the corporation of the city of elliot lake consolidated ......the corporation of the city of elliot...

The Corporation of the City of Elliot Lake Consolidated Financial Statements For the year ended December 31, 2017

The Corporation of the City of Elliot Lake Consolidated Financial Statements For the year ended December 31, 2017

Management's Responsibility for Financial Reporting

Independent Auditor's Report

Consolidated Financial Statements Statement of Financial Position Statement of Operations Statement of Change in Net Financial Assets Statement of Cash Flows Notes to Financial Statements Schedule 1 - Tangible Capital Assets Schedule 2 - Segment Disclosure

Trust Funds


Financial Statements Statements of Financial Position and Operations Notes to Financial Statements

Contents

2

3

4 5 6 7 8

18 20

23

24 25

December 31 2017

The Corporation of the City of Elliot Lake Management's Responsibility for Financial Reporting

The accompanying consolidated financial statements of The Corporation of the City of Elliot Lake (the City) and all the information in this annual report are the responsibility of management and have been approved by the Mayor and Treasurer on behalf of Council.

The consolidated financial statements have been prepared by management in accordance with Canadian public sector accounting standards. Consolidated financial statements are not precise since they include certain amounts based on estimates and judgments. When alternative accounting methods exist, management has chosen those it deems most appropriate in the circumstances, in order to ensure that the consolidated financial statements are presented fairly, in all material respects.

The City maintains systems of internal accounting and administrative controls of high quality, consistent with reasonable cost. Such systems are designed to provide reasonable assurance that the financial information is relevant, reliable and accurate and the City's assets are appropriately accounted for and adequately safeguarded.

The City Council is responsible for ensuring that management fulfills its responsibilities for financial reporting and is ultimately responsible for reviewing and approving the consolidated financial statements.

The consolidated financial statements have been audited by BDO Canada LLP in accordance with Canadian generally accepted auditing standards on behalf of the ratepayers and inhabitants of the City. The accompanying Independent Auditors' Report outlines their responsibilities, the scope of their examination and their opinion on the City's consolidated financial statements.

Mayor

Acting Treasurer


To the Members of Council, Inhabitants and Ratepayers of The Corporation of the City of Elliot Lake

We have audited the accompanying consolidated financial statements of The Corporation of the City of Elliot Lake, which comprise the consolidated statement of financial position as at December 31, 2017 and the consolidated statements of operations, change in net financial assets and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these consolidated 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 consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility Our responsibility is to express an opinion on these consolidated 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 consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor's 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 consolidated 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 consolidated financial statements.

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

Opinion In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of The Corporation of the City of Elliot Lake as at December 31, 2017 and the consolidated results of its operations, change in its net financial assets and cash flows for the year then ended in accordance with Canadian public sector accounting standards.

Chartered Professional Accountants, Licensed Public Accountants Sault Ste. Marie, Ontario June 11 , 2018

3

The Corporation of the City of Elliot Lake Consolidated Statement of Financial Position

December 31 2017 2016

Financial assets Cash and cash equivalents (Note 2) $ 9,113,632 $ 7,102,952 Portfolio investments (Note 3) 6,638,135 6,368,625 Taxes receivable (Note 4) 1,016,341 605,431 Accounts receivable (Note 5) 989,109 1,527,057 Inventory and land held for resale 31,398 24,666 Residential lots inventory for resale (Note 6) 131,745 227,585 Mortgage receivable (Note 7) 852,549 852,549

18,772,909 16,708,865

Liabilities Accounts payable and accrued liabilities 1,397,983 1,331,224 Other liabilities 195,130 337,944 Deferred revenue (Note 8) 1,487,707 743,627 Long term debt (Note 9) 2,663,905 2,942,099 Accrued landfill closure and post-closure costs (Note 1 0) 1,046,158 1,145,804 Accrued employee benefits (Note 11) 2,234,212 2,177,426

910251095 8,678,124

Net financial assets 9,747,814 8,030,741

Non-financial assets Prepaids and supplies inventory 878,479 467,525 Tangible capital assets (Schedule 1) 24,891,266 24,893,957

25,769,745 25,361,482

Accumulated surelus ~Note 12l $ 35,517,559 $ 33,392,223

~ M ____ __::::::::::::::....\.!:!:~\====------ ayor

Acting Treasurer

The accompanying notes are an integral part of these financial statements.

