city of estevan...city of estevan statement of change in net debt for the year ended december 31,...

City of EstevanFinancial Statements

December 31, 2014

Accounting › Consulting › Tax

100, 1219 - 5th Street; Estevan SK; S4A 0Z5

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City of EstevanContents

For the year ended December 31, 2014

Page

Management's Responsibility

Auditors' Report

Financial Statements

Statement 1 - Statement of Financial Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Statement 2 - Statement of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Statement 3 - Statement of Changes of Net Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Statement 4 - Statement of Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Notes to the Financial Statements 6

SchedulesSchedule 1 - Schedule of Taxes and other Unconditional Revenue . . . . . . . . . . . . . . . . . . . . 15

Schedule 2 - Schedule of Operating and Capital Revenue by Function . . . . . . . . . . . . . . . . . 16

Schedule 3 - Schedule of Expenses by Function . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Schedule 4 - Schedule of Current Year Segment Disclosure by Function . . . . . . . . . . . . . . . 23

Schedule 5 - Schedule of Prior Year Segment Disclosure by Function . . . . . . . . . . . . . . . . . 24

Schedule 6 - Schedule of Tangible Capital Assets by Object. . . . . . . . . . . . . . . . . . . . . . . . . 25

Schedule 7 - Schedule of Tangible Capital Assets by Function. . . . . . . . . . . . . . . . . . . . . . . . 26

Schedule 8 - Schedule of Accumulated Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Schedule 9 - Schedule of Mill Rates and Assessments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Schedule 10 - Schedule of Council Remuneration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Auditors' Report

To the Council of the City of Estevan:

Basis for Qualified Opinion

Opinion

Estevan, Saskatchewan

May 25,2015 Chartered Accountants

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion.

Opening inventory is not reconciled to the general ledger and we were not able to satisfy ourselves concerning opening inventory quantities by alternative means. Accordingly, our verification of opening inventory is limited to the amount recorded in the records of the City and we were not able to determine whether any adjustments might be necessary to expenses, changes in non-financial assets, stock and supplies. The City is also required to accrue landfill closure and post-closure costs. Since we have been unable to obtain information with respect to these costs, we are unable to determine what the related liability should have been nor are we able to determine the related effect on liabilities, expenses and surplus for the year ended December 31, 2014.

In our opinion, except for the possible effects of the matters described in the Basis for Qualified Opinion paragraph, the financial statements present fairly, in all material respects, the financial position of the City of Estevan as at December 31, 2014 and the results of its operations, changes in net assets and cash flows for the year then ended in accordance with Canadian public sector accounting standards.

We have audited the accompanying financial statements of the City of Estevan, which comprises the statement of financial position as at December 31, 2014, and the statement of operations, change in net debt, and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information. These financial statements are the responsibility of the City's management. Our responsibility is to express an opinion on these financial statements based on our audit.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian public sector accounting standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

City of Estevan

Statement of Operations

For The Year Ended December 31, 2014 Statement 2

2014 Budget 2014 Actual 2013 Actual

Revenues

Taxes and other unconditional revenue (Schedule 1) 17,529,033 17,981,869 15,723,570

Fees and charges (Schedule 4, 5) 11,566,686 12,223,687 12,701,870

Conditional grants (Schedule 4, 5) 496,000 794,531 1,332,401

Tangible capital asset sales - gain (Schedule 4, 5) - - -

Land sales - gain (Schedule 4, 5) 5,827,910 230,890 1,508,764

Investment income and commissions (Schedule 4, 5) 3,750 111 1,980

Other revenues (Schedule 4, 5) 352,000 584,007 504,808

Total Revenues 35,775,379 31,815,095 31,773,393

Expenses

General government services (Schedule 3) 3,724,196 5,253,082 5,811,195

Protective services (Schedule 3) 5,097,593 4,801,425 4,713,030

Transportation services (Schedule 3) 4,010,798 6,092,186 5,753,716

Environmental and public health services (Schedule 3) 1,519,119 1,666,160 1,393,436

Planning and development services (Schedule 3) 411,788 451,959 366,219

Recreation and cultural services (Schedule 3) 5,589,330 6,807,211 7,620,794

Utility services (Schedule 3) 2,958,448 5,715,690 5,443,290

Total Expenses 23,311,272 30,787,713 31,101,680

Surplus of Revenues over Expenses before Other Capital Contributions 12,464,107 1,027,382 671,713

Provincial/Federal capital grants and contributions (Schedule 4, 5) 574,500 818,148 2,647,483

Surplus of Revenues over Expenses 13,038,607 1,845,530 3,319,196

Accumulated Surplus, Beginning of Year 72,855,154 72,855,154 69,535,958

Accumulated Surplus, End of Year 85,893,761 74,700,684 72,855,154

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City of Estevan

Statement of Change in Net Debt

For The Year Ended December 31, 2014 Statement 3


13,038,607 1,845,530 3,319,196

(Acquisition) of tangible capital assets (6,770,793) (4,378,270) (12,134,755)

Amortization of tangible capital assets - 5,006,103 5,136,306

Proceeds on disposal of tangible capital assets - - -

Loss on the disposal of tangible capital assets - - -

Surplus (Deficit) of capital expenses over expenditures (6,770,793) 627,833 (6,998,449)

Net (acquisition) of supplies inventories - (98,151) (48,905)

