HomeMy WebLinkAboutCS 33-07
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Report Number: CS 33-07
Date: September 10, 2007
Cit.J1 0#
REPORT TO
EXECUTIVE COMMITTEE
From:
Gillis A. Paterson
Director, Corporate Services & Treasurer
Subject:
2006 Year End Audit
Recommendation:
1. That Report CS 33-07 of the Director, Corporate Services & Treasurer be
received; and,
2. That the 2006 draft Audited Consolidated Financial Statements for the City of
Pickering be received and forwarded to Council for approval.
Executive Summary:
Not applicable
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Financial Implications: None. This report provides the draft Audited Consolidated
Financial Statements for the year ended December 31, 2006.
Sustainability Implications:
implications.
This report does not contain any sustainability
Background: The Audit of the consolidated financial statements for the year
ended December 31, 2006 has been completed. Attached is the draft Audited
Consolidated Financial Statements.
The draft Consolidated 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 LLP are responsible to express an
opinion on these Consolidated 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 33-07
Date: September 10, 2007
2006 Year-End Audit
Page 2
The Consolidated Financial Statements also includes the activities of the City of
Pickering Public Library Board and the proportional consolidation of Ajax Pickering
Transit Authority. Even though transit operations were transferred to the Region
effective January 1, 2006 the final accounting and formal dissolution of APT A was not
completed at December 31, 2006. Therefore for reporting purposes any transactions,
remaining assets and liabilities pertaining to APT A have been consolidated in the City's
financial statements for the reporting year.
Overall net assets marginally increased over prior year as a result of an increase in
financial assets of approximately $10.6 million offset by an increase in liabilities of
approximately $9.6 million.
Financial Assets
The increase in financial assets is primarily due to an increase in the temporary
investments balance ($7.6M) which arose due to the timing of supplementary taxes
billed and collected at the end of 2006, the overall increase in the obligatory Reserve
Fund balances, primarily Development Charges Reserve Fund and Federal Gas Tax
Reserve Fund and a dividend received from Veridian in late December.
The taxes receivable increase of approximately $1.0 million over the prior year is
reasonable since total taxes billed increased over the prior year. The outstanding
receivable balance at December 31, 2006 represents 8.2% (2005 - 7.8%) of total taxes
billed which is comparable to the prior year.
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The increase in the investment in Veridian Corporation arises due to the City's share of
Veridian's net income offset by the dividends received from Veridian during the course
of the year.
Liabilities
The increase in liabilities is primarily due to an increase in the accounts payable and
accrued liabilities balance ($6.3M) that arose due to an expenditure accrual for an
expected settlement of an assessment appeal that has been outstanding for a number
of years. A report summarizing the settlement is currently being prepared for
presentation to Council in September.
The increase in deferred revenue arises from the increase in the obligatory Reserve
Funds which are made up of the following: Development Charges, Parkland, Third
Party/Developer's Contribution, Ontario Transit Renewal, Provincial Gas Tax and
Federal Gas Tax. In compliance with generally accepted accounting principles, these
restricted funds are to be reported as deferred revenue. The Development Charges
Reserve Fund and Federal Gas Tax fund balance increased because of the timing of
receipt of funds and occurrence of related capital expenditures.
Report CS 33-07
Date: September 10, 2007
2006 Year-End Audit
Page 3
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The increase in long-term liabilities is the net effect of the issue of $2.792 million in
debentures in July 2006 and the annual debt payment.
Revenues & Expenditures
Consolidated revenues and expenditures are comparable with the budget with the
exception of government grants and fees, investment Income and general government
expenditures which are discussed below.
The budget for government grants and fees includes provincial and federal grant
monies, such as COMRIF and federal gas tax, identified in the 2006 capital budget to
fund various capital projects. Because of the timing of capital expenditures, revenue
can only be recognized for those expenditures incurred. Since the identified projects
were not fully completed, the revenue is not fully recognized in that year and thus
provides this difference from budget.
The budget for investment income is usually a conservative estimate as it is difficult to
predict interest rates and timing of cash on hand. The variance from budget of
approximately $800K arose due to the unexpected interest rate increase over the
course of the year and excess cash on hand from timing of receipts. The budget
""" estimate, although remaining somewhat conservative, was increased to $1,000,000 for
2007 to reflect the increased interest rates and higher investment balance.
The higher than expected general government expenditures results from the City's
share of the accrual for the expected assessment appeal settlement as noted above.
As you are aware capital expenditures for projects may be incurred over multiple years
and often are not comparable to budget. As a result 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, approximately $3.8 million was
budgeted in 2006 for external subdivision works of which approximately 10% of this
amount was incurred in 2006.
Attachments:
1. 2006 Draft Audited Consolidated Financial Statements
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Report CS 33-07
2006 Year-End Audit
Date: September 10, 2007
Page 4
Prepared By:
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(~ .. J.~ a" i' "- (-<~ tA
ristlne Senior
Manager, Accounting Services
GAP/vw
Attachment
Copy: Chief Administrative Officer
Approved I Endorsed By:
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Gillis A. Paterson
Director, Corporate Services & Treasurer
Recommended for the consideration of
Pickering City Council
Thomas J. Quinn, RDMR., CMM III
Chief Administrative Officer
-<'!W~lW'
CS 33-0j7
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Consolidated Financial Stotement'7'(;; /
THE CORPORATIoN O~7~ /
CITY OF PICKE,iNG
December 31, 20001" /
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MC Document m 22JJ City of Pickering Notes (7/10/073.17 PM
FOR DISCUSSION PURPOSES ONLY
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Deloitte & TOtXhe LLP
5140 Yonge/Street
Suite 1700/
Toronto ON M2N 6L7
Canad:;/
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T.eI/416-6.01-6150 II
FiD<: 416-601-6151
.www.deloltte.ca I
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We have audited the consolidated statement of financial pclsiti6h of the Csiporation of the City of
Pickering as at December 31, 2006 and the consolidated stat6mentsOf financial activities and of changes
in financial position for the year then ended. These finan>ial statemen!s,are}he responsibility of the City's
management. Our responsibility is to express an opinioron these financ,Ystatements based on our audit.
We conducted our audit in accordance with Can~tkn generally ae{epted auditing standards. Those
standards require that we plan and perform an a~.:ili~~ obtain reaso11able assurance whether the financial
statements are free of material misstatement. IAn audit include( examining, on a test basis, evidence
supporting the amounts and disclosures in th~finatlciaJstatemiI;ts. An audit also includes assessing the
accounting principles used and Significallt/estimat~s. !hade;by management, as well as evaluating the
overall financial statement presentation. 1/ \\\ I
In our opinion, these consolidated fir~cial statements~tsent fairly, in all material respects, the financial
position of the Corporation of th~li'~y of Pickeririg as at December 31, 2006 and the results of its
;~~:~~~;'a~;:p:~~ ~;;;7~~~~7[O' the yea, then ended ;n a"",dance whh Canad;an
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Chartered Accoun)ants
Licensed Public;Accountants
Toronto, on~.o .
April 13, 07
Auditors' Report
To the Members of Council, Inhabitants and
Ratepayers of the Corporation of the City of Pickering
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700eument In 2211 City of Piekerlng Notes ( 7/10/07; J,17 PM
/ FOR DISCUSSION PURPOSES ONLY
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THE CORPORL\TION OF THE CITY OF PICKERING
Table of Contents
December 31,2006
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Consolidated Schedule of Operating Fund Financial Activitie~cYFund Ba]anc/I
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Consolidated Schedule of Capital Fund Financia] Acti~ and Fund:s~~e
Con,ol;dated Schedule nfRos,"'" ",d Rcs",ve F~.....n..d. ,...f....i.nandal A~e' and Fund Balance
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Consolidated Statement of Financial Position
Consolidated Statement of Financial Activities
Consolidated Statement of Changes in Financial Position
Notes to the Consolidated Financial Statements
/Document in 2211 City of Pickering Notes ( 7/10/07. 3.17 PM
FOR DISCUSSION PURPOSES ONLY
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THE CORPORATION OF THE CITY OF PICKERING
Consolidated Statement of Financial Position
December 31,2006
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FINANCIAL ASSETS
Cash
Temporary investments
Taxes receivable
Accounts receivable
Other current assets
Investment in Veridian Corporation (Note 4)
Promissory notes receivable (Note 5)
LIABILITIES
Accounts payable and accrued liabilities
Other current liabilities
Deferred revenue (Note 6)
Long-term liabilities (Note 9)
Post-employment benefit liability (Note 8(a))
WSIB benefit liabilities (Note 8(b))
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NET FINANCIAL ASSETS
NON-FINANCIAL ASSET
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Inventory
NET ASSETS
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2006
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$ 2,969,181 / $
50,867,722/
11,367,986
4,892,92'"
53e-;363
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34,768,015
2,5,069,000
,130,464,291
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/ II /17,625,266
/ .' // 61,168
/29,~292
/ 9~929,000
/2,316,950
/ 690,331
/ 60,057,007
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/ $
70,407,284
209,760
70,617,044
2005
2,711.