4

The Corporation of the City of Elliot Lake Consolidated Statement of Operations

For the year ended December 31 Budget 2017 2016

Revenue Taxation (Note 13) $ 11,601,348 $ 11,349,053 $ 11,203,747 Government grants - Provincial 7,540,440 7,642,099 7,864,099 Government grants - Federal 354,280 29,081 365,500 User fees and service charges 5,222,650 5,175,398 5,287,437 Licences, permits and rents 200,480 160,820 222,420 Investment income 259,600 339,538 291,150 Interest and penalties on taxes, water and other 104,000 129,245 114,918 Other 1,355,640 807,512 1,127,846

26,638,438 25,632,746 26,477,117

Expenses General government 4,344,450 3,853,287 4,116,602 Protection services 4,937,470 4,825,238 4,961,944 Transportation services 5,323,830 5,143,738 4,627,223 Environmental services 4,141,840 3,632,148 3,543,897 Health services 1,496,280 1,519,361 1,471,734 Social and family services 1,335,250 1,304,616 1,306,402 Recreation and cultural services 2,654,610 2,568,215 3,691,724 Planning and development 1,074,380 660,807 880,745

25,308,110 23,507,410 24,600,271

Annual surplus 1,330,328 2,125,336 1,876,846

Accumulated surplus, beginning of year 33,392,223 33,392,223 31,515,377

Accumulated surplus, end of year $ 34,722,551 $ 35,517,559 $ 33,392,223


5

The Corporation of the City of Elliot Lake Consolidated Statement of Change in Net Financial Assets

For the year ended December 31 Budget 2017 2016

Annual surplus $ 1,330,328 $ 2,125,336 $ 1,876,846

Acquisition of tangible capital assets (2, 767, 750) (2,502,284) (2,934,018) Amortization of tangible capital assets 2,470,000 2,328,166 2,446,738 Gain on disposal of tangible capital assets (68, 191) (42,196) Proceeds on sale of tangible capital assets 245,000 243,330 Write-downs of tangible capital assets 602,205 Change in prepaid and supplies inventory (410,954) (21,360)

Net change in net financial assets 1,032,578 1,717,073 2,171,545

Net financial assets, beginning of year 8,030,741 8,030,741 5,859,196

Net financial assets, end of ~ear $ 9;0631319 $ 9,7471814 $ 8,030,741


6

The Corporation of the City of Elliot Lake Consolidated Statement of Cash Flows

For the year ended December 31 2017 2016

Operating transactions Annual surplus $ 2,125,336 $ 1,876,846 Items not involving cash

Amortization 2,328,166 2,446,738 Gain on disposal of tangible capital assets (68,191) (42,196) Write down of capital assets 602,205

4,385,311 4,883,593 Changes in non-cash operating balances

Taxes receivable (410,910) (18,282) Accounts receivable 537,948 (151,361) Inventory and land for resale (6,732) 113,883 Prepaids and supplies inventory (410,954) (21,360) Residential lots inventory for resale 95,840 19,737 Accounts payable and accrued liabilities 66,758 102,319 Other liabilities (142,814) 50,072 Deferred revenue 744,080 (463,347) Accrued employee benefits 56,786 (18,034) Accrued landfill closure and post-closure costs (99,646) (512,927)

4,815,667 3,984,293

Capital transactions Acquisition of tangible capital assets (2,502,284) (2,934,018) Proceeds on sale of tangible capital assets 245,000 243,330

(2,257 ,284) (2,690,688)

Investing transactions Acquisition of portfolio investments (269,510) (128,426)

Financing activities Repayment of long term debt (278,193) (361,341)

Net change in cash 2,010,680 803,838

Cash and cash equivalents, beginning of year 7,102,952 6,299,114

Cash and cash equivalents, end of year $ 9,113,632 $ 7,102,952


7

December31, 2017

The Corporation of the City of Elliot Lake Notes to the Consolidated Financial Statements

1. Significant accounting policies

The consolidated financial statements of the Corporation of the City of Elliot Lake (the City} are prepared in accordance with Canadian public sector accounting standards, as recommended by the Public Sector Accounting Board.

Basis of Consolidation These consolidated financial statements reflect the assets, liabilities, sources of financing and expenditures of all City organizations, committees and boards which are owned or controlled by the City including the following:

Elliot Lake Public Library Board Elliot Lake Residential Development Commission

Cash and Cash Equivalents Management considers all highly liquid investments with maturity of three months or less at acquisition to be cash equivalents

Trust Funds

Portfolio Investments

Tangible Capital Assets

Leased Assets

Funds held in trust by the City and their related operations are not included in these consolidated financial statements. The financial activity and financial position of the trust funds are reported separately.

Portfolio investments are recorded at cost. A write down is recorded where there has been a loss in value that is other than a temporary decline.