Net consumption (acquisition) of prepayments / deferred charges - 323,289 (349,620)

Increase in patronage equity - (41,115) -

Consumption of stock and supplies inventory - - -

Surplus of expenses of other non-financial over expenditures - 184,023 (398,525)

Increase/Decrease in Net Financial Assets 6,267,814 2,657,386 (4,077,778)

Net Debt - Beginning of Year - (34,499,008) (30,421,230)

Net Debt - End of Year 6,267,814 (31,841,622) (34,499,008)

Surplus

4

City of EstevanStatement of Cash FlowFor The Year Ended December 31, 2014 Statement 4

2014 2013

Cash provided by (used for) the following activities

Operating:

Surplus 1,845,530 3,319,196

Amortization 5,006,103 5,136,306

Loss (gain) on disposal of tangible capital assets - -

6,851,633 8,455,502

Change in net financial and non financial assets

Taxes Receivable - Municipal 69,970 (408,272)

Other Receivables 495,232 158,124

Land for Resale 279,436 537,036

Other Financial Assets 372,659 402,998

Accounts and accrued liabilities payable 257,916 204,034

Deposits 33,727 6,126

Deferred Revenue (556,270) 92,056

Stock and supplies for use (98,151) (48,906)

Patronage equity (41,115) -

Prepayments and Deferred Charges 323,288 (349,619)

Net cash from operations 7,988,325 9,049,079

Capital:

Acquisition of capital assets (4,378,270) (12,134,755)

Proceeds from the disposal of capital assets - -

Net cash used for capital (4,378,270) (12,134,755)

Financing:

Long-term debt and capital lease issued 7,500,000 10,200,000

Long-term debt and capital lease obligations repaid (5,099,883) (4,972,200)

Other financing - bank indebtedness (10,504,711) 1,094,674

Net cash from financing (8,104,594) 6,322,474

(Decrease) increase in cash resources (4,494,539) 3,236,798

Cash - Beginning of Year 4,759,840 1,523,042

Cash - End of Year 265,301 4,759,840

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City of Estevan

Notes to the Financial Statements

For The Year Ended December 31, 2014

1. Significant accounting policies

a)

Entity

Estevan Police Department

Souris Valley Aquatic & Leisure Centre

c)

d) Revenue Recognition: The City recognizes a government transfer as revenue when the transfer is authorized and all

eligibility criteria, if any, have been met. A government transfer with stipulations giving rise to an obligation that meets

the definition of a liability is recognized as a liability. In such circumstances, the City recognized revenue as the liability

is settled. Transfers of non-depreciable assets are recognized in revenue when received or receivable.

The City recognizes externally restricted inflows as revenue in the period the resources are used for the purposes specified in

accordance with an agreement of legislation. Until this time, the City records externally restricted inflows in deferred revenue.

The City recognizes taxes as assets and revenue when they meet the definition of an asset; are authorized by a legislature,

council, or legislative convention; and the taxable event has occurred. Taxes related to unreported taxable events or unidentified

economic events that would be taxable events if disclosed or known to the government are recognized when such events are

known, the related taxes are quantifiable, and amounts are collectible. Tax revenue is initially measured at management's best

estimate of the amount resulting from the original taxable event in accordance with tax legislation. The related tax receivable

is initially recognized at its realizable value at the date of the acquisition. At each financial statement date, the City evaluates

the tax reveivable for collectability and records a valuation allowance to best reflect the tax receivable at its net recoverable

amount, if necessary.

e) Expenditure recognition: Expenditures are recognized in the period the goods and services are acquired and a

liability is incurred. They also include grants and contributions made when no direct goods or services were acquired.

Expenditures include amounts for interest on debt outstanding but do not include any amounts for principal repayments.

b)

The financial statements of the municipality are prepared by management in accordance with the local government accounting standards established by the Public Sector Accounting Board of the Canadian Institute of Chartered Professional Accountants. Significant aspects of the accounting policies are as follows:

Basis of accounting: The financial statements are prepared using the accrual basis of accounting. The accrual

basis of accounting recognizes revenue as they become available and measurable; expenses are recognized as they are incurred and measurable as a result of the receipt of goods and services and the creation of a legal obligation to pay.

Reporting Entity: The financial statements presents the assets, liabilities and flow of resources of the

municipality. The entity is comprised of all of the organizations that are owned or controlled by the municipality and are, therefore, accountable to the Council for the administration of their financial affairs and resources. Entities included in these financial statements are as follows:

All inter-organizational transactions and balances have been eliminated.

Collection of Funds for Other Authorities: Collection of funds by the municipality for the school board,

municipal hail and conservation and development authorities are collected and remitted in accordance with relevant legislation. The amounts collected are disclosed in note 3.

6

City of EstevanNotes to the Financial StatementsFor The Year Ended December 31, 2014

1. Significant accounting policies - continued

f)

i)

Asset Useful Life Useful Life

General Assets Infrastructure AssetsLand IndefiniteLand Improvements 15 Yrs Water & Sewer 35 to 40 YrsBuildings 20 to 40 Yrs Road Network Assets 15 to 40 YrsVehicles & Equipment Vehicles 15 Yrs Machinery and Equipment 5 to 20 Yrs

h)

g)

Deferred Revenue - Fees and charges: Certain user charges and fees are collected for which the

related services have yet to be performed. Revenue is recognized in the period when the related expenses are incurred or services performed.

