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Staff Report
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Report To: Joint Committees
Date of Meeting: June 19, 2023 Report Number: FSD-030-23
Submitted By: Trevor Pinn, Deputy CAO/Treasurer
Reviewed By: Mary -Anne Dempster, CAO Resolution#: JC-074-23
File Number:
Report Subject: 2022 Audited Financial Statements
Recommendations:
By-law Number:
1. That Report FSD-030-23 and any related delegations or communication items, be
received;
2. That the Financial Statements for the Board of Management for Historic Downtown
Bowmanville Business Improvement Area for the year ending December 31, 2022
be approved;
3. That the Financial Statements for the Board of Management for the Newcastle
Central Business District Improvement Area for the year ending December 31, 2022
be approved;
4. That the Financial Statements for the Board of Management for the Orono Central
Business District Improvement Area for the year ending December 31, 2022 be
approved;
5. That the Financial Statements for the Municipality of Clarington Trusts for the year
ending December 31, 2022 be approved;
6. That the Consolidated Financial Statements for the Municipality of Clarington for the
year ending December 31, 2022 be approved;
7. That the Deputy CAO/Treasurer and Accounting Services Manager/Deputy
Treasurer be authorized to sign the required letters to finalize each of the audits;
Municipality of Clarington Page 2
Report FSD-030-23
8. That Staff prepare the Annual Financial Report for the year ending December 31,
2022 for public consumption; and
9. That all interested parties listed in Report FSD-030-23 and any delegations be
advised of Council's decision.
Municipality of Clarington
Report FSD-030-23
Report Overview
Page 3
The Municipality is required to prepare financial statements in compliance with Public Sector
Accounting Standards (PSAS) as established by the Public Sector Accounting Board (PSAB)
annually.
To further enhance the transparency and understandability of the Municipality's financial
data, an Annual Financial Report is also issued. This additional information includes five-
year trends for certain financial information, provides historical context and trends the
financial statements.
1. Background
1.1 Section 294.1 of the Municipal Act, 2001 requires that a municipality, for each fiscal
year, prepare annual financial statements for the municipality in accordance with
generally accepted accounting principles for local governments as recommended, from
time to time, by the Public Sector Accounting Board of the Chartered Professional
Accountants of Canada.
1.2 The statements included in the attachments to this report have been prepared in
accordance with the current Public Sector Accounting Standards (PSAS) that are in
force. Municipality of Clarington Financial Services staff continue to monitor changes to
PSAS as they become effective.
1.3 The Consolidated Financial Statements for the Municipality of Clarington include the
organizations, local boards and committees that are controlled by the Municipality and
form the reporting entity under PSAS. These include:
a. Board of Management for the Historic Downtown Bowmanville Business
Improvement Area
b. Board of Management for the Newcastle Central Business District Improvement
Area
c. Board of Management for the Orono Central Business District Improvement Area
d. Clarington Public Library Board and Clarington Museums and Archives
e. Newcastle Arena Board
Newcastle Community Hall Board
g. Solina Hall Board
Municipality of Clarington Page 4
Report FSD-030-23
h. Tyrone Community Hall Board
Clarington Heritage Committee
Bowmanville Santa Clause Parade Committee
1.4 Section 295 of the Act requires the Municipality to publish, within 60 days, the audited
financial statements in a newspaper having general circulation within the municipality
and a notice that the statements and notes would be available at no cost to the taxpayer
upon request. The information may also be provided in a manner that the Treasurer
considers appropriate. As in the past, these statements will be made available on the
Municipality's website, and copies may be obtained from Financial Services.
1.5 Continuing a practice started in 2021, Financial Services have drafted an Annual
Financial Report, which provides the audited financial statements as well as financial
discussion and analysis. This report is becoming a more common report from larger
municipalities and is similar to reports seen by publicly traded companies. The numbers
in a financial statement only provide a certain amount of information, to be usable to
stakeholders' additional information may be beneficial. In 2022, staff have added five-
year charts to provide a trend analysis of certain financial information.
2. Financial Statements for the Board of Management for
Historic Downtown Bowmanville Business Improvement Area
2.1 The major change in the Statement of Financial Position of the Bowmanville BIA is an
increase of $10,772 in the cash and cash equivalents held by the Bowmanville BIA. This
corresponds with the annual surplus of $18,101 during the year.
2.2 The fundraising revenue increased significantly during the year, driven by a return to in -
person events, such as Maplefest, Bluesberry Festival and Applefest.
2.3 The events and promotion expenses returned to a level similar to the pre -pandemic
level as the Bowmanville BIA increased promotions and events (other than festivals) to
assist businesses in recovery.
2.4 Expenses remained at a consistent level for 2022.
2.5 There were no capital projects during the year.
2.6 The Bowmanville BIA has an accumulated surplus of $68,507, which is higher than the
pre -pandemic level and is, in part, a result of the surpluses in the pandemic periods.
Municipality of Clarington Page 5
Report FSD-030-23
3. Financial Statements for the Board of Management for the
Newcastle Central Business District Improvement Area
3.1 Cash and cash equivalents increased during the year by $13,490. This corresponds
with the annual surplus for 2022 of $14,035.
3.2 The Newcastle BIA's revenue was lower by $8,641 versus 2021. The fundraising
revenue increased by $32,907 during the year driven by a return to in -person events.
This was offset by lower grant revenue and lower transfers, as in 2021, the Newcastle
BIA received a grant from the Municipality of Clarington for COVID-19 support for
$16,548 and a transfer of $25,000 from the Municipality of Clarington's reserve fund for
the BIA ("west end money") to fund the purchase of Christmas wreaths.
3.3 Expenses are higher by $6,513, which primarily is due to increased event expenses.
3.4 The annual surplus of $14,035 increases the accumulated surplus to $76,201, which
can be utilized in future years to promote and support the Newcastle BIA.
3.5 The net financial assets of the Newcastle BIA equal the total accumulated surplus of
$76,201 as there are no non -financial assets (tangible capital assets). The Newcastle
BIA is in a strong financial position.
4. Financial Statements for the Orono Central Business District
Improvement Area
4.1 The main changes in the Orono BIA statement of financial position are a reduction of
cash of approximately $2,635, which is related to the annual deficit of $4,985, and an
increase in Accounts Payable of $2,310 due to the timing of purchases.
4.2 The Orono BIA saw an increase in revenue, of $11,092 for 2022 over 2021. This was
driven mainly by an increase in fundraising activities, stemming from a return to in -
person events and grant revenues.
4.3 The expenses were higher in 2022 as a result of increased advertising and promotional
activities in support of many events, including the Orono Antique Festival and Orono
Santa Claus Parade.
4.4 The annual deficit of $4,985 decreased the accumulated surplus to $7,652. The BIA still
has an accumulated surplus which is sufficient to cover its liabilities.
Municipality of Clarington Page 6
Report FSD-030-23
5. Financial Statements for the Municipality of Clarington Trust
Funds
5.1 The Trust Funds are not included in the Municipality of Clarington's consolidated
financial statements. The financial reporting follows PSAB and includes all of the trust
funds that the Municipality is responsible for. Most of the funds are related to cemetery
trusts, with an additional two bequests which are not cemetery related.
5.2 The Trusts do not have any liabilities and consist predominantly of investments, which
are primarily GICs. The due (to) from the Municipality of Clarington relates to expenses
incurred at the cemetery or funds received by the Municipality, which are due to be
transferred to the trust fund.
5.3 During the year, $119,514 in care and maintenance receipts were received, with an
additional $36,270 of interest earned on the trust fund investments. The trusts
transferred $30,531 to the Municipality mainly for the ongoing care and maintenance of
the cemeteries.
