|
The Corporation of the Regional Municipality of York
(the “Region”) was incorporated as a municipality in 1971
by the Province of Ontario. The area municipalities within the regional
boundaries include the towns of Aurora, East Gwillimbury, Georgina,
Markham, Newmarket, Richmond Hill, Whitchurch-Stouffville, the Township
of King and the City of Vaughan.
1. Accounting Policies
The consolidated financial statements of the Regional Municipality
of York are the representations of management prepared in accordance
with generally accepted accounting principles for local governments
established by the Public Sector Accounting Board (PSAB) of the
Canadian Institute of Chartered Accountants.
The focus of PSAB financial statements is on the financial
position of the Region and the changes thereto. The Consolidated
Statement of Financial Position reports the financial assets and
liabilities, and the non financial assets and liabilities of the
Municipality. Financial assets are those assets which could provide
resources to discharge existing liabilities or finance future operations.
Municipal position represents the financial position and is the
difference between assets and liabilities. This provides information
about the Municipality’s overall future revenue requirements
and its ability to finance activities and meet its obligations.
a) Basis of Consolidation
i) These consolidated financial statements reflect the assets, liabilities,
sources of financing and expenditures in the Current Fund, Capital
Fund, Reserves and Reserve Funds, and include the activities of
all committees of Council, the York Region Police Services Board,
and effective January 1, 2001 York Regional Housing Corporation,
and effective November 1, 2001 Region of York Housing Corporation.
The 2000 comparative figures have been reclassified
to conform to current presentation.
ii) The financial activities of the sinking fund are
not included in these statements.
iii) Funds held in trust by the Region for the residents
of Newmarket Health Centre and Maple Health Centre and their related
operations are not included in the financial statements. The financial
activity and position of the trust funds and donations received
on behalf of the Centres are reported separately in the Residents’
Trust Funds and Donation Account Statement of Financial Position,
and Statement of Financial Activities.
b) Basis of Accounting
i) Accrual Basis of Accounting
Sources of financing and expenditures are reported on the accrual
basis of accounting. The accrual basis of accounting recognizes
revenues as they become available and measurable; expenditures are
recognized as they are incurred and measurable as a result of receipt
of goods or services and the creation of a legal obligation to pay.
ii) Capital Assets
The historical cost and accumulated depreciation for capital assets
are not recorded for municipal purposes. Capital assets are reported
as an expenditure on the Consolidated Statement of Financial Activities
in the year of acquisition.
iii) Use of Estimates
Since precise determination of many assets and liabilities is dependent
upon future events, the preparation of periodic financial statements
necessarily involves the use of estimates and approximations.
iv) Deferred Revenue-Obligatory Reserve Funds
Development Charges, collected under the authority of Sections 33
to 35 of the Development Charges Act 1997, are reported as Deferred
Revenue in the Consolidated Statement of Financial Position in accordance
with the standards of the Public Sector Accounting Board (PSAB).
Amounts applied to qualifying capital projects are recorded as revenues
in the fiscal period in which they are applied to the qualifying
capital projects.
v) Reserves and Reserve Funds
Certain amounts, as approved by Regional Council, are set aside
in reserves and reserve funds for future operating and capital purposes.
Transfer to and/or from reserves and reserve funds are an adjustment
to the respective fund when approved.
vi) Government Transfers
Government transfers are recognized in the period in which the events
giving rise to the transfer occur, providing the transfers are authorized,
any eligibility criteria have been met, and reasonable estimates
of the amounts can be made.
vii) Investment Income
Investment income earned on surplus current fund, capital fund,
reserves and reserve funds (other than development charges) are
reported as revenue in the period earned. Investment income on the
development charge reserve funds is added to the fund balance and
form part of the respective deferred revenue balances.
viii) Pensions and Employee Benefits
The Region accounts for its participation in the Ontario Municipal
Employee Retirement Fund (OMERS), a multi-employer public sector
pension fund, as a defined contribution plan. Vacation entitlements
are accrued for as entitlements are earned. Sick leave benefits
are accrued where they are vested and subject to pay out when an
employee leaves the Region’s employ.
ix) Budget Figures
The Regional Municipality of York Council completes a review of
its operating and capital budgets each year. The approved operating
budget for 2001 is reflected on the Consolidated Schedule of Current
Fund Operations and is included in the budget figures presented
in the Consolidated Statement of Financial Activities.