Local Improvement Charges: Local improvement projects financed by frontage taxes recognize any

prepayment charges as revenue in the period assessed.

Net-Financial Assets: Net-Financial Assets at the end of an accounting period are the net amount of

financial assets less liabilities outstanding. Financial assets represent items such as cash and those other assets on hand which could provide resources to discharge existing liabilities or finance future operations. These include realizable assets which are convertible to cash and not intended for consumption in the normal course of operations.

l) Tangible Capital Assets: All tangible capital asset acquisitions or betterments made throughout the

year are recorded at their acquisition cost. Initial costs for tangible capital assets that were acquired and developed prior to 2009 were obtained via historical cost information or using current fair market values discounted by a relevant inflation factor back to the point of acquisition. Donated tangible capital assets received are recorded at their fair market value at the date of contribution. The tangible capital assets that are recognized at a nominal value are disclosed on Schedule 6. The cost of these tangible capital assets less any residual value are amortized over the asset's useful life using the straight-line method of amortization. The City's tangible capital asset useful lives are estimated as follows:

Appropriated Reserves: Reserves are established at the discretion of Council to designate surplus

for future operating and capital transactions. Amounts so designated are described on Schedule 8.

Non-Financial Assets: Tangible capital and other non-financial assets are accounted for as assets

by the government because they can be used to provide government services in future periods. These assets do not normally provide resources to discharge the liabilities of the government unless they are sold.

j)

k) Inventories: Inventories of materials and supplies expected to be used by the city are valued at the

lower of cost or replacement cost. Inventories of materials and supplies held for resale are valued at the lower of cost or net realizable value. Cost is determined by the average cost method. Net realizable value is the estimated selling price in the ordinary course of business.

Land inventory, comprising land held for future development and resale, is valued at the lower of cost and net realizable value. Cost includes amounts for land acquisition and improvements to prepare for sale or servicing. Land is available for resale when approved for sale by the engineering department and when all municipal services have been completed.

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City of Estevan




The segments (functions) are as follows:

General Government: The general government segment provides for the administration of the municipality.

Protective Services: Protective Services is comprised of expenses for Police and Fire protection.

Transportation services: The Transportation services segment is responsible for the delivery of public works services related to the development and maintenance of roadway systems and street lighting.

Planning and Development: The planning and development segment provides for neighbourhood development and sustainability.

Recreation and Culture: The recreation and culture segment provides for community services through the provision of recreation and leisure services.

Environmental and Public Health: The environmental segment provides waste disposal and other environmental services. The public health segment provides for expenses related to public health services in the municipality.

Government contributions: Government contributions for the acquisition of capital assets are reported as capital

revenue and do not reduce the cost of the related asset.

Landfill liability: The City of Estevan maintains a waste disposal site. The City is unable to estimate closure and

post-closure costs. No amount has been recorded as an asset or a liability.

Capitalization of Interest: The municipality does not capitalize interest incurred while a tangible capital asset is

under construction.

Leases: All leases are recorded on the consolidated financial statement as either a capital or operating lease. Any

lease that transfers the majority of benefits and risk associated with the leased asset is classified as a capital lease. At the inception of a capital lease, an asset and a payment obligation are recorded at an amount equal to the lesser of the present value of the minimum lease payments and the asset's fair market value. Assets under capital leases are amortized on a straight line basis, over their estimated useful lives (lease term). Any other lease not meeting the before mentioned criteria is classified as a operating lease and rental payments are expensed as incurred.

These estimates and assumptions are reviewed periodically and, as adjustments become necessary they are reported in earnings in the periods in which they become known.

o) Basis of Segmentation: The City has adopted the new Public Sector Accounting Board's recommendations

requiring financial information to be provided on a segmented basis. Municipal services have been segmented by grouping activities that have similar service objectives (by function). Revenues that are directly related to the costs of the function have been attributed to each segment. Interest is allocated to functions based on the purpose of specific borrowings.

m)

n)Measurement Uncertainty: The preparation of consolidated financial statements in conformity with generally

accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenditures during the period. Accounts receivable are stated after evaluation as to their collectability and an appropriate allowance for doubtful accounts is provided where considered necessary. The measurement of materials and supplies are based on estimates of volume and quality. The 'Opening Asset costs' of tangible capital assets have been estimated where actual costs were not available. Amortization is based on the estimated useful lives of tangible capital assets.

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City of Estevan




p) Recent accounting pronouncements

Liability for contaminated sites

In June 2010, the Public Sector Accounting Board (PSAB) issued PS 3260 Liability for Contaminated Sites to

establish recognition, measurement and disclosure standards for liabilities associated with the remediation of contaminated

sites. The new section defines activities included in a liability for remediation, establishes when to recognize and how

to measure a liability for remediation, and provides the related financial statement presentation and disclosure

requirements.

PS 3260 is effective for fiscal years beginning on or after April 1, 2014. The City has not yet determined the

effect of the new section on its financial statements.

Financial Instruments

In June 2011, the Public Sector Accounting Board (PSAB) issued new PS 3450 Financial Instruments. The new standard

establishes requirements for recognition, measurement, derecognition, presentation and disclosure of financial assets

and financial liabilities, including derivatives. The main features of the new standard are:

- Financial instruments are classified into two measurement categories: fair value, or cost or amortized cost.

- Almost all derivatives, including embedded derivatives not closely related to the host contract, are

measured at fair value.

