AGENDA - Audit Committee - 20150623AUDIT COMMITTEE
MEETING AGENDA
TUESDAY,JUNE 23,2015
6 P.M.
COUNCIL CHAMBERS
AURORA TOWN HALL
PUBLIC RELEASE
June 19,2015
TOWN OF AURORA
AUDIT COMMITTEE MEETING AGENDA
Tuesday,June 23,2015
6 p.m.
Council Chambers
1.DECLARATION OF PECUNIARY INTEREST AND GENERAL NATURE
THEREOF
2.APPROVAL OF THE AGENDA
RECOMMENDED:
THAT the agenda as circulated by Legal and Legislative Services be
approved as presented.
3.DELEGATIONS
(a)Giselle Bodkin,Partner,and Andrea Nauss,Manager,BDO Canada
LLP
Re:Item 1 –CFS15-030 –2014 Year End Audited Financial Statements
4.CONSIDERATION OF ITEMS
5.CLOSED SESSION
6.ADJOURNMENT
Audit Committee Meeting Agenda
Tuesday,June 23,2015 Page 2 of 2
AGENDA ITEMS
1.CFS15-030 –2014 Year End Audited Financial Statements pg.1
RECOMMENDED:
THAT Report No.CFS15-030 be received;and
THAT the 2014 Audit Reports and Financial Statements for the year-ended
December 31,2014,be approved and published in accordance with the
Municipal Act,2001,S.O.2001,c25,Section 295 on the Town’s website.
AUDIT COMMITTEE REPORT No.CFS15-030
SUBJECT:2014 Year End Audited Financial Statements
FROM:Dan Elliott,Director of Corporate &Financial Services -Treasurer
DATE:June 23,2015
RECOMMENDATIONS
THAT Report No.CFS15-030 be received;and
THAT the 2014 Audit Reports and Financial Statements for the year-ended
December 31,2014 be approved and published in accordance with the Municipal
Act,2001,S.O.2001,c25,Section 295 on the Town’s website.
PURPOSE
To present for approval,the audited financial statements for the year ended December
31,2014,and the auditor’s report thereon.
BACKGROUND
Attached hereto is the entire audit package as presented by our auditors BDO Canada
LLP,which include the Audited Financial Statements,2014 Year End Report and a
management letter if applicable.The actual financial statements have been prepared by
staff and audited by BDO Canada LLP.The results shown in these consolidated
statements differ from the traditionally prepared year-end report card due to the
inclusion of tangible capital assets and other PSAB reporting differences.They have
been marked DRAFT by the auditors,as the audit cannot be technically completed until
after the approval of the statements by Council.Council is required to approve these
statements as part of the finalization of the audit.Once the auditors sign their final
report in the coming days,the financial statements will be made publicly available by
being placed on the Town website,a requirement under Section 295 of the Municipal
Act,2001,S.O.2001,c.25 as amended.The management letter section of the
package,if applicable,outlines any issues that relate to the audit.Any such items were
identified during the audit process and discussed with management following the actual
field work of the audit.
Representatives from BDO Canada LLP will be in attendance to present their report and
findings.
TOWN OF AURORA
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -1
-1 -
June 23,2015 -2 -Report No.CFS15-030
COMMENTS
The Audited Financial Statements present a consolidation of the Town’s finances and
include the combined results of the General Operations of The Town,the Library Board,
and the Water/Wastewater Sewer Operations.
Staff continue to monitor the Town’s financial processes in an attempt to identify further
opportunities for efficiency.Any time that a change in process is considered,staff give
full consideration to any impact that these proposed changes may have on the existing
internal controls,and the adequacy thereof.Any deliberated changes made are
approved by the Director of Corporate &Financial Services -Treasurer,and drawn to
the auditors’attention during the next audit.
During the course of this audit,BDO Canada LLP reviewed their previous management
letter items.
LINK TO STRATEGIC PLAN
None:The annual audit is a statutory requirement,and is guided by professional
standards applicable to all Canadian licensed audit practitioners.Preparation and
publication of the annual audited financial statements supports the Strategic Plan
principles of integrity,and progressive corporate excellence and continuous
improvement.
ALTERNATIVE(S)TO THE RECOMMENDATIONS
n/a
FINANCIAL IMPLICATIONS
There are no financial implications to this report,the purpose of which is for its receipt
by the Audit Committee as well as to obtain approval of the Consolidated 2014 Financial
Statements of the Town so that the Statements may be published as required by
legislation.The 2014 internal year-end report card was presented to General Committee
on June 16,2015.
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -2
-2 -
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -3
-3 -
–“
Year End Report for The Corporation of
the Town of Aurora
Presented by
Giselle Bodkin,CPA,CA
Attachment #1
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -4
-4 -
TABLE OF CONTENTS
Where are you today?
Key Performance Results .......................................................................2-5
Industry Comparison ..........................................................................6-12
Audit Committee Best Practice Recommendations...................................................13
Summary of Audit Process ............................................................................14-15
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -5
-5 -
2
TOTAL REVENUE,EXPENSES AND ANNUAL SURPLUS
(IN THOUSANDS ‘000)
2008 2009 2010 2011 2012 2013 2014
Revenue 63,657 66,858 65,094 79,442 71,871 70,409 94,495
Expenses 52,594 54,065 58,877 62,547 65,071 67,315 71,543
Annual Surplus 11,063 12,793 6,217 16,895 6,800 3,094 22,952
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -6
-6 -
3
TOTAL NET FINANCIAL ASSETS
(IN THOUSANDS ‘000)
2008 2009 2010 2011 2012 2013 2014
Net Financial Assets 41,465 48,008 50,022 50,942 54,983 59,474 65,065
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -7
-7 -
4
TOTAL ACCUMULATED SURPLUS AND TANGIBLE CAPITAL
ASSETS
(IN THOUSANDS ‘000)
2008 2009 2010 2011 2012 2013 2014
Accumulated Surplus 384,741 400,102 406,319 423,214 428,195 437,926 460,878
Accumulated TCA 343,252 352,074 356,269 371,887 379,720 378,381 395,727
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -8
-8 -
5
2014 REVENUE
2010 REVENUE
37.25%
40.71%
2.63%
-0.07%9.11%
10.23%
Revenue
Taxation
User fees
Grants
Loss on disposal of
TCA
Assumed
infrastructure assets
Other
47.62%
34.23%
6.55%
0.43%
7.79%
3.38%
Revenue
Taxation
User fees
Grants
Gain on disposal of TCA
Assumed infrastructure
assets
Other
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -9
-9 -
6
FIVE YEAR EXPENSE COMPARISON
(IN THOUSANDS ‘000)
2014 2013 2012 2011 2010
General government 12,078 11,677 9,076 9,433 8,262
Protection to person and property 12,254 10,875 10,386 10,090 8,915
Transportation services 8,236 7,652 7,996 7,237 6,708
Environmental services 20,176 18,714 18,539 16,981 16,541
Leisure and cultural services 16,883 16,485 17,656 17,267 16,794
Planning and development 1,916 1,912 1,418 1,539 1,657
71,543 67,315 65,071 62,547 58,877
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -10
-10 -
7
2014 EXPENSES
2010 EXPENSES
34.91%
15.25%
6.24%
42.71%
0.32%0.58%
Expenses
Salaries,wages and benefits
Amortization