43,287;887
10,315,099
4;532,772
/ 422,075
/33,558,427
/ 25,069,000
/ 119,906,416
11,334,288
254,032
27,658,305
7,984,000
2,306,250
952,898
50,489,773
69,416,643
$
438,987
69,855,630
$ (50,232) $ 1,271
5,209,345 4,079,053
20,148,226 20,725,437
62,880,035 61,670,447
88,187,374 86,476,208
(17,570,330) ( 16,620,578)
$ 70,617,044 $ 69,855,630
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THE CORPOR4.TION OF THE CITY OF PICKERING
Consolidated Statement of Financial Activities
Year ended December 31, 2006
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/ 2005
Actual;1 Actual ;/
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$ 26,111,967 $ 26,474\748 $ 26,52~;006
6,545,118 6,683,041 6,)89,020
6,887,159 r,~b7,311 ~(623,333
7,984,58: /7,194,785 /8,951.432
4,643,83~ /1 2,$06,426. 710,432
79,000 549,778, / 680,442
1,646,550 / 1,552,588// 1,063,284
605,0~Y 1,498,7~ 945,532
1,380,900 1,698/53 1,534,795
50r,000 5~,341 550,611
1,~2,2fO 1, 05,244 1,905,244
V,158-',922 602,157 4,691,574
/~9,394,360 ;58,493,431 62,773,705
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I 12,117,23/1
14'67~'0 .
5,635, 2
/ 3 ,619
/58,552
/ 1~;708,378
/2,724,862
52,161,586
2006
Budget
REVENUES
Residential and farm 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 14)
Current
General government
Protection to persons and propeliy
Transportation services
Environmental services
Social and family services
Recreational and cultural services
Plannin and develo ment
Capital
General government
Protection to persons and prop
Transportation services
Environmental services
Social and Family Servic s
Recreation and culturay{ervices
Plannin and develo ment
1,351,880
1,701,308
6,755,500
125,000
211,000
2,672,665
6,750
12,824,103
64,985,689
te 4 c))
NET EXPE DFCURE)REVE E
INCREA% (DECRJ2:ASE) I AMOUNTS
TO I}E ~COVERED'
Ptmcipal repayment f debentures
)rincipal repaymcyIt of internal loans
Procecds from debentures
Post-employm61t benefits liability
Proceeds frorh internal loans
WSlB be fit liabilities
(5,591,329
(1,808,039)
3,013,757
686,000
1,891,718
$ (3,699,611 )
DECRE E IN NON-FINANCIAL ASSET
CHANE IN FUND BALANCES
Worksh et In 2210 City of Pickering FS (//102739)- 7/10/2007; 3:14 PM
FOR DISCUSSION PURPOSES ONLY
15,302,981
13,513,808
5,308,877
46,718
333,056
16,047,858
1,928,424
52,481,722
9,377,042
12,977,758
12,165,029
42,682
348,748
15,068,380
1,7 49,085
51,728,724
1,280,176 1,161,949
1,739,315 253,167
3,570,541 6,644,547
91,493
14,945 15,314
1,993,404 3,207,192
782 4,411
8,690,656 11,286,580
61,172,378 63,015,304
3,669,588 3,227,016
990,641 2,985,417
(847,000) (807,000)
(1,095,381 ) (1,110,725)
2,792,000
10,700 8,400
352,000 287,000
262,567 321,112
949,752 (1,301,213)
(229,227) (9,220)
$ 1,711,166 $ 1,674,984
Page 2 of21
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THE CORPORATION OF THE CITY OF PICKERING
Consolidated Statement of Changes in Financial Position
Year ended December 31,2006
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2006
2005
NET INFLOW (OUTFLOW) IN CASH RELATED
TO THE FOLLOWING ACTIVITIES
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OPERATING
Net revenue
Change in equity in Veridian Corporation
$ 990 64'1 .
(3,66~588)
(2~78,947)
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(2 1,567)
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Uses
Increase in taxes receivable
Increase in accounts receivable
Increase in other current assets
Decrease in other current liabilities
Decrease in WSIB benefit liabilities
Sources ,I
Increase in accounts payable and accrued lia6ilities
Increase in deferred revenue /
Increase in post-employment benefit liability
Increase in WSIB benefit liabilities I
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6,290,978
1,775,987
10,700
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3,432,860
(7,579,835)
2,460,000
(5,119,835)
FINANCINNG
Proceeds from dy enturcs issued
Principal repa r I ent of debentur'
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$ 2,985,4] 7
(},'227,016)
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(834,292)
(1,277,270)
(141,626)
( 159,372)
(2,412,560)
309,651
3,544,473
8,400
321,112
4,183,636
1,529,477
(8,568,563 )
1,968,000
(6,600,563)
2,792,000
(847,000) (807,000)
1,945,000 (807,000)
258,025 (5,878,086)
2,711,156 " 8,589,242
$ 2,969,181 $ 2,711,156
NET INC EASE (D~C~?ASE) IN CASH
CAS~EGINN[NG F YEAR
CA , END OF YEAR
Worksh et in 2210 City of Pickering FS (#102739): 7/10/2007 3:14 PM
FOR DISCUSSION PURPOSES ONLY
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THE CORPORATION OF THE CITY OF PICKERING
Notes to the Consolidated Financial Statements
December 31,2006
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SIGNIFICANT ACCOUNTING POLICIES / /
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The consolidated financial statements of The Corporation of the City of Pickeri~g (the "City") a~
the representations of management prepared in accordance with generally/accepted accounting
principles for local governments as established by the Public Sector Accou~ting Board ("PSAB") of
the Canadian Institute of Chartered Accountants. Significant accounting policies adopte! by the
City are as follows: / /' /
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(a) Reporting entity / " ,
(i) Consolidated statements / /
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The consolidated financial statements reflect/tl~e assets, liabjri'ties, revenues and
expenditures of the operating fund, capitifll nd, reserve fun,0s and reserves. The
reporting entity is comprised of the activitie oflo/l committeelof Council and the City
of Pickering Public Library Board which is onti:~l!~a by the/ity.
All material inter-fund transactions and~ances a;~~lim~ted on consolidation.
(ii) Proportionate consolidation II II
The consolidated financial state~ts reflect the city's proportionate share of the assets,
liabilities, revenues and expej;&;~...~res of the AJ,aX Pickering Transit Authority (APT A).
(see Note 2). /', I
All inter-entity tzansa nkns
consolidated.
(iii) Investment in Veri Ian Corporation
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The City's inv stment in Veridi n Corporation is accounted for on a modified equity
basis, consis nLwith general' accepted accounting principles as recommended by
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PSAB for i vestn1~:ntsjl1 go mment business partnerships. Under the modified equity
basis, Ve dian C'QiR?ral(o s accounting policies are not adjusted to conform to those of
the Ci and inter-otgani ational transactions and balances are not eliminated. The City
reco izes its equity i. erest in the annual income or loss of Veridian Corporation in its
sta ment of financjill activities with a corresponding increase or decrease in its
i!J'~estment asset /iccount. Dividends that the City may receive from Veridian
i,":orpo. ration and~ther capital transactions are reflected as adjustments in the investment
asset accounj
iv) Oper~tions,6f school boards and the Region of Durham
/ The {;~on, other revenues, expenditures, assets and liabilities with respect to the
oper<;tfons of the school boards and the Region of Durham are not reflected in these
coryiolidated financial statements.
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(v) lrust funds
/ 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.
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are eliminated when proportionately
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M Document In 22Il Cdyof Pickering Notes ( 7/10/07; 3;17 PM
Page 4 of21
FOR DISCUSSION PURPOSES ONLY
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THE CORPORATION OF THE CITY OF PICKERING
Notes to the Consolidated Financial Statements
December 31. 2006
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(b)
SIGNIFICANT ACCOVNTING POLICIES (continued)
Basis of accounting
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(i)
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Temporary investments are recorded at the lower of COsv ;'1)/( accrued i;tt&est and
market value. Any premium or discount of purchase of a]Vlnvestrr~ is amOrtized over
the life of the investment. /::::, /1
Tangible capital assets / II
Tangible capital asset expenditures incurred d].iLg the year ar/~corded as capital
expenditures in the consolidated statement of fulancial activities;1
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Accounting fo' Pmpecty Ta' Capping ,.OV~ ,csnlti/g ham the OOla,io Fai,
Assessment System / L//~ /
The net impact in propeliy taxes as 'fTesult of the appJ1cation of the capping provisions
does not affect the Consolidated Statement of Financi~l Activities as the full amounts of
the property taxes were levied. ,However, the cap>>lng adjustments are repOlied on the
Consolidated Statement of Fina;kial Position as ivreceivable from the Region.
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D. eferred revenue / \<'~. ,..... I"
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Defened revenues represent user ~)1~)rge~nd fees which have been collected but for
which the related s~r,fces have yet to fi performed. These amounts will be recognized
as revenues in the f;scal year the services are performed. In addition, any contributions
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received with ext mal restrictions a e deferred until the related expenditures are made.
Temporary investments
( ii)
(iii)
(iv)
(v)
Post employ nt benefits
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The prese t va'l~-OH:l117 c t of providing employees with future benefits programs is
recogni~d as empf~ees/earn these entitlements through service. Actuarial gains and
losses arc amOliized. oler the average remaining service period (ARSP). The actuary
dete ined ARSP to t>C 16 years.