- Other financial assets and financial liabilities are generally measured at cost or amortized cost.

- An entity may elect to measure any group of financial assets or financial liabilities (or both) at fair value when

the entity has a risk management or investment strategy to manage those items on a fair value basis.- Remeasurement gains and losses on financial instruments measured at fair value are reported in the statement of remeasurement gains and losses until the financial instrument is derecognized.- Budget to actual comparisons are not required within the statement of remeasurement gains and losses.- Financial liabilities are derecognized when, and only when, they are extinguished.- Financial assets and financial liabilities are only offset and reported on a net basis if a legally enforceable right to set off the recognized amounts exists, and the entity intends to settle on a net basis or realize/settle the amounts simultaneously.

In May 2012, the transitional provisions for this Section were amended, effective at the time the standard is initially applied,to clarify that the measurement provisions are applied prospectively. Adjustments to previous carrying amounts are recognized inopening accumulated remeasurement gains or losses. Additionally, a new transitional provision has been added that appliesto government organizations transitioning from the standards in Part V of the CPA Canada Handbook - Accounting with itemsclassified as available for sale. Accumulated other comprehensive income (OCI) from items classified as available for saleis recognized in accumulated remeasurement gains or losses on transition.

In February 2013, this Section was amended to clarify that the requirements of PS 3100 Restricted Assets and Revenuesapply when reporting on externally restricted assets that are financial instruments. When there is an external restriction ona financial asset and the income on that financial asset is also externally restricted, gains or losses associated with thatrestricted asset will be accounted for as a liability until the resources are used for the purpose(s) specified. Thisamendment is effective for fiscal years beginning on or after March 1, 2013. Early adoption is permitted as of the beginning of the fiscal year in which the Section is first applied.

In December 2013, PSAB completed its review of the application of PS 2601 Foreign Currency Translation and PS 3450 by governments. PSAB confirmed that the principles are fundamentally sound. A one-year extension of the effective datewas approved to provide opportunity to address transitional issues and concerns. PS 3450 is effective for fiscal years beginningon or after April 1, 2016. In the period that the public sector entity applies PS 3450, it also applies PS 1201, PS 2601,and PS 3041. Early adoption is permitted.

Utility Services: The Utility services segment provides for delivery of water, collecting and treating of wastewater and providing collection and disposal of solid waste.

o) Basis of Segmentation (continued from previous page)

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City of Estevan



2. Cash

$264,700 (2013 - $264,700).

3. Taxes and grants in lieu receivable2014 2013

Municipal - Current 494,856 923,713 - Arrears 178,509 -

673,365 923,713 - Less Allowance for Uncollectibles - -

Total municipal taxes receivable 673,365 923,713

School - Current 250,684 511,522 - Arrears 90,716 -

Total school taxes receivable 341,400 511,522

Other - -

Total taxes and grants in lieu receivable 1,014,765 1,435,235

Deduct taxes receivable to be collected on behalf of other organizations (341,400) (691,900)

Municipal and grants in lieu taxes receivable 673,365 743,335

2014 2013

4. Other accounts receivable

Federal government 247,196 486,109

Utility 980,785 868,728

Trade 1,104,375 2,096,812

Other - -

Total Other Accounts Receivable 2,332,356 3,451,649

Less Allowance for Uncollectibles (30,000) (654,061)

Net Other Accounts Receivable 2,302,356 2,797,588

The City of Estevan has restricted cash to provide upkeep of the cemetery amounting to

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City of Estevan



5. Land for resale 2014 2013

Tax Title Property 39,138 39,138

Allowance for market value adjustment (19,569) -

Net Tax Title Property 19,569 39,138

Other Land 3,048,118 3,307,985

Allowance for market value adjustment - -

Net Other Land 3,048,118 3,307,985

Total Land for Resale 3,067,687 3,347,123

6. Local improvement receivable

Local improvements that were paid in full by the city and will be repaid at the total cost plus interest at a rate of 7% (2013 - 7%) by rate payers are as follows:

Year Current Total2015 337,098 2016 337,097 2017 291,399 2018 236,877

Thereafter 850,117 Balance 2,052,588

7. Bank indebtedness

Bank indebtedness includes an operating loan with a maximum limit of $9,000,000 (2013 - $9,000,000) cumulative of both cash and bank indebtedness that is bearing interest at prime less 0.5% (2013 - prime less 0.5%) with assets are pledged as collateral.

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City of Estevan



8. Deferred revenue

2014 2013

Uniform deposit - -

Land sales option deposits 96,400 -

Security deposits 264,770 917,440

Total deferred revenue 361,170 917,440

9. Long-term debt

The debt limit of the city is $55,000,000 (2013 - $55,000,000) of which 65% (2013 - 79%) has been utilized as of

December 31, 2014.

Future principal and interest payments are as follows:

Year Principal Interest Current Total Prior Year Total

2015 4,065,724 888,465 4,954,189 4,874,241

2016 3,738,297 754,284 4,492,581 4,065,543

2017 3,828,591 676,748 4,505,339 3,603,535

2018 3,482,000 518,860 4,000,860 3,615,169

Thereafter 17,340,000 1,259,089 18,599,089 17,175,948

Balance 32,454,612 4,097,446 36,552,058 33,334,436

rates that range from prime less .5% to fixed rates of 5.5%, matures from March 2021 to September 2026.