Materials and supplies
Contracted services
Interest on long-term liabilities
Others
34.53%
19.07%6.90%
38.31%
0.81%0.39%
Expenses
Salaries,wages and benefits
Amortization
Materials and supplies
Contracted services
Interest on long-term liabilities
Others
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -11
-11 -
8
INDUSTRY COMPARISON
NET FINANCIAL ASSETS (DEBT)
TCA ADDITIONS
2008 2009 2010 2011 2012 2013
Town of Aurora 41,465 48,008 50,022 50,942 54,983 59,474
Town #2 13,459 (787) (16,624) (20,479) (17,981) (14,620)
Town #3 (17,478) (22,427) (26,022) (18,168) (12,355) (15,755)
Town #4 (5,959) (4,228) (3,026) (1,529) 2,641 5,964
Town #5 33,729 33,790 33,758 40,092 50,863 60,667
(40,000)
(30,000)
(20,000)
(10,000)
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
2008 2009 2010 2011 2012 2013
Town of Aurora 17,052 20,556 14,074 25,306 15,183 7,894
Town #2 26,432 50,871 44,547 24,794 45,531 14,867
Town #3 21,422 11,999 12,017 9,994 9,396 13,125
Town #4 6,667 7,812 21,060 16,549 5,382 6,853
Town #5 - 27,284 43,754 21,455 20,782 27,714
-
10,000
20,000
30,000
40,000
50,000
60,000
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -12
-12 -
9
REVENUE
EXPENSES
2008 2009 2010 2011 2012 2013
Town of Aurora 63,657 66,858 65,094 79,442 71,871 70,409
Town #2 50,257 63,545 52,196 53,320 68,232 54,398
Town #3 31,628 26,948 33,383 41,159 43,825 39,682
Town #4 41,794 39,164 52,895 54,749 44,491 46,003
Town #5 94,052 85,614 94,595 97,511 102,893 114,929
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
2008 2009 2010 2011 2012 2013
Town of Aurora 52,594 54,065 58,877 62,547 65,071 67,315
Town #2 26,299 30,619 35,165 40,128 44,257 50,092
Town #3 22,722 23,984 29,480 32,199 33,514 34,342
Town #4 39,461 38,772 39,649 44,486 45,410 47,006
Town #5 77,707 82,127 85,326 89,907 93,817 98,182
-
20,000
40,000
60,000
80,000
100,000
120,000
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -13
-13 -
10
ANNUAL SURPLUS (DEFICIT)
ACCUMULATED SURPLUS
2008 2009 2010 2011 2012 2013
Town of Aurora 11,063 12,793 6,217 16,895 6,800 3,094
Town #2 23,958 32,884 19,934 13,193 24,245 8,046
Town #3 8,906 2,964 3,903 8,960 10,311 5,341
Town #4 2,333 392 13,247 10,239 (1,774) (1,175)
Town #5 17,374 9,494 12,753 8,514 10,446 16,747
(5,000)
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
2008 2009 2010 2011 2012 2013
Town of Aurora 384,741 400,102 406,319 421,395 428,195 437,926
Town #2 139,199 171,601 192,269 205,462 229,707 237,753
Town #3 108,720 111,684 115,588 129,898 140,209 145,550
Town #4 336,394 336,786 350,030 358,867 357,093 357,093
Town #5 443,284 452,778 465,531 472,638 483,084 499,831
-
100,000
200,000
300,000
400,000
500,000
600,000
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -14
-14 -
11
2013 TOWN OF AURORA REVENUE
2013 INDUSTRY AVERAGE REVENUE
47.76%
38.27%
0.74%
-0.14%
2.04%
11.06%Revenue Taxation
User fees
Grants
Loss on disposal of tangible
capital assets
Assumed infrastructure assets
Other
48.82%
29.62%
2.30%
-0.31%
9.82%
9.13%Revenue Taxation
User fees
Grants
Loss on disposal of tangible
capital assets
Assumed infrastructure assets
Other
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -15
-15 -
12
2013 TOWN OF AURORA EXPENSE
2013 INDUSTRY AVERAGE EXPENSE
36.02%
15.63%6.26%
40.68%
0.44%
0.96%Expense Salaries,wages and benefits
Amortization
Materials and supplies
Contracted services
Interest on long-term liabilities
Other
44.02%
17.00%
10.07%
23.80%
2.02%
3.08%Expense Salaries,wages and benefits
Amortization
Materials and supplies
Contracted services
Interest on long-term liabilities
Other
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -16
-16 -
13
Audit Committee Best Practice Recommendations
Financial Reporting
The Committee should receive monthly internal financial statements and ensure that
the financial statements clearly reflect the true performance of the Organization.
The Committee should review audit adjustments made and those waived because of
immateriality.
The Committee should review and approve the draft audited financial statements.
Is there a financial expert on the Committee?The financial expert would have the
following 5 attributes:
Understanding of the financial statements and accounting principles used to
prepare the issuer's financial statements;
Ability to assess the application of such accounting policies;
Experience preparing,auditing,analyzing or evaluating financial statements,or
experience supervising individuals engaged in preparing,auditing,analyzing or
evaluating financial statements;
An understanding of internal controls and procedures for financial reporting;
An understanding of audit committee functions
Risks and Controls
The Committee should create the right tone at the top to foster growth of suitable
controls.
The Committee should have a sufficient understanding of the risks at the Organization.
The Committee should analyze the internal control system to ensure that the risks are
adequately mitigated.
Audit Function
The Committee should ensure that the external auditor selected has sufficient
knowledge of and experience in the Organization’s industry.
The Committee should review the audit fee and ensure that it is in line with the scope
of the audit.
The Committee should confirm and discuss the auditor’s independence.
The Committee should keep an open line of communication with the external auditors,
including such items as:
The auditor's responsibility under Canadian Auditing Standards.
The quality of the accounting principles followed by the Organization.
Disagreements with management.
Difficulties in performing the audit.
Major issues management discussed with the auditors before their retention.
Other Issues to Consider:
Is the Committee independent from the Organization?
Is the Committee sufficiently financially literate?
Are there clear position descriptions for directors?
Is there orientation and continuing education for all directors in place?
Is there a written code of business conduct and ethics?
Is there a nominating committee?
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -17
-17 -
14
Summary of Audit Process
Overall Approach
Attain an understanding of processes and controls within the departments by
performing system descriptions and walkthroughs.
Attain an understanding of internal IT and software,through discussions with the IT
department and our systems descriptions.
Identify specific areas of the financial information which contain risk,and significant
judgment.
From these initial stages,we determine what procedures to be performed on the
specific areas of the financial statements.
Income Statement Approach
Revenue
Taxation –we obtain the annual by-law and compare to the revenue recorded
following-up on significant differences.
Grants and government transfers –we obtain a sample of revenue received
and agree to the funding documents,following up on differences.
Interest income –Interest reasonability tests are performed on tax interest,
reserve interest,bank and investments.
Assumed infrastructure assets –we obtain the asset registers and recalculate.
We take a sample of additions and trace to the supporting documentation to
ensure the amounts agree.We then compare the overall asset registers to that
recorded and follow-up on any significant differences.