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I.Il,[~ntory is v ued at the lower of cost and net realizable value. Cost is determined on a
/AG. 'elQhted-av rag'e basis.
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(vii) ~nlent transfers
Gov4nent transfers are recognized in the financial statements in the period in which
th~~~;~ts giving rise to the transfer occur, eligibility criteria are met, and reasonable
stimates of the amount can be made.
The preparation of financial statements in confonnity with Canadian generally acceptcd
accounting principles requires management to make estimates and assumptions that
affect the reported amounts in the financial stakments and accompanying notes. Actual
results could differ from these estimates.
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M Document In 2211 City of Pickering Notes ( 7/10/07 317 PM
FOR DISCUSSION PURPOSES ONLY
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THE CORPORATION OF THE CITY OF PICKERING
Notes to the Consolidated Financial Statements
Decem her 31. 2006
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Effective September 4,2001, a joint Board of Management was established by/the City of Pickering
and the Town of Ajax by way of a Merger Agreement for operating ~'transit system SlCross
Pickering and Ajax. Operations, under the control of the joint boartf, commenced yITective
January 1,2002. / /
In January 2005, the Councils of the City of Pickering and the TO~ of Ajax passel a resolution
agreeing to the transfer of the responsibilities for transit servicesAo the Regional J<'lunicipality of
Durham (the "Region"). On January I, 2006 the Ajax Piclsi~ing Transit Autf{ority ("APTA")
transferred its operations to the Region as part of the./Du.r.i1am Region Tra~it Commission in
accordance with Regional By-law #85-2004. I
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Negotiations between the City of Pickering, Town of 1)-ja~irid/1he Reg~ are still underway as to
the ultimate realization of assets and assumption 0" liabiliqes by te Durham Region Transit
Commission. /:; /
During 2006, APT A finalized transactions in pfogress, collecte9/~eceivables and settled liabilities
outstanding at December 31, 2005. Any remaining fund balay-te will be settled once negotiations
with the Region are completed. I I
The following table provides condeI}sed supplemental financial information for the Transit
Authority for the year ended Dcccm~~{- 31: \></:) I
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2. AJAX PICKERING TRANSIT AUTHORITY
Financial position:
Financial assets
Non-financial assets
Liabilities
Net liabilities
Fund balance
Amounts to be r overed
Transit Autho ty Position
FinanCial... ..c..t...i.V....iti.es: I
Rev ue .. .
OJ? ratingexp~nditu es
apitalexpen,\:l;itur s
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t expenditures
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Fund balance, eginning of year
Net expe itures
Increas in amounts to be recovered
Incre e in non-financial assets
M Document In 2211 City of PIckering Note< (.7/10/07 3J7 PM
FOR DISCUSSION PURPOSES ONLY
2006
$
266,884
536,894
(1,350,612)
(546,834)
$
$
(336,134)
(210,700)
(546,834)
$
$
358,417
(113,165)
(348,324)
(103,072)
$
$
(233,062)
(103,072)
$
(336,134)
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2005
$
1,004,441
536,894
(1,985,097)
(443,762)
$
$
(233,062)
(210,700)
(443,762)
$
$
13,318,943
(12,026,290)
(1,518,568)
(225,915)
$
$
(57,524)
(225,915)
3,600
46,777
(233,062)
$
~,
Page 601'21
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THE CORPORATION OF THE CITY OF PICKERING
Notes to the Consolidated Financial Statements
Decem ber 31, 2006
1
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OPERATIONS OF SCHOOL BOARDS AND THE REGION OF DURHAM// /
/ //
Further to Note 1 (a) (iv) requisitions are made by the Region of Durham/~nd School Boa(ds
requiring the City to collect property taxes and payments in lieu of property taxes on theirYl1alf.
The amounts collected and remitted are summarizes as follows: /
. /
Region SchO,ol Board
$ 7Q..,{25,816 $/;;1,081,783
4,807,491 / 520,039
$/ 75,133,307 / $ 41,601,822
INVESTMENT VERIDIAN CORPORATION ~, , /
(a) Veridian Corporation is owned by the City oFPickeril)g, Tow~f Ajax, Municipality of
C1arington and the City of Belleville. Vey(dian Corporatiol as a govemment business
partnership, is accounted for on the modJfied equity basi/in these financial statements.
Veridian Corporation serves as the electriyal distribution utility for a number of communities
including the four noted above and 70n acts non-regulatei utility service ventures through its
subsidiaries. /
The following table provides con;tens~~;;uPPlemen;~ consolidated financial information for
the corporation and its subsicliari,es for tbe, y,', ear/ended December 31:
/ \V I
/ /
/ .
/ /
libles
3.
Taxation
Payments in lieu of taxes
4.
'~
Financial Position:
Assets
Current
Capital and inta
Other
Total assets
Liabilities /
Cune
Lon term debt
Ot er
Toti! liabilities
ltcluitY
/ Share.c~p'ital .
/ Conit] bllte<;y capital
I Retaincc1/amings
/ Total equj.{y
Totalli;rbilities and equity
/ Fh'n rkial Activities:
I evenue
/ / Other income
II Expenses
/ / Net income for the year
I=ument m 2211 Cdy of PIckering Notes { 7110/07,' 3,17 PM
/
II
.' :~.__? /
'/" /
.j
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FOR DISCUSSION PURPOSES ONL Y
2006
2005
68,864,051
138,225,079
946,571
$ 208,035,701
$
92,281,194
132,918,454
2,201,700
227,40 1,348
$
$
$ 42,312,425 $ 130,029,467
60,794,000
20,129,238 15,522,058
123,235,663 145,551,525
67,285,173 67,285,173
24,910 24,910
17,489,955 14,539,740
84,800,038 81,849,823
$ 208,035,701 $ 227,401,348
$ 223,302,423 $ 207,388,764
6,823,343 4,894,868
221,175,551 204,412,861
$ 8,950,215 $ 7,870,771
Page 7 of21
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Balance, beginning of year /
Equity share of net income for th~e~
Dividend received from V eridiarr COrpPra~ion_
Balance, end of year
(d) Contingencies and guar~es of
statements are as fOllOI,lllt
(i) Insurance clajizs:
I /., \\
The Com6rat(~h<(s~~a=h1 nber of .the Municipal Electric Association Rec~procal
Insuranof' Exchange~C'M ARlE") whIch was created on January 1,1987. A recIprocal
ins~r rice exchange m be defined as a group of persons formed for the purpose of
exc anging reciproc contracts of indemnity or inter-insurance with each other.
~ ARIE provides eneralliability insurance to member electric utilities.
Insurance pre urns charged to each member utility consist of a levy per $1,000 of
"'experjcnc5/ Insurance IJlmts of up to $30 mIllIon per occurrence are covered by
M;
/ /
/ /
/
/
""~'-r"
"XI
, ~-,-
!. - -.)-
J'Tli'!!i i---pt
.--!ii!t-.{jl"'iil:-~iD:1'-~
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THE CORPORATION OF THE CITY OF PICKERING
Notes to the Consolidated Financial Statements
December 31, 2006
I
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4.
INVESTMENT VERIDIAN CORPOR<\TION (continued)
,
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2006 /
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(b)
City of Pickering's equity represented by:
Promissory notes receivable (Note 5)
2095
/
$ 25,069,000
.. /
,496,196 /30,496,196
8,256,018 / 4,586,430
(5,093,020) / (2,633,020)
1,108,821/ 1,108,821
34,768,0 5 $ 33,558,427
$ 25,06<),000,
I
Investments in Veridian Corporation
Initial investment in shares of the Corporation
Accumulated income
Accumulated dividends received
Increase in value of investments
Total investment
(c)
Equity in Veridian Corporation
..V/, /
II 2006
Ii 61,670,447
/ 3,669,588
/ (2,460,000)
$ 62,880,035
$ 61,670,447
2005
$
58,443,431
3,227,016
Corporation as disclosed in their financial
/
M Document 'n 2211 City of P,ckermg Notes (' 7/10/07' 3,17 PM
Page 8 of21
FOR DISCUSSION PURPOSES ONLY
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THE CORPORATION OF THE CITY OF PICKERING
Notes to the Consolidated Financial Statements
Decem ber 31, 2006
/
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(d)
(contin ued)
II
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....
INVESTMENT VERIDIAN CORPORATION (continued)
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An action has been brought under the Class Proceedings 1).ct, 1992. The plaintiff class
seeks $500 million in restitution for amounts paid to Tor<)rito Hydro and to.6ther Ontario
municipal electric utilities ("LDCs") who received/late payment plnalties which
constitute interest at an effective rate in excess of 60jlo per year, contra(y to Section 347
of the Criminal Code. Pleadings have closed in thji action. The actj6n has not yet been
certified as a class action and no discoveries havy;been held, as the/parties were awaiting
the outcome of a similar proceeding broughJ;/ag~inst EnbridV Gas Distribution Inc.
(formerly Consumers Gas)./ ;// I> /
On April 22, 2004, the Supreme Court srCanada~~I"asedla' decision in the Consumers
Gas case rejecting all of the defences ,which had been! rabed by Enbridge, although the
Court did not permit the plaintiff cl;iss to recover dap{ages for any period prior to the
issuance of the statement of c1aip{ in 1994 chall~ging the validity of late payment
penalties. The Supreme Court rymitted the matterjoack to the Ontario Superior Court of
Justice for determination of ~e damages. At;fhe end of 2006, a mediation process
resulted in the settlement ofJl{e damages paya)le by Enbridge.