10. Lease obligations

Year

2015 445,581

2016 338,410

2017 229,819

2018 222,056

2019 110,312

Total future minimum lease payments 1,346,178

(136,622)

Capital lease liability 1,209,556

rates that range from 4.93% to 6.66%, and mature from April 2015 to June 2019.

Future minimum lease payments under the capital leases together with the balance of the obligation

Lease obligations are repayable in monthly installments ranging from $1,545 to $18,504, bearing

Bank loans are repayable in monthly installments ranging from $7,490 to $118,901, bearing interest

Amounts representing interest at a weighted average rate

of 5.76%

12


11. Intergovernmental Transactions

2014 2013

CAPITAL GRANTSGovernment of Saskatchewan GTF (Gas Tax Program) 626,791 626,056 MRIF (Leisure Centre) - 76,494 Transit assistance 73,292 59,289 Saskatchewan infrastructure Growth 995,638 1,678,155 Airport grant - 131,231

Other Governments RM of Estevan 70,000 70,000

Total 1,765,721 2,641,225

OPERATING GRANTS: UnconditionalMunicipal Government Revenue Sharing 2,286,867 2,350,915

OPERATING GRANTS: Conditional

Sask. Justice Funded Police Officers 330,000 345,000

Sask. Municipal Affairs

Grants In Lieu 43,130 35,577

Sask. Corrections & Public Safety P.D.A.P - Flooding - 449,666

Sask. Urban Municipalities Association (SUMA) Recycling program 9,160 11,163

Sask. Parks, Recreation & Culture Association Operating 10,000 10,000

392,290 851,406

Total 2,679,157 3,202,321

Intergovernmental transactions were conducted in the normal course of operations and are measured

at the exchange amount, which is the amount of consideration established and agreed to by the

related parties.

13


12. Comparative figures

Prior year comparative figures have been restated to conform to the current year's presentation.

13. Contingent Liabilities

In the ordinary course of business, various claims and lawsuits are brought against The City. It is theopinion of management that settlement of these actions will not result in any material liabilities beyondany amounts already accrued. No provision has been made for pending expropriations of land beyond payments already made to affected property owners. Any payments made by The City pursuant to expropriation settlement is charged to the surplus of revenues over expenses in the year of settlement.

14. Budget Information

During the year, the Council approved the operating budget based on planned expenses and current year revenue.

15. Guarantees

As part of a an agreement with the Estevan TS&M Woodlawn Golf Course the City has a residual valueguarantee on the mortgage of the land and buildings of the golf course. The maximum amount payableunder the guarantee is $500,000 (2013 - $500,000).

As at December 31, 2014 no liability has been recorded associated with this guarantee.

16. Subsequent Events

The municipality received a payment from ESSEX developments on February 17, 2015 for $1,346,250.This payment relates to property development.

14

City of Estevan

Schedule of Taxes and Other Unconditional Revenue

For The Year Ended December 31, 2014 Schedule 1


TAXES

General municipal tax levy 12,578,000 12,796,680 10,246,437

Abatements and adjustments (20,000) (98,987) (47,901)

Discount on current year taxes (50,000) (35,651) (48,362)