6. Consolidated Financial Statements for the Municipality of
Clarington
Administrative
6.1 The letter stating management's responsibility for the financial statements is a
requirement of PSAS and serves to emphasize that the financial statements are the
responsibility of the Municipality, not the auditors.
6.2 The Independent Auditor's Report is in accordance with requirements of Canadian
Auditing Standards (CAS). The report indicates the auditor's opinion on whether the
financial statements and the notes are in accordance with Canadian public sector
accounting standards. The audit opinion is "clean" which indicates that we are materially
compliant with applicable accounting standards.
Statement of Financial Position
6.3 The Statement of Financial Position is the public sector accounting equivalent of a
balance sheet. The statement provides a snapshot, as at December 31, 2022, of the
assets, liabilities and accumulated surplus (an indicator of service capacity) specifically
on that day.
6.4 Net Financial Assets (the difference between financial assets and liabilities) increased
by approximately $13.5 million in 2022. The financial asset -to -liability ratio of 1.8.1.0
shows that the Municipality is in a position to fulfill its financial obligations. The reserve
Municipality of Clarington
Report FSD-030-23
Page 7
and reserve fund balances of $66.7 million are two times higher than debenture debt,
indicating that there are sufficient resources to meet future debt obligations.
6.5 A detailed breakdown of the accumulated surplus is presented in Note 19,
"Accumulated Surplus" of the Consolidated Financial Statements. The term
"accumulated surplus" does not mean and cannot be implied to mean that there are
"cash or funds" available for spending. The vast majority of the value in the accumulated
surplus represents non -financial assets and reflects the Municipality's investment in the
required infrastructure to deliver the programs and services that stakeholders expect.
Statement of Operations
6.6 The Statement of Operations is the public sector accounting equivalent of an income
statement in the private sector. The Statement of Operations provides a summary of
revenue and expenses for the year, with the annual surplus representing the difference
between the cost of providing the Municipality's services and the revenues recognized
during the year.
6.7 In accordance with PSAS, the Municipality uses the accrual basis of accounting rather
than the cash -basis. Revenue is recognized when it is earned, and expenses are
recognized when they are incurred, as opposed to when funds transfer.
6.8 The Statement of Operations, as required by PSAS, lists revenues based on like
revenue streams (e.g., taxation, user charges, grants) and expenses based on
functional segments. The functional segments for expenses follows the Province of
Ontario's Financial Information Return (FIR) segmentation on service lines.
6.9 Information on the segments' revenues and expenses, including expense accounting
object (e.g., salaries and wages, operating materials, contract services), are included in
Schedule 2. Current year and prior year schedules are provided to allow for year -over -
year comparisons.
6.10 Schedule 3 shows the budgeted breakdown by segment for each accounting object.
This is not a required schedule; but is included to provide additional information to
users.
6.11 Property taxation includes the Municipality's portion only. Funds which are collected on
behalf of the Region of Durham, or the Province of Ontario (for education purposes) are
not shown as part of the Statement of Operations. The notes to the financial statements
contain a note disclosure on the funds which have been collected and remitted on
behalf of the other levels of government.
6.12 A return to pre -pandemic service levels at all facilities drove the 2022 increase in user
charge revenue over the prior year's level. Investment income and contributed tangible
Municipality of Clarington
Report FSD-030-23
Page 8
capital assets also experienced increases. Most of the deferred revenue earned relates
to development charges and is recognized when the asset is recognized. Deferred
revenue may also be recognized when grant obligations are met.
6.13 Amortization expense is a non -cash expense which allocates the capital cost of assets
across the useful life of the asset.
6.14 Overall, the expenses for the Municipality were below the 2022 budget, but higher than
2021 actuals. The increase is mainly driven by a return to full -service levels post -
pandemic. It should be noted that the surplus and budget shown on the statements are
in accordance with PSAB and are not shown on the same basis that the Municipality
budgets annually (which uses a modified cash -basis).
6.15 The Statement of Operations shows an annual surplus of $14.3 million for 2022; this
compares to the $9.2 million indicated in the budget column. This surplus is a result of
the differing treatment between the cash -based budget process and the accrual -based
reporting process. Included in revenue is $7.5 million, the fair market value of assets
transferred from developers (assumed subdivisions) during the year. In future years
there will be expenses related to these assets' replacement, maintenance and repairs.
As well, there was a significant investment income variance in 2022, this is in part due
to the fact that historically the Municipality did not budget for reserve fund interest
income, this was changed with the 2023 budget process. Approximately $3.1 million of
the $5.5 million relates to interest for reserve and reserve funds, this income is put into
the reserve fund (per regulation) rather than general use. The other variance is a result
of the change in interest rates during 2022, the budget for 2022 was based on a
significantly lower interest rate environment than what occurred and was beyond the
expectation of staff at the time. Further, included in the annual surplus is $2.0 million
which is recognizing Clarington's equity share of the net income of Elexicon. These
funds are not Clarington's but rather show the value of the asset which is the investment
in the company.
Statement of Changes in Net Financial Assets
6.16 The purpose of the Statement of Change in Net Financial Assets is to provide financial
statement users additional information on the Municipality's financial activities during the
year.
6.17 The statement starts with the annual surplus and backs out non -financial activities such
as amortization, accounting gains/losses, and the purchase and sale of assets.
6.18 The main variance between 2022 and 2021 relates to a significant increase in the
acquisition of tangible capital assets and the difference in the assets under construction
transferred to tangible capital assets in 2022.
Municipality of Clarington Page 9
Report FSD-030-23
Statement of Cash Flows
6.19 The statement of cash flows explains how the organization financed its activities and
met its cash obligations. As is common with public sector entities, the Municipality uses
the indirect method of cash flow statements, which takes the annual surplus/deficit and
adjusts for non -cash transactions as well as the implied cash impact through changes in
the statement of financial position.
6.20 The cash position of the Municipality decreased during the year from $77.7 million in
cash to $66.2 million. During the year, operating activities contributed to an increase of
$40.4 million, this includes the receipt of receivables as well as cash (development
charges) that are restricted to be used in future years.
6.21 Capital activities represent the investment the Municipality has made in its tangible
capital assets that are utilized in the delivery of services to stakeholders. The
Municipality invested $15.7 million in cash outlays in 2022.
6.22 The Municipality investment levels increased significantly during 2022, as funds which
had been received in 2021 as cash and the debenture funds received in 2022 (to be
expended in future years) were transferred to various investment vehicles. Dividends
from our investment in Elexicon were received during the year.
6.23 Financing activities during the year included repayment of $1.8 million in the principal of
long-term debenture debt. There were $26.4 million in new issuances of debenture debt
in 2022. The debenture funds are earmarked for arena improvements at the Newcastle
and Orono arenas and the South Bowmanville Recreation Centre. The South
Bowmanville Recreation Centre project was paused in 2023 with the funds to be
redirected for use in other recreational amenities.
7. Draft Annual Financial Report
7.1 A growing trend in municipal finance is the preparation of annual financial reports, which
provide more information for stakeholders than simply financial statements. These
documents provide narrative information, charts, graphs, five-year historical trends, and
financial discussion and analysis. This data is intended to show a greater picture of the
activity of the municipality during the year and provides context for the financial
operations of the Municipality that may not be seen in a financial statement that only
looks at year -over -year changes.
7.2 The Financial Discussion and Analysis section of the report provides an explanation on
variances year -over -year for areas with significant changes.