/ - \.'. .'
After the release by the .?"~reme C:O(lrt o~ianada of its 2004 decision in the Consumers
Gas case, the plaintift:i in the LDC fatO' payment penalties class action indicated their
intention to proceedj~ith the litigatioldl.~'ainst the LDCs, To date, no formal steps have
been taken to move the action for;:><arcl. The electric utilities intend to respond to the
action if and when it proceed? on the basis that the LDCs' situation may be
distinguishabl0'1rom that of Co~umers Gas,
The Coep ";;;"";~J\iU)"t" ;!cOllccted late payment pc",I';e, of $5,339,593 from and
after 19 4. Nodetermi;la';i;n of the portion of these payments which may have
consti ted interest at 'iuv(mpermissible rate has been made.
/
(iii) Grantees - ver7n Connections Inc.
/The Corporation's regulated subsidiary partiCIpates in the competitive supply of
/ e.lectr.i.c.....ity mayJ(et to procure a supply of electricity for its customers. f3ased upon the
. mark.eZ'- ?art'~pant's credit rating, the ~n~rket participants .are r;quired to post security
prudential With the Independent Electnclty System Operations ( 'IESO").
At De ember 31, 2006, this requirement was satisfied by the posting of letters of credit
i~f amount of $5,565,530.
/
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IL" '" uu "",, M.,,~ ~", i m'ffi' "',.
FOR DISCUSSION PURPOSES ONLY
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(ii)
Other claims
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Page 9 of21
,'~"'u--n:
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THE CORPORATION OF THE CITY OF PICKERING
Notes to the Consolidated Financial Statements
December 31, 2006
/
II
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Future minimum lease payment obligations under operating leases ar}las follows:
/
/
$ 678806
63~;OOO
611,000
/i21,000
I 602,000
/ 1,148,000
I .~. 4,302,000
/
Promissory notes are payable by Veridian Cor~'ltion and Vericyan Connections Inc. in the amount
of $7,095,000 and $17,974,000 respect~iVely../with an inte. rest/rate of 7.6% and maturity dates of
November I, 2009. These promissory note are convertible Wo common shares at the option of the
holder at the rate of I common share for very $1,000 of pyt'ncipal then outstanding on or before the
maturity date. / <. .... II
/ \. \ /,
I \V'
\1 I
DEFERRED REVENUE / /
Obligatory Reserve Fun~/ . II
Development charg;s /i . \
Parkland / L_.
Ontario Transit enewal F~ncjs
Provincial Ga Tax
Federal Gay ax
Third PalfY/Developer's Co tributions Reserve Fund
4.
INVESTMENT VERIDIAN CORPORATION (continued)
(e)
Lease commitments
2007
2008
2009
2010
2011
Thereafter
5.
PROMISSORY NOTES RECEIVABLE
6.
2006
$ 22,341,331
1,993,928
19,166
771,076
1,455,769
1868148
28,449,418
984,874
$ 29,434,292
FOR DISCUSSION PURPOSES ONLY
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2005
$ 21,135,306
2,103,060
19,166
722,039
850,684
1,819,264
26,649,519
1,008,786
$ 27,658,305
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Page 10 of21
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THE CORPORATION OF THE CITY OF PICKERING
Notes to the Consolidated Financial Statements
December 31,2006
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6.
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II
2006
$ 27,6?S:305
DEFERRED REVENUE (continued)
Continuity of deferred revenue is as follows:
Balance, beginning of year
Restricted funds received
General funds received
Interest earned
I
/
/0,088,149
/
/ 1,108,004
4,196,153/
~ /
/ / j.
,:~2,091,112)
1 9 054
. ,420,166)
//
$/ 29,434,292
II
Revenue recognized in current operations
Revenue recognized in capital operations
General deferred revenues
/
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Balance, end of year
/
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/
/
/
/2005
/
$ ;;4, I] 3,832
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3,821,953
335,053
778.524
4,935,530
(327,773)
(1,063,284)
(1,391,057)
$ 27,658,305
/
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INTERFUND LOANS / \ . ... /
As a means of funding various cap~ aCqUis;<<l?J1S'i~:dS are borrowed by the Capital Fund from
Development Charges and Parkl;t6d deferred rev~ue (obligatory reserve funds). These funds are
secured by ten year promisst notes with inteJCst rates of 4.37%, 5 year promissory notes with
interest rates of 4.5%, 3.73~ and 3.67%, and <<year promissory notes with interest rates of 4.25%.
The financing arrangemen~ and ultimate r ~yment are approved by Council through the current
budget process. For the/pur;pQ.~e of these 1I1ancial statements, the loans are included in amounts to
be recovered (Note 1 ~ TJl~:,~91~~~Y1ng i a summary of the related loans negotiated, by function:
I~</ 2006 2005
Roads and str~ights / $ 2,470,785 $ 3,122,]29
c.ommu~1.ity; acilities, librariy{ and parks 1,867,264 2,002,544
Fire serVl es / 392,318 334,009
EnvirolJ nental Services / 82,681 97,748
/ / $ 4,813,048 $ 5,556,430
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FOR DISCUSSION PURPOSES ONLY
Page 11 01'21
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The City makes available to qualifying employees who retire b7fore the age of/iS, the
opportunity to continue their coverage for such benefits as e;dended health and drugs.
Coverage ceases at the age of 65. Dependent on eligibility, heqlth c6ver(ige may/be a shared
financial responsibility between the City and the retired empJ6yees. The'City/itlso provides
full time and permanent part-time employees a sick tip1e entitlement .rCl any unused
entitlement is accumulated year to year. This accumu\ited entitlementjs'T.~ot vested and
therefore does not get paid out at the time of retirem/eht or termination. The most recent
aetu",ial valuation of the post-employment benefits W~p".formed at J0ary 1,2004.
Information about the City's benefits liability is aS/~lo/ws: /
Accrued benefits liabdity, beginniog of y/ ' :~:~~::::
Current service costs I I' 134,700
Interest on accrued benefits /1 112,800
Amortization of actuarial losses / (25,000)
Benefits paid during the year I / (211 ,800)
Accrued benefits liability, end;6fyear \/i . / $ 2,316,950
/ \jl
Accrued benefit obligatiol / $ 1,999,100
Unamortized actuarial sses 317,850
Accrued benefits lial;j ity, end of year / $ 2,316,950
/ .~...... /
The mam act71 a,{";;'u~;nos e./ployed in the actuac;al valuat;ons are", follows
(,) D"7" Ratc " /
Tje present value a~ December 31,2006 of the future benefits was determined using a
/,dlscount rate 0;0%.
()/ DeJ1tal Costs
/ The9~rre trend cost at January I, 2004, the date of the most recent actuarial valuation,
was 4'.500 per annum.
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THE CORPORATION OF THE CITY OF PICKERING
Notes to the Consolidated Financial Statements
Decem ber 31, 2006
ul'r~~n" n-
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>~,"'-
8.
POST EMPLOYMENT BENEFIT LIABILITY
((1)
Post employment benefit liability
(iii)
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2005
$ 2,297,850
141,500
117,450
(24,300)
(226,250)
$ 2,306,250
~
$ 1,963,400
342,850
$ 2,306,250
ealth costs were assumed to increase at 10% in 2005 and decrease by I % increments
per year to an ultimate rate of 5% per year in 20 I 0 and thereafter.
jDocument in 2211 City of Pickering Notes ( 7/10/07. 3.17 PM
FOR DISCUSSION PURPOSES ONLY
/
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Page 12 of21
THE CORPORATION OF THE CITY OF PICKERING
Notes to the Consolidated Financial Statements
Decem ber 31, 2006
/
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,/ /
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Effective January I, 200 I, the City became a Schedule II employp under the W~!tlplace
Safety & Insurance Act and follows a policy of self insurance for a)rit~ employees. I
/ . /
/ .
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I I
II 2006 I 2005
Accrued WSIB liability, beginning of year /1 $ 952,898/ $ 631,786
(Recovery)/Expense for the year / (208,4~3) 382,512
Benefits paid during the year (54, 74) (61,400)
Accrued WSIB liability, end of year 69 ,331 $ 952,898
1<> /'
Management, using best estimates, identifild that the amou'1t provided in the liability account
at year-end of $690,331 (2005 - $952,8,98) is sufficient 19'/ cover the potential liability of all
existing claims granted by WS18 and oDtstanding as at I)ecember 3 I, 2006.
/ /
The outcome of any claims filed with \\,S,18 is undey:rninable at this time.
/ ,.
I \ \ ./ /-----~~/ /
A WSIB Reserve Fund was e~tablished Ii<WO liThe Reserve Fund balance at December 31,
2006 was $ 834,922 (2005 - 589,575). In\addftion, the City purchased two insurance policies
/
that protect the City again significant clai~Y(s to the Corporation. The occupational accident
insurance pays loss c1ai s up to $350,006 per work related accident. The excess workers
compensation indem~ insurance has j $350,000 deductible and will pay for claims up to
and including $25,OPO,000 per work r~(ated accident.