Tangible capital assets are recorded at cost less accumulated amortization. Cost includes all costs directly attributable to acquisition or construction of the tangible capital asset including transportation costs, installation costs, design and engineering fees, legal fees and site preparation costs. Contributed tangible capital assets are recorded at fair value at the time of the donation, with a corresponding amount recorded as revenue. Amortization is recorded on a straight-line basis over the estimated life of the tangible capital asset commencing once the asset is available for productive use as follows:

Land improvements Buildings Machinery and equipment Vehicles Library collection Linear assets Information technology Parks infrastructure Plants equipment Leasehold improvements

20 years to indefinite 10 to 40 years 3 to 40 years 5 to 40 years

10 years 8 to 40 years 3 to 8 years

5 to 40 years 5 to 40 years

overtheleaseterm

Leases entered into that transfer substantially all the benefits and risks associated with ownership are recorded as the acquisition of a tangible capital asset and the incurrence of an obligation. The asset is amortized in a manner consistent with tangible capital assets owned by the City, and the obligation, including interest thereon, is retired over the term of the lease. All other leases are accounted for as operating leases, and the rental costs are expensed as incurred.

8

December 31 2017


1. Significant accounting policies (continued)

Inventories and Land Held for Resale

Collection of taxes on Behalf of Other Taxation Authorities

Retirement Benefits and Other Employee Benefit Plans

Deferred Revenue

Government Transfers

Revenue Recognition

Inventories held for consumption are recorded at the lower of cost and replacement cost. Land held for resale is recorded at the lower of cost and net realizable value.

The City collects tax revenue on behalf of other entities. Such levies, other revenues, expenses, assets and liabilities with respect to the operations of these other entities are not reflected in these consolidated financial statements.

The City provides pension benefits to specified employees through the Ontario Municipal Employees Retirement Fund (OMERS), a multi-employer plan. The municipality's contributions due during the period are expensed as incurred. The City provides other post-employment benefits. These costs accumulate over the period of service provided by employees and are determined by actuaries using the projected benefit method pro-rated on services and management's best estimate of salary escalation, retirement ages of employees and expected health care costs.

Funds received for specific purposes which are externally restricted by legislation, regulation or agreement and are not available for general City purposes are accounted for as deferred revenue on the consolidated statement of financial position. The revenue is recognized in the consolidated statement of operations in the year in which it is used for the specified purpose.

Government transfers are recognized as revenue in the financial statements when the transfer is authorized and any eligibility criteria are met, except to the extent that transfer stipulations give rise to an obligation that meets the definition of a liability. Transfers are recognized as deferred revenue when transfer stipulations give rise to a liability. Transfer revenue is recognized in the statement of operations as the stipulation liabilities are settled.

Taxes are recorded at estimated amounts when they meet the definition of an asset, have been authorized and the taxable event occurs. For property taxes, the taxable event is the period for which the tax is levied. Taxes receivable are recognized net of an allowance for anticipated uncollectable amounts.

Charges for sewer and water usage are recorded as user fees. Connection fee revenues are recognized when the connection has been established.

Sales of service and other revenue is recognized on an accrual basis.

9


December 31,2017

1. Significant accounting policies (continued)

2.

3.

Solid Waste Landfills

Use of Estimates

Cash and cash equivalents

The estimated costs to close and maintain solid waste landfill sites are based on estimated future expenses in current dollars, discounted, adjusted for estimated inflation, and are charged to expense as the landfill site's capacity is used. Future events may result in significant changes to the estimated total expenses, capacity used, or total capacity and the estimated liability and would be recognized prospectively, as a change in estimate, when applicable.

The preparation of financial statements in conformity with Canadian public sector accounting standards requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from management's best estimates as additional information becomes available in the future.

2017 2016

Unrestricted cash and cash equivalents are comprised of: Cash on hand $ 3,850 $ 5,050 Cash held in banks 6,498,068 4,615,002

6!501,918 4,620,052

Restricted cash and temporary investments are composed of: Cash held in banks 2,587,238 2,451,160 Investments 24,476 31,740

2,611,714 2,482,900

$ 9,1131632 $ 7,102,952

Portfolio investments 2017 2016

GICs, corporate and provincial bonds $ 2,915,676 $ 2,782,316 Strip and coupon bonds 3,263,367 . 3,136,043 Term deposits 459,092 450,266

$ 6,638,135 $ 6,368,625

Corporate, provincial bonds and GIC's carry effective interest rates between 2.00% and 6.14% and mature between March 2018 and November 2026. Interest is receivable annually.

Strip and coupon bonds carry effective interest rates between 2.15% and 4.74% and mature between September 2018 and June 2026.

Term deposits carry effective interest rates between 2.00% and 2.75% and mature between October 2018 and October 2019. Interest is receivable on an annual basis.

10


December 31,2017

4.

5.

6.

7.

8.

