9,747,699
NET EXPENDITURES (3,798,580) (7,311,118)
FINANCING AND TRANSFERS
Transfers from Operating Fu ~ 5,069,137 4,604,156 4,987,257
Transfer from Reserves Fu cis 570,000 351~71 (5,540)
Proceeds from debentur 2,212,000 5,031,000
Proceeds from intern a oans 267,000 349,071
Repayment of inte Joan (23,990) (298,000)
Net financing an ansfers 7,851,137 10,229,537 5,032,788
6,430,957 (2,278,330)
6i2,984 2,891,3 i4
$ $ 7,043,941 $ 612,984
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Page 20 of21
FOR DiSCUSSION PURPOSES ONLY
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THE CORPORATION OF THE CITY OF PICKERING
Consolidated Schedule of Reserves and Reserve Funds
Financial Activities and Fund Balance
Year ended December 31,2004
2004
REVENUES
Developer contributions and donations
Investment income
$
NET TRANSFERS FROM (TO) OTHER FUNDS
Operating Fund
Ca ital Fund
Total net transfers
692,320
5,540
697,860
CHANGE IN RESER YES AND RESERVE
FUND BALANCE
&26,720
RESERVES AND RESERVE FUNDS,
BEGINNING OF YEAR - AS
PREVIOUSLY REPORTED
18,572,282
17,745,562
Adjustment for externally restricted
contributions (Note 7)
AS RESTATED
RESERVES AND RESERVE F
END OF YEAR
(305,094)
18,267,188
(305,094)
17,440,468
$ 19,224,908
$ 18,267,188
in 2211 City of Pickering 81117: 611512005: 3;41 PM
Page 21 of21
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Financial Statements of
THE CORPORATIO
THE CITY OF PIC
TRUST FUNDS
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MN Document in 2290 Pickering- Trust-Funds-124 (81122): 6/15/05: 3:32 Mj draft
FOR DISCUSSION PURPOSES ONLY
Auditors'Report
Deleltte & Touche LL
5140 Yonge Street
Suite 1700
Toronto ON M
Canada
To the Members of Council, Inhabitants and Ratepay.ers
of The Corporation of the City of Pickering
We have audited the statement of fmancial position of the T st unds of the orporation of the City of
Pickering as at December 31, 2004 and the statement of fm ci
then ended. These financial statements are the responsibi "ty
is to express an opinion on these fmandal statements b ed on 0
We conducted our audit in accordance with C Those
standards require that we plan and perform an a it to obtain rea nable assurance whether the financial
statements are free of material misstatement. ~ udit inclu s examining, on a test basis, evidence
supporting the amounts and disclosures in fm' e ents. An audit also includes assessing the
accounting principles used and signifi estima mad by management, as well as evaluating the
overall financial statement presentation.
In our opinion, these financial stat
the Trost Funds of the Corporati
operations and changes in finan 1al
Canadian generally accepted c
M -Document in 2290 Pickering- Trust-funds-124 (81122); 6/15/05: 3:32 PM
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THE CORPORATION OF THE CITY OF PICKERING
TRUST FUNDS
Statement of Financial Position
December 31, 2004
OHRP
2004
Dorothy Card
Estate
2003
ASSETS
Cash
Investment
Interest receivable
Loans receivable
$ $ 24,571 10,485
220,363 231,741
4,310 662
6,115 6,629
$ 6,115 $ $ 249,517
$ 6,115 $ 249,517
TRUST FUI\r:D POSITION
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wor7 in 229/ Pickering- Trust-Funds-/24 (8//22); 6//5/2005; 3:3/ PM
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Page 1 00
THE CORPORATION OF THE CITY OF PICKERING
TRUST FUNDS
Statement of Financial Activities
Year ended December 31, 2004
OHRP
2004
Dorothy Card
Estate
REVENUES
Interest
$
338
$ 6,356
EXPENDITURES
Provincial payments
Administration char es
810
42
852
NET (EXPENDITURES) REVENUE
FUND BALANCE, BEGINNING
OF YEAR
FUND BALANCE,
END OF YEAR
(514)
$
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in 2291 Pii:kering- Trust-Funds-124 (81122): 6/15/2005: 3:31 PA{ .
FOR DISCUSSION PURPOSES ONLY
742
40
782
6,326
249~17 243,191
$ 255,359 $ 249,517
Page 2 of3
Significant accounting policies adopted include:
THE CORPORATION OF THE CITY OF PICKERING
TRUST FUNDS
Notes to the Financial Statements
December 31, 2004
1. ACCOUNTING POLICY
The Trust Funds financial statements of The Corporation of the Ci of Pickering
representation of management prepared in accordance with Canadian ge erally accepted
principles.
Basis of accounting
2. ONTARIO HOME RENEWAL PROG
was ablished by the Ontario Ministry of
t make loans to assist owner occupants to
loc property standards. Individual loans are
Ie ortion is $4,000.