9. LONG-TERM L1A~fmi II
(a) The balan~f long-term li~ifities is made up of the following:
II I 2006
ThelnlLlnicipality is r,'nsible for the payment
;jOfPriDCiPal and)'llterest charges on long-term
liapilitie.s issued by the Region of Durham on the
municipalitY{ behalf. At the end of the year, the
outstaI'ltliI;lg principal amount of this liability is
I I
II II
/ /
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/ /
I Document In 2211 City of P,ckerlng Notes ( 7/10/01317 PM
FOR DISCUSSION PURPOSES ONL Y
/
8.
POST EMPLOYMENT BENEFITS LIABILITY (continued)
(b)
Workplace safety and insurance liahility (WSIBj
Infonnation about the City's WSIB liability is as follows:
2005
$ 9,929,000
$ 7,984,000
Page 13 of21
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THE CORPORATION OF THE CITY OF PICKERING
Notes to the Consolidated Financial Statements
Decem ber 31,2006
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9.
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(b) The above long-term liabilities have maturity dates of July 12, 2fJ11, 2016 & 2)}21,
November 1,2012, July 15, 2014 and December 23, 2014 with varioyd interest rates rgtlging
from 3.3% to 5.6%. Principal repayments are summarized as follow:! I
2007 $1,132,~' II
2008 1,190,\648
2009 1,2;lcS,393 I
2010 1,,<>26,228 /
2011 ),077,159 II
Thereafter / 4,253,583
I ;$9,929,000 /
(eJ Loog-teon liabi!;ti" include a p,ineipaJ sum ~,O;7,~~;lS '~odablc Debentuces' wbich
may be raised by the issuance of debentures .over a further per'6d not to exceed 10 years.
/
(d) The above long-term liabilities haV~beri approved by C ncil by-law. The annual principal
and interest payments required to servo e these liabilitie are within the annual debt repayment
limit prescribed by the Ministry of ~ unicipal Affairs 1d Housing.
/ ; -
( e) Interest expense recordezd in the year relating-to th~e long-term liabilities is $440,813 (2005 -
\' I
$404,958). \ ,
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10. AMOUNTS TO BE RECOV ED /
/ /
Fromfiilure revenues:l; ....J ') /
Post -employment )Jenefits JiahiI ity
WSlB benefit Ij,abilities .~.
Intemalloan~A'rom Obligator; eserve Funds
Net long-term liabilities
/
From resr~erunds' /
WSI benefit liabilitiel
LONG-TERM LIABILITIES (continued)
/
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2006
2005
$
2,137,950
$
2,127 ,250
363,323
5,556,430
7,984,000
4,813,049
9,929,000
/ }i
I L /UNICIP AL i~ BALANCES AT THE END OF THE YEAR
/ The City's fu~alances are comprised of the following:
/ (a) in" Fund Balan"
/ /1'0' geoeml "due"oo of taxa lion
/ /Document in 2211 Cdy of P,ckenng Notes ( 7//0/07. 3:/7 PM
FOR DISCUSSION PURPOSES ONLY
690,331
$ 17,570,330
$
589,575
16,620,578
2006
2005
$
(50,232)
$
1,271
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Page 14 of21
THE CORPORATION OF THE CITY OF PICKERING
Notes to the Consolidated Financial Statements
December 31. 2006
"tV
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11.
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MUNICIPAL FUND BALA~CES AT THE END OF THE YEAR (continued) /
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Reserves set aside for special purpose?/oy Council
Working capital I
Self insurance ' '
I
Replacement of capital equio/tlent\ . 7.
Contingencies I ,.
Rate stabilization / ,.
City's share for dev710 (nent charge
Transit I
Continuing studie7' II
Vehicle replacement..
Easement set~Jlm(e~t. .....r.~e.,;;er~/
Eastern Braych.', - --I
Move Ontario . '.) I
Total Res {yes /
Reserv/Funds set aside or special purposes
ltounci'
Recreation pro~ams and facilities
. /Acquisition cfrtangible capital assets
/ Squa~h CO}~1S
I WSIJ3' /
Total Resey(e Funds
I Total Rele"", and RC<e"'e Funds
/ /
/ /
/ ML,"NU"~',^"",'~~",' M~' "'eM
/
/
(b) Capital Fund Balance
Funds available for acquisition of
tangible capital assets
Acquisition of tangible capital assets
expected to be
Financed by long-term liabilities
Financed by taxation or user charges
Financed by grants
Financed by donations
(c)
Reserves and Reserve Funds
I
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2006
/
/
$ 6,22?,0l.t.
/' /
/ /
Ii (8.t8,273) /
(131,084) /
(15,822) /
I (24,49Q(
I . $ 5,209,3;45
/
/
~
) 400,000
II 95],391
/... 685,715
..., 6,356,615
6,910,981
/ 809,654
120,999
47.t,484
72,547
30,000
833,243
17,645,629
/
/
/
/
J005
$
/
6,688, I 19
/
(2,1 10,939)
(199,752)
$
(298,375)
4,079,053
2005
$
400,000
915,514
722,843
10,774,911
3,388,965
484,204
237,]06
342,533
75,000
] ,095, 129
20,000
18,456,205
] 94, 175 265,492
1,394,511 1,348,078
78,989 66,087
834,922 589,575
2,502,597 2,269,232
$ 20,148,226 $ 20,725,437
FOR DISCUSSION PURPOSES ONL Y
Page 15 of21
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THE CORPORATION OF THE CITY OF PICKERING
Notes to the Consolidated Financial Statements
December 31. 2006
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The municipality makes contributions to the Ontario Municipal Employds Retirement F,l1nd
(OMERS), which is a multi-employer plan, on behalf of the members of it-s staff. The play! is a
defined benefit plan which specifies the amount of the retirement benefct to be received/by the
employees based on the length of service and rates of pay. / /
em",i h"!io,,s 00 ,ceo"n! of cmcent mv ice 1m 2006 wece $] ,705, :~005 - $17)91,2, ~.
13. TRUST FUNDS /
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Trust funds administered by the municipality amounting to/$268,567 (2005) $260,785) have not
been included in the Consolidated Statement of FinanciavP, osition nor7a " their operations been
included in the Consolidated Statement of Financial Ac~liti~??
/ (i
14. CLASSIFICATION OF EXPENDITURES BYiJECT /
The Consolidated Statement of Financial Acyvities presents tyie expenditures by function; the
following classifies those same expenditures l}y object: /
1/ l-
. I b - / I
Salanes, wages anc cmployee eneht . . /~ "'/ $
Operating materials, supplies and ot er expens~( .
Contracted Services 1\1
Rents and financial expenses
External transfers to others /
Tangible capital assets
Total expenditures by obj ct /
15. RELATEDPARTyj.J~~~T~
Veridian Cor or ion /
The City oYPickering recei):6 electricity and services from Veridian Corporation (Note 4), a
corporatiojY in which The Cty is a principal shareholder. Veridian also provides streetlight and
power I~e maintenance se ices on a contract basis.
/ , ' 2006 2005
Tr l1sactions / /
Revenues /
Interest orypromissory notes
Property;faxes levied
Expen~el
Eltrical energy and services
Balan s
A counts payable
romissory notes receivable
12. PENSION AGREEMENTS
2006
32,114,799
17,386,515
1,721,394
1,097,] 44
16],870
8,690,656
$ 6],172,378
$
$
] ,905,294
40,366
$
1,931,707
$ ] 75,508
$ 25,069,000
FOR DISCUSSION PURPOSES ONLY
;
2005
$ 34,725,091
13,475,404
2,284,134
1,032,190
211,905
11,286,580
$ 63,015,304
$
$
1,905,294
40,616
$
1,727,633
$ 156,947
$ 25,069,000
Page 160f21
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In the normal course of business, the City enters into agreements which con/lain guarantecs',/The
City's primary guarantees are as follows: II,
(i) The City has provided indemnities under lease agreements for the/6sebf various faiIlities or
land. Under the terms of these agreements the City agrees to ind,e'Dmify the countyfparties for
various items including, but not limited to, all liabilities, los~, suits, anddamages arising
during, on or after the term of the agreement. The maximu,' amount of any),otential future
payment cannot be reasonably estimated. / /
(ii) The City indemnifies employees and elected official;/ror various itero(including, but not
limited to, all costs to settle suits or actions due to a~ciation with thtjCity, subject to certain
restrictions. The City has purchased liability insu,rance to mitigate jthe cost of any potential
future suits or actions. The term of the indemnif\i'atiOfl.iSP,ot exp~icitly defined, but is limited
to the period over which the indemnified party ~rved as an emp~0yee or elected official of the
City. The maximum amount of any potential)'uture payment c}limot be reasonably estimated.
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(iii) The City has entered into agreements th~may include ingemnities in favour of third parties,
such as purchase and sale agreements/confidentiality agreements, engagement letters with
advisors and consultants, outsourci~' agreements, le~ng contracts, information technology
agreements and service agreements;, These indemnification agreements may require the City
~o compensat~ counterparties. for)osse~\ing~red bi ~he ~ounte~parties as a result of ?reaches
111 representatlon and regulatJops or as a<rrsu!f of litIgatIOn clanDs or statutory sanctIOns that
may be suffered by the coun,terparty as a \~Qns5iquence of the transaction. The terms of these
indemnities are not exp)kitly defined ,jJ{d the maximum amount of any potential
reimbursement cannot bejeasonably estimJied.