Municipality of Clarington
Report FSD-030-23
Page 10
7.3 The Annual Financial Report will be provided to Council during the summer, after the
ratification of the financial statements and final drafting of the report. The Report will
then be placed on the Municipality's website for public consumption.
8. Concurrence
Not Applicable.
9. Conclusion
It is respectfully recommended that the financial statements for the Municipality and its
components be approved, that Staff be authorized to sign the final letters to complete
the audit, and that Staff be directed to finalize the Annual Financial Report with the
approved financial statements.
Staff Contact: Michelle Pick, CPA, CGA, Accounting Services Manager/Deputy Treasurer,
905-623-3379 ext.2605 or mpick@clarington.net.
Attachments:
Attachment 1 — Draft Financial Statements for the Board of Management for Historic
Downtown Bowmanville Business Improvement Area for the year ending December 31, 2022
Attachment 2 — Draft Financial Statements for the Board of Management for the Newcastle
Central Business District Improvement Area for the year ending December 31, 2022
Attachment 3 — Draft Financial Statements for the Board of Management for the Orono Central
Business District Improvement Area for the year ending December 31, 2022
Attachment 4 — Draft Financial Statements for the Municipality of Clarington Trusts for the year
ending December 31, 2022
Attachment 5 — Draft Consolidated Financial Statements for the Municipality of Clarington for
the year ending December 31, 2022
Interested Parties:
The following interested parties will be notified of Council's decision:
• Ministry of Municipal Affairs and Housing
Attachment 1 to Report FSD-030-23
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Coordinator at (905) 623-3379 ext. 2131.
Financial statements of
The Corporation of the
Municipality of Clarington
Board of Management for
Historic Downtown Bowmanville
Business Improvement Area
December 31, 2022 *'V
Attachment 1 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Board of Management for the Historic Downtown
Bowmanville Business District Improvement
Area
Notes to the financial statements
December 31, 2022
Table of contents
Independent Auditor's Report............................................................... 1-2
Statement of financial position ............................................. ..F
........................ 3
Statementof operations........................................................................................ 4
Statement of change in net financial assets ........................................................... 5
Statement of cash flows ..................... r. 6
Notes to the financial statements ....... .. ...................................................................... 7
Attachment 1 to Report FSD-030-23
Independent Auditor's Report
To the Members of the Corporation of the Municipality of Clarington Board of Management for Historic
Downtown Bowmanville Business Improvement Area, Members of Council, Inhabitants and Ratepayers of
the Corporation of the Municipality of Clarington
Qualified Opinion
We have audited the accompanying financial statements of the Historic Downtown Bowmanville Business
Improvement Area of the Corporation of the Municipality of Clarington (the Entity), which comprise the
statement of financial position as at December 31, 2022, and the statements of operations, changes in
net financial assets and cash flows for the year then ended, and notes to the financial statements,
including a summary of significant accounting policies.
In our opinion, except for the possible effects of the matter described in the Basis for Qualified Opinion
section of our report, the accompanying financial statements present fairly, in all material respects, the
financial position of the Entity as at December 31, 2022, and its results of operations and its cash flows
for the year then ended in accordance with Canadian public sector accounting standards.
Basis for Qualified Opinion
The Entity derives revenue from fundraising activities the completeness of which is not susceptible to
satisfactory audit verification. Accordingly, verification of these revenues was limited to the amounts
recorded in the records of the Entity. Therefore, we were not able to determine whether any adjustments
might be necessary to event and donation revenue, annual surplus, and cash flows from operations for
the years ended December 31, 2022 and 2021, net financial assets as at December 31, 2022 and 2021,
and accumulated surplus as at January 1 and December 31 for both the 2022 and 2021 years. Our audit
opinion on the financial statements for the year ended December 31, 2021 was modified accordingly
because of the possible effects of this limitation in scope.
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our
responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit
of the Financial Statements section of our report. We are independent of the Entity in accordance with
the ethical requirements that are relevant to our audit of the financial statements in Canada, and we
have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that
the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified
audit opinion.
Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with Canadian public sector accounting standards, and for such internal control as
management determines is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
Attachment 1 to Report FSD-030-23
In preparing the financial statements, management is responsible for assessing the Entity's ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless management either intends to liquidate the Entity or to cease
operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Entity's financial reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with Canadian generally accepted auditing standards will always detect
a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
• Obtain an understanding of internal control relevant to the audit 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.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Entity's ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor's report to the related disclosures in the financial statements or, if such disclosures
are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained
up to the date of our auditor's report. However, future events or conditions may cause the Entity
to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including
the disclosures, and whether the financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
Chartered Professional Accountants, Licensed Public Accountants
Lindsay, Ontario
June 19, 2023
Attachment 1 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Board of Management for Historic Downtown
Bowmanville Business Improvement Area
Statement of Financial Position
as at December 31, 2022
2022 t021
Calk
Financial assets
Cash and cash equivalents 62,034 51,262
Accounts receivable -
t7
HST receivable 6,481 5,141
Total financial assets 68,515 56,403
Liabilities
Accounts payable 8 5,997
Total liabilities 8 5,997
Net financial assets 68,507 50,406
Accumulated surplus (deficit) 68,507 50,406
The accompanying notes are an integral part of these financial statements.
Page 3
Attachment 1 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Board of Management for Historic Downtown
Bowmanville Business Improvement Area
Statement of Operations
as at December 31, 2022
Budget 2022 0�
Revenues
Taxation - Municipality of Clarington 171,625 171-,625 167,439
Grant - Municipality of Clarington 13,948
Interest 198
Fundraising 6,000 51,090 3,545
Total revenues 177,625 222,715 185,130
Expenses
�X000
Administration
5,176
4,743
Events and promotion
88,799
104,143
114,305
Salaries and wages
78,200
60,150
61,400
Streetscape
29,500
35,145
24,519
Capital works
apt 6,300
-
-
Total expenses
215,799
204,614
204,967
Annual surplus (deficit) llllhk� `-N IF (38,174) 18,101 (19,837)
Accumulated surplus, beginning of year 50,406 50,406 70,243
Accumulated surplus (deficit), end of year 12,232 68,507 50,406
The accompanying notes are an integral part of these financial statements.
Page 4
Attachment 1 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Board of Management for Historic Downtown
Bowmanville Business Improvement Area
Statement of Change in Net Financial Assets
as at December 31, 2022
1 T
Budget 2022
Annual surplus (deficit) (38,174) 18,101 ` (19,837)
Change in prepaid expenses - - -
Change in net financial assets (38,174) 18,101 (19,837)
Net financial assets, beginning of year 50,406 50,406 70,243
Net financial assets (liabilities), end of ye 12,232 68,507 50,406
The accompanying notes are an integral part of these financial statements.
Page 5
Attachment 1 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Board of Management for Historic Downtown
Bowmanville Business In Area
Statement of Cash Flows
for the year ended December 31, 2022
2022
$ VN $
Operating activities
Annual surplus 18,101 (19,837)
Changes in non -cash operating items
Decrease (increase) due from Government of Canada (1,340) 388
Increase (decrease) in accounts payable and accrued IiabilitiE (5,989) 5,979
10,772 (13,470)
Net increase in cash
Cash, beginning of year
10,772 (13,470)
51,262 64,732
Cash, end of year 62,034 51,262
The accompanying notes are an integral part of these financial statements.
Page 6
Attachment 1 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Board of Management for the Historic Downtown
Bowmanville Business District Improvement
Area
Notes to the financial statements
December 31, 2022
The Corporation of the Municipality of Clarington Board of Management for Historicb.