Budgets established for the Capital Fund and Reserves
and Reserve Funds are set on a project-oriented basis, the costs
of which may be carried out over one or more fiscal years. The budgets
reflected in the Consolidated Schedule of Capital Fund Operations
and the Consolidated Schedule of Reserves and Reserve Funds and
included in the Consolidated Statement of Financial Activities is
an annual budget only as required by the recommendations of the
Public Sector Accounting Board of the Canadian Institute of Chartered
Accountants.
2. Investments
Included in cash and short-term investments are short-term investments
of $650,585,794 (2000 - $669,647,027) recorded at cost, adjusted
for amortization of discount or premium, and with a market value
of $671,352,105, (2000 - $705,659,101) at the end of the year.
Long-term investments of $67,112,631 (2000 - $26,152,618) are recorded
at cost, adjusted for amortization of discount or premium, and with
a market value of $69,774,557 (2000 - $26,244,152). These items
are valued at the lower of cost and market value.
3. Accounts Receivable
The balance for accounts receivable, net of the Allowance for Doubtful
Accounts on the Consolidated Statement of Financial Position totaled
$78,158,819 for 2001, (2000 - $61,204,537). This amount is comprised
of the following receivables:
| |
2001
|
2000
|
|
|
| Government of Canada |
$ 3,368,773
|
$ 1,269,337
|
| Government of Ontario |
2,777,354
|
859,538
|
| Other Municipalities |
40,111,940
|
42,808,896
|
| Others |
32,360,526
|
16,327,940
|
|
|
| |
78,618,593
|
61,265,711
|
| Less: Allowance for Doubtful Accounts |
459,774
|
61,174
|
|
|
| |
$ 78,158,819
|
$ 61,204,537
|
|
|
4. Capital Financing
Capital expenditure on the Consolidated Statement of Financial Activities
includes capital assets and transfers to the Capital Fund in the
amount of $32,852,068, (2000 - $31,014,307) which have been financed
from general municipal revenues, reserves and reserve funds of the
current year.
5. Long-term Liabilities
a) The balance for long-term liabilities reported on the Consolidated
Statement of Financial Position is made up of the following items.
Interest rates for the debts range from 3% to 12%.
| |
2001
|
2000
|
|
|
Total long-term liabilities incurred by the Municipality
including those
incurred on behalf of school boards and area municipalities
and outstanding
at the end of the year amount to |
$ 335,178,980
|
$ 348,317,882
|
| Sinking fund debenture |
20,756,703
|
66,591,717
|
| Mortgages payable by Region of York Housing Corporation
|
90,022,886
|
-
|
| Obligation to fund debentures issued by the Ontario
Housing Corporation |
10,751,489
|
-
|
|
|
| |
456,710,058
|
414,909,599
|
Of the long-term liabilities shown above, the
payment of principal and
interest charges recoverable from others amounts to |
(96,479,927)
|
(117,409,664)
|
|
|
| Net Long-term Liabilities at the end of the
year |
$ 360,230,131
|
$ 297,499,935
|
|
|
b) Long-term liabilities, including the 2001 current
portion not segregated on the Consolidated Statement of Financial
Position, is repayable as follows:
| 2002 |
$ 45,354,289
|
|
| 2003 |
30,250,958
|
|
| 2004 |
21,976,534
|
|
| 2005 |
31,964,161
|
|
| 2006 |
20,406,361
|
|
| Thereafter |
200,489,248
|
|
|
|
| Net sinking fund debt repayable according to
actuarial recommendations |
9,788,580
|
|
|
|
| |
$ 360,230,131
|
|
|
|
c) Charges for Net Long-term Liabilities
Total charges for the year for net long-term liabilities which are
included in the Consolidated Statement of Financial Activities,
are as follows:
| |
2001
|
2000
|
|
|
| Principal payments |
$ 20,073,348
|
$ 17,062,604
|
| Interest |
18,329,659
|
16,732,864
|
|
|
| Total charges for Net Long-term Liabilities
at the end of the year |
$ 38,403,007
|
$ 33,795,468
|
|
|
6. Municipal Position –
Capital Fund
Approval of Council has been obtained for the pending issues of
long-term liabilities and for those commitments to be financed from
revenues beyond the term of Council.