The nature of these inde}~fication agreen:ents prevents the City from making a reasonable
estimate of the maximunyexposure due to tfie difficulties in assessing the amount of liability which
stems from the U~1P edictabV;i!y , of fu'ture events and the unlimited coverage offered to
~ounterparti~s. Hist Ically,tljeCity!)as not made any significant paym~nts under such or simi~ar
mdemmficatlOn agy ements ancl)hefe'fore no amount bas been accrued 111 the balance sheet With
respect to these 1rcements. I
CONTlNG,N'T LIABILIr
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At/gat/of!
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Tbe tity' bas b, c,efl nJ ed as a defendant in celiain legal actions in which damages have been
soyght. The outc le of these actions is not determinable as at the date of reporting and
cordingly, nopr vision has been made in these financial statements for any liabilities which may
res ul 1.
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THE CORPORATION OF THE CITY OF PICKERING
Notes to the Consolidated Financial Statements
December 31, 2006
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GUARANTEES
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M~ocument In ??ll City of Plckenng Notes (' 7/10/07 317 PM
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THE CORPORATION OF THE CITY OF PICKERING
Notes to the Consolidated Financial Statements
December 31. 2006
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The approved operating and capital budgets for 2006 are reflected on the Con:>blidated Schedulel of
Operating Fund Financial Activities and Fund Balance, Consolidated Scl)edule of Capita1lund
Financial Activities and Fund Balance, and the Consolidated Statement offinancial Activiti,tts. The
budgets established for the capital fund operations are on a project-orien~ed basis, the cost;ylof which
may be carried out over one or more years and, therefore, may not be/comparable with/the current
year actual amounts. As well, the municipality does not have a budtet for activity; w~in Reserves
and Reserve Funds, ""ith the exception being those transaction;/which flow through either the
operatmg or capital fund budgets. Budget figures have been rec1assified for7he ~rposes of these
statements to comply with PSAB reporting principles. //
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BUDGET FIGURES
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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. 2006
Schedule 1
REVENUES
Residential and farm taxation
Commercial and industrial taxation
Taxation from other governments
LJ ser charges
Government grants and fees
Developer contributions and donations
Investment income
Penalties and interest on taxes
Fines
Interest on promissory notes
Other
Total revenues
EXPEND ITLJRES
General government
Protection to persons and property
Transportation services
Environmental services
Stlcial and family services
Recreational and cultural services
Plannin and develo men!
Total expenditures
NET REVENUES
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Budget
2006
Actual
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/ 2005
Actual
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26A7.t,748 /
$ 26,111,967 $ $ 26,52,8,006
6,545,118 6;683,041 6$89,020
6,887,159 /6,937,311 ~6"" ..,..,..,
, ~_),.J.J.J
7,984,589 / / 8,951,432
, 7,] 9.t 785
360,717 I 352,672 568,040
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2,00, 98,443 / 113,775
605,0 ],404,5~/ 874,684
],380 00 1,698,2 3 1,534,795
5 ,000 59r,34 ] 550,611
] 52,220 q05,244 L 905,244
;1,15&;922 /591,612 4,1>39,315
153,387,{:9'2 ,
/53,930,955 60,878,255
I' 15,302,98] 9,377,042
12,117i
14,677,0 ]3,513,808 12,977,758
5,63~ 32 5,308,877 12,165,029
,)9,619 46,718 42,682
,158,552 333,056 348,748
)6,708,378 16,047,858 15,068,380
/ 2,724,862 ],928,424 1,749,085
52,161,586 52,48 1,722 51,728,724
1,226,]06 ] ,449,233 9,149,531
820,000 2,460,000
(2,469,]28) (2,668,858) (5,968,131)
2,] 21 ,061 ],131,597 (1,671,640)
(1,808,039) (847,000) (807,000)
(1,095,381) (1,110,725)
(262,567) 321,J J2
10,700 8,400
(229,227) (9,220)
(1,336,] 06) (1,500,736) (9,237,204)
(110,000) (5],503) (87,673)
110,000 1,271 88,944
$ $ (50,232) $ 1,271
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FINANCING AND TRANSFERS II
Dividend from Veridian Corp ation.
Transfers to Capital Fund/ ):. /
Transfers from (to) Rescl es andR~sei\T-'eFU' as
Increase (decreasc) in ~ounts to be recov 'ed
Principal repaymq1t of debentures
Principal repaY9'{ent of internalloaJ}'
WSIB bcnefiy(iabilities /
post-cmplojinent benciit liabilj{y
Decrease in ~)n financial asset /
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ClIANGE IN OPERATING rGND BALANCE
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OPE TING FUND B "ANCE,
EGINNING OF ~AR
PERA TING FUND BALANCE,
END OF YE'\i
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Page 190f21
Worksh et In 2210 City of Pickering F5 (#102739) 7/10/20013.18 PM
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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, 2006
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2006
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Actual /
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REVENUES
Grants
Developer contributions and donations
Development charges and developer
contributions earned
Other
Total revenues
EXPENDITURES
General government
Protection to persons and property
Transportation services
Environmental services
Social and family services
Recreation and cultural services
Planning and development
Total ex enditures
NET EXPENDITURES
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FINANCING AND TRANSFERS L
Transfers from Operating Fund
Transfers from (to) Reserves and Resc 'e Funds
Proceeds from debentures /
Proceeds from intcrnalloans
Net financin and transfers
2005
Actual
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$ 2,4~,754 $ 17:'bn
/42:140 128,219
/ I j', /
/ 1,552,588 / 1,063,284
/ 10,545 / 52,259
/ 4,441,727 / 1,786,]54
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1,280,h6
1,7 ,30~ 1:7~,315
/6. 55i~~0,.,./~;.,. ~A70,541
125'OOO~/ 91,493
211,000'; 14,945
I 2,672,665 1,993,404
I 6,750 / 782
12,824,10Y 8,690,656
, ':;<:/
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BAI~0C6=7 /
CAPITAL FUND, BEGI ING OF YEAR /
CAPITAL FUND, EN OF YEAR $
Worksh et m 2210 City of Pickermg FS (#102739 J 7/10/2007 3.18 PM
Budget
$
4,283,118
77,000
1,646,550
(6,81 ,435)
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2,469,128
648,550
3,013,757
686,000
6,817,435
FOR DISCUSSION PURPOSES ONLY
1,16],949
253,167
6,644,547
15)14
3,207,192
4,411
I] ,286,580
(4,248,929) (9,500,426)
2,668,858 5,968,131
(433,637) 280,407
2,792,000
352,000 287,000
5,379,221 6,535,538
1,130,292 (2,964,888)
4,079,053 7,043,941
$ 5,209,345 $ 4,079,053
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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 31,2006
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(1,13],597) /
433,63
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/ 20,725,437
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$ 20,148,226
REVENUES
Developer contributions and donations
Investment income
NET TI0'\NSFERS FROM (TO) OTHER FUNDS
Operating Fund
Ca ita] Fund
Total net transfers
CHANGE IN RESERVES AND RESERVE
FUND BALANCE
RESERVES AND RESERVE FUNDS,
BEGINNING OF YEAR
RESERVES AND RESERVE FUNDS,
END OF YEAR
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W","hIIO Cdy of Nk,mg (5 (#102739) 7/10/2007 3" PM
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2006 I
Actual
$
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76,495
/94,254
120,749
2005
Actual
$
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/70,848
/ I09,296
1,671,640
(280,407)
1,391,233
1,500,529
19,224,908
$ 20,725,437
Page 21 of21
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CITY OF PICKERI~ /
PUBLIC LI8RAR/ BOAR~
December 31,2006 / I
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MC Document in 2211 City of Pickering Public LIbrary Board ( 7/10/07 12:34 PM
FOR DISCUSSION PURPOSES ONLY
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Auditors' Report
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Deloitte & Tou(he LLP
5140 YongeStreet
Suite 170Q/
Toronto ON M2N 6L7 //
Canadal /
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Tel,/416-601-6150 /
F9'x: 416-601-6151 I
www.deloltte.ca I
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We have aud;ted the stalement of financ;aI pos;t;on Oft~C;ty ~'ked1pUb];C Library Board as at
December 31, 2006 and the statement of financial acti/ities ando~ h~k~ce for the year then ended.
These financial statements are the responsibility of ,the Board's man%ement. Our responsibility is to
express an opinion on these financial statements bY on our audit. /
We conducted our audit in accordance :;:ith canadiaX~erallY accepted auditing standards.
Those standards require that we plan and PYfor~~_ Q_~udit t obtain reasonable assurance whether the
financial statements are free of matelrial I] lsstatel e)t>/A audit includes examining, on a test basis,
evidence supporting the amounts and d' closures i \3he ,financial statements. An audit also includes
assessing the accounting principles u d and signi'fica t estimates made by management, as well as
evaluating the overall financial stateryent presentation.