Gain on disposal of tangible capital assets –we review the disposals and
compare to the asset registers to ensure the cost was removed appropriately.
Also,if the assets were sold we obtain documentation on the proceeds to
ensure the calculation of the gain/loss is appropriate.
User fees,fines,licenses,permits and other revenue –we performed a
detailed comparison of current year to the prior five years and budget on an
account by account basis,using a threshold to determine the significant
changes.We then review the significant changes with management and obtain
supporting documentation.
Expenses
Salaries,wages and employee benefits –we perform test of controls on a
cyclical basis.This tests various input and output controls for salaries.With
regards to benefits we perform a reasonability test based on yearly
percentages of CPP,EI,and benefits as a percentage of salaries.These are
compared to the stated rates and differences are followed up.
Materials and supplies,contracted services and other –we perform
substantive tests on these expenses and vouch to supporting documentation on
a sample basis,following up on any differences.
Interest on long-term liabilities -we review the various debenture contracts
and agree the interest expensed to the interest indicated in those.
Amortization –we recalculate the amortization on a test basis and compare to
the actual amounts recorded,following up on any significant differences.
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -18
-18 -
15
Balance Sheet Approach
Assets
Cash –test of controls are performed on bank reconciliations,and a bank
confirmation is sent to the bank and agreed to the general ledger.
Taxes receivable –we perform a detailed five year comparison by aging
following-up on significant differences.We also perform a large arrears check
and follow-up to determine what the approach is to collect from that resident.
User fees and accounts receivable –we obtain the various accounts receivable
account details and for significant balances agree to the supporting
documentation or calculations.We also perform reasonability tests on various
specific balances.We perform cut-off tests to ensure that amounts have been
recorded in the proper period.We also check for deferred revenue or amounts
that have been outstanding for significant periods of time and ensure they
should not be written off.
Portfolio investments –Confirmations are sent to the investment advisors and
review of investment certificates and continuity schedules is performed.
Land listed for sale –we obtain the current year listing and for any purchases
or sales obtain the agreement and agree the amounts and recalculate any
gains/losses.
Tangible capital assets and tangible capital assets under construction –we
obtain the asset registers and recalculate.We take a sample of additions and
trace to the supporting documentation to ensure the amounts agree.We then
compare the overall asset registers to that recorded and follow-up on any
significant differences.
Prepaid expenses –we obtain supporting documentation for any material items
included in prepaid.
Liabilities
Accounts payable and accrued liabilities –we obtain supporting
documentation for significant liabilities outstanding.We perform cut-off
testing to ensure they have been recorded in the proper period.We test to
ensure that accruals are reasonable.
Deposits –we review the deposits and ensure that amounts received should not
be recognized through a sample of items,following up with the specific
departments.
Deferred revenue –we obtain the continuity schedule.For additions we test
the supporting grant funding letters,test the calculation of developer charges
and the reasonability of interest.For decreases we ensure they are approved
in the budget.
Employee benefits liabilities –we obtain the actuarial report,and review the
assumptions made and ensure they are reasonable.We then ensure that the
appropriate accounting method has been applied.We follow-up with both the
actuary and the Town’s Finance department on any unusual items,differences.
Net long-term liabilities –we obtain third party confirmation on the balance,
terms and interest rate,following up on any significant differences.
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -19
-19 -
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -20
-20 -
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -21
-21 -
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -22
-22 -
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -23
-23 -
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -24
-24 -
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -25
-25 -
The Corporation of the Town of Aurora
Consolidated Financial Statements
For the year ended December 31,2014y
of the Town ofoftheTown
lidated FinancialdatedFina
ended DeceendedD
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -26
-26 -
The Corporation of the Town of Aurora
Consolidated Financial Statements
For the year ended December 31,2014
Contents
Independent Auditor's Report 1
Consolidated Financial Statements
Consolidated Statement of Financial Position 2
Consolidated Statement of Operations and Accumulated Surplus 3
Consolidated Statement of Change in Net Financial Assets 4
Consolidated Statement of Cash Flows 5
Notes to the Consolidated Financial Statements 6 -21
Schedule 1 -Consolidated Schedule of Segmented Disclosure 22 -23dule1-Cdule1-
olidol
lid
inancial PositioncialPosition
t of Operations andOperationsan
ement of Change inementofChange
ement of Cashementof
d Fin
y
of the Town ofoftheTown
lidated FinancialdatedFina
ended DeceendedD
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -27
-27 -
Independent Auditor's Report
To the Mayor and Councillors of
The Corporation of the Town of Aurora
We have audited the accompanying consolidated financial statements of The Corporation of the Town of
Aurora,which comprise the consolidated statement of financial position as at December 31,2014,the
consolidated statements of operations and accumulated surplus,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 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 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 controls 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,these consolidated financial statements present fairly,in all material respects,the financial
position of The Corporation of the Town of Aurora as at December 31,2014 and the results of its operations
and accumulated surplus,change in net financial assets,and its cash flows for the year then ended in
accordance with Canadian public sector accounting standards.
Chartered Professional Accountants,Licensed Public Accountants
Barrie,Ontario
June 23,2015
1
g the
elieve that telieveth
dit opinion.opinion.