Net Municipal Taxes 12,508,000 12,662,042 10,150,174

Trailer license fees 93,000 174,015 183,880

Penalties on tax arrears 80,000 184,321 56,617

Special tax levy 375,063 - 520,283

Other - 130,934 107,106

Total Taxes 13,056,063 13,151,312 11,018,060

UNCONDITIONAL GRANTS

Equalization (Revenue Sharing) 2,280,470 2,286,267 2,350,915

Total Unconditional Grants 2,280,470 2,286,267 2,350,915

GRANTS IN LIEU OF TAXES

Federal - 2,965 2,271

Provincial

S.P.C. Electrical 600,000 674,515 649,651

SaskEnergy Gas 300,000 331,271 394,035

Local/Other

Housing Authority 92,500 154,131 120,529

Other Government Transfers

S.P.C. Surcharge 1,200,000 1,381,408 1,188,109

Total Grants in Lieu of Taxes 2,192,500 2,544,290 2,354,595

TOTAL TAXES AND OTHER UNCONDITIONAL REVENUE 17,529,033 17,981,869 15,723,570

15

City of Estevan

Schedule of Operating and Capital Revenue by Function

For The Year Ended December 31, 2014 Schedule 2 - 1


GENERAL GOVERNMENT SERVICES

Operating

Other Segmented Revenue

Fees and Charges

- Custom work 1,019,986 1,045,631 959,701

- Sales of supplies 50,000 28,279 80,127

- Other (Fees & permits) 157,500 530,404 378,314

Total Fees and Charges 1,227,486 1,604,314 1,418,142

- Land sales - gain 5,827,910 230,890 1,508,764

- Investment income and commissions 3,750 111 1,980

- Other (Rentals) 100,000 70,236 109,922

Total Other Segmented Revenue 7,159,146 1,905,551 3,038,808

Conditional Grants

- Other (Building Canada Fund) - - -

- Other (PDAP funding) - - 449,666

Total Conditional Grants - - 449,666

Total Operating 7,159,146 1,905,551 3,488,474

Capital

Conditional Grants

- Gas Tax 312,000 627,291 626,056

- Canada/Sask Municipal Rural Infrastructure Fund - - -

- Other (Community builds) 137,500 - 135,178

Total Capital 449,500 627,291 761,234

Total General Government Services 7,608,646 2,532,842 4,249,708

PROTECTIVE SERVICES

Operating


Fees and Charges

- Other 103,500 104,096 181,090

Total Fees and Charges 103,500 104,096 181,090

- Other (Court, violations & enforcement) 252,000 513,771 394,886

Total Other Segmented Revenue 355,500 617,867 575,976

Conditional Grants

- Other (Special constable) 330,000 330,000 345,000

Total Conditional Grants 330,000 330,000 345,000

Total Operating 685,500 947,867 920,976

Total Protective Services 685,500 947,867 920,976

16

City of Estevan




TRANSPORTATION SERVICES

Capital

Conditional Grants

- Other (Hwy 47) 12,000 47,465 1,756,960

Total Transportation Services 12,000 47,465 1,756,960

ENVIRONMENTAL AND PUBLIC HEALTH SERVICES

Operating


Fees and Charges

- Waste and Disposal Fees 890,000 879,623 1,101,656

- Other (Cemetery fees) 21,250 34,703 27,360

Total Fees and Charges 911,250 914,326 1,129,016

- Tangible capital asset sales - gain (loss) - - -

- Other (Specify) - - -

Total Other Segmented Revenue 911,250 914,326 1,129,016

Total Operating 911,250 914,326 1,129,016

Capital

Conditional Grants

- Transit for Disabled 43,000 73,392 59,289

Total Capital 43,000 73,392 59,289

Total Environmental and Public Health Services 954,250 987,718 1,188,305

17

City of Estevan




PLANNING AND DEVELOPMENT SERVICES

Operating


Fees and Charges

- Maintenance and Development Charges 1,121,350 905,984 638,785


Total Fees and Charges 1,121,350 905,984 638,785

- Tangible capital asset sales - gain (loss) - - -


Total Other Segmented Revenue 1,121,350 905,984 638,785

Total Operating 1,121,350 905,984 638,785

Total Planning and Development Services 1,121,350 905,984 638,785

RECREATION AND CULTURAL SERVICES

Operating


Fees and Charges

- Other 1,860,600 1,973,265 2,908,558


Conditional Grants

- Donations 19,500 359,135 365,330

- Other (Provincial agencies) 146,500 105,396 172,405

Total Conditional Grants 166,000 464,531 537,735

Total Operating 2,026,600 2,437,796 3,446,293

Capital

Conditional Grants

- Local government 70,000 70,000 70,000

Total Capital 70,000 70,000 70,000

Total Recreation and Cultural Services 2,096,600 2,507,796 3,516,293

18

City of Estevan




UTILITY SERVICES

Operating


Fees and Charges

- Water and sewer 6,342,500 6,721,702 6,426,279


Total Operating 6,342,500 6,721,702 6,426,279

Capital

Conditional Grants

- Other (Provincial water and sewer grant) - - -

Total Capital - - -

Total Utility Services 6,342,500 6,721,702 6,426,279

TOTAL OPERATING AND CAPITAL REVENUE BY FUNCTION 18,820,846 14,651,374 18,697,306

SUMMARY


Total Conditional Grants 496,000 794,531 1,332,401

Total Capital Grants and Contributions 574,500 818,148 2,647,483

TOTAL OPERATING AND CAPITAL REVENUE BY FUNCTION 18,820,846 14,651,374 18,697,306

19

City of EstevanSchedule of Expenses by FunctionFor The Year Ended December 31, 2014 Schedule 3 - 1