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In our opinion, these financial sta1ements present fairly, in all material respects, the financial position of
the City of Pickering Public L~~a 'f Board as ~December 31, 2006 and the results of its operations and
the changes in its financial ,-bs' ~~L~he,ar then ended in accordance with the Canadian generally
accepted accounting principles. ~--J
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Chartered Acc~nts
Licensed pU~CGCQuntants
Toronto, ntario~
March 2007
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To the Members of
The City of Pickering Public Library Board,
Members of Council, Inhabitants and Ratepayers
of the City of Pickering
.~""
M~ocument In 2i?ll City of Pickering Public Library Board ( 7/10/07. 12/34 PM
/ FOR DISCUSSION PURPOSES ONLY
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CITY OF PICKERING
PUBLIC LIBRARY BOARD
Table of Contents
December 31, 2006
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Statement of Financial Position
Statement of Financial Activities and Fund Balance
Notes to the Financial Statements
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/Documentln 2211 Cdyof Pickering Pubilc LibroryBoord (7/10/0712:34 PM
FOR DISCUSSION PURPOSES ONLY
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CITY OF PICKERING
PUBLIC LIBRARY BOARD
Statement of Financial Position
December 31,2006
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2005 II
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/ 231
/ 2,291
FINANCIAL ASSETS
Cash
Accounts receivable
LIABILITIES
CURRENT
Accounts payable and accrued liabilities
Due to the Government of Canada
Due to City of Pickering
Post-employment benefits obligation (Note 3)
NET FINANCIAL LIABILITIES
NON-FINANCIAL ASSET
Prepaid expense
NET LIABILITIES
BOARD POSITION
AMOUNTS TO BE RECO
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Workshee't in 2211 City of Picker/fig Public Library Board (#106457), 711012007' 12:30 PM
/ FOR DISCUSSION PURPOSES ONLY
2006
$
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6~554
1i3,000
198,940
(196,364)
73,364
$ (123,000)
$ (123,000)
$
17,668
243
74,918
128,800
221,629
(219,338)
90,538
$ (128,800)
$ (128,800)
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Page 1 of 5
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CITY OF PICKERING
PUBLIC LIBRARY BOARD
Statement of Financial Activities and Fund Balance
Year ended December 31,2006
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2006
Budget
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Actual /
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REVENUES
City of Pickering grants - operating
City of Pickering grants - capital
Federal grants
Province of Ontario grants
Fines and other receipts
$ 4,009,777
118,465
$ 3,95425
,140/UO
/ ~~lt4
/ 1((9,72~
I 196,910~> /
4,421,004 /
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2 82,430
531,921
3,114,351
EXPENDITURES
Operating
Salaries
Salaries and wages
Fringe benefits
Material, supplies and utilities
Books
Utilities
Other supplies
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51~'35
219, 2
4, ,300
80,652
526,327
205,422
49,125
780,874
~-
189,704
40,131
11,817
10,103
11,885
4,183
5,509
58,509
14,806
15,228
361,875
4,257,100
140,930
4,398,030
22,974
Services
Repairs and maintenance
I nsurance I
Travel I
Consulting & Professiona
Advertising /' ~~,
Conventions <Q ~:7
Postage ~
Telephone
Seminars and e ucation
Miscellanea /
220,082
41,092
10,872
16,600
7,275
8,045
4,706
54,327
9,050
15,663
387,712
4,311,824
118,465
4,430,289
-~'Wt"
Total opera~ilig expenditures
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Capital ~xpe lture' ot )
Total penditu ~ /
NET EVENUES (E'X ENDITURES)
A(Di~REASE) INC~ 'ASE IN AMOUNTS
TO BE RECovERED
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(DECREASE) tNCREASE IN
NON-FIN NCIAL ASSET
CHANGr N FUND BALANCE
FUND/BALANCE, BEGINNING OF YEAR
FU 6 BALANCE, END OF YEAR
$
$
(5,800)
(17,174)
Workshe tin 2211 City 0 f Pickering Public Library Board (#106457). 7/10/2007' 12.'30 PM
FOR DISCUSSION PURPOSES ONLY
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2005
Actual
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$ 3,78~;87~
2j4,47"-
/10,399
/ 130,425
/ 196,852
4,40 1,024
2,510,323
520,522
3,030,845
540,204
177,551
41,298
759,053
264,224
32,622
10,699
]0,520
7,102
4,093
5,113
51,941
9,033
9,609
404,956
4,194,854
274,472
4,469,326
(68,302)
600
67,702
$
Page 2 of 5
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CITY OF PICKERING
PUBLIC LIBRARY BOARD
Notes to the Financial Statements
December 31,2006
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SIGNIFICANT ACCOUNTING POLICIES I /
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The financial statements of the City of Pickering Public Library Board (the ylibrary Board"vfre the
representations of management prepared in accordance with C~o/C1iaJ)> generally ;1ccepted
accounting principles for local government established by the Pub~ s/~ -Acc071 "ng Board
(PSAB) of the Canadian Institute of Chartered Accountants. / ~ ~
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Significant accounting policies adopted by the Library Board are; follows: II
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Basis of accounting / /
(a) Accrual basis of accounting /~~k /
Revenues and expenditures are reported on theJcrua . / is of ~mting. The accrual basis
of accounting recognize revenues as they;are earned d ;measurable; expenditures are
recognized, as they are incurred and measuplhle as a result o,tlhe receipt of goods and services
and the crcation of a legal obligation 'j" /
(b) Tangible capital assets . /
The .historical cost and accumul,~ a~~.i7';:1tiO. n f~r tangible capital assets are not recorded
for Library Board purposes. y,ngible c 'taYa~ts acquired during the year are reported on
the s.t~t~ment of financ7'al ac lvities and7alance as capital expenditures in the year of
acqUIsItion.
(c) Post employment bene s
The present value o~~ cost~~f ~Viding employees with future benefits programs is
recognized as e 10t~~S grn thes entitlements through service. Actuarial gains or losses are
amortized on straig me==b IS over the average remaining service period (ARSP) of
employees. e actuary ~;<ed ARSP to be 16 years.
(d) Use of e lmates /
The ~paration of fi~ncial statements in conformity with Canadian generally accepted
acJ&mting princi~le requires management to make estimates and assumptions that affect the
!tpog. ount 0 assets, liabilities and the disclosure of contingent assets and liabilities at
the o. e financial statements and the reported amounts of revenues and expenditures
during t tilej6d. Actual results could differ from those estimates.
CAPIT AL E P{NDITURES
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Capital ex nditures were incurred to acquire furniture and equipment in the amount of $140,930
(2005 - $ 74,472).
M Document in ZZl1 City of Pickering Public Library Board ( 7110107; 12..34 PM
FOR DISCUSSION PURPOSES ONLY
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The Library Board makes available to qualitying employees who retire ~efore the age of ~5, the
opportunity to continue their coverage for such benefits as extended he;rlth,-and drugs. y6verage
ceases at the age of 65. Dependent on eligibility, health coverage/fnaY<~ a sharecV financial
resp~nsibility ?ctween the Library Boa~d and the retired ~mpl?y~es. .,{D~~~rary/Board also
provIdes full time and permanent part-tIme employees a sIck tl!lle entitlement and any unused
entitlement is accumulated year to year. This accumulated entitJement is not ves}ed and therefore
does not get paid out at the time of retirement or termination. U{e most recent ac 6arial valuation of
the post-employment benefits was performed at January 1, 2~.
fnformation about the Library Board's post employment J~ts liabilities' as follo,^,s:
/ ~ 1/ 2006
Post-employment benefits liability, beginning of year /$ 128,800
Expense for the period II 14,900
Amortization of actuarial loss / / 800
Interest expense / / 8,400
Benefits paid during the period, (29,900)
Post-employment benefits liability, end;6fYME~ / $ 123,000
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Accrued post-employment benyfits obligation $ 132,700
Unamortized actuarial loss I (9,700)
Post-employment benefits liability $ 123,000
The main actuarial a~n~7PIOY d in the actuarial valuations are as follows:
(a) Discount ra/
The prc~t value as at ~cember 31, 2006 of the future benefits was determined llSll1g a
disco~rit rate of 6.0%. I
(b) De~l ~~~t
A ('~t en cost at January I, 2004, the date of the most recent actuarial valuation was
I 4.5% pe~ u .
(c)
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CITY OF PICKERING
PUBLIC LIBRARY BOARD
Notes to the Financial Statements
December 31, 2006
3.
POST EMPLOYMENT BENEFITS OBLIGA nON
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2006
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$ 128,200
14,100
800
8,500
(22,800)
$ 128,800
2005
$ 139,300
( 10,500)
$ 128,800
Health osts were assumed to increase at ] 0% in 2005 and decrease by 1 % increments per year
to an ltimate rate of 5% per year in 20 I 0 and thereafter.