Opinionpinion
In our opiniInouropini
positionposition
and acand
acccc
useduse
all presall
the p
or error.erro
n on thesethese consolidatconso
ce with Canadian gewithCanadian
with ethical requhethicalreqirem
er the financial statemfinancialst
procedures to obtaincedurestoobtai
ements.ts.The proceduTheprocedu
ks of material misstatmaterialmis
making those risk assemakingthoserisk
nd fair presentationdfairpresenta
propriate inropriate the
ntity's inteity's
the
presentation opresentation
unting standauntingstanda
ration oationo
e CoeCorporation of therporationo
n as at December 31asatDecemb
ge in net financial aseinfinancia
ting policinges and oesan
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -28
-28 -
The Corporation of the Town of Aurora
Consolidated Statement of Financial Position
December 31 2014 2013
(Dollar amounts presented in '000's)Restated
(note 2)
Financial assets
Cash (note 3)$ 8,106 $ 9,002
Taxes receivable 6,163 7,003
User fees receivable 3,344 3,361
Accounts receivable 6,281 6,440
Portfolio investments (note 5)68,444 62,725
Land listed for sale (note 6)9,500 9,273
101,838 97,804
Liabilities
Accounts payable and accrued liabilities 14,290 11,849
Deposits (note 7)4,024 5,148
Deferred revenue (note 8)13,210 14,587
Employee benefits liabilities (note 9)963 818
Net long-term liabilities (note 10)4,286 5,928
36,773 38,330
Net financial assets 65,065 59,474
Non-financial assets
Tangible capital assets (note 23)395,727 378,381
Prepaid expenses 86 71
395,813 378,452
Accumulated surplus (note 11)$ 460,878 $ 437,926
Contingencies and contractual obligations (notes 17 and 18)
Approved by Council
Mayor
Chief Administrative Officer
The accompanying notes are an integral part of these consolidated financial statements
2
at
ontingencies andngenciesan
ApproveApprove
plusplu (n
sets (note 23)(note 23)
1
2013013
RestatedRestated
(note 2)(note 2)
106 $ 9,002$ 9,002
6,16363 7,0
3,34444
6,2816,281
68,44468,444
9,5009,50
101,810
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -29
-29 -
The Corporation of the Town of Aurora
Consolidated Statement of Operations and Accumulated Surplus
Budget
For the year ended December 31 2014 2014 2013
(Dollar amounts presented in '000's)Restated
(note 2)
(note 4)
Revenue
Taxation (note 12)$ 39,493 $ 35,249 $ 33,719
User fees 26,184 38,522 27,017
Grants (note 13)2,472 2,493 520
Loss on disposal of tangible
capital assets -(63)(96)
Assumed infrastructure assets -8,618 1,439
Other (note 14)9,426 9,676 7,810
77,575 94,495 70,409
Expenses
General government 12,130 12,078 11,677
Protection to person and property 12,346 12,254 10,875
Transportation services 8,030 8,236 7,652
Environmental services 20,105 20,176 18,714
Leisure and cultural services 17,030 16,883 16,485
Planning and development 2,289 1,916 1,912
71,930 71,543 67,315
Annual surplus 5,645 22,952 3,094
Accumulated surplus,beginning of year,as previously stated 437,926 437,926 428,195
Prior period adjustment (note 2)--6,637
Accumulated surplus,beginning of year,as restated 437,926 437,926 434,832
Accumulated surplus,end of year $ 443,571 $ 460,878 $ 437,926
The accompanying notes are an integral part of these consolidated financial statements
3
nning of yeagofyr,as previousasprevio
(note 2)e 2)
us,s,beginning of yeaginningofyr
end of yeardofy
12,130,130
12,34612,346
8,0308,030
20,1020,10
7
te 2
$ 33,71933,719
27,01727,017
93 520520
(6363))
8,6188,618
9,6769,676
94,4954,49
1
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -30
-30 -
The Corporation of the Town of Aurora
Consolidated Statement of Change in Net Financial Assets
Budget
For the year ended December 31 2014 2014 2013
(Dollar amounts presented in '000's)Restated
(note 2)
(note 4)
Annual surplus $ 5,645 $ 22,952 $ 3,094
Amortization of tangible capital assets 10,907 10,907 10,524
Net proceeds on disposal of tangible capital
assets -54 174
Loss on disposal of tangible capital assets -63 96
Acquisition of tangible capital assets (19,752)(19,752)(7,894)
Assumed infrastructure assets -(8,618)(1,439)
Land listed for sale --(122)
Change in prepaid expenses -(15)58
Change in net financial assets (3,200)5,591 4,491
Net financial assets,beginning of year 59,474 59,474 54,983
Net financial assets,end of year $ 56,274 $ 65,065 $ 59,474
The accompanying notes are an integral part of these consolidated financial statements
4
$$
(3,200),200)
59,47459,47
tate
(note 2)e 2)
$ 3,0943,094
907 10,52410,524
5454
6363
((19,75219,752))
((8,6188,6 )
-
(1
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -31
-31 -
The Corporation of the Town of Aurora
Consolidated Statement of Cash Flows
For the year ended December 31 2014 2013
(dollar amounts presented in '000's)Restated
(note 2)
Operating transactions
Annual surplus $ 22,952 $ 3,094
Non-cash charges to operations:
Amortization of tangible capital assets 10,907 10,524
Loss on disposal of tangible capital assets 63 96
Assumed infrastructure assets (8,618)(1,439)
Changes in non-cash operating working capital:
Taxes receivable 840 (1,154)
User fees receivable 17 (487)
Accounts receivable 159 1,787
Land listed for sale (227)(1,373)
Accounts payable and accrued liabilities 2,441 2,585
Deposits (1,124)1,206
Deferred revenue (1,377)(4,996)
Employee benefits liabilities 145 2
Prepaid expenses (15)58
Total Operating Transactions 26,163 9,903
Capital transactions
Acquisition of tangible capital assets (19,752)(7,894)
Net proceeds on disposal of tangible capital assets 54 174
Total Capital Transactions (19,698)(7,720)
Investing transactions
Decrease /(Increase)in portfolio investments (5,719)4,773
Financing transactions
Principal repayment on long-term liabilities (1,642)(1,579)
Increase /(Decrease)in cash (896)5,377
Cash,beginning of year 9,002 3,625
Cash,end of year $ 8,106 $ 9,002
The accompanying notes are an integral part of these consolidated financial statements
5
/
h,,beginningbeginn
Cash,sh,end of yeendo
ease)iease
ts
gible capital assetscapitalasse
e)in portfolio invesnportfolioin
onsons
nt on long-telon
ash
3,094094
10,52410,524
3 9696
618)(1,439(1,439
84040 (
1717
15959
((22722)
2,4412
((1,12
(1
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -32
-32 -
The Corporation of the Town of Aurora
Notes to the Consolidated Financial Statements
December 31,2014
(Dollar amounts presented in '000's)
1.Summary of Significant Accounting Policies
The Corporation of the Town of Aurora (the "Town")is a municipality in the Province of
Ontario.The Town conducts its operations guided by the provisions of provincial statutes
such as the Municipal Act,Municipal Affairs Act and related legislation.
Management's Responsibility
The consolidated financial statements of the Town are the responsibility of management.
They have been prepared in accordance with Canadian public sector accounting standards
established by the Public Sector Accounting Board ("PSAB")of The Chartered Professional
Accountants of Canada.
Basis of Consolidation
The consolidated financial statements reflect the assets,liabilities,revenue,expenditures
and fund balances of the Town and comprise all of the organizations that are accountable
for the administration of their financial affairs and resources to the Town and are owned or
controlled by the Town.These boards include:
The Aurora Public Library Board
All inter-organizational and inter-fund transactions and balances are eliminated.
Basis of Accounting
Revenue and expenses are reported on the accrual basis of accounting whereby revenue is
recognized as it is earned and measurable;and expenses are recognized in the period that
goods and services are acquired,a liability is incurred,or transfers are due.
Cash
Cash and cash equivalents are comprised of cash on hand,cash held in financial institutions
and temporary investments with maturities of 90 days or less.
Government Transfers
Government transfers,which include legislative grants,are recognized in the consolidated
financial statements in the period in which the events giving rise to the transfers occur,
providing the transfers are authorized,any eligibility criteria have been met,and
reasonable estimates of the amounts can be made,except to the extent possible that the
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 consolidated statement of operations as the
stipulated liabilities are settled.
Tangible Capital Assets
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 using
the following rates.
6
vern
GovernmentGovernment
financial stafinancialsta
providingprovidi
reasonareasona
transtrans
TrT
i
TransT
irs
lude:de:
-fund transactions adtransactio
are reported on thearereportedon
arned and measurabedandmeasura
are acquired,a liabacquired,a
uivalents arelen
stmentstme
assets,liabilassets,liab
of the organoftheorgan
resourceresourc
Province ofinceof
ncial statuteslstatutes
onsibility of managetyofman
sector accounting sectoraccounti
of The Chartered PofTheCharte
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -33
-33 -
The Corporation of the Town of Aurora
Notes to the Consolidated Financial Statements
December 31,2014
(Dollar amounts presented in '000's)
1.Summary of Significant Accounting Policies (continued)
Tangible Capital Assets (continued)
Buildings 10 -50 years
Vehicles 7 -15 years
Other
Machinery and Equipment 7 -15 years
Library Collection 7 years
Computer Equipment 4 -10 years
Parks Facilities (excluding Buildings)5 -80 years
Transportation Infrastructure
Roads 20 -36 years
Bridges and Other Structures 30 -40 years
Environmental Infrastructure
Sanitary Pumping Stations 20 -50 years
Underground and Other Networks 15 -100 years
One half of the annual amortization is charged in the year of acquisition and in the year of
disposal.