7. Amounts to be Recovered
Amounts to be recovered represent liabilities established for accrual
accounting purposes. In some cases, reserves have been established
to fund these amounts. In other cases, the liabilities are to be
funded from future years’ budgetary allocations. Net increase
in amounts to be recovered is $126,137,321, (2000 - $9,667,918).
| |
2001
|
2000
|
|
|
| Long-term liabilities |
$ 339,196,666
|
$ 230,908,218
|
| Vested sick leave benefits (a) |
18,020,185
|
17,982,279
|
| Benefits payable for early retirees (c) |
15,019,889
|
489,715
|
| Vacation payable |
5,524,420
|
4,642,882
|
| Insurance claims (Note 9b) |
2,310,137
|
-
|
| Accrued interest payable on long-term liabilities |
1,681,976
|
1,768,182
|
| Workers’ comensation obligations (d) |
1,316,324
|
1,141,000
|
|
|
| |
$ 383,069,597
|
$ 256,932,276
|
|
|
a) Liability for Vested Sick
Leave Benefits
Regional Operations
In 2000, the accumulated sick leave plan was replaced by a Short-term
Disability plan for employees in Regional Operations. Under the
plan, employees with five or more years of service were given the
option of receiving a cash payout of fifty percent of the balance
in their sick leave bank as at December 31, 1999 or deferring payment
until termination of employment with the Region. The value of the
liability of the accumulated days for employees who chose the deferral
option is $2,669,045 (2000 - $2,688,646) at the end of the year.
Employees who had less than five years of service at December 31,
1999 are given the option on the fifth anniversary of their hire
date to either receive payment for the value of accumulated sick
days as at December 31, 1999 or defer payment until termination
of their employment with the Region. From time to time, the Region
is required to settle severance payouts which are funded from the
Sick Leave Reserve. The value of these payouts cannot be determined
at this time. A reserve has been established for the past service
liability and severance payouts and is reported on the Consolidated
Statement of Financial Position. The reserve balance at December
31, 2001 is $4,743,571 (2000 - $2,800,501).
An amount of $73,520 was paid to employees who left
the municipality’s employment during 2001.
Police Services
Under the sick leave benefit plan, unused sick leave can accumulate
and employees may become entitled to a cash payment of one-half
of the sick bank balance to a maximum of six months salary when
they leave the municipality’s employ.
The liability for the accumulated days to the extent
that they have vested and could be taken in cash by an employee
on termination amounted to $15,351,140 (2000 - $15,293,633). A reserve
was established to provide for a portion of the Police Services
past service liability and the balance at the end of the year is
$8,089,443 (2000 - $5,400,374).
b) Pension Agreement
The Region contributes to the Ontario Municipal Employees Retirement
System (OMERS), a multi-employer plan on behalf of approximately
2,817 members of its staff. The plan is a defined benefit plan and
specifies the amount of the retirement benefit to be received by
the employees based on length of credited service and average earnings.
The latest actuarial valuation as at December 31,
2000 indicates that current member and employer contribution rates
are sufficient to fund future benefits. Currently, OMERS members
and employers are enjoying a full contribution holiday. From August
1, 1998 to December 31, 2002, member and employer contribution rates
are 0%. In January 2003, rates will begin to rise gradually so that
by January 1, 2005 they will return to normal.
c) Post Employment Benefits
Employees who retire under the OMERS pension plan at age 55 or greater
with a minimum of twenty years of service with the Region, are entitled
to continued coverage for extended health and dental benefits until
they reach age sixty-five. As at December 31, 2001 eighty-three
early retirees were covered under the plan. According to an independent
actuarial valuation report, the total future cost associated with
these benefits is $15,019,889 as at December 31, 2001and is reported
in the Consolidated Statement of Financial Position.
d) Workers’ Compensation
Under the Workplace Safety and Insurance Act, the Region is a self-insured
employer (Schedule II) for the majority of its employees.
