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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.
Management is confident that it has developed a system of
internal control that ensures the financial information presented
in the financial statements is both accurate and reliable.
The accounting
function of the Corporation is the responsibility of the Regional
Treasurer who ensures that all corporate accounting records
and reports conform to Council budgetary requirements, bylaws,
policies, procedures, accounting principles and financial
reporting requirements. York Region’s financial statements,
as well as the Financial Information Return (FIR) which is
submitted to the Ministry of Municipal Affairs and Housing,
are prepared on a basis consistent with these accounting practices.
The accounting
firm of KPMG LLP was appointed by Regional Council to perform
an independent audit of the Region’s 2004 financial statements.
Their reports are included with the financial statements.
For the
seventh consecutive year, the Government Finance Officers
Association of the United States and Canada (GFOA) awarded
a Canadian Award for Financial Reporting to The Regional Municipality
of York for its annual financial report for the fiscal year
ended December 31, 2003. The Canadian Award for Financial
Reporting program was established to encourage municipal governments
throughout Canada to publish high quality financial reports
and to provide peer recognition and technical guidance for
finance officials preparing these reports.
In order
to be awarded a Canadian Award for Financial Reporting (CANFR),
a government unit must publish an easily readable and efficiently
organized annual financial report, whose contents conform
to program standards. Such reports should go beyond the minimum
requirements of generally accepted accounting principles and
demonstrate an effort to clearly communicate the municipal
government’s financial picture, enhance an understanding
of financial reporting by municipal governments and address
user needs. Management believes the current report is reflective
of the high standards associated with the CANFR award and
it will be submitted to GFOA for consideration once again
this year.
FINANCIAL
MANAGEMENT AND CONTROL
The financial management
and control of The Regional Municipality of York is largely
governed through bylaws that prescribe purchasing, accounting,
investment, risk management procedures and debt policy. York
Regional Council has sole authority to allocate funds through
the approval of the operating and capital budgets.
York
Region has established risk management programs and procedures
to protect the Corporation's assets against the financial
consequences of accidental loss. Through a combination of
self-insuring and purchase of insurance, corporate assets
are preserved and public service capabilities are protected.
Insurance coverage is purchased from both traditional insurers
and municipal insurance exchange.
The Region
has also established a Risk Management Committee. This cross-functional
committee helps to ensure, from a Regional perspective, that
the various risk management programs support the business
of the Region. The committee reviews claims against the Corporation
to prevent them from reoccurring, or at the very least, minimize
adverse impact or the likelihood of reoccurrence.
In addition,
the Region has an Audit Services Branch within the CAO’s
office to assist Regional Council, the Audit Committee, Senior
Management and all departments in the effective and efficient
implementation of their responsibilities and achievement of
their objectives. This service provides advice on managing
and controlling risk, performs independent appraisals on control
systems and participates as an advisor in the identification
of efficiencies and improvements in new and existing processes,
programs and services.
REGIONAL
ECONOMIC OVERVIEW
York Region is
a major growth centre in the Greater Toronto Area (GTA) and
contains 16% of the GTA’s population base and 14% of
its employment population. As one of the fastest growing municipalities
in Canada, York Region’s 2004 population of 889,591 residents
represents a 4% increase over 2003. In 2004, approximately
32% of the GTA’s population increase occurred in York
Region. By 2031 it is estimated that York Region’s population
will be 1.5 million and employment will be nearly 780,000.
The
number of jobs in York Region is estimated to have grown by
approximately 20,000 in 2004. With approximately 440,000 jobs
in York Region, the number of jobs has increased by 110,000
or 25% since the 1998 Employment Survey. In the past five
years, growth has been particularly strong in the business
service and retail sectors. There are now an estimated 27,000
businesses located and operating in York Region.
Employment
in York Region is mostly service oriented, with almost 70%
of all Regional jobs concentrated in service producing industries.
Manufacturing continues to be the Region's primary employment
sector, followed by the business services and personal services
sectors.