Downtown Bowmanville Business Improvement Area is a Municipal Local Board (the
"Board") in the Province of Ontario, Canada. It conducts its operations guided by the
provisions of provincial statutes such as the Municipal Act and related legislation.
1. Significant accounting policies
OVA
The financial statements of the Board are the representations of management
prepared in accordance with Canadian public sector accounting standards
("PSAS").
The focus of the financial statements is on the financial position of the Board and
the changes thereto. The Statement of Financial Position includes the assets
and liabilities of the Board.
Financial assets are those assets which could provide resources to discharge
existing liabilities or finance future operations.
Non -financial assets are not available to discharge existing liabilities and are held
for use in the provision of services. They have useful lives extending beyond the
current year and are not intended for sale in the ordinary course of operations.
Accumulated surplus represents the difference between assets and liabilities of
the Board. This provides information about the Board's overall future revenue
requirements and its ability to finance operations and meet its obligations.
a) Revenue recognition
Taxation revenue is recorded when earned and is based on a special
assessment. Other revenues are recorded in the period in which transactions
or events occurred that gave rise to the revenues.
b) Use of estimates
The preparation of financial statements in conformity with PSAS requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenue and expenses during the year. Actual results could differ from those
estimates.
c) Cash and cash equivalents
Cash and cash equivalents are made up of cash held in financial institutions
as well as temporary investments with maturities of 90 days or less.
Page 7
Attachment 2 to Report FSD-030-23
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Coordinator at (905) 623-3379 ext. 2131
A\
Financial statements ofej'qxj
The Corporation of the
Municipality of Clarington
Board of Management for the
Newcastle Central Business
District Improvement Area
December 31, 2022
Attachment 2 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Board of Management for the Newcastle Central
Business District Improvement Area
Notes to the financial statements
December 31, 2022 •
Table of contents A\
qj
Independent
's Re port ............................................................�.................................1-2
p
Statement of financial position .......................................... ........`...................................3
Statement of operations........................................................................................................4
Statement of change in net financial asset ..... ................................................................5
Statement of cash flows ..........t........................................................ 6
Notes to the financial statements.......................................................................................... 7
00
Attachment 2 to Report FSD-030-23
Independent Auditor's Report
To the Members of the Corporation of the Municipality of Clarington Board of Management for the
Newcastle Central Business District Improvement Area, Members of Council, Inhabitants and Ratepayers
of the Municipality of Clarington
Qualified Opinion n!
We have audited the accompanying financial statements of the Newcastle Central Business District
Improvement Area of the Corporation of the Municipality of Clarington (the Entity), which comprise the
statement of financial position as at December 31, 2022, and the statements of operations, changes in
net financial assets and cash flows for the year then ended, and notes to the financial statements,
including a summary of significant accounting policies.
In our opinion, except for the possible effects of the matter described in the Basis for Qualified Opinion
section of our report, the accompanying financial statements present fairly, in all material respects, the
financial position of the Entity as at December 31, 2022, and its results of operations and its cash flows
for the year then ended in accordance with Canadian public sector accounting standards.
Basis for Qualified Opinion ♦ 70
The Entity derives revenue from fundraising activities the completeness of which is not susceptible to
satisfactory audit verification. Accordingly, verification of these revenues was limited to the amounts
recorded in the records of the Entity. Therefore, we were not able to determine whether any adjustments
might be necessary to event and donation revenue, annual surplus, and cash flows from operations for
the years ended December 31, 2022 and 2021, net financial assets as at December 31, 2022 and 2021,
and accumulated surplus as at January 1 and December 31 for both the 2022 and 2021 years. Our audit
opinion on the financial statements for the year ended December 31, 2021 was modified accordingly
because of the possible effects of this limitation in scope.
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our
responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit
of the Financial Statements section of our report. We are independent of the Entity in accordance with
the ethical requirements that are relevant to our audit of the financial statements in Canada, and we
have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that
the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified
audit opinion.
Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with Canadian public sector accounting standards, and for such internal control as
management determines is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
Attachment 2 to Report FSD-030-23
In preparing the financial statements, management is responsible for assessing the Entity's ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless management either intends to liquidate the Entity or to cease
operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Entity's financial reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with Canadian generally accepted auditing standards will always detect
a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
• Obtain an understanding of internal control relevant to the audit 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.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Entity's ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor's report to the related disclosures in the financial statements or, if such disclosures
are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained
up to the date of our auditor's report. However, future events or conditions may cause the Entity
to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including
the disclosures, and whether the financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
Chartered Professional Accountants, Licensed Public Accountants
Lindsay, Ontario
June 19, 2023
Attachment 2 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Board of Management for the Newcastle Central
Business District Improvement Area
Statement of financial position
as at December 31, 2022
2022
2021
Financial assets
Cash
76,716
63,226
Accounts receivable
100
70
Total financial assets
76,816
63,296
Liabilities
Accounts payable
4kV
615
1,130
Deferred revenue
-
-
Total liabilities NO
615
1,130
Net financial assets (liabilities)
76,201
62,166
Accumulated surplus (deficit)
76,201
62,166
The accompanying notes are an integral part of these financial statements.
Page 3
Attachment 2 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Board of Management for the Newcastle Central
Business District Improvement Area
Statement of operations
for the year ended December 31, 2022
2022
2021
Budget
Actual
Actual
Revenues
Taxation - Municipality of Clarington
40,000
40,000
40,000
Grant - Municipality of Clarington
16,548
Grant - Government of Canada
Fundraising
32,977
70
Transfer from Municipality of Clarington
25,000
Miscellaneous
Total revenues
40,000
72,977
81,618
Expenses
Administration
2,000
4,086
4,689
Advertising
10,000
9,309
4,996
Events
5,000
28,903
9,091
Downtown safety and decor
23,000
16,644
33,653
Total expenses 40,000 58,942 52,429
Annual surplus (deficit) - 14,035 29,189
Accumulated surplus, beginning of year 62,166 62,166 32,977
Accumulated surplus, end of year 62,166 76,201 62,166
The accompanying notes are an integral part of these financial statements.
Page 4
Attachment 2 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Board of Management for Newcastle Central
Business District Improvement Area
Statement of change in net financial assets
as at December 31, 2022
Budget
2022
2021
Annual surplus (deficit)
-
14,035
29,189
Change in net financial assets
Net financial assets, beginning of year
-
62,166
14,035
62,166
29,189
32,977
Net financial assets (liabilities), end of year
62,166
76,201
62,166
The accompanying notes are an inegral part of these financial statements.
Page 5
Attachment 2 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Board of Management for the Newcastle Central
Business District in Area
Statement of cash flows
for the year ended December 31, 2022
Operating activities
Annual surplus
Non cash items
Amortization of tangible capital assets
Changes in non -cash operating items
Decrease (increase) in accounts receivable
Increase (decrease) in accounts payable and accrued IiabilitiE
Increase (decrease) in deferred revenue
2022
$ N46
14,035 4,189
'.._j -
(30) 1,132
(515) 1,130
- (2,000)
13,490 29,451
Capital activity
Acqusition of tangible capital assets - -
Net increase in cash
Cash, beginning of year
13,490 29,451
63,226 33,775
Cash, end of year 76,716 63,226
The accompanying notes are an integral part of these financial statements.
Page 6
Attachment 2 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Board of Management for the Newcastle Central
Business District Improvement Area
Notes to the financial statements
December 31, 2022
The Corporation of the Municipality of Clarington Board of Management for the
Newcastle Central Business District Improvement Area is a Municipal Local Board ino
Province of Ontario, Canada. It conducts its operations guided by the provisions o
provincial statutes such as the Municipal Actand related legislation.