Non-pension Post-employment Benefits,Compensated Absences &Termination Benefits
The Town accrues its obligations under employee benefit plans as the employees render the
services necessary to earn employee future benefits.The Town has adopted the following
valuation methods and assumptions:
a) Actuarial cost method:
Accrued benefit obligations are computed using the projected benefit method
prorated on service,as defined in PSAB 3250 and PSAB 3255.The objective under
this method is to expense each member's benefit under the plan taking into
consideration projections of benefit costs to and during retirement.Under this
method an equal portion of total estimated future benefit is attributed to each year
of service.
b) Accounting policies:
Actuarial gains and losses are amortized on a linear basis over the expected average
remaining service life ("EARSL")(expected remaining payment period in respect of
the retiring allowance)of members expected to receive benefits under the plan,
with amortization commencing in the period following the determination of the gain
or loss.Obligations are attributed to the period beginning on the member's date of
hire and ending on the expected date of termination,death or retirement,
depending on the benefit value.
c) Workplace Safety and Insurance Board (WSIB):
The costs related to WSIB benefits are recognized immediately in the period in
which the event occured.
7
o
b) Accob) Acco
ActuActu
r
hod anhod
rvice.
chargedged in t
t Benefits,Compennefits,Comp
ations under employsunderem
rn employee futurernemployee
d assumptions:ssumption
cost method:method:
d benefit obligatiobenefitoblig
ed on service,asdonservice,
hod is to eis
on projenp
ual
10 -50 years10-50 years
7 -15 years7-15 years
7 -15 y7-
4
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -34
-34 -
The Corporation of the Town of Aurora
Notes to the Consolidated Financial Statements
December 31,2014
(Dollar amounts presented in '000's)
1.Summary of Significant Accounting Policies (continued)
Pension agreements
The Town makes contributions to the Ontario Municipal Employees'Retirement System
("OMERS"),a multi-employer public sector pension fund,based on the principles of a
defined benefit plan,which specifies the amount of the retirement benefit to be received
by the employees on the basis of predefined retirement age,length of eligible service and
rates of remuneration over a fixed period of time.
Because OMERS is a multi-employer pension plan,any pension plan surpluses or deficits are
a joint responsibility of all participating Ontario municipalities and their employees.As a
result,the Town does not recognize any share of the OMERS pension surplus or deficit.
Accordingly,contributions made during the year are expensed.
Deposits
The Town receives deposits on building permits and site plan applications that ensure
restitution of any potential damage caused by the developer.These deposits are held in
trust until the work has been completed,at which point in time,the deposit is returned.
Deferred Revenue
Deferred revenue represents user charges and fees which have been collected,but for
which the related services have yet to be performed.These amounts will be recognized as
revenue in the fiscal year the services are performed.
The Town receives development charges under the authority of provincial legislation and
Town by-laws.These funds,by their nature,are restricted in their use and,until applied to
specific capital works,are recorded as deferred revenue (formerly obligatory reserve
funds).
Use of Estimates
The preparation of financial statements in accordance 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.The principal
estimates used in the preparation of these financial statements are the post-employment
benefits liabilities,the estimated useful lives of tangible capital assets and valuation of
tangible capital assets.Actual results could differ from management's best estimates as
additional information becomes available in the future.
Assumed Infrastructure Assets
Subdivision streets,lighting,sidewalks,drainage and other infrastructure are required to be
provided by subdivision developers.Upon completion they are assumed by the Town and
recorded at fair value at the date of assumption.The Town is not involved in the
construction and does not budget for either the contributions from the developer or the
capital expenditure.
8
pr
ccountingccount
the reportedthereported
the reportedthereported
estimatesestimat
benefitbenefit
tangtan
ad
ationatio
nd
ed byy
,at whichwhi
user charges anuserchargesand f
have yet to be peveyettoberfo
the services are peservicesare
development chargelopmentcharg
ese funds,by their nnds,by their n
works,are recordworks,are re
en
ts and sitesandsite
develdevel
nt
rement SystemtSystem
e principles of arinciplesofa
nefit to be receivedtobereceived
of eligible service aeligibleservi
plan surpluses or deplansurpluseso
ities aniesd their empdtheir
MERS pension surpRSpension
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -35
-35 -
The Corporation of the Town of Aurora
Notes to the Consolidated Financial Statements
December 31,2014
(Dollar amounts presented in '000's)
1.Summary of Significant Accounting Policies (continued)
Revenue Recognition
Revenues are recognized as follows:
a) Taxation revenue is recognized as revenue when it is authorized and the taxable
event occurs.Related penalties and interest are recognized as revenue in the year
that they are earned.
b) User fees are reported on an accrual basis.
c)Grants
-Conditional grant revenue is recognized to the extent the conditions imposed
on it have been fulfilled.
-Unconditional grant revenue is recognized when monies are receivable.
d)Investment income earned on surplus funds is reported as revenue in the period
earned.
Investment income earned on deferred revenue amounts such as development
charges and parkland allowances,is added to the associated funds and forms part of
the respective deferred revenue balance.
Investment income earned on the Town's reserve fund balances is added to the
associated funds and forms part of the respective period ending reserve fund
balance.Reserve fund balances in a credit position are similarly charged interest.
e)Development related fees and charges are recognized over the period of services or
when required expenses occur if applicable.
9
eferredferre
es,is addedadd
nue balance.balance.
ed on the Town'sontheTow
forms part of theformspartf
und balances in a crbalancesin
elated fees and charatedfeesand
ed expenses occur ifxpensesoccuri
zed whendwhe
unds is reportendsisrepor
venuenu
ed and the taxablendthetaxable
as revenue in the yeevenueintheye
e extent the conextentthe
onies a
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -36
-36 -
The Corporation of the Town of Aurora
Notes to the Consolidated Financial Statements
December 31,2014
(Dollar amounts presented in '000's)
2. Restatement of Prior Period
Tangible Capital Asset Value Review:
The Town's transition to its GIS system necessitated a review of its linear assets.A review
of these asset types was commenced in 2013 and concluded in the fall of 2014.At
December 31,2013,it was estimated based upon the results to date that these assets were
collectively overstated by $24,400 as of December 31,2012.In addition,it was discovered
that the Town's inventory of water and sewer connections,valued at a historical cost of
$16,375,were missing from its reported tangible capital asset cost as of December 31,
2012.Finally,over the course of the Town's 2013 audit process it was discovered that its
tangible capital assets under construction were understated by $127 as of December 31,
2012.Consequently,a prior period adjustment reducing the historical cost of the Town's
tangible capital assets by a net total of $7,898 was recorded in the December 31,2013
consolidated financial statements.As a result of this adjustment to historical cost,it was
necessary to record a prior period adjustment reducing accumulated amortization by a net
total of $6,328.These adjustments resulted in a decrease in the net book value of tangible
capital assets of $1,570.