. discontinued this program. Unused funds were
arch 1, 1994. utstanding balances of loans issued prior to July 16,
ed unde the terms of the original program. The City continues
o standing loans and remit the proceeds, net of a 5%
of M llcipal Affairs and Housing.
3.
T City of Picke . g has established a trust fund for the Dorothy Card Estate for the care and
pkeep of the stitute elderly. The fund balance is comprised of cash, investments and
accumulated in est amounting to $249,244 (2003 - $242,888).
STAT~ OF CIlANGES IN FINANCIAL POSITION
'stat ent of changes in financial position has not been presented as the information is readily
dete . able from the information provided.
7Document in 2290 Pickering- TrU..t-Fu~S-124 (811EZ): 6/15/05: 3;32 PM Page 3 of 3
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Financial Statements of
December 31, 2004
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MN Document in 2206 Library FS.notes : 6/15/05: 3;59 PM
FOR DISCUSSION PURPOSES ONLY
~uditors'lleport
Oeloltte &. Touche LL
5140 Yonge Street
Suite 1700
Toronto ON M2 6L7
Canada
We conducted our audit in accordance with anadian gene accepted auditing standards. Those
standards require that we plan and perform a~. . sonable assurance whether the financial
statements are free of material misstatem 1. 't m udes examining, on a test basis, evidence
supporting the amounts and disclosures' the fman 1 s ements. An audit also includes assessing the
accounting principles used and signi ant estimates de by management, as well as evaluating the
overall financial statement presentati
In our opinion, these financial s t
the City of Pickering Public L' ra
the changes in its financial .ositl
accepted accounting pn..Tld es.
s present airly, in all material respects, the fmancial position of
B a ecember 31, 2004 and the results of its operations and
- r the y, ar then ended in accordance with the Canadi3.l1 generally
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. CITY OF PICKERING
PUBLIC LmRARY BOARD
Table of Contents
December 31, 2004
Statement of Financial Position
Statement of Financial Activities and Fund Balance
Notes to the Financial Statements
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CITY OF PICKERING
PUBLIC LIBRARY BOARD
Statement of Financial Position
December 31, 2004
FINANCIAL ASSETS
LIABILITIES
CURRENT
Accounts payable and accrued liabilities
Due to City of Pickering
Post-em loyment benefits obligation (Note 4)
NET FINANCIAL LIABILITIES
NON-FINANCIAL ASSETS
Prepaid expense
Inventory
NET LIABILITIES
BOARD POSITION
AMOUNTS TO BE RE
2004
$
2,060
59
7,260
60,953
70,332
$ 72,176
9 1, I 00
163,276
(151,036) (92,944)
21,658
1,178
$ (128,200)
267
1,577
$ (91,100)
. $ (128,200) $ (91,100)
~~~~'"~~m.~~:V~~ ~.~
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Page 1 of6
The fmanciaI statements of the City of Pickering Public Library Board the representat' ns of
management prepared in accordance with Canadian generally acc~ accounting . ciples
established by the Public Sector Accounting Board (pSAB) of the C adian fustitute 0 Chartered
Accountants. / If.
Significant accounting policies adopted by the Library Board are s foYb~
CITY OF PICKERL.~G
PUBLIC LmRARYBOARD
Notes 10 the Financial Statements
December 31, 2004
1. SIGNIFICANT ACCOUNTING POLICIES
Basis of accounting
(b) Capital assets
lifetime
(c)
Cd)
The pI: para' on of fin cial statements in conformity with Canadian generally accepted
acco f~~'ples quires management to make estimates and assumptions that affect the
I rt ~moun; f sets, liabilities and the disclosure of contingent liabilities at the date of
Ie finan~~ents and the reported amounts of revenues and expenditures during the
period. /0 solIs could differ from those estimates.
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In 2004, the Library Board adopted fully the local government accountin standards issued y the
Public Sector Accounting Board of the Canadian Institute of Chartered countants relat to Post-
Employment Benefits, Compensated Absences and Termination Bene ts.Previous1y, e costs of
providing the sick bank program were recorded when paid. Thes~are now cognized as
employees earn these entitlements through service. This chang" unting licy has been
applied retroactively and the comparative figures included in t e c tat ents have been
restated to conform with the accounting policies adopted for th current year.
CITY OF PICKERING
PUBLIC LffiRARY BOARD
Notes to the Financial Statements
December 31, 2004
2. CHANGE IN ACCOUNTING POLICY
The adoption of these standards has resulted in the fo owing signific
previously reported in the 2003 financial statements:
.. "Post-employment benefits obligation" and " m~ be re vered from future revenues"
reported on the statement of fmancial pos' ion ea creas a by $45,900 at December 31,
2002. .
· "Employment benefits expenditures" and "increase in ounts to be recovered" reported on
the statement of fmancial activi "es and fund ba ce each increased by approximately
$7,800 for the year ended Dece e~3.