1. Significant accounting policies
The financial statements of the Board are the representations of management
prepared in accordance with Canadian public sector accounting standards
("PSAS").
The focus of the financial statements is on the financial position of the Board and
the changesthereto. The Statement of Financial Position includes the assets and
liabilities of the Board.
Financial assets are those assets which could provide resources to discharge
existing liabilities orfinance future operations.
Non -financial assets are not available to discharge existing liabilities and are held
for use in the provision of services. They have useful lives extending beyond the
current year and are not intended for sale in the ordinary course of operations.
Accumulated surplus represents the difference between assets and liabilities of
the Board. This provides information about the Board's overall future revenue
requirements and its ability to finance operations and meet its obligations.
a) Revenue recognition _ff
Taxation revenue is recorded when earned and is based on a special
assessment. Other revenues are recorded in the period in which transactions
or events occurred that gave rise to the revenues.
b) Use of estimates
The preparation of financial statements in conformity with Canadian generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the
year. Actual results could differfrom those estimates.
c) Cash and cash equivalents
Cash and cash equivalentsare made upof cash held in financial institutions as
well as temporary investments with maturities of 90 days or less.
Page 7
Attachment 3 to Report FSD-030-23
If this information is required in an alternate format, please contact the Accessibility
Coordinator at (905) 623-3379 ext. 2131.
A\
Financial statements of
The Corporation of the
Municipality of Clarington
Board of Managemel ki w the
Orono Central Business
District Improvement Area
December 31, 2022
Attachment 3 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Board of Management for the Orono Central
Business District Improvement Area
December 31, 2022
Table of contents
Independent Auditor's Report......................................................................... �.................1-2
In_
Statement of financial position
Statement of operations.................................................... ................................................4
Statement of change in net financial assets........................................................................... 5
NOStatement of cash flows ...........................................................................6
Notes to the financial statements........q ........................................................................................... 7
Attachment 3 to Report FSD-030-23
Independent Auditor's Report
To the Members of the Corporation of the Municipality of Clarington Board of Management for Orono
Central Business District Improvement Area, Members of Council, Inhabitants and Ratepayers of the ,'
Municipality of Clarington
Qualified Opinion
We have audited the accompanying financial statements of the Orono Central Business District
Improvement Area of the Corporation of the Municipality of Clarington (the Entity), which comprise the
statement of financial position as at December 31, 2022, and the statements of operations, changes in
net financial assets and cash flows for the year then ended, and notes to the financial statements,
including a summary of significant accounting policies.
In our opinion, except for the possible effects of the matter described in the Basis for Qualified Opinion
section of our report, the accompanying financial statements present fairly, in all material respects, the
financial position of the Entity as at December 31, 2022, and its results of operations and its cash flows
for the year then ended in accordance with Canadian public sector accounting standards.
Basis for Qualified Opinion
The Entity derives revenue from fundraising activities the completeness of which is not susceptible to
satisfactory audit verification. Accordingly, verification of these revenues was limited to the amounts
recorded in the records of the Entity. Therefore, we were not able to determine whether any adjustments
might be necessary to event and donation revenue, annual surplus, and cash flows from operations for
the years ended December 31, 2022 and 2021, net financial assets as at December 31, 2022 and 2021,
and accumulated surplus as at January 1 and December 31 for both the 2022 and 2021 years. Our audit
opinion on the financial statements for the year ended December 31, 2021 was modified accordingly
because of the possible effects of this limitation in scope.
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our
responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit
of the Financial Statements section of our report. We are independent of the Entity in accordance with
the ethical requirements that are relevant to our audit of the financial statements in Canada, and we
have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that
the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified
audit opinion.
Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with Canadian public sector accounting standards, and for such internal control as
management determines is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
Attachment 3 to Report FSD-030-23
In preparing the financial statements, management is responsible for assessing the Entity's ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless management either intends to liquidate the Entity or to cease
operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Entity's financial reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with Canadian generally accepted auditing standards will always detect
a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
• Obtain an understanding of internal control relevant to the audit 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.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Entity's ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor's report to the related disclosures in the financial statements or, if such disclosures
are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained
up to the date of our auditor's report. However, future events or conditions may cause the Entity
to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including
the disclosures, and whether the financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
Chartered Professional Accountants, Licensed Public Accountants
Lindsay, Ontario
June 19, 2023
Attachment 3 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Board of Management for the Orono Central
Business District Improvement Area
Statement of Financial Position `
as at December 31, 2022
2022 2021
Financial assets
Cash and cash equivalents 10,966 ' 113,
Accounts receivable 260 -
Total financial assets 11,226 13,601
Liabilities 0
Accounts payable 3,574 964
Total liabilities 3,574 964
Net financial assets 7,652 12,637
Accumulated surplus (deficit) 7,652 12,637
The accompanying notes are an integral part of these financial statements.
Page 3
Attachment 3 to Report FSD-030-23
The Corporation of the Municipality of Claringtoi
Board of Management for the Orono Central
Business District Improvement Area
Statement of Operations
for the year ended December 31, 2022
Budget 2022 2
Revenues
Taxation - Municipality of Clarington (Note 1) 6,000 /N0 6,000
Grants - Municipality of Clarington - - 1,504
Grants - Other - 6,804 3,670
Donations/fundraising/miscellaneous - 9,462 -
Total revenues 6,000 22,266 11,174
Expenses
Advertising and promotion
6,400
10,284
1,601
Landscaping
4,000
15,215
18,531
Miscellaneous
1,400
1,752
1,527
Total expenses
11,800
27,251
21,659
Annual surplus (deficit) (5,800) (4,985) (10,485)
Accumulated surplus, beginning of year 12,637 12,637 23,122
Accumulated surplus, end of year 6,837 7,652 12,637
The accompanying notes are an integral part of these financial statements.
J�
Page 4
Attachment 3 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Board of Management for Orono Central
Business District Improvement Area
Statement of Change in Net Financial Assets
as at December 31, 2022
Budget 2022 2021
Annual surplus (deficit) (5,800) (4,985) (10,485)
Net financial assets, beginning of year
12,637 12,637 23,122
Net financial assets (liabilities), end of year 6,837 7,652 12,637
The accompanying notes are an integral part of these financial statements.
Page 5
Attachment 3 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Board of Management for the Orono Central
Business District Improvement Area
Statement of Cash Flows
for the year ended December 31, 2022
2022
2021
Operating activities
Annual surplus
(4,985)
(10,485)
Non cash items
Amortization of tangible capital assets
-
-
Changes in non -cash operating items
0
Decrease (increase) in accounts receivable
(260)
-
Increase (decrease) in accounts payable and accrued liabilities
2,610
884
(2,635)
(9,601)
Capital activity
Acqusition of tangible capital assets
-
-
Net increase in cash
(2,635)
(9,601)
Cash, beginning of year
13,601
23,202
Cash, end of year
10,966
13,601
The accompanying notes are an integral part of these financial statements.
Page 6
Attachment 3 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Board of Management for the Orono Central
Business District Improvement Area
Notes to the financial statements
December 31, 2022 41
The Corporation of the Municipality of Clarington Board of Management for the Orono
Central Business District Improvement Area is a Municipal Local Board in the Province
of Ontario, Canada. It conducts its operations guided by the provisions of provincial
statutes such as the Municipal Act and related legislation. kN4110-
1 Significant accounting policies
_v
The financial statements of the Board are the representations of management
prepared in accordance with Canadian public sector accounting standards
("PSAS").