GENERAL GOVERNMENT SERVICES

Council remuneration and travel 167,000 166,714 154,554

Wages and benefits 1,449,296 1,332,028 1,485,374

Professional/Contractual services 912,806 995,382 871,593

Utilities 55,950 65,587 57,468

Maintenance, materials and supplies 374,144 365,762 818,983

Grants and contributions - operating 465,000 467,597 456,840

Amortization - 80,684 86,375

Interest 10,000 1,246,887 1,133,143

Allowance for uncollectibles - 52,142 4,838

Other 290,000 480,299 742,027

Total Government Services 3,724,196 5,253,082 5,811,195

PROTECTIVE SERVICES

Police protection



Utilities 74,250 62,016 77,991

Maintenance, material and supplies 247,100 234,098 210,055

Grants and contributions - operating - - -

Fire protections

Wages and benefits 421,187 422,117 397,875


Utilities 18,300 19,074 28,572

Maintenance, material and supplies 334,600 97,149 101,155


Other - - -

Total Protective Services 5,097,593 4,801,425 4,713,030

TRANSPORTATION SERVICES

Wages and benefits 1,560,226 1,060,974 946,305

Professional/Contractual Services 625,728 1,023,741 735,207

Utilities 379,405 415,264 332,250

Maintenance, materials, and supplies 1,445,439 1,564,585 1,544,407

Amortization - 2,027,622 2,195,547

Total Transportation Services 4,010,798 6,092,186 5,753,716

20

City of Estevan

Schedule of Expenses by Function



ENVIRONMENTAL AND PUBLIC HEALTH SERVICES



Utilities 10,500 14,025 17,770



Loss on sale of assets - - -

Total Environmental and Public Health Services 1,519,119 1,666,160 1,393,436

PLANNING AND DEVELOPMENT SERVICES


Professional/Contractual Services 93,500 165,136 142,434


Other 1,000 175 651

Total Planning and Development Services 411,788 451,959 366,219

RECREATION AND CULTURAL SERVICES



Utilities 616,590 646,461 508,604


Grants and contributions - operating 756,048 778,991 716,314


Interest - - -

Other 234,655 385,587 1,108,738

Total Recreation and Cultural Services 5,589,330 6,807,211 7,620,794

21

City of Estevan

Schedule of Expenses by Function



UTILITY SERVICES


Professional/Contractual services 351,900 1,123,930 1,092,216

Utilities 273,400 161,789 241,727

Maintenance, materials and supplies 909,647 1,112,165 777,567

Amortization - 1,832,866 1,795,722

Interest - - 5,387

Total Utility Services 2,958,448 5,715,690 5,443,290

TOTAL EXPENSES BY FUNCTION 23,311,272 30,787,713 31,101,680

22

City of EstevanSchedule of Segment Disclosure by FunctionFor The Year Ended December 31, 2014 Schedule 4

General

Government

Protective

Services

Transportation

Services

Environmental

& Public Health

Planning and

Development

Recreation and

Culture Utility Services Total

Revenues (Schedule 2)

Fees and Charges 1,604,314 104,096 - 914,326 905,984 1,973,265 6,721,702 12,223,687

Tangible Capital Asset Sales - Gain (loss) - - - - - - - -

Land Sales - Gain 230,890 - - - - - - 230,890

Investment Income and Commissions 111 - - - - - - 111

Other Revenues 70,236 513,771 - - - - - 584,007

Grants - Conditional - 330,000 - - - 464,531 - 794,531

- Capital 627,291 - 47,465 73,392 - 70,000 - 818,148

Total revenues 2,532,842 947,867 47,465 987,718 905,984 2,507,796 6,721,702 14,651,374

Expenses (Schedule 3)

Wages & Benefits 1,498,742 3,912,703 1,060,974 263,362 283,163 2,989,079 1,484,940 11,492,963

Professional/ Contractual Services 995,382 261,441 1,023,741 872,151 165,136 503,929 1,123,930 4,945,710

Utilities 65,587 81,090 415,264 14,025 - 646,461 161,789 1,384,216

Maintenance Materials and Supplies 365,762 331,247 1,564,585 375,114 - 798,170 1,112,165 4,547,043

Grants and Contributions 467,597 - - - - 778,991 - 1,246,588

Amortization 80,684 214,944 2,027,622 141,508 3,485 704,994 1,832,866 5,006,103

Interest 1,246,887 - - - - - - 1,246,887

Allowance for Uncollectibles 52,142 - - - - - - 52,142

Other 480,299 - - 175 385,587 - 866,061

Total expenses 5,253,082 4,801,425 6,092,186 1,666,160 451,959 6,807,211 5,715,690 30,787,713

Surplus (Deficit) by Function (2,720,240) (3,853,558) (6,044,721) (678,442) 454,025 (4,299,415) 1,006,012 (16,136,339)

Taxation and other unconditional revenue (Schedule 1) 17,981,869

Net Surplus 1,845,530

23

City of EstevanSchedule of Segment Disclosure by FunctionFor The Year Ended December 31, 2013 Schedule 5

General

Government

Protective

Services

Transportation

Services

Environmental

& Public Health

Planning and

Development

Recreation and

Culture Utility Services Total

Revenues (Schedule 2)

Fees and Charges 1,418,142 181,090 - 1,129,016 638,785 2,908,558 6,426,279 12,701,870

Tangible Capital Asset Sales - Gain (loss) - - - - - - - -

Land Sales - Gain 1,508,764 - - - - - - 1,508,764

Investment Income and Commissions 1,980 - - - - - - 1,980

Other Revenues 109,922 394,886 - - - - - 504,808

Grants - Conditional 449,666 345,000 - - - 537,735 - 1,332,401

- Capital 761,234 - 1,756,960 59,289 - 70,000 - 2,647,483

Total revenues 4,249,708 920,976 1,756,960 1,188,305 638,785 3,516,293 6,426,279 18,697,306

Expenses (Schedule 3)

Wages & Benefits 1,639,928 3,742,060 946,305 271,892 219,649 3,005,223 1,530,671 11,355,728

Professional/ Contractual Services 871,593 345,028 735,207 714,955 142,434 681,892 1,092,216 4,583,325

Utilities 57,468 106,563 332,250 17,770 - 508,604 241,727 1,264,382

Maintenance Materials and Supplies 818,983 311,210 1,544,407 248,737 - 893,097 777,567 4,594,001

Grants and Contributions 456,840 - - - - 716,314 - 1,173,154

Amortization 86,375 208,169 2,195,547 140,082 3,485 706,926 1,795,722 5,136,306

Interest 1,133,143 - - - - - 5,387 1,138,530

Allowance for Uncollectibles 4,838 - - - - - - 4,838

Other 742,027 - - - 651 1,108,738 - 1,851,416

Total expenses 5,811,195 4,713,030 5,753,716 1,393,436 366,219 7,620,794 5,443,290 31,101,680

Surplus (Deficit) by Function (1,561,487) (3,792,054) (3,996,756) (205,131) 272,566 (4,104,501) 982,989 (12,404,374)

Taxation and other unconditional revenue (Schedule 1) 15,723,570

Net Surplus 3,319,196

24

City of EstevanSchedule of Tangible Capital Assets by ObjectFor The Year Ended December 31, 2014 Schedule 6