Taxes receivable

2017 2016

Levies $ 1,071,341 $ 650,228 Interest and penalties 50,000 39,851 Less: allowance for doubtful collection {1051000} {84,648}

$ 1,016,341 $ 605,431

Accounts receivable

2017 2016

Ontario specific grants $ 716,440 $ 770,459 School board receivable 21,363 1,357 HST receivable 89,423 100,334 Accounts receivable general 105,911 115,552 Accounts receivable water 24,934 46,167 Due from trust fund 5,448 9,234 Other receivables 86,810 484,076 Physician recruitment loan receivable 57,326 74,605 Less: allowance for doubtful collection i118,546} ~74,727}

$ 989,109 $ 1,527,057

Residential lots inventory for resale

Land is purchased from the Crown and is further developed to bring the land ready for resale to residential builders. The Elliot Lake Residential Development Commission is responsible for the development and facilitation of the sale of the land to residential developers. Land inventory is carried at the lower of cost and fair market value.

Mortgage receivable

The City holds a first mortgage on the property known as the ELNOS building. Commencing in 2007, subject to an agreement dated October 19, 2006, there are no annual payments required so long as the borrower remains the owner of the property. On the sale of the property, the City will be entitled to the principal amount of the mortgage plus interest at the rate of 2% calculated from the date of advance of the funds.

Deferred revenue

2017 2016

Deferred other revenue $ 140,119 $ 98,285 Deferred gas tax grants 113471588 645,342

$ 1,487,707 $ 743,627

11


December 31, 2017

9. Long term debt

Long term debt is made up of the following:

RBC demand loan, payable $13,503 monthly including interest at 2.23%

Ontario Infrastructure debenture loan, with $49,250 bi-annual payments plus interest at 2. 75%, maturing April2035

ReaiTerm loan, payable $8,338 (2016- $8, 117) monthly including interest at 12.7 4%, with payment amounts escalating each September, maturing August 2025

2017 2016

$ 409,364 $ 560,442

1,723,750 1,822,250

530,791 559,407

$ 2,663,905 $ 2,942,099

Principal repayments over the next five years and thereafter are as follows:

Year Amount

2018 $ 288,297 2019 299,471 2020 247,272 2021 160,424 2022 171 ,965

Thereafter 1,496,476

$ 2,663,905

10. Landfill closure and post-closure costs

Solid \.vaste closure and post-closure care requirements have been defined in acco;dance with industry standards and include final covering and landscaping of the landfill, removal of ground water and leachates, and ongoing environmental monitoring, site inspection and maintenance. The present value of the City's estimated future liability for this expense is recognized as the landfill site's capacity is used. The liability and annual expense is calculated based on the ratio of utilization to total capacity of the landfill site and the discounted estimated cash flows associated with closure and post-closure activities. The reported liability as at year end was $1,046,158 (2016 -$1, 145,804) and reflects a discount rate of 3.58% (2016- 3.33%).

The liability is based on estimates and assumptions related to events extending over the remaining life of the landfill. The landfill is expected to reach its capacity in 28 years and the estimated remaining capacity is 434,800 cubic metres (2016 - 200,500). The total undiscounted estimated future expenditures for closure and post-closure care are $2,556,000 (2016- $1,679,500). The estimated length oftime needed for post-closure care is 25 years.

During the year the City's application to the Ministry to expand its current landfill site was approved. This expanded capacity has been included in the calculations starting in 2017.

12


December 31, 2017

11. Employee benefits

Employee benefits plan liabilities are made up of the following:

Accrued sick leave Accrued vacation pay Accrued retirement and post-employment benefits

2017

$ 49,146 $ 658,766

1,526,300

2016

58,687 593,639

1,525,100

$ 2,234,212 $ 2,177,426

The City provides sick leave employee benefits to certain employees, accessible only upon request, termination or retirement. The liability represents the value required to cover the sick leave plan.

Accrued vacation pay represents the liability for vacation entitlements earned by employees but not taken as at December 31, 2017.

The City provides certain health, dental and life insurance on behalf of retired employees. The City accrues the liability for these employee future benefits over the service periods in which the employees earn the benefits. The cost of these employee future benefits was determined based on the December 31, 2017 actuarial valuation that included the following significant assumptions:

Discount rate of 3.30% (2016- 2.75%) There are no plan assets. Weighted average health care trend rate of 5.96% (2016- 6.55%) decreasing by 0.10% per year to 4.0% in 2038.

The accrued benefit obligation at the end of the year was $1,636,400 (2016- $1,720,1 00).