The focus of the financial statements is on the financial position of the Board and
the changes thereto. The Statement of Financial Position includes the assets
and liabilities of the Board.
Financial assets are those assets which could provide resources to discharge
existing liabilities orfinance future operations.
Non -financial assets are not available to discharge existing liabilities and are held
for use in the provision of services. They have useful lives extending beyond the
current year and are not intended for sale in the ordinary course of operations.
Accumulated surplus represents the difference between assets and liabilities of
the Board. This provides information about the Board's overall future revenue
requirements and its ability to finance operations and meet its obligations.
a) Revenue recognition
Taxation revenue is recorded when earned and is based on a special
assessment. Other revenues are recorded in the period in which transactions
or even is occu rred th at gave ri se to th a reven u es.
b) Use of estimates
The preparation of financial statements in conformity with PSAS requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenue and expenses during the year. Actual results could differ from those
estimates.
c) Cash and cash equivalents
Cash and cash equivalents are made up of cash held in financial institutions as
well as temporary investments with maturities of 90 days or less.
Page 7
Attachment 4 to Report FSD-030-23
If this information is required in an alternate format, please contact the Accessibility Co-Ordinatorat
(905) 623-3379 ext. 2131
*C
Financial statements of
The Corporation of the
Municipality of Clarington
Trust Funds
December 31, 2022
1W
, 00
Attachment 4 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Trust Funds
December 31, 2022
Table of contents
Independent Auditor's Report............................................................................................1
0
Statement of financial position..............................................................................�...�i��.�.. 4
Statement of operations...................................................................................... ............. 5
Notes to the financial statements.......................................................... ...... ....................
6-7
Attachment 4 to Report FSD-030-23
Independent Auditor's Report
To the Members of Council of the Corporation of the Municipality of Clarington `
Opinion
We have audited the financial statements of the Corporation of the Municipality of Clarington Trust Funds
(the Entity), which comprise the statement of financial position as at December 31, 2022, and the
statement of operations and accumulated surplus for the year then ended, and notes to the financial
statements, including a summary of significant accounting policies.
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial
position of the Entity as at December 31, 2022, and its operations for the year then ended in accordance
with Canadian public sector accounting standards.
Basis for Opinion
kv
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our
responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit
of the Financial Statements section of our report. We are independent of the Entity in accordance with
the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have
fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Responsibilities of Management and Those Charged with Governance for the Consolidated Financial
Statements *&� `J i
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with Canadian public sector accounting standards, and for such internal control as
management determines is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Entity's ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless management either intends to liquidate the Entity or to cease
operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Entity's financial reporting process.
o��
Attachment 4 to Report FSD-030-23
Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with Canadian generally accepted auditing standards will always detect
a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
• Obtain an understanding of internal control relevant to the audit 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.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Entity's ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor's report to the related disclosures in the financial statements or, if such disclosures
are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained
up to the date of our auditor's report. However, future events or conditions may cause the Entity
to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including
the disclosures, and whether the financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
k*N
Chartered Professional Accountants, Licensed Public Accountants
Lindsay, Ontario
June 19, 2023
Attachment 4 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Trust Funds
Statement of financial position
as at December 31, 2022
Investments Interest revenue
Cash (Note 3) receivable
Due (to) from
Municipality of
Clarington
Net Financial Assets
and Accumulated
Surplus
Advent Cemetery
- 918
3
-
921
Bondhead Cemetery
- 236,243
818
1,937
238,998
Bowmanville Cemetery
- 1,300,505
4,503
2,188
1,307,196
Hampton Cemetery
- 50,048
173
-
50,221
Lovekin Cemetery-
10 000
35
-
10 035
,
Orono Cemetery
- 300,490
9,102
-
309,592
St. George's Cemetery
- 49,13
170
-
49,300
Trulls Cemetery
- 1,
6
-
1,780
Vanderveer Legacy Trust
- 0
3
-
1,003
- 1,950,108
14,813
4,125
1,969,046
Montague Trust
- 10,775
294
- 11,069
Estate of Irene Rinch/Newcastle Community Hall
- 147,925
4,040
- 151,965
Total - 2022
- 2,108,808
19,147
4,125 2,132,080
Total - 2021
2,020,448
15,568
The accompanying notes are an integral part of these financial statements.
2,006,827
Page 4
Attachment 4 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Trust Funds
Statement of operations and accumulated surplus
as at December 31, 2022
Revenues
Care and
Balance
maintenance
Less:
Excess (shortfall)
Accumulated
beginning of
receipts Interest
Contribution
Investments
of revenues over
surplus, end
year
(Note 4) earned Total
to cemeteries
in Capital
expenses
of year
Advent Cemetery
897
22 14 36
12
-
24
921
Bondhead Cemetery
220,415
20,782 913 21,695
3,112
-
18,583
238,998
Bowmanville Cemetery
1,239,593
60,692 24,411 85,103
17,500
-
67,603
1,307,196
Hampton Cemetery
50,886
(819) 832 13
678
-
(665)
50,221
Lovekin Cemetery
9,960
44 166 210
135
-
75
10,035
Orono Cemetery
270,036
39,135 ril766 40,901
1,345
-
39,556
309,592
St. George's Cemetery
46,474
2,676 r 816 3,492
666
-
2,826
49,300
Trulls Cemetery
1,758
16 30 46
24
-
22
1,780
Vanderveer Legacy Trust
976
24 17 41
14
-
27
1,003
1,840,995
122,572 28,965 151,537
23,486
-
128,051
1,969,046
Montague Trust
13,445
- 288 288
2,664
-
(2,376)
11,069
Estate of Irene Rinch
152,387
- 3,959 3,959
4,381
-
(422)
151,965
Total - 2022
2,006,827
122,572 33,212 155,784
30,531
-
125,253
2,132,080
Total - 2021
1,933,011
79,417 15,660 95,077
21,261
-
73,816
2,006,827
The accompanying notes are an integral part of these financial statements
Page 5
Attachment 4 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Trust Funds
Notes to the financial statements
December 31, 2022
The Corporation of the Municipality of Clarington Trust Funds consist of various trust
fu nds administered by the Municipality of Clarington. The funds include holdings relate
to the care and maintenance of cemeteries and funds bequest to the Newcastle
Community Hall.
Significant accounting policies
The financial statements of the Corporation of Municipality of Clarington Trust
Funds are the representations of management prepared in accordance with
Canadian public sector accounting standards and reflect the following policies:
Basis of accounting
Revenues are recorded in the period in which the transactions or events occurred
that gave rise to the revenue.
Expenditures are recorded in the period the goods and services are acquired and a
liability is incurred. Refunds are reported in the period issued.
Investments
Investments are recorded at a cost which approximates fairvalue.
Use of estimates C %
The preparation of the financial statements in conformity with Canadian public
sector accounting standards, requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements and the
reported amountof revenues and expenditures during the year. Actual results could
differ from these estimates.
2. Statement of cash flows
A statement of cash flows has not been included in these financial statements as
the information is readily determinable from the financial statements presented.
3. Investments
The total investments held by the trust funds of $2,108,808 (2021—$2,020,448)
reported on the Statement of Financial Position at cost have a fair value of
$2,123,103 (2021 - $2,024,124) at the end of the year. The investments consist of
holdings pursuant to the provisions of the Municipality's investment policy and
comprise government bonds and guaranteed investment certificates (GICs) issued
by various financial institutions. It is the Municipality's intention to hold these
investments until maturity.