Upon the conclusion of the review of the Town's linear asseets in the fall of 2014 it was
determined that the historical cost of these assets as at December 31,2012 was
understated by $6,388.In addition,it was determined that the Town's inventory of water
and sewer connections as at December 31,2012 was overstated by $1,287.Finally,over
the course of the review,it was discovered that the historical cost of underground
infrastructure assets was understated by $7,826 as at December 31,2012.Consequently,it
was deemed necessary that a prior period adjustment increasing the historical cost of the
Town's tangible capital assets by a net total of $12,927 be recorded.As a result of this
adjustment to historical cost,it was necessary to record a prior period adjustment
increasing accumulated amortization by a net total of $6,562.These adjustments resulted
in an increase in the net book value of tangible capital assets of $6,365.
The net effect of all of the above noted prior period adjustments is as follows:
2013
Statement of Financial Position:
Increase in tangible capital assets $6,365
Increase in accumulated surplus $6,365
Statement of Operations:
Increase in accumulated surplus,beginning of year $6,637
Increase in expenses
Transportation services 195
Environmental services 77
Total increase in expenses 272
Decrease in annual surplus $(272)
Increase in accumulated surplus,end of year $6,365
10
ement of Fimento
crease in tangibasetangib
Increase in accreasein
StatemeStateme
IncreaIncr
In
the TownTow's
st ofof these assesea
on,it was dewasdetermint
ecember 31,mber 31,2012 w20
it was discoveredtwasdisco
understated by $7,82rstatedby$
that a prior periodthatapriorpe
tal assets by a netassetsbyne
storical cost,it walcost,it w
mulated amortizatiomulatedamortiz
in the net book valnthenetbook
all of the aboft
reco
his adjustmadjust
ducing accumuducingaccum
decrease indecreasein
sets.A reviewAreview
fall of 2014.Atof2014.At
at these assets wereeseassetswere
tion,it was discove,it was di
ed at a historical cahistoric
et cost as of DecemcostasofDe
cess it was discovercessitwasdis
ed by $127 as of Ddby$127 a
he historical coehistoric
d in the Ddinth
t to h
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -37
-37 -
The Corporation of the Town of Aurora
Notes to the Consolidated Financial Statements
December 31,2014
(Dollar amounts presented in '000's)
3. Cash
The Town's bank accounts are held at one chartered bank.The bank accounts earn interest
at composite prime rate minus 1.75%.As at December 31,2014,the rate is 1.25%(2013 -
1.25%).
The Town has an overdraft credit facility agreement with TD Bank,to be used for day to
day operations.The maximum credit limit is $1,000 with interest calculated using the
composite prime rate minus 0.25%.As at December 31,2014,the rate is 2.75%(2013 -
2.75%)and the outstanding balance is $Nil (2013 -$Nil).
4. Budget Reconciliation
The Budget for 2014 adopted by Council on March 18,2014 was prepared on a basis not
consistent with that used to report actual results (Canadian public sector accounting
standards).The budget was prepared on a modified accrual basis,while Canadian public
sector accounting standards now require financial statements to be prepared on a full
accrual basis.Accordingly,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 represent the 2014 budget
adopted by Council with adjustments as follows:
Revenue Expense Net
Council approved budget:
Operating -Town &Library $ 53,470 $ 53,470 $ -
Operating -water/sewer 16,767 16,767 -
Capital (for multiple years)9,530 9,530 -
Total Council approved budget 79,767 79,767 -
Less:Multiple years capital (9,530) (9,530)-
debt principal payments1 - (1,637) 1,637
Plus:2014 Non-TCA capital - 790 (790)
budget change 450 450 -
2014 outside source for capital projects 3,080 - 3,080
transfers to/from other funds2 (4,900) (8,817) 3,917
transfers from deferred revenue 8,708 - 8,708
amortization expense3 - 10,907 (10,907)
Adjusted budget per the
consolidated statement of operations $ 77,575 $ 71,930 $ 5,645
1 "Debt principal payments"are considered a repayment of a long-term liability and are not
considered an expense under accrual accounting -only the related interest portion
remains a valid expense under accrual accounting.
2 "Transfers to/from other funds"represents transfer to/from reserves for expenditures and
is not considered a revenue source under accrual accounting.
3 Under accrual accounting,costs related to the acquisition of "Tangible Capital Assets"are
recorded on the balance sheet -only the amortization of existing Tangible Capital Assets
is included as an expense.
11
20
budgebud
2014 ou2014ou
transfeansfe
transtra
amam
AdjuAdju
cipci
n-TCAn-T
an
fin
expenspense
As aa resultre
ge in nennt financifinan
nts as follows:follows:
aryary
wer
e years)ars)
pproved budgetprovedbudget
capitalapit
ayme
18,2014201
ults (Canadia(Canad
ified accrualfiedaccrual
al statemalstatem
ll tantan
rn interesterest
.25%(2013 -%(2013 -
be used for day tousedfordayto
calculated usinglculatedusi
he rate is 2.75%(20eis2.75%
as prep
u
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -38
-38 -
The Corporation of the Town of Aurora
Notes to the Consolidated Financial Statements
December 31,2014
(Dollar amounts presented in '000's)
5. Portfolio Investments
Portfolio investments are comprised of fixed income securities that are primarily federal,
provincial and municipal government bonds,debentures and promissory notes and bearer
deposits that mature after more than 90 days.Portfolio investments are valued at the lower
of cost or market value.
Portfolio investments of $68,444 (2013 -$62,725)have a market value of $75,253 (2013 -
$68,466).
6. Land Listed for Sale
The Town owns two parcels of land,which are surplus to the Town's needs and were listed
for sale in 2010.
In 2014,the servicing of the above noted two parcels of land was completed with a total of
$227 being invested net of all recoveries.
Subsequent to the year end,a portion of one of these parcels was sold.The details of this
transaction can be found in note 19.
7. Deposits
Beginning Ending
Balance 2014 2014 Balance
2014 Inflows Outflows 2014
Refundable Damage Deposits $ 5,148 3,049 (4,173)$ 4,024
12
of oneone of theofthe
BeginnBeginn
Bala
age DepositsageDep
s to th
rcels of land wcelsofland
ly federal,federal,
es and bearerndbearer
ed at the lowerthelowe
lue of $75,253 (2013of$75,253 (2
own's neeown's
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -39
-39 -
The Corporation of the Town of Aurora
Notes to the Consolidated Financial Statements
December 31,2014
(Dollar amounts presented in '000's)
8.Deferred Revenue
Beginning
Balance
2014
2014
Inflows
2014
Outflows
Ending
Balance
2014
Development charges $ (12,317)10,505 (7,087)$(8,899)
Parkland purposes 12,581 1,931 (4)14,508
Building Code Act,1992 203 458 (258)403
Federal Gas Tax 2,290 1,582 (1,586)2,286
Revenue Deferral -General 1,122 2,754 (1,682)2,194
3,879 17,230 (10,617)10,492
Deferred Revenue
transferred to capital but
unexpensed at the end of
the year 10,708 4,162 (12,152)2,718
$ 14,587 21,392 (22,769)$ 13,210
During 2009,an appeal was made to the Ontario Municipal Board (OMB)regarding the
Town's Development Charges Bylaw at that time.A settlement of this outstanding appeal
was reached in 2012 resulting in the establishment of a related estimated settlement
accrual.This settlement amount was fully paid out to all applicable parties in 2014.