Total
construction value in 2004 was $2.6 billion, ranking York
Region among the highest in Canada. All elements of the construction
sector remained strong as industrial, commercial and institutional
(ICI) construction, generating 34% of the total value. In
the residential sector, 10,679 homes were completed and 10,221
new residential units were started within York Region last
year. This trend of economic vitality is anticipated to continue
in 2005 and beyond.
STRATEGIC
PLANNING
Vision 2026 is
the Region’s overarching long-term strategic document
and is intended to guide daily corporate decisions to ensure
the Region’s high quality of life now and in the future.
Vision
2026 was adopted by Regional Council in 2002 following two
years of consultation with organizations, individual citizens,
Councillors and Regional and area municipal staff.
| The
eight goal areas outlined in Vision 2026 help set a broad
context and framework for the Region’s corporate
strategies and business plans. These goal areas include
the following: |
| • |
Quality
communities for a diverse population |
| •
|
Enhanced
environment, heritage and culture |
| •
|
A
vibrant economy |
| •
|
Responding
to the needs of our residents |
| •
|
Housing
choices for our residents |
| •
|
Managed
and balanced growth |
| •
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Infrastructure
for a growing Region |
| •
|
Engaged
communities and a responsive Region |
Each
year the Region measures progress in achieving the goals of
Vision 2026 in the annual Indicators of Progress report.
STRATEGIC
ALIGNMENT
York Region has
adopted a strategy of aligning and co-ordinating the activities
of all departments to ensure a focused and co-operative effort
to achieve the Region’s long-term Vision 2026 goals.
This approach links overall corporate strategies
to departmental initiatives, and ultimately, to individual
employee performance plans. Furthermore, the Region utilizes
a multi-year business planning process to ensure that budget
decisions are consistent with the Region’s long-term
sustainability.
PLANNING
FOR THE FUTURE
The establishment,
maintenance and prudent management of reserves are important
components of the Region’s financial strategy. Reserve
funding supports a significant portion of infrastructure capital
costs and plays an instrumental role in offsetting unforeseen
cost increases during uncertain economic cycles.
In accordance with the Regional Council’s
approved Reserve strategy, the 2004 surplus of $43.3 million
was transferred to the Capital Reserve ($32.7 million) and
the Tax Stabilization Reserve ($10.7 million).
Furthermore, a portion of the operating surplus
in Social Assistance and Social Housing programs was transferred
in accordance with the reserve strategy to the Social Assistance
Reserve Fund ($0.3 million), the Social Housing Reserve Fund
($4.6 million), and the Working Capital Reserve ($1.3 million).
GROWTH
MANAGEMENT STRATEGY
York Region’s
policies ensure that growth and development are financed in
a fiscally responsible manner to meet the future needs of
the Region’s communities. In 2004, the Region committed
to spend $882.5 million on capital programs, or 51% of total
expenditures in the 2004 Business Plan and Budget. This amount
provided for the costs to acquire, construct or improve infrastructure
and long-term assets.
| Key
capital initiatives continued in 2004: |
| • |
Quickstart
Transit Infrastructure program |
| •
|
Water
Supply from Toronto and Peel |
| •
|
Diversion
of Sewage Flows to Peel Region |
| •
|
Infrastructure
projects supporting York Durham Sewage System (YDSS) expansion |
| •
|
Construction
of a new waste facility |
| •
|
Redevelopment
of major Regional roads to facilitate traffic flow |
THE
2004 APPROVED BUDGET
The Budget Review
Committee, comprised of the Regional Chair, the Chief Administrative
Officer, the Regional Treasurer and the Director of Business
Planning and Budgets, reviews proposed Business Plans and
Budgets, to ensure compliance with Council guidelines and
to balance competing priorities.
On March
25, 2004, York Regional Council adopted a total gross expenditure
budget of $1.73 billion. After assessment growth of 3.8%,
the net tax levy for all Regional services was 6.3%.
The Budget
addressed the challenges associated with managing both a rapidly
growing Region and the increasing responsibilities given to
municipalities as a result of local services realignment.