In addition, the adoption of these s dards res ed in the following changes to the amounts
reported for the year ended Dece er 31, 2004:
· "Post-employment b
reported in the stat
of approximately 63
.. ~. end" ures" and "increase in amounts to be recovered in future
t of financial activities have each increased by approximately
3.
CAPITAL~~URE
Capital p~(tures nere curre~ to acquire.~ture and equipm~t in the am~unt ~f $367,528.
Prior ar caPfu\...1We "tures of $57Y,625 included an amoWlt ot $230,325 tor Library .'book
coll tion", For 2tlO~, all Library book costs were budgeted under operating expenditures, and
ac ordingly the op ating budget for book purchases was increased by an amoUnt similar to that
eviously budget a Wlder capital expenditures.
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CITY OF PICKERING
PUBLIC LmRARY BOARD
Notes to the Financial Statements
December 31, 2004
4. POST EMPLOYMENT BENEFITS OBLIGATION
The Library makes available to qualifying employees who retire befi e the age of
opportunity to continue their coverage for such benefits as extended h th and drugs.
ceases at the age of 65. Dependent on eligibility, health coverage y bea shar :financial
responsibility between the Library and the retired employees. The also provi es full time
and permanent part-time employees a sick time entitlement d unused .tlement is
accumulated year to year. This accumulated entitlement is not est ere re does not get
paid out at the time of retirement or termination. The poS' employment fits obligatioII at
December 31, 2004 and the changes in the accrued benefit ligation for the 04 fiscal year was
detennined by an actuarial valuation prepared January 1,20 4.
leave entitlements were
Information about the Library's benefits liabilities
2004 2003
$ 91,100 $ 78,600
13,300 10,100
36,100
800 100
8,500 2,300
(21,600)
$ 128,200 $ 91,100
2004 2003
$ 139,500 $ 94,400
(11,300) (3,300)
$ 128,200 $ 91 ,1 00
The main C~Pf ns employed in the actuarial valuations are as follows:
1a) iscount~
The present v ue as at December 31, 2004 of the future benefits was determined using a
discount rat of 6%. .
/ (b) Dental!'t
/ The cent trend cost at January 1,2004 was 4.5% per annum.
(c)
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Health costs were assumed to increase at 10% in 2005 and decrease by 1 % increments per year
to an ultimate rate of5% per year in 2010 and thereafter.
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The Library Board makes contributions to the Ontario Municipal Emp yees Retirem
(OMERS), which is a multi-employer plan, on behalf of eligible membe of its staff. The Ian is a
defined benefit plan that specifies the amount of the retirement befit to be recei ed by the
employees based on the length of service and rates of pay. I d..
Due to significant swpluses, OMERS had declared a tempor co~~ ho '(lay, wbich was
effective August 1, 1998 through December 31,2002. The Li ary Board res d contributions at
a reduced rate, commencing January 1, 2003. As of Janu 1, 2004 the Li rary Board resumed
contributions at the full rate and an amount of $122,244 03 - $37,517) as paid to OMERS on
behalf of its members during the year.
CITY OF PICKERING
PUBLIC LmRARY BOARD
Notes to the Financial Statements
December 31, 2004
5. PENSION AGREEMENTS
readily determinable from the financial state
ed, as the related information is
6.
7. GUARANTEES
In tbe normal course of business, the ibrary~ agreements which contain guarantees. The
Library's primary guarantees are as allows: J '\)V~~;
(i) The Library indemnifies mployees and b ard members for various items including, but not
limited to, all costs to ettle suits or a 'ons due to association with the Library, subject to
certain restrictions. ~.~ has p chased liability insurance to mitigate the cost of any
potential future sui 0 cf " he erm of the indemnification is not explicitly dermed, but
is limited to the erio er will the indemnified party served as an employee or board
member of th Library. m 'mum amount of any potential future payment cannot be
reasonably e imated.
(ii) The Lib bas entered . to agreements that may include indemnities in favour of third
Parties~p. urchas and sale agreements, confidentiality agreements, engagement letters
with a . ors nd nsultants, outsourcing agreements, leasing contracts, information
te 0 agI; ts and service agreements. These indemnification agreements may
quire th~ to compensate counterparties for losses incurred by the cotinterparties as ~
result of breac s in representation and regulations or as a result of litigation claims or
statutory san ions that may be suffered by the counterparty as a consequence of the
transaction. e terms of tbese indemnities are not explicitly defined and the maximum
amount 0 any potential reirnbursement cannot be reasonably estimated.
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The nature of these indemnification agreements prevents the Library from making a reasonable
estimate the maximum exposure due to the difficulties in assessing the amount of liability which
stems om the unpredictability of future events and the unlimited coverage offered to
coun rparties. Historically, the Library has not made any significant payments under such or
si ar indemnification agreements and therefore no amount has been accrued in the Statement of
E' ancial Position with respect to these agreements.
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