9.Employee Benefits Liabilities
2014 2013
Post-employment benefits $ 638 $ 619
Accrued sick leave 183 199
821 818
WSIB benefits 142 -
$ 963 $ 818
13
crued
WSIB benefWSIBf
mentmen
leavel
7
to the Ontario MtheOntario
aw at that tthatime.Am
g in the establtheestablishmi
ount was fully paiduntwasfully
LiabilitiesLiabilities
efit
4,1624,162
21,3921,39
Endingding
Balancealance
20142014
,087)$$((8,8998,899
(4)(4)14,5
(258)258)
(1,586)(1,586)
(1,682)(1,682)
(10,617)10,6
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -40
-40 -
The Corporation of the Town of Aurora
Notes to the Consolidated Financial Statements
December 31,2014
(Dollar amounts presented in '000's)
9.Employee Benefits Liabilities (Continued)
Post-employment benefits
Post-employment benefits are health and dental benefits that are provided to early retirees
and employees currently on a long term disability.The Town recognizes these post-
employment costs as they are earned during the employee's tenure of service.The accrued
benefit obligations for the Town's post-employment benefits and accrued sick leave
liabilities as at December 31,2014 are as follows:
2014 2013
Accrued benefit obligation,beginning of year $ 1,318 $ 898
Add: Benefit expense 63 50
Interest cost 60 42
Actuarial losses -424
Less: Benefits paid for the period (156)(96)
Accrued benefit obligation,end of year 1,285 1,318
Unamortized actuarial losses (464)(500)
Accrued benefit liability $ 821 $ 818
The accrued benefit obligations for the Town's post-employment benefits liability and
accrued sick leave as at December 31,2014 are based on actuarial valuations for
accounting purposes as at December 31,2013 with projections to December 31,2016.
These actuarial valuations were based on assumptions about future events.The economic
assumptions used in these valuations are management's best estimates of expected rates of:
2014 2013
Expected future inflation rates 2.0%2.0%
Discount on accrued benefit obligations 4.75%4.75%
Health care costs escalation 5.67%4.00%
Dental costs escalation 4.0%4.0%
The amount of benefits paid by the Town during the year was $38 (2013 -$50).
Workplace Safety and Insurance Board (WSIB)benefits
The Town is a Schedule 2 employer under the Workplace Safety and Insurance Act and,as
such,assumes responsibility for financing its workplace safety and insurance costs.The
accrued WSIB benefit obligations for the Town's WSIB benefits liability as at December 31,
2014 are based on actuarial valuations for accounting purposes as at December 31,2013
with projections to December 31,2016.These actuarial valuations were based on
assumptions about future events.
14
ExE
DiscoD
HealthHealt
Den
TheThe
ed fu
obligations for thebligationsfor
as at DecemberatDecember
ses as at DecembeatDecembe
valuations were bavaluationswere
sed in these valuatedintheseva
to early retireesearlyretirees
gnizes these post-es these post-
service.The accruevice.The accrue
nd accrued sick laccruedsi
201420
1,3
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -41
-41 -
The Corporation of the Town of Aurora
Notes to the Consolidated Financial Statements
December 31,2014
(Dollar amounts presented in '000's)
10. Net Long-term Liabilities
2014 2013
Debenture,bearing interest at rates varying from 3.1%
to 4.1%,maturing in September 2015.Principal is
repayable in annual installments,and interest is payable
in semi-annual installments.$ 1,502 $ 2,946
Debenture,bearing interest at 4.37%,maturing in
September 2025.Principal and interest is repayable in
semi-annual installments of $160.2,776 2,968
Capital leases,bearing interest at 3.80%,maturing in
July 2016.Principal and interest is repayable in
quarterly installments.8 14
$ 4,286 $ 5,928
Principal repayments for each of the next five years and thereafter are as follows:
2015 $ 1,709
2016 213
2017 220
2018 229
2019 239
Thereafter 1,676
$ 4,286
The interest expense related to the above long-term debt was $230 (2013 -$294).
The debentures were issued by The Regional Municipality of York in the name of the Town
to fund the construction of a recreation complex.The long-term liabilities have been
approved by municipal and regional by-law.The annual principal and interest payments
required to service these liabilities are within the annual debt repayment limit prescribed
by the Ministry of Municipal Affairs and Housing.
15
The debenThedeb
to fund thetofundthe
approved byapprovedby
requiredrequire
by thebythe
xpexp
s
next five years antfiveyears
$$
fter
relat
20132013
1,50202 $ 2,$
2,7762,77
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -42
-42 -
The Corporation of the Town of Aurora
Notes to the Consolidated Financial Statements
December 31,2014
(Dollar amounts presented in '000's)
11.Accumulated Surplus
Accumulated surplus is comprised of the following:
2014 2013
Restated
(note 2)
Non Financial Surpluses
General revenue $ 5,356 $ 8,771
Land listed for sale 9,500 9,273
Invested in tangible capital assets 395,727 378,381
Less:financed by long-term liabilities (4,286)(5,928)
Total non-financial surpluses 406,297 390,497
Reserves set aside by Council for Infrastructure
Infrastructure Sustainability -Water Rate Funded 3,902 1,084
Infrastructure Sustainability -Tax Rate Funded 9,809 7,698
13,711 8,782
Reserve funds,set aside for specific purposes by Council 5,282 3,860
Proceeds of sale of Aurora Hydro 35,588 34,787
Total reserves and reserve funds 54,581 47,429
Accumulated surplus $ 460,878 $ 437,926
12. Net Taxation
2014 2013
Total taxes levied by the Town $ 108,421 $ 105,666
Less:
Taxes levied on behalf of the Boards of Education 30,957 30,500
Taxes levied on behalf of the Region of York 42,215 41,447
$ 35,249 $ 33,719
13.Grants Revenue
2014 2013
Federal $ 2,068 $ 248
Provincial 111 23
Other 314 249
$ 2,493 $ 520
16
otal taxeotalta
Less:Less:
Taxes levTaxeslev
TaxesTaxe
vied
Fun
ic purposes by CourposesbyC
dro
e fundsnds
us
ndedded
dd
20132013
RestatedRestated
(noteote
5,3565,356 $$
9,5009,500
395,72795,727
(4,2864,28 )
406,240
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -43
-43 -
The Corporation of the Town of Aurora
Notes to the Consolidated Financial Statements
December 31,2014
(Dollar amounts presented in '000's)
14.Other Revenue
2014 2013
Penalties and interest on taxes $ 987 $ 1,003
Fines 239 220
Licenses,permits and fees 3,313 2,205
Interest income 3,275 3,593
Other 1,862 789
$ 9,676 $ 7,810
15. Pension Agreements
OMERS provides pension services to more than 451,115 active and retired members and
their approximately 974 employers.Each year an independent actuary determines the
funding status of OMERS Primary Pension Plan (the Plan)by comparing the actuarial value of
invested assets to the estimated present value of all pension benefits that members have
earned to date.The most recent actuarial valuation of the Plan was conducted at
December 31,2014.The results of this valuation disclosed total actuarial liabilities of
$76,924 million in respect of benefits accrued for service with actuarial assets at that date
of $69,846 million indicating an actuarial deficit of $7,078 million.Because OMERS is a
multi-employer plan,any pension plan surpluses or deficits are a joint responsibility of
Ontario municipal organizations and their employees.As a result,the town does not
recognize any share of the OMERS pension surplus or deficit.