Page 6
Attachment 4 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Trust Funds
Notes to the financial statements
December 31, 2022
4. Care and maintenance funds
The Care and Maintenance Funds administered by the Municipality are funded by
the sale of cemetery plots. These funds are invested, and the interest earned is
used to perform care and maintenance to the Municipality's cemeteries. The
operations and investments of the Funds are undertaken by the Municipali it
accordance with the regulations of the Cemeteries Act.
Page 7
Attachment 5 to Report FSD-030-23
If this information is required in an alternate format, please contact the Accessibility Co-ordinator at
905-623-3379 ext. 2131
The Corporation of the Municipality of Clarington
Consolidated Financial Statements
December 31, 2022
Attachment 5 to Report FSD-030-23
The Corporation of the Municipality of Clarington
December 31, 2022
Table of Contents
Page
Consolidated Financial Statements
Management's Responsiblity for the Consolidated Finanacial Statements 1
Independent Auditor's Report
Consolidated Statement of Financial Position
Consolidated Statement of Operations
Consolidated Statement of Change in Net Financial Assets
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
2-3
4
5
6
7
8-29
Consolidated Schedule of Tangible Capital Assets - Schedule 1 30 - 31
Consolidated Schedule of Segmented Information - Actual - Schedule 2 32 - 33
Consolidated Schedule of Segmented Information - Budget - Schedule 3 34 - 35
Attachment 5 to Report FSD-030-23
The Corporation of the Municipality of Clarington
December 31, 2022
Management's Responsibility for the Consolidated Financial Statements
The accompanying consolidated financial statements of the Corporation of the
Municipality of Clarington are the responsibility of the Municipality's management and
have been prepared in accordance with Canadian public sector accounting standards.
The preparation of the financial statements necessarily involves the use of estimates
based on management's judgment, particularly when transactions affecting the current
accounting period cannot be finalized with certainty until future periods.
The Corporation maintains a system of internal controls designed to provide reasonable
assurance that the financial information is relevant, reliable, and accurate, that
transactions are properly authorized, and the Corporation's assets are properly
accounted for and adequately safeguarded.
The financial statements have been examined by BDO Canada LLP, Chartered
Professional Accountants, the external auditors for the Corporation. The responsibility
of the external auditor is to express an opinion on whether the financial statements are
fairly presented, in all material respects, in accordance with Canadian public sector
accounting standards.
Council, through the Audit and Accountability Committee, is responsible for ensuring
that management fulfills its responsibility for financial reporting and internal control. The
Audit and Accountability Committee meets periodically with management, as well as the
external auditors to satisfy itself that each party is properly discharging its
responsibilities with respect to internal controls and financial reporting.
The Audit and Accountability Committee meets with management and the external
auditor to review the consolidated financial statements and discuss any significant
financial reporting or internal control matters prior to their approval of the consolidated
financial statements.
Trevor Pinn, CPA, CA
Deputy CAO / Treasurer
June 19, 2023
-4wmexe�� I�a_
Michelle Pick, CPA, CGA
Accounting Services Manager / Deputy Treasurer
June 19, 2023
Attachment 5 to Report FSD-030-23
Independent Auditor's Report
To the Members of Council of the Corporation of the Municipality of Clarington `
Opinion ♦��
We have audited the consolidated financial statements of the Corporation of the Municipality of
Clarington and its subsidiaries (the Group), which comprise the consolidated statement of financial
position as at December 31, 2022, and the consolidated statement of operations, the consolidated
statement of change in net assets and the consolidated statement of cash flows for the year then ended,
and notes to the consolidated financial statements, including a summary of significant accounting
policies.
In our opinion, the accompanying consolidated financial statements present fairly, in all material
respects, the consolidated financial position of the Group as at December 31, 2022, and its consolidated
results of operations, its consolidated change in net financial assets, and its consolidated cash flows for
the year then ended in accordance with Canadian public sector accounting standards.
Basis for Opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our
responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit
of the Consolidated Financial Statements section of our report. We are independent of the Group in
accordance with the ethical requirements that are relevant to our audit of the consolidated financial
statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Responsibilities of Management and Those Charged with Governance for the Consolidated Financial
Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with Canadian public sector accounting standards, and for such internal control
as management determines is necessary to enable the preparation of consolidated financial statements
that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group's
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless management either intends to liquidate the Group or
to cease operations, or has no realistic alternative but to do so.
1 Those charged with governance are responsible for overseeing the Group's financial reporting process.
) 1W
Page 2
Attachment 5 to Report FSD-030-23
Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
considered material if, individually or in the aggregate, they could reasonably be expected to influence —
the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks,
and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit 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 Group's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group's ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor's report to the related disclosures in the consolidated financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor's report. However, future events or conditions
may cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial
statements, including the disclosures, and whether the consolidated financial statements
represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group
audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
Chartered Professional Accountants, Licensed Public Accountants
Lindsay, Ontario
June 19, 2023
Page 3
3
Attachment 5 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Consolidated Statement of Financial Position
As at December 31, 2022
2022
2021
Financial assets
Cash and cash equivalents
$ 66,161,067
$ 77,658,903
Investments (Note 4)
158,112,846
96,426,970
Accounts receivable
11,429,392
7,838,504
Taxes receivable (Note 5)
10,394,135
8,785,220
Inventories for resale
9,636
29,707
Inventory - surplus land
146,349
146,349
Promissory notes receivable (Note 6)
8,321,000
8,321,000
Investment in Elexicon Corporation (Note 7)
20,258,934
19,145,126
Total financial assets
274,833,359
218,351,779
Liabilities
Accounts payable and accrued liabilities
11,115,311
9,298,615
Employee future benefits liabilities (Note 8)
9,902,896
9,542,139
Debenture debt (Note 10)
32,312,792
7,686,715
Deferred revenue - general
21,443,515
17,445,864
Deferred revenue - obligatory reserve funds (Note 12)
82,188,877
69,404,094
Total liabilities
156,963,391
113,377,427
Net financial assets
117,869,968
104,974,352
Non -financial assets
Investment in tangible capital assets (Note 18) (Schedule 1)
Prepaid expenses
Inventory supplies
461,450,953
2,077,729
674,008
461,278,530
908,604
582,214
Total non -financial assets
464,202,690
462,769,348
Accumulated surplus (Note 19)
$582,072,658
$567,743,700
Contingencies (Note 14) and Contractual Commitments (Note 15)
The accompanying notes are an integral part of these consolidated financial statements.
El
Attachment 5 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Consolidated Statement of Operations
For the year ended December 31, 2022
2022 2022 2021
Budget
Actual
Actual
(Note 21)
Revenues
Taxation and user charges
Property taxation
$ 69,595,132
$ 69,694,792
$ 66,928,003
Taxation from other governments
4,702,049
4,766,210
4,683,341
User charges
10,266,601
13,387,305
9,608,832
Grants
Government of Canada
-
597,534
367,458
Province of Ontario
134,481
996,099
3,081,368
Other
Deferred revenue earned
18,909,308
8,660,096
12,296,143
Investment income
386,563
5,452,665
2,629,395
Penalty and interest on taxes
1,450,000
1,571,377
1,582,534
Fines
299,375
427,488
312,578
Donations and contribution from others
15,130
471,647
1,566,684
Elexicon Corporation
Equity share of net income
-
1,959,096
1,617,475
Contributed tangible capital assets
7,524,869
7,524,869
2,425,232
Other income
-
6,299
1,004,257
Loss on disposal of tangible capital assets
-
(271,569)
(352,699)
Total revenue
113,283,508
115,243,908
107,750,601
Expenses
General government services
7,985,575
8,094,774
6,411,011
Protection services
22,223,728
20,758,814
19,933,461
Transportation services
34,331,827
32,271,115
31,321,742
Enviromental services
3,777,492
3,734,759
3,334,134
Health services
629,753
672,259
520,247
Recreation and cultural services
28,798,491
28,938,043
25,413,530
Planning and development services
6,286,730
6,445,186
5,703,383
Total expenses 104,033,596 100,914,950 92,637,508
Annual surplus 9,249,912 14,328,958 15,113,093
Accumulated surplus, beginning of year 567,743,700 567,743,700 552,630,607
Accumulated surplus, end of year $576,993,612 $582,072,658 $567,743,700
The accompanying notes are an integral part of these consolidated financial statements.