Major enhancements to Police Services, Emergency Medical Services,
York Region Transit, the introduction of Viva Rapid Transit
and various capital programs accounted for the majority of
the Region’s increased financial pressures on the 2004
budget.
PROGRESS
REPORTING AND KEY PERFORMANCE INDICATORS (KPIs)
With the Region’s
growing mandate and increased responsibilities, a greater
emphasis is placed on the ability to monitor results, report
timely information to both the departments within the organization
and to community stakeholders, and proactively address areas
requiring improvement.
York
Region continued its efforts in 2004 to focus on program results
and service delivery commitments. Detailed quarterly progress
reporting for all Regional service areas has allowed the organization
to better monitor business plan objectives and budgeted expenditures.
| The
Performance Measurement framework has become a crucial
element of York Region’s business planning system
by: |
| • |
developing
key performance indicators to evaluate service delivery
and provide input for resource allocation decisions |
| •
|
development
of a cost allocation methodology to evaluate the full
cost of service provision |
| •
|
linking employee compensation to program delivery and
performance, and |
| •
|
public
reporting of service delivery outcomes, demonstrating
to residents how their tax dollars are being managed |
|
|
| Key
Performance Indicators (KPIs) in each program area assist
with understanding delivery objectives and aid in setting
appropriate cost and quality targets. The examples below
illustrate how York Region incorporates a balanced approach
to measure efficiency and community impact of service
delivery. |
| |
|
|
| |
|
|
In 2004,
York Region continued its participation in the Ontario Municipal
CAO’s Benchmarking Initiative (OMBI). As a leader among
peer municipalities, this initiative involves comparing York
Region’s activities to those of other municipalities
to continually search for improved and innovative methods
of service delivery.
2004
FINANCIAL RESULTS
York Region’s
2004 financial activities reflect accelerated capital investments
in response to growth and development. Consolidated fund balances
decreased by $2.1 million compared to the prior year as transfers
from reserves contributed toward the financing of capital
projects. Another important component of the Region’s
financial strategy is the timely and effective use of long-term
debenture financing. As demands for new and updated infrastructure
grow within the Region and its area municipalities, so have
capital financing needs grown. In 2004, the Region issued
public debentures both in the spring and the fall, borrowing
a total of $226.7 million at historically low interest rates.
The Region’s share of these issues totalled approximately
$193.2 million and the balance of $33.5 million was borrowed
on behalf of the Town of Newmarket.
REVENUES
Total
2004 revenues of $1.0 billion financed current fund operations,
reserves and reserve funds and capital expenditures.
| The
sources of revenues are as follows: |
| • |
$636.0
million through taxation and water and wastewater fees |
| •
|
$132.7
million through provincial and federal transfer payments
and subsidies |
| •
|
$107.4
million through contributions from the Development Charges |
| •
|
$119.7
million through direct service user fees, service charges
and other |
| •
|
$12.3
million through interest earned on Operating Funds, Reserves
and Reserve Funds |
CURRENT
FUND EXPENDITURES
|
Expenditures
for Current Fund Operations totalled $722.4 million
in 2004. Expenditures by functional area along with
key service delivery highlights are noted below:
|
|
| Community
Services ($171.1 M) |
| • |
Financial
Assistance to 4,304 York Region households monthly, representing
8,238 beneficiaries |
| •
|
York
Region’s share ($39.2 million) of GTA Pooled Social
Assistance costs |
| •
|
Child
care fee assistance to 2,569 children per month |
| •
|
Early
Intervention and Special Needs services to 1,372 children
throughout the year |
|
| Protection
to Persons & Property ($137.8 M) |
| • |
Police
Services through the deployment of 1,132 Police Officers
and 345 civilian staff |
| •
|
Emergency
Services for the operation of 911 call center and emergency
preparedness |
| •
|
Court
Services for the administration of over 116,000 charges