The following total expenses related to these benefits are included in the consolidated statement of operations as a component of program expenses:

2017 2016

Current year benefit cost $ 88,900 $ 100,600 Interest cost 48,000 48,300 Amortization of actuarial gain 36,200 33,900

$ 173,100 $ 182,800

13


December 31,2017

12. Accumulated surplus 2017 2016

Reserves set aside for specific purposes by Council Working capital $ 359,896 $ 215,278 Elections 78,176 56,666 Capital expenses 10,061,690 8,230,709 Cemetery capital development 109,687 86,757 Landfill closure and post closure 2,227,507 2,182,767 Sick leave 50,367 58,687 Economic development 375,986 883,619 Miner's heritage 58,907 52,628 Civic centre theatre improvements 23,695 Legislative requirements 151,313 187,865 Wireless towers 52,489 32,118 Waterfront development 1!9701997 2,141,446

Total reserves 15,497,015 14,152,235

Equity in tangible capital assets 24,360,473 24,334,549

Operating surplus 945,580 808,002

Unfunded capital expenditures (230,874)

Unfunded liabilities Long term debt (2,663,905) (2,942,098) Employee benefit plans liabilities (1,526,300) ( 1,525,1 00) Sick leave (49,146) (58,687) Landfill closure and post closure costs (1,046, 158) (1 '145,804)

$ 35,517,559 $ 33,392,223

Allocation of annual surplus:

Reserves $ 1,344,i80 ... 1,152,601 ;'II

Equity in tangible capital assets 25,924 (200,963) Operating surplus 137,578 592,532 Unfunded capital expenditures 230,874 118,968 Unfunded liabilities 386,180 213,708

$ 2,1251336 $ 1,876,846

14

The Corporation of the City of Elliot Lake Notes to Consolidated Financial Statements

December 31,2017

13. Taxation

Residential and multi-residential Commercial and industrial Taxation from other governments Tax reductions and rebates

Deduct: amounts received or receivable for school boards

$

$

2017

10,497,314 2,352,896

262,756 (345,314)

12,767,652 (1,418,599)

1113491053

2016

$ 10,270,210 2,302,696

255,887 (150,406}

12,678,387 (1 ,474,640)

$ 11,203,747

Property tax billings are prepared by the City based on an assessment roll prepared by the Municipal Property Assessment Corporation ("MPAC"), an agency of the Ontario government. All assessed property values in the City were reviewed and new values established based on a common valuation date which was used by the City in computing the property tax billings. However, property tax revenue and taxes receivable of the City are subject to measurement uncertainty as ratepayers may appeal the values assessed.

14. Pension agreements

The City makes contributions to the Ontario Municipal Employees Retirement System (OMERS), which is a multi-employer plan, on behalf of all permanent, full time members of its staff. The plan is a defined benefit plan that specifies the amount of the retirement benefit to be received by the employees based on length of service and rates of pay. Employees and employers contribute jointly to the plan.

Because OMERS is a multi-employer pension plan, the City does not recognize any share of the pension plan deficit, as this is a joint responsibility of all Ontario municipalities and their employees. Employer's contributions for current and past service are included as an expense on the consolidated statement of operations. The amount contributed to OMERS in 2017 was $532,928 (2016- $535,073).

15. Segmented information

The City is a diversified local government institution that provides a wide range of services to its citizens. For management reporting purposes, City operations and activities are organized and reported by Fund. Funds were created for the purpose of recording specific activities to. attain certain objectives in accordance with special regulations, restrictions or limitations.

City services are provided by departments and their activities are reported in these funds. Certain departments that have been separately disclosed in the segmented information, along with the services they provide, are as follows:

General government The administration department oversees the delivery of all government services. The department is responsible for ensuring that there are adequate policies and procedures in place to safeguard assets and to properly report financial activities. This category encompasses the CAO's office, Mayor and Council, clerks and elections, administrative buildings, treasury financial, budgets and bill collection. Administrative services to other departments include information technology and human resources departments.

15

December 31 2017


15. Segmented information (continued)

Protection Protection is comprised of the fire/emergency by-law enforcement and building inspections departments as well as transfers to the Ontario Provincial Police for policing services. The mandate of the police services is to ensure the safety of the lives and property of citizens; preserve peace and good order; prevent crimes from occurring; detect offenders; and enforce the law. The fire/emergency department is responsible to provide fire suppression service; fire prevention programs; training and education related to prevention, detection or extinguishment of fires. The by-law enforcement and building inspection department ensures properties are in compliance with applicable legislation, by-laws, building standards and construction codes.

Transportation The transportation department is responsible for the delivery of City public works services related to the planning, development and maintenance of City roads and streets, transit operations, airport operations and street lighting.

Environmental The environmental department consists of three distinct utilities - water, wastewater and solid waste disposal. The department provides drinking water to ratepayers, collects and treats wastewater, and provides garbage disposal and waste minimization programs and facilities for solid waste disposal.

Health Through the Algoma Health Unit, the City contributes to public health services and education and through the Algoma District Services Administration Board, to ambulance services. In addition, this department oversees the care and maintenance of City cemeteries.