According to an independent actuarial valuation dated
March 5, 2002 the estimated liability for all claims incurred to
December 31, 2001 are $1,316,324, (2000 - $1,141,000).
8. Contractual Obligations
and Commitments
a) Water Agreements
Under the terms of agreements with the Ministry of the Environment
and the City of Toronto, the Region is entitled to purchase water
at rates established every year. Payments in respect of these agreements
amounted to $16,447,180 (2000 - $15,371,836). Payments under these
agreements are financed by area municipalities based on water consumption.
b) York-Peel Water Supply
Agreement
In 2001, the Region entered into an inter-regional water servicing
agreement with the Regional Municipality of Peel. Under the terms
of the agreement, the Region is entitled to purchase water from
Peel at a negotiated rate, beginning in 2004. The agreement provides
for a buy-in payment of $52.4 million, payable in three equal instalments
of $17.46 million. The first instalment was paid in 2001 and subsequent
payments are due in 2004 and 2011. The Region of York will be required
to pay operating costs to the Region of Peel for water consumption
based on the York Wholesale Rate, commencing in 2004, through to
2031 and beyond. The York Wholesale Rate will include a component
to be contributed to a Capital Repair and Replacement Reserve. Payments
under this agreement will be financed by the area municipalities
based on water consumption
c) Sale-leaseback Agreement
Under the terms of an agreement, the Region sold and leases back
computer and communications equipment. The proceeds from the sale
of the equipment are used to offset lease payments over a period
of three years.
d) Operating Leases
Under the terms of various operating lease agreements, future minimum
payments are as follows:
| 2002 |
$ 4,823,659
|
|
| 2003 |
4,776,470
|
|
| 2004 |
4,384,009
|
|
| 2005 |
3,733,173
|
|
| 2006 |
3,829,010
|
|
|
|
| |
$ 21,546,321
|
|
|
|
9. Contingent Liabilities
a) Long-term Liabilities
The Region is contingently liable for long-term liabilities for
which the responsibility for the payment of principal and interest
is recoverable from other municipalities, school boards and unconsolidated
local boards. The total amount outstanding as at December 31, 2001
is $85,511,804, (2000 - $107,933,032) and is recorded on the Consolidated
Statement of Financial Position.
b) Public Liability Insurance
During 2001, the Region insured public liability through participation
in a reciprocal insurance exchange, Ontario Municipal Insurance
Exchange (OMEX).
Public liability insurance limits are at $50,000,000.
The Region increased its level of self-insured retention, from the
various deductible levels under the independent insurance policies,
to $100,000 on January 1, 1998 under the OMEX policies.
Insurance premiums, claims under the deductible provisions
of policies and claims in excess of insurance limits are paid from
a Self Insurance Reserve Fund established by the Region. The Region
makes annual contributions to the reserve on the basis of type of
coverage, deductibles and insurance limits. Contributions in 2001
were $887,158, (2000 - $916,194) and are reported in the Consolidated
Statement of Financial Activities.
The Region estimates that the liability as at December
31, 2001 for all outstanding public liability claims is $2,310,137.
Environmental impairment liability is fully self-insured
by the Region. Total reserve available for public liability and
environmental impairment is $4,487,063, (2000 - $4,848,813).
c) Contingencies
In the normal course of its operations, the Region is subject to
various litigation and claims. The ultimate outcome of these claims
cannot be determined at this time. However, the Region’s management
believes that the ultimate disposition of these matters will not
have a material adverse effect on its financial position.