Contributions in 2014 ranged from 9.0%to 14.6%depending on the level of earnings.As a
result,$1,841 (2013 -$1,809)was contributed to OMERS for current year services.
16.Insurance Coverage
The Town is self-insured for insurance claims up to $10 for any individual claim and for any
number of claims arising out of a single occurrence.
Claim costs during the year amounted to $69 (2013 -$46).
The Town has made provisions for reserves for self-insurance claims under $10 to be used
for those claims that exceed the sum provided for in the annual budget.These reserves are
reported on the Consolidated Statement of Financial Activities under reserves set aside by
Council.In 2013,the Insurance stand alone reserve was collapsed into the Town's general
Tax Rate Stabilization Reserve;this reserve will be similarly accessible for this purpose.
The balance of the Tax Rate Stabilization Reserve as of December 31,2014 was $2,691.
17
To
umber oumber
Claim costs dClaimcostsd
The TownTheTow
for thofortho
reporep
C
self-insel
ms
value
ctuariaarial vl
this valuasvaluationtion
fits accrued focruedfor servr
n actuarial detuarialdeficit ofi
nsion plan surplusesionplansurp
ations and their emnsandthei
he OMERS pension suheOMERSpen
4 ranged from 9.0%nged from 9.0
013 -$1,809)was co$1,809)wa
e
d
51,115 activ15act
an independeanindepend
e Plan)by coPlan)by co
all penllpen
tio
2013013
1,0031,003
220220
3 2,2052,205
275 3,593593
1,86262 7
9,6769,676 $$
nd
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -44
-44 -
The Corporation of the Town of Aurora
Notes to the Consolidated Financial Statements
December 31,2014
(Dollar amounts presented in '000's)
17. Contingencies
The Town is subject to various legal claims arising in the normal course of its operations.
The ultimate outcome of these claims cannot be determined at this time;therefore,no
amounts have been recorded in these financial statements.The Town's management believe
that the ultimate disposition of these matters will not have a material adverse effect on its
financial position.
18.Contractual Obligations
The Town committed contractual obligations on major capital projects of approximately
$27,166 during 2014,which have various contract completion dates.
Effective January 1,2002,the Town entered into an agreement with the Town of
Newmarket with respect to the provision of Fire and Emergency services.Under the
Agreement,the Town of Newmarket assumed responsibility for the combined Central York
Fire Services.The cost of these services is shared between the two municipalities on the
basis of a pre-defined cost sharing formula.The Town's share of costs for the year was
$8,809 (2013 -$8,227).
19.Subsequent Events
Subsequent to year end,the Town drew upon a pre-approved contractor's line of credit in
the amount of $4,710 in relation to its Joint Operations Centre construction.
In addition,subsequent to year end,the Town sold a parcel of land on June 1,2015 for a
sale price of $522.This parcel of land had been listed for sale at December 31,2014 and is
disclosed in note 6.
20.Segment Information
The Town is a diversified municipal government institution that provides a wide range of
services to its citizens.Distinguishable functional segments have been separately disclosed
in the Consolidated Schedule of Segment Disclosure.The nature of the segments and the
activities they encompass are as follows:
Taxation Revenue
The Town's primary source of funding for its operations is achieved through property taxes
levied against property owners.
Governance &Corporate Support
This functional segment includes The Mayor's office and Council,CAO Office,Legislative
Services,Legal,Communication,Information Technology and Financial Services,and all
other support services.
Fire &Emergency Services
Central York Fire Services provides fire and emergency services to the residents of Aurora
and Newmarket.The cost the Town paid for these services is described in Note 18.
18
Segment InfSegment
The TownTheTown
servicesservices
in theinthe
actact
s sha
mula.la.TheT
d,the Town drew utheTowndrew
10 in relation to itsrelationtoits
sequent to year endsequenttoyear
522.This parcel o22.This parc
6.6
eti
nto an aganag
Fire and EmeFireandEm
sponsibilityponsibility
betwebetwe
wn
operations.rations.
therefore,noefore,no
agement believementbelieve
verse effect on itseeffectonits
pital projects ofitalproject
dates.dates.
men
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -45
-45 -
The Corporation of the Town of Aurora
Notes to the Consolidated Financial Statements
December 31,2014
(Dollar amounts presented in '000's)
20.Segment Information (continued)
Building,Bylaw &Licensing Services
The Town issues a variety of licenses and permits.This segment ensures an acceptable
quality of building construction and maintenance of properties through enforcement of
construction codes,building standards and by-laws for the protection of occupants.It
enforces all zoning by-laws and the processing of building permit applications.
Roads &Related Services
This segment represents the reconstruction,repair,maintenance works and winter control
services provided to the Town's roads,sidewalks,street lighting,walkways and bridges.
Environmental Services
This segment represents the water/sewer services and waste management services provided
by the Public Works Department.
Community Programs &Events
This segment represents the services that the Parks &Recreation Services Department
provided through community programs and special events.
Parks &Facilities
This segment maintains numerous recreation facilities,as well as indoor community space
for booking and community use.It also maintains parks and playgrounds,open spaces and a
vast trail system.
Public Library Services
This segment of library services covers the Library Board and The Town's library expenses.
The funding from the Town to the Library Board is eliminated before the segment amount is
determined.
Planning &Development
This functional segment manages the Town's urban development through the development
application process.It also oversees community economic development,environmental
concerns,heritage matters,local neighbourhoods,and the Town's Official Plan.
21.Comparative Amounts
Certain comparative figures in these consolidated financial statements have been
reclassified to conform to the presentation adopted for the current year.
22. Tangible Capital Assets Under Construction
Tangible capital assets under construction and other capital work in progress by the Town
having a value of $18,540 (2013 -$8,069)have not been amortized.Amortization of these
assets will commence when these noted assets are put into service.This value excludes any
developer constructed assets which have yet to be assumed.
19
.ComparativeComparative
Certain cCertain
reclassireclass
22
spec
ecreation facationfacilitieilit
t also maintamaintains parin
services covers theservicescover
Town to the LibrarywntotheLibra
elopmentelopment
l segment managesegmentman
ess.It alsoIt
mattersmatt
was
Parks &ReParks&Re
events.vents.
an acceptablecceptable
enforcement oforcementof
n of occupants.Itoccupants.It
cations.ns.
ce works and wintereworksandw
ng,walkways and brng,walkways a
managementmanagem
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -46
-46 -
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -47
-47 -
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -48
-48 -
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -49
-49 -
Audit Committee Meeting Agenda
Tuesday,June 23,2015
Item 1 Page -50
-50 -