2013

Infrastructure

Assets

General/

Infrastructure

Land

Land

Improvements Buildings Vehicles

Machinery &

Equipment Linear assets

Assets Under

Construction Total Total

Asset cost

Opening Asset costs 1,239,314 2,963,910 48,327,130 4,079,265 11,226,498 130,526,014 198,362,131 186,227,376

Additions during the year - 724,005 1,460,893 - 79,790 2,113,582 - 4,378,270 12,134,755

Disposals and write-downs during the year - - - - - - - - -

Transfers (from) assets under construction - - - - - - - - -

Closing Asset Costs 1,239,314 3,687,915 49,788,023 4,079,265 11,306,288 132,639,596 - 202,740,401 198,362,131

Accumulated Amortization Cost

Opening Accumulated Amortization

Costs - 1,255,836 13,534,412 1,416,740 7,752,954 68,437,187 - 92,397,129 87,260,823

Add: Amortization taken - 170,191 817,517 279,578 566,726 3,172,091 - 5,006,103 5,136,306

Less: Accumulated amortization on

disposals - - - - - - - - -

Closing Accumulated

Amortization Costs - 1,426,027 14,351,929 1,696,318 8,319,680 71,609,278 - 97,403,232 92,397,129

Net Book Value 1,239,314 2,261,888 35,436,094 2,382,947 2,986,608 61,030,318 - 105,337,169 105,965,002

2014

Assets

Am

ort

izati

on

General Assets

25

City of EstevanSchedule of Tangible Capital Assets by FunctionFor The Year Ended December 31, 2014 Schedule 7

2013

General

Government

Protective

Services

Transportation

Services

Environmental &

Public Health

Planning &

Development

Recreation &

Culture

Water &

Sewer Total Total

Asset cost

Opening Asset costs 1,776,511 3,971,768 81,353,020 1,924,015 104,565 40,504,959 68,727,293 198,362,131 186,227,376

Additions during the year 1,305 144,472 2,112,277 - - 759,549 1,360,667 4,378,270 12,134,755

Disposals and write-downs during the year - - - - - - - - -

Closing Asset Costs 1,777,816 4,116,240 83,465,297 1,924,015 104,565 41,264,508 70,087,960 202,740,401 198,362,131

Accumulated Amortization Cost

Opening Accumulated Amortization Costs 742,044 1,823,896 52,235,708 492,343 13,807 8,310,306 28,779,025 92,397,129 87,260,823

Add: Amortization taken 80,684 214,944 2,027,622 141,508 3,486 704,994 1,832,865 5,006,103 5,136,306

Less: Accumulated amortization on disposals - - - - - - - -

Closing Accumulated Amortization Costs 822,728 2,038,840 54,263,330 633,851 17,293 9,015,300 30,611,890 97,403,232 92,397,129

Net Book Value 955,088 2,077,400 29,201,967 1,290,164 87,272 32,249,208 39,476,070 105,337,169 105,965,002

Assets

Am

ort

izati

on

2014

26

City of Estevan

Schedule of Accumulated Surplus


2013 Changes 2014

UNAPPROPRIATED SURPLUS (2,133,057) 4,873,480 2,740,423

APPROPRIATED RESERVES

Machinery and Equipment - - -

Public Reserve - - -

Capital Trust - - -

Utility 287,260 - 287,260

Total Appropriated 287,260 - 287,260

NET INVESTMENT IN TANGIBLE CAPITAL ASSETS

Tangible capital assets (Schedule 6) 105,965,002 (627,833) 105,337,169

Less: Related debt (31,264,051) (2,400,117) (33,664,168)

Net Investment in Tangible Capital Assets 74,700,951 (3,027,950) 71,673,001

Total Accumulated Surplus 72,855,154 1,845,530 74,700,684

27

City of Estevan

Schedule of Mill Rates and Assessments


Residential Seasonal Commercial Potash

Agriculture Residential Condominium Residential & Industrial Mine(s) Total

Taxable Assessment 584,500 653,325,080 118,711,180 - 338,900,300 1,111,521,060

Regional Park Assessment -

Total Assessment 1,111,521,060

Mill Rate Factor(s) - - - - - Total Base/Minimum Tax (generated for

each property class) - 87,500 - - 2,800 90,300

Total Municipal Tax Levy (include base

and/or minimum tax and special levies) 4,971 5,354,743 1,041,387 - 6,395,579 12,796,680

MILL RATES: MILLS

Average Municipal* 11.5128

Average School* 6.0197

Uniform Municipal Mill Rate 11.0000

* Average Mill Rates (multiple the total tax levy for each taxing authority by 1000

and divide by the total assessment for the taxing authority.

PROPERTY CLASS

28

City of EstevanSchedule of Council RemunerationFor The Year Ended December 31, 2014 Schedule 10

Name Remuneration

Reimbursed

Costs TotalLori Carr 12,420 2,814 15,234 Greg Hoffort 12,420 1,405 13,825 Brian Johnson 12,420 4,319 16,739 Trevor Knibbs 8,280 - 8,280 Roy Ludwig 37,200 5,645 42,845 Dennis Moore 12,420 2,708 15,128 Kevin Smith 12,420 1,623 14,043

Total 107,580 18,514 126,094

29

city of estevan...city of estevan statement of change in net debt for the year ended december 31,...

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