laid for matters under municipal by-laws, the Provincial
Offences Act and the Contravention Act |
| •
|
Funding
contributions to the Conservation Authorities of $3.1
million for watershed and groundwater management and conservation
activities within York Region |
|
| Transportation
($99.5 M) |
| • |
Maintenance
of 3,233 lane kilometres of roads |
| •
|
Operation
of a centralized control system and 619 signalized intersections |
| •
|
Operation
of York Regional Transit to provide service to 13.8 million
passengers |
| •
|
York
Region’s share of GO Transit costs |
|
| Social
Housing ($93.7 M) |
| • |
A
network of 6,200 housing units |
| •
|
Over 29,500 nights of emergency shelter and 107,021 days
of service for domiciliary care through partnerships with
community agencies |
| •
|
York
Region’s share ($39.7 million) of GTA Pooled Social
Housing costs |
|
| Environmental
Services ($92.5 M) |
| • |
Delivery
and treatment of over 109 million cubic metres of water
and wastewater |
| •
|
Operation of 89 water and 22 wastewater facilities |
| • |
Administration
of the Water for Tomorrow efficiency program that saved
22.4 million litres of water per day in 2004 |
| • |
Management
of over 300,000 tonnes of solid waste with 74,000 tonnes
diverted from landfills |
| •
|
Operation
of three Household Hazardous Waste Depots and two material
recovery facilities |
|
| Health
& Emergency Services ($64.2 M) |
| • |
Emergency
Medical Services (EMS) through the deployment of 32 emergency
vehicles and 310 paramedics and support staff responding
to over 92,000 calls |
| •
|
Three additional Paramedic Response Stations, opened in
Markham, Richmond Hill and Mt. Albert in 2004, increasing
the total number of stations to 18 |
| • |
Family
Health screening assessments for over 9,100 new mothers
and infants |
| • |
11,389
food premise inspections |
| •
|
Direct
care and services to 339 seniors at Regionally operated
Long Term Care facilities |
| •
|
Homemaking
community outreach programs to 956 York Region seniors
|
|
| General
Government ($56.8 M) |
| • |
Included
$11.0 million for York Region’s share of funding
for the Municipal Property Assessment Corporation (MPAC) |
| •
|
A $7.3 million contribution for new construction projects
at York Region’s community-based hospitals (South
Lake and York Central) |
|
| Health
& Emergency Services ($64.2 M) |
| • |
Enhanced
geographic information systems |
| •
|
Promotion of economic development and tourism |
| • |
Management
of regional growth policies and land use development. |
CAPITAL
FUND EXPENDITURES
|
Capital
Fund Expenditures in 2004 totalled $481.3 million.
|
|
| Environmental
Services ($280.1 M) |
| • |
Regulatory
upgrades to comply with new water regulations |
| •
|
Construction
of phase 2 of 16th Avenue Trunk Sewer |
| •
|
Cost
Sharing of works carried out by Peel to supply water to
York Region |
| •
|
Construction
of sanitary forcemain to Peel Region |
| •
|
Increased
plant sewage capacity of Mount Albert site |
|
| Road
Improvements & Expansion of the Transit System ($164.5M)
|
| • |
Quickstart
Transit Infrastructure projects |
| •
|
Construction of Vaughan Mills Mall Terminal |
| • |
Road
widening for Teston Road from Jane Street to Keele Street |
| • |
Widening
of Elgin Mills Road from Bayview Avenue to Markland &
Highway 407 Interchange |
| • |
Extension
of Markham Bypass Phase 2 from 16th Avenue to Major Mackenzie
Drive |
| • |
Replacement
of 12 conventional transit buses and 3 specialized transit
buses |
| • |
Various
intersection and road surface improvements, bridge and
culvert rehabilitations |
|
| Protection
to Persons & Property ($13.4M) |
| • |
Continued
Construction of Police No. 2 District Headquarters. |
| •
|
Upgrades to the York Regional Police communication and
computer aided dispatch systems |
|
| Community
Services ($4.0 M) and General Government ($19.3 M) represented
mainly: |
| • |
Renovations
to long term care facilities at the Newmarket Health Centre |
| •
|
Upgrades to various EMS facilities throughout the Region |
| • |
Various
leasehold improvements at Regionally owned facilities |
 INNOVATIVE
PARTNERSHIPS
The York Rapid
Transit Plan continues its development toward providing an
extensive inter-regional network reflecting an integrated
approach to transit services within the Regions of York, Peel
and Durham and the cities of Toronto, Brampton, Vaughan, Markham
and Richmond Hill.