Social and family Through the Algoma District Services Administration Board, the City contributes to social assistance payments, child care services and social housing.

Recreation and cultural The recreation and cultural department provides public services that contribute to neighbourhood development and sustainability through the provision of recreation and leisure services such as parks, arena and pool operation, fitness and sports programs, civic centre operation, recreational programming and trail maintenance. It provides public services that contribute to healthy communities through partnerships, promotion, pievention, piotection and enforcement. The department also contributes towards the information needs of the City's citizens through the provision of library services.

Planning The planning department provides a diverse bundle of services. It manages development for business interests, environmental concerns, heritage matters and neighbourhoods through planning and community development activities. It facilitates economic development by providing services for the approval of all land development plans.

For each reported segment, revenues and expenses include both amounts that are directly attributable to the segment and amounts that are allocated on a reasonable basis. Therefore, certain allocation methodologies are employed in the preparation of segmented financial information.

The accounting policies used in these segments are consistent with those followed in the preparation of the consolidated financial statements as disclosed in the Note 1 significant accounting policies. For additional information see Schedule 2 - Consolidated Schedule of Segment Disclosure.

16


December 31,2017

16. Funds held in trust

Funds held in trust by the City for cemetery care and maintenance amounting to $299,467 (2016 - $286,075) are not included in these financial statements but are reported upon separately.

17. Budget

The Financial Plan (Budget) By-Law adopted by Council on December 12, 2016 was not prepared on a basis consistent with that used to report actual results. The budget was prepared on a modified accrual basis while Public Sector Accounting Standards require a full accrual basis. The budget figures anticipated use of reserves and/or surpluses accumulated in previous years to increase current year revenues in excess of expenditures. In addition, the budget expensed all tangible capital expenditures rather than including amortization expense. As a result, the budget figures presented in the statements of operations and change in net financial assets include the following adjustments:

Financial Plan (Budget) Bylaw Operating fund surplus for the year Capital fund surplus for the year

Add: Capital expenditures Net inter-fund transfers to reserves Principal payments on long-term debt ELRDC budget surplus

Less: Amortization

Budget surplus per statement of operations

18. Contingent liabilities

$

2,767,750 493,248 236,380 302,950

(2,470,000)

$ 1,330,328

The City has been named in litigation matters, the outcome of which is not determinable and accordingly, no provision has been made for them in these financial statements. Should any loss result from these claims, such loss would be charged to operations in the year of resolution.

19. Comparative figures

Amounts shown for comparative purposes have been reclassified to conform to current year presentation.

17

For the ~ear ended December 31 1 2017

Buildings & Machinery Land Leasehold and

Land Improvements Improvements Equipment Vehicles

Cost, beginning of year $ 2,839,652 $ 10,116,342 $ 17,093,980 $ 5,105,831 $ 7,328,409 $

Additions - . 456,868 409,673 273,400

Disposals (4,481) . (231,381) (3(]1,987) . Capitalized construction . . 1,047,642 . .

Cost, end of year 2,835,171 10,116,342 18,367,109 5,484,517 7,601,809

Accumulated amortization,

beginning of year . 9,231,604 14,576,603 2,662,197 5,092,542 Amortization . 93,188 215,987 169,059 457,968 Disposals . . (59,053) (30,987) . Accumulated amortization,

end of year . 9,324,792 14,733,537 2,800,269 5,550,510

Net carrying amount, end of year $ 2,835,171 $ 791,550 $ 3,633,572 $ 2,684,248 $ 2,051,299 $

Library Linear collection assets

478,459 $ 53,395,126

52,213 . . .

. .

530,672 53,395,126

131,754 44,481,537 50,425 836,362 . .

182,179 45,317,899

348,493 $ 8,077,227

The Corporation of the City of Elliot Lake Schedule 1 -Consolidated Tangible Capital Assets

Parks Information infra- Plants Work in technology structure equipment progress Total

$ 342,642 $ 3,187,349 $ 14,712,860 $ 1,188,219 $115,788,869

19,097 162,651 318,317 810,065 2,502,284

. . . . (266,849)

. . . (1,047,642)

361,739 3,350,000 15,031,177 950,642 118,024,304

139,452 2,372,253 12,206,970 . 90,894,912 22,094 94,889 388,194 . 2,328,166

. . . . (90,040)

161,546 2,467,142 12,595,164 . 93,133,038

$ 200,193 $ 882,858 $ 2,436,013 $ 950,642 $ 24,891,266

The net book value of tangible capital assets not being amortized because they are under construction/development or have been removed from service is $950,642 (2016 - $1,188,219).

The City holds various works of art and historical treasures. These items an~ not recognized as tangible capital assets in the financial statements because a reasonable estimate of the future benefits association with such property cannot be made.