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FOR DISCUSSION PURPOSES ONLY
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CITY OF PICKERING
PUBLIC LIBRARY BOARD
Notes to the Financial Statements
December 31, 2006
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4. PENSION AGREEMENTS
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The Library Board makes contributions to the Ontario Municipal Emp}6~ees Retireme~V'/Fund
(OMERS), which is a multi-employer plan, on behalf of eligible memberi o(~s staff. The/Plan is a
defined benefit plan that specifies the amount of the retirement b;;fefWe received by the
employees based on the length of service and rates of pay. /. '''~ I
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Contributions in the amount of$143,143 (2005 - $125,264) welpaid to Orv7ER ~n behalf of its
members during the year. /
STATEMENT OF CHANGES IN FINANCIAL POSI1~N /
A statement of changes in financial position has not;fee'Z~nted, ~e related information is
readily determinable from the financial statements p;isented~ /
/ I
:u::t::c::~:ou"e of business, the L Buacd c?/nto agccements, which contain
guarantees. The Library Board's primary~uarantees are as/follows:
(i) The Library Board indemnifies n:Plo~~.rtta=bo)il~ members for various items including, but
not limited to, all costs to se Ie suit~ o~tio s due to association with the Library Board,
subject to certain restricti?~ . The Library Bard has purchased liability insurance to mitigate
the cost of any potenti<;r. future suits or ctions. The term of the indemnification is not
explicitly defined, butjS limited to the p riod over which the indemnified party served as an
employee or board ~ember of the Li~rary Board. The maximum amount of any potential
future payment can~ o~easonabl)j,e'stimated.
(ii) The Library B rd ha~2k-:ed'i~'agreements that may include indemnities in favour of third
parties, such s purchas~d ale agreements, confidentiality agreements, engagement letters
with advi rs and consul' nts, outsourcing agreements, leasing contracts, information
technolo agreements a Ci service agreements. These indemnification agreements may
requir the Library Bard to compensate counterpatiies for losses incurred by the
cou erparties as a r 'ult of breaches in representation and regulations or as a result of
li~ atiQQ claims or statutory sanctions that may be suffered by the counterparty as a
9<m#~~of th transaction. The terms of these indemnities are not explicitly defined and
/the llta~ au ount of any potential reimbursement cannot be reasonably estimated.
Jhe nature of t se indemnification agreements prevents the Library Board from making a
/ reasonable esti ate of the maximum exposure due to the difficulties in assessing the amount of
/ liability, ~~ stems from the unpredictability of future events and the unlimited coverage offered
to counter~~ies. I listorically, the Library Board has not made any significant payments under such
or sim~i:l:r mdemnification agreements and therefore no amount has been accrued in the Statement of
Finan,S>u1 Position with respect to these agreements.
5.
6.
Page 5 of 5
M Document In :?:?ll Cityaf Pickering Public LIbrary Boord ( 7/10/07. 1:?'34 PM
FOR DISCUSSION PURPOSES ONLY
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Financial Statements of I
THE CORPORATIO~~
THE CITY OF PIC/KERING
TRUST FUNDS 1/
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December 31,2006 /
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Me Document in 22108 Proforma Trust Notes ( 7/10/07, 1.02 PM
FOR DISCUSSION PURPOSES ONLY
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Deloitte & TmIche LLP
5140, Yonge"Street
Suite 170,0
Toronto/ON f'12N 6L7
CanadB
Tel (416) 60,1-6150, II
!?ax: (416) 60,1-6151,
/www.deloitte.ca/.
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To the Members of Council, Inhabitants and Ratepayers / /
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of The Corporation of the City of Pickering / /
We have audited the statement of financial position of the Tr t unds of the ctporation of the City of
Pickering as at December 31, 2006 and the statement of fin9~~( <jOities a~ fund balances of the Trust
Funds for the year then ended. These financial statements;ii:re the re ~ sibjrlty of the City's management.
Our responsibility is to express an opinion on these finantial statements bred on our audit.
We conducted our audit in accordance with Lnadian genlJ."~~ accepted auditing standards.
Those standards require that we plan and perfo;j an audit to ob.tain reasonable assurance whether the
financial statements are free of material miss~tement. An auJift includes examining, on a test basis,
evidence supporting the amounts and discloturl"":::~'nJbe fimj.ricial statements. An audit also includes
assessing the accounting principles used jnd sig \. ant ~imates made by management, as well as
evaluating the overall financial statement presentation. /
In our opinion, these financial state~ present fair~(;n all material respects, the financial position of
the Trust Funds of the Corporatio of the City of ~(ckering as at December 31, 2006 and the results of
operations and cash flows of t e Trust Fundsfx{r the year then ended in accordance with Canadian
generally accepted accountin~ ri~es. /1
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Chartered Accou ants /
Licensed Public :A:countant/
Toronto, 0)1 ari<<-=-~
AP'j0071
Auditors' Report
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Ie Document In 22108 Proforma Trust Notes (7/10/07; 1.02 PM
FOR DISCUSSION PURPOSES ONLY
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THE CORPORATION OF THE CITY OF PICKERING
TRUST FUNDS
Statement of Financial Position
December 31. 2006
FINANCIAL ASSETS
Investments
Interest receivable
Loans receivable
TRUST FUND POSITION $
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OHRP
2006
Dorothy Card
Estate
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TotaY
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$ 256,674 /I{ '~'74 $
8,222 ~:~ /
/ 3,671 /
$ 264,896/ $ 268,56l $
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$ 2 4.8 $ ts,567
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$
3,671
3,671
3,671
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Worksh et 111 2210A Proforma Trust - 2006 (#106459)- 7/10/2007; 1.01 PM
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FOR DISCUSSION PURPOSES ONLY
2005 /
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Total /
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250,414
5,077
5,294
260,785
$ 260,785
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Total Total/
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,;$ ;(9,641 $1 7,222
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1,766/
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THE CORPORATION OF THE CITY OF PICKERING
TRUST FUNDS
Statement of Financial Activities and Fund Balances
Year ended December 31, 2006
OHRP
2006
Dorothy Card
Estate
REVENUES
Interest
$
9,405
$
236
EXPENDITURES
Provincial payments
Administration charges
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1,766
93
1,859
,859
~405 /7,782
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2~9,1 260,785
$ 26~6 $ 268,567
NET REVENUES (EXPENDITURES)
(1,623)
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$ ~71
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70rkSh et In 2210A Proforma Trust - 2006 (#106459)" 7/10/2007; 1:01 PM
FOR DISCUSSION PURPOSES ONLY
FUND BALANCES, BEGINNING
OF YEAR
FUND BALANCES, END OF YEAR
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1,706
90
1,796
5,426
255.359
$ 260,785
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THE CORPORATION OF THE CITY OF PICKERING
TRUST FUNDS
Notes to the Financial Statements
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The financial statements of the Trust Funds of the The Corporation of the ~ity of Pickering/are the
representations of management prepared in accordance with Canadi5l{)> generally /;lccepted
accounting principles. / <I~ //
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Basis of accounting / /
Revenues are recorded in the period in which the transac~ or events oc~ed that gave rise to
the revenue. L II /
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Expenditures are reported on the accrual basis of ac. untin~f1ich rep6gnizes expenditures as they
are incurred and measurable as a result of the rece~Pt of go~ds~erVlces and the creation of a legal
obligation to pay. / /
Investments / /
Invcstmcnts arc "c",ded at cost. The e~i~~estments~roximates their [air market value.
[he of "lima/e.v / ~:) /
The preparation of periodic fin~cial statement:/conformity with Canadian generally accepted
accounting principles requiri management t~/ make estimates and assumptions that affect the
reported amounts of assets rd liabilities anfdisciosure of contingent assets and liabilities at the
date of the financial statyments and Ir~~::Z:d amounts of revenues and expenditures during the
period. Actual results cyi<<JtrT~r/se "timates.
ONTARIO HO~':NEW~ PI}OGRAM
The Ontario fi6me Renewal py~ram ("OHRP") was established by the Ontario Ministry of
Housing in 1;9"73 to provide gJiclnts for municipalities to make loans to assist owner occupants to
repair, reha)1llitate and impro/e their homes to local property standards. Individual loans are limited
to S7,500;tfwhich the maJlmum forgivable portion is $4,000.
Effe~~ 199/'the Province of Ontario discontinued this program. Unused fonds were
rel)'~tted totn~~6'rice on March I, 1994. Outstanding balances of loans issued prior to July 16,
I 93 will continue 0 be administered under the terms of the original program. The City continues
to administer tl) collection of any outstanding loans and remit the proceeds, net of a 5%
administraZion tee to the Ministry of Municipal Affairs and Housing.
"OHRP" ans receivable at December 31, 2006 are comprised entirely of repayable loans of
$3,671 kio05 - $5,294). In the event of the sale or lease of the home or in the event of the
home .(yner ceasing to occupy the home, the balances of the repayable loan immediately become
due nd payable by the homeowner.
December 31, 2006
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ACCOUNTING POLICY
Significant accounting policies adopted include:
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Page 3 of 4
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THE CORPORATION OF THE CITY OF PICKERING
TRUST FUNDS
Notes to the Financial Statements
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The City of Pickering has established a trust fund for the Dorothy Cardl~tate for the ca.' and
upkeep of the destitute elderly. The fund balance is comprised of in,:~t~nts and acc/l~ulated
interest amounting to $264,896 (2005 - $255,491). II~" //
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STATEMENT OF CASH FLOWS / /
A statement of cash flows has not been presented as the infoLation is readitydeterminable from
the information provided. JIll( I
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December 31, 2006
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DOROTHY CARD ESTATE
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M Document in 2210B Proforma Trust Notes ( 7/10/07; 104 PM
Page 4 of 4
FOR DISCUSSION PURPOSES ONLY