Significant
investments in capital infrastructure are being made to support
this initiative. Development of the Quick Start program commenced
in 2004, based on a partnership involving York Region, the
Province of Ontario and the Government of Canada.
A
new water supply from Peel Region will be implemented in 2005
to assist growth and to meet water consumption projections
in the Yonge Street Aquifer corridor (Aurora, Newmarket and
East Gwillimbury), Vaughan, Richmond Hill and Markham. The
York-Peel Water Supply agreement is another strategic partnership
designed to optimize the benefits of capital investments,
contain costs and provide efficient services to the residents
of both regions.
The
York Durham Sewage System is a partnership between the Regions
of York and Durham to provide sewage treatment at the Duffin
Creek Water Pollution Control Plant, located in Pickering.
Ownership and operation of this facility is governed by two
agreements, with operating costs allocated pro-rata based
on wastewater flows. Approximately 80% of the treated flows
at the plant originate from York Region.
HERE
TO SERVE YOU
Providing service
to over 889,600 residents and an employment base of 440,000
in a rapid growth environment requires proactive financial
management and development of sustainable financial strategies.
I would like to acknowledge the professional efforts of the
Finance team for their commitment and dedication during 2004.
| To
assist in conducting the various financial functions and
transactions of the Region, professional services are
provided to the Region of York by the following companies:
|
|
| Auditor:
KPMG LLP, Chartered Accountants |
| Banker:
TD Canada Trust |
| Fiscal
Agents: |
RBC
Dominion Securities Inc. |
|
CIBC
World Markets Inc. |
|
Scotia
Capital Inc. |
|
BMO
Nesbitt Burns Inc. |
|
National
Bank Financial Inc. |
FINANCIAL
RESPONSIBILITY & ACCOUNTABILITY
York Region is
committed to the goal of financial accountability through
initiatives to evaluate and report on performance, in addition
to seeking feedback from citizens. The Region is in compliance
with the guidelines of the Municipal Performance Measurement
Program (MPMP), a Provincial Ministry of Municipal Affairs
& Housing program which requires municipalities to report
on measures reflecting the efficiency and effectiveness of
programs and services. In addition, York Region is a leading
participant in the Ontario Municipal Benchmarking Initiative
(OMBI), a project with a focus on identifying and sharing
best practices of service delivery and quality standards in
Ontario municipalities.
As
a result of applying innovative service delivery, creative
partnerships and excellence in customer service, York Region
has achieved many successes in 2004. With responsible, prudent
fiscal policies, sustainable financial strategies and constantly
improving financial planning processes, York Region strives
to ensure that programs and services continue to be delivered
to the community in an effective and efficient manner. Readers
are encouraged to visit the Region’s Web site at www.york.ca
for updates on performance and progress achieved throughout
the course of the year.
FINANCIAL
STATEMENTS
The financial statements
contained herein have been prepared in accordance with accounting
policies that conform to local government accounting standards
established by the Public Sector Accounting Board (PSAB) of
the Canadian Institute of Chartered Accountants. Where the
determination of assets and liabilities is dependent upon
future events, amounts are based upon reasonably determined
estimates, forecasts and judgments.
The Municipal
Act requires the Region to engage independent auditors to
express an opinion as to whether the financial statements
present the Region’s financial position and operating
results fairly in all material respects. KPMG LLP Chartered
Accountants has fulfilled this audit function as evidenced
by the audit reports included in this annual report.
Sandra
Cartwright
Commissioner of Finance and Regional Treasurer
May, 2005
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