The' accompanying notes are an integral part of these financial statements.

18

The Corporation of the City of Elliot Lake Schedule 1 - Consolidated Tangible Capital Assets (Continued)

For the ~ear ended December 31 1 2016 {comgarative figure:s

Buildings & Machinery Parks Land Leasehold and Library Linear Information infra- Plants Work in

Land Improvements Improvements Equipment Vehicles collection assets technology structure equipment progress Total

Cost, beginning of year $ 2,839,652 $ 10,057,984 $ 17,617,915 $ 5,1 05,,831 $ 8,556,032 $ 428,238 $ 51,912,810 $ 342.642 $ 3,090,317 $ 14,516,015 $ 795,180 $ 115,262,616

Additions - 58,358 78,270 - 456,486 50,221 892,956 - 97,032 112,476 1,188,219

Disposals - - (1,684,109) - (121,451) - - - -Capitalized construction - - - - - 710,811 - - 84,369 (795,180)

Write-downs - - (602,205) - - - - - -Cost,

end of year 2,839,652 10,116,342 17,093,980 5,105,831 7,328,409 478,459 53,395,126 342,642 3,187,349 14,712,860 1,188,219


beginning of year - 9,097,818 14,400,066 2,494,930 6,016,430 86,310 43,743,721 111,753 2,278,017 11,823,555 -Amortization - 133,786 176,537 167,267 559,087 45,444 859,267 27,699 94,236 383,415 -Disposals - - - (1 ,482,975) - (121 ,451) - - - -


end of year - 9,231,604 14,576,603 2,662,197 5,092,542 131,754 44,481,537 139,452 2,372,253 12,206,970 -

Net carrying amount, end of year $ 2,839,652 $ 884,738 $ 2,517,377 $ 2,443.634 $ 2,235,867 $ 346,705 $ 8,913,589 $ 203,190 $ 815,096 $ 2,505,890 $ 1,188,219

The net book value of tangible capital assets not being amortized because they are under construction (or development or have been removed from service) is $1,188,219 (2015- $795,180).

The City holds various works of art and historical treasures. These items am not recognized as tangible capital assets in the financial statements because a reasonable estimate of the future benefits association with such property cannot be made.


19

2,934,018

(1,805,560)

(602,205)

115,788,869

90,052,600 2,446,738

(1,604,426)

90,894,912

$ 24,893,957

The Corporation of the City of Elliot Lake Schedule 2 - Consolidated Segment Disclosure

For the ~ear ended December 31 1 2017

General Trans- Environ- Social and Recreation Consolidated Government Protection portation mental Health Family and Cultural Planning Total

Revenue Taxation $ 2,920,55li $ 2,963,669 $ 2,538,023 $ 302,963 $ 901,401 $ 538,705 $ 996,012 $ 187,725 $ 11,349,053 Ontario grants 1,841,75() 1,988,149 1,864,383 191,054 568,438 339,716 727,243 121,366 7,642,099 Canada grants . - - - - . 2,394 26,687 29,081 User fees and service charges 66,07.5 63,567 367,806 3,835,540 81,024 - 761,386 - 5,175,398 Licences, permits and rents 3,852 135,272 - . - - 21,696 - 160,820 Investment income 315,03:1 - - - - . - 24,505 339,538 Interest and penalties on taxes, water and other 100,664! - - 28,583 . . - - 129,245 Other 138,50i' 59,803 97,829 214,926 - . 129,906 166,541 807,512

5,386,434 5,210,460 4,868,041 4,573,066 1,550,863 878,421 2,638,637 526,824 25,632,746

Expenses Salaries and benefits 2,069,6H 1,777,206 1,938,953 1,084,646 29,912 - 1,348,411 207,194 8,455,939 Materials and supplies 1,223,886 144,007 1,210,882 1,302,822 82,114 . 555,049 162,171 4,680,931 Contracted services 478,45SI 2,845,123 665,133 764,139 51,325 . 202,551 191,166 5,197,896 Rents and financial .. - 69,675 - - 10,952 72,540 53,320 206,487 External transfers .. . - - 1,344,327 1,293,664 - - 2,637,991 Amortization 81,325i 58,902 1,259,095 480,541 11,683 . 389,664 46,956 2,328,166

3,853,287 4,825,238 5,143,738 3,632,148 1,519,361 1,304,616 2,568,215 660,807 23,507,410

Excess (deficiency) of revenue over expenses $ 1,533,147 $ 385,222 $ (275,697) $ 940,918 $ 31,502 $ (426,195) $ 70,422 $ (133,983) $ 2,125,336


20

The Corporation of the City of Elliot Lake Schedule 2- Consolidated Segment Disclosure (Continued)