10. Expenditures by Object
The consolidated statement of financial activities reports expenditures
by function. The Regional Municipality of York’s expenditures
by object are as follows:
| |
2001
|
2000
|
|
|
| Current Fund Expenditures |
|
|
| Salaries, wages and benefits |
$ 186,541,265
|
$ 151,688,786
|
| Long-term debt charges |
18,329,659
|
16,701,482
|
| Materials, services, rents and financial items
|
269,240,697
|
225,290,789
|
| Asset acquisitions |
21,223,712
|
24,704,172
|
| Transfers to other governments and the public |
57,513,779
|
52,889,198
|
|
|
| |
$ 552,849,112
|
$ 471,274,427
|
|
|
| Capital Fund Expenditures |
|
|
| Materials, services, rents and financial items |
$ 148,615,042
|
$ 111,104,311
|
| Asset acquisitions |
19,453,200
|
12,465,864
|
| Transfers to other governments and the public |
12,262,275
|
11,898,658
|
|
|
| |
$ 180,330,517
|
$ 135,468,833
|
|
|
11. Funding of 10-5-5 Capping
Requirement of Bill 140
Bill 140, the “Continued Protection for Property Taxpayers
Act, 2000” maintained the Province’s commitment to limit
property tax reform-related increases to 5% per year for the Commercial,
Industrial and Multi-residential classes. This legislation, together
with the Municipal Act, requires that the Region manage any necessary
inter-municipal tax adjustments. The Region will only transfer funds
between area municipalities as part of the related tax adjustments
and does not incur any direct financial cost.
12. Assumption of Local Transit
Services
Effective January 1, 2001 the Region assumed the responsibility
for the operation of local transit services previously provided
by its area municipalities. Accordingly, the 2001 results include
revenues and expenditures for provision of local transit services.
13. Provincial Offences Administration
Effective July 12, 1999 the Region assumed the responsibilities
of administering collection of revenues arising under the Provincial
Offences Act (POA) from the Ministry of Attorney General. A Local
Side Agreement was signed by the nine area municipalities setting
out the terms and conditions of the transfer of responsibilities.
The Region administers prosecutions and the collection
of related fines and fees under the authority of the POA. The POA
is a procedural law for administering and prosecuting provincial
offences, including those committed under the Highway Traffic Act,
Compulsory Automobile Insurance Act, Trespass to Property Act, Liquor
Licence Act, Municipal By-laws and minor federal offences. Offenders
may pay their fines at any court office in Ontario, at which time
their receipt is recorded in the Integrated Courts Operation Network
system (“ICON”). The Region recognizes fine revenue when
the receipt of funds is recorded by ICON regardless of the location
where payment is made.
The revenues consist of fines levied under Part I,
II and III (including delay penalties) for POA charges and amount
to $6,250,663 (2000 - $4,653,345). Balances arising from operation
of the POA offices are consolidated with these financial statements.
14. Social Housing Reform
Act (“Bill 128”)
Effective January 1, 2001 under the provisions of Bill 128, the
Province of Ontario transferred responsibility for social housing
administration to municipal control resulting in the following:
a) Housing stock formerly owned by the Ontario Housing
Corporation that was located in York Region was transferred to a
new corporation, York Regional Housing Corporation (“YRHC”).
This transfer included $10,999,684 of the book values of income
producing properties, and an obligation to fund provincial debentures
related to these properties of $10,999,684. The Region is the sole
shareholder of YRHC. Financial activities of YRHC are reported on
a consolidated basis with the financial activities of the Region.
b) Effective November 1, 2001 the Region was designated
as the Service Manager responsible for administration of the social
housing program, including subsidy disbursement to the housing providers
in the Region.
c) As a result of gaining responsibility to fund the
subsidies to the housing providers in the Region along with the
existing governance structure, effective November 1, 2001 the Region
of York was seen to acquire control of the Region of York Housing
Corporation (“RYHC”). As of this date, the financial activities
of the Region of York Housing Corporation are reported on a consolidated
basis with the financial activities of the Region.
d) At the effective date of consolidation, the assets
and liabilities assumed may be summarized as follows:
| RYHC: |
|
|
|
| Net financial resources |
$ 7,696,679
|
| Less: Mortgages |
(91,185,178)
|
|
|
| |
(83,488,499)
|
|
|
| |
|
| YRHC: |
|
|
|
| Obligation to fund debentures issued by Ontario
Housing Corporation |
(10,999,684)
|
|
|
| Social housing stock acquired |
$ (94,488,183)
|
|
|
| |
|
|
|
|
|
Print 