For the ~ear ended December 31 1 2016 !com12arative figures}

General Trans· Environ- Social and Recreation Consolidated Government Protection portation mental Health Family and Cultural Planning Total

Revenue Taxation $ 2,083,094 $ 2,980,648 $ 2,104,200 $ 360,418 $ 899,307 $ 898,587 $ 1,745,364 $ 132,129 $ 11,203,747 Ontario grants 1,247,746 1,884,935 1,567,975 604,574 538,673 538,242 1,396,560 85,394 7,864,099 Canada grants - 333.410 - - - 32,090 365,500 User fees and service charges 316,778 120,958 423,656 3,584.494 90,237 - 751,314 - 5,287,437 Licences, permits and rents 2,870 194,365 - - - - 21,615 3,570 222,420 Investment income 264,673 - - - 3,818 - - 22,659 291,150 Interest and penalties on taxes, water and other 88,800 - - 26,118 - - - - 114,918 Other 102,172 56,953 137,665 210,464 - - 136,218 484,374 1,127,846

4,106,133 5,237,859 4,566,906 4,786,068 1,532,035 1,436,829 4,051,071 760,216 26,477,117

Expenses Salaries and benefits 1,907,557 1,821,447 1,572,864 1,135,492 30,815 - 1,693,266 195,184 8,356,625 Materials and supplies 1,497,576 210,697 843,211 1,799,701 80,346 - 1,194,810 422,669 6,049,010 Contracted services 636,576 2,824,956 783,532 134,053 52,902 - 245,840 155,584 4,833,443 Rents and financial 9,382 - 77,134 - - 14,284 173,295 52,286 326,381 External transfers - - - - 1,295,956 1,292,118 - - 2,588,074 Amortization 65,511 104,844 1,350,482 474,651 11,715 - 384,513 55,022 2,446,738

4,116,602 4,961,944 4,627,223 3,543,897 1,471,734 1,306,402 3,691,724 880,745 24,600,271

Excess (deficiency) of revenue over expenses $ (10,469) $ 275,915 $ (60,317) $ 1.242,171 $ 60,301 $ 130,427 $ 359,347 $ (120,529) $ 1,876,846


21

The Corporation of the City of Elliot Lake Care and Maintenance Trust Funds Financial Statements For the year ended December 31, 2017


Financial Statements Statement of Financial Position

Statement of Operations and Accumulated Surplus

Notes to Financial Statements

Contents

23

24

24

25


To the Members of Council, Inhabitants and Ratepayers of The Corporation of the City of Elliot Lake Care and Maintenance Trust Fund

We have audited the accompanying financial statements of the City of Care and Maintenance Trust Funds of The Corporation of the City of Elliot Lake, which comprise the statement of financial position as at December 31, 2017 and the statement of operations for the year then ended, and a summary of significant accounting policies and other explanatory information.

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.

Auditor's Responsibility 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 auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Trust Funds' 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 Trust Funds' 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 audit opinion.

Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of the Trust Funds of The Corporation of the City of Elliot Lake as at December 31, 2017 and the statement of operations for the year then ended in accordance with Canadian public sector accounting standards.

Chartered Professional Accountants, Licensed Public Accountants Sault Ste. Marie, Ontario June 11 , 2018

23

The Corporation of the City of Elliot Lake Cemetery Care and Maintenance Trust Funds

December31

Assets

Cash Investments Due from the City of Elliot Lake

Liabilities and Fund Balance

Trust Fund Balance

For the year ended December 31

Revenue Interest earned Contributions from the City of Elliot Lake:

Care and maintenance Marker installation fees Niche care and maintenance

Expenditures Contributions to the City of Elliot Lake

Annual surplus

Trust Fund Balance, beginning of year

Trust Fund Balance, end of year

Statement of Financial Position

$

$

2017

85,533 $ 205,990

7,944

299,467 $

299 467

2016

79,337 201,585

5,153

286,075

286,075

Statement of Operations

2017 2016

$ 5,448 $ 3,818

5,250 4,500 850 650

7,292 9,237

18,840 18,205

5,448 3,818

13,392 14,387

286;075 271,688

$ 299,467 $ 286,075


24

December 31, 2017

The Corporation of the City of Elliot Lake Cemetery Care and Maintenance Trust Funds

Notes to Financial Statements

1. Significant accounting policies

The financial statements of the Trust Funds of The Corporation of the City of Elliot Lake are prepared in accordance with Canadian public sector accounting standards.

2. Investments

Trust fund investments of $205,990 (2016 - $201 ,560) have an estimated market value of $202,543 (2016 - $202,132). Investments consist of Canadian federal, provincial and municipal bonds and bank guaranteed investment certificates.

25

the corporation of the city of elliot lake consolidated ......the corporation of the city of elliot...

Documents