5
Attachment 5 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Consolidated Statement of Change in Net Financial Assets
For the year ended December 31, 2022
Annual surplus
Amortization of tangible capital assets
Acquisition of tangible capital assets
Investment in assets under construction
Assets under construction transferred to tangible
capital assets
Net book value of tangible capital assets disposals /
adjustments
2022 2022
Budget Actual
2021
Actual
$ 9,249,912 $ 14,328,958 $ 15,113,093
21,943,590
(99,030,540)
22,803,898
(25,733,309)
(8,986,977)
11,201,368
542,597
21,567,993
(16,232,109)
(9,843,572)
6,931,129
390,901
(Decrease) Increase in prepaid expenses - (1,169,125) 63,667
Decrease in inventory supplies - (91,794) (119,906)
Increase(decrease) in net financial assets (67,837,038) 12,895,616 17,871,196
Net financial assets, beginning of year 104,974,352 104,974,352 87,103,156
Net financial assets, end of year $ 37,137,314 $117,869,968 $104,974,352
The accompanying notes are an integral part of these consolidated financial statements.
Attachment 5 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Consolidated Statement of Cash Flows
For the year ended December 31, 2022
Operating activities
Annual surplus
Non cash items
Amortization of tangible capital assets
Loss on disposal of tangible capital assets
Equity share of Elexicon Corporation net income
Contributed tangible capital assets recorded in revenue
Change in non -cash operating items
Accounts receivable
Taxes receivable
Inventories for resale
Inventory of land for resale
Accounts payable and accrued liabilities
Employee future benefits liabilities
Deferred revenue - general
Deferred revenue - obligatory reserve funds
2022 2021
$ 14,328,958 $ 15,113,093
22,803,898
21,567,993
271,569
352,699
(1,959,096)
(1,617,475)
(7,524,869)
(2,425,232)
(3,590,888) 1,251,594
(1,608,915)
(247,079)
20,071
499
-
75,000
1,816,696
(2,187,446)
360,757
478,182
3,997,651
2,998,330
12,784,783
7,968,447
Prepaid expenses (1,169,122) 63,667
Inventory supplies (91,794) (119,906)
40,439,699 43,272,366
Capital activities
Acquisition of tangible capital assets (net of contributed) (15,994,053) (16,719,320)
Proceeds on disposal of tangible capital assets 271,028 38,202
(15,723,025) (16,681,118)
Investing activities
Increase in investments (61,685,876) (27,146,372)
Dividends received from Elexicon Corporation 845,288 1,053,347
(60,840,588) (26,093,025)
Financing activities
Repayment of long term liabilities (1,775,922) (1,858,842)
Proceeds of debenture issue 26,402,000 -
24,626,078 (1,858,842)
Net decrease, of cash and cash equivalents (11,497,836) (1,360,619)
Cash and cash equivalents, beginning of year 77,658,903 79,019,522
Cash and cash equivalents, end of year $ 66,161,067 $ 77,658,903
The accompanying notes are an integral part of these consolidated financial statements.
7
Attachment 5 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Notes to the Consolidated Financial Statements
December 31, 2022
The Municipality of Clarington (the "Municipality") is a municipality in the Province of Ontario, Canada.
It conducts its operations guided by the provisions of provincial statutes such as the Municipal Act,
the Municipal Affairs Act and related legislation.
1. Significant accounting policies
The consolidated financial statements of the Municipality are the representations of management
prepared in accordance with Canadian Public Sector Accounting Standards ("PSAS").
a. Significant accounting policies adopted are as follows:
Reporting entity
These consolidated financial statements reflect financial assets, liabilities, operating
revenues and expenses, and the changes in investment in tangible capital assets of
the Municipality of Clarington. The reporting entity is comprised of all organizations,
local boards and committees controlled by the Municipality, including the following:
- Board of Management for the Historic Downtown
Bowmanville Business Improvement Area
- Board of Management for the Newcastle Central
Business District Improvement Area
- Board of Management for the Orono Central
Business District Improvement Area
- Clarington Public Library Board and Clarington
Museums and Archives
- Newcastle Arena Board
- Newcastle Community Hall
Board
- Solina Hall Board
- Tyrone Community Hall Board
- Bowmanville Santa Claus Parade Committee - Clarington Heritage Committee
All material inter -entity transactions and balances are eliminated on consolidation.
ii. Investment in Elexicon Corporation
The Municipality of Clarington, along with the City of Pickering, the Town of Ajax, and
the City of Belleville own 68% of Elexicon Corporation. The Town of Whitby owns the
remaining 32% of Elexicon Corporation. The Municipality of Clarington holds a 9.248%
share of ownership.
The Municipality's investment in Elexicon Corporation and its subsidiaries is accounted
for on a modified equity basis, consistent with generally accepted accounting principles
as recommended by PSAS for investments in government business partnerships.
Under the modified equity basis of accounting, the business partnership's accounting
principles are not adjusted to conform to those of the Municipality and inter -
organizational transactions and balances are not eliminated. The Municipality
recognizes its equity interest in the annual income or loss of Elexicon Corporation in its
"Consolidated Statement of Operations" with a corresponding increase or decrease in
its investment asset account. Any dividends that the Municipality may receive from
Attachment 5 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Notes to the Consolidated Financial Statements
December 31, 2022
1. Significant accounting policies (continued)
a. Significant accounting policies adopted are as follows: (continued)
ii. Investment in Elexicon Corporation (continued)
Elexicon Corporation and other capital transactions will be reflected as adjustments in
the investment asset account.
iii. Accounting for region and school board transactions
The taxation and other revenues, expenses, assets and liabilities with respect to the
operations of the school boards and the Regional Municipality of Durham are not
reflected in these financial statements.
iv. Accounting for phase-in/capping provisions
Increases/decreases in property taxes levied as a result of the application of phase-
in/capping legislation are not reflected in the Consolidated Statement of Operations but
are reported on the Consolidated Statement of Financial Position.
V. Trust funds
Trust funds and their related operations administered by the Municipality are not
included in these consolidated financial statements, but are reported separately on the
"Trust Funds Statement of Operations" and "Trust Funds Statement of Financial
Position".
b. Basis of accounting
Accrual basis of accounting
Revenues and expenses are reported on the accrual basis of accounting. The accrual
basis of accounting recognizes revenues in the period in which transactions or events
occurred that gave rise to the revenues; expenses are recognized in the period the
goods and services are acquired and a liability is incurred or transfers are due.
ii. Cash and cash equivalents
Cash and cash equivalents are comprised of cash on hand, demand deposits and
bankers acceptances, all of which are highly liquid, subject to insignificant risk of
changes in value and have a short-term maturity of less than 90 days.
iii. Investments
Portfolio investments are carried at cost, net of accumulated amortization on premiums
and discounts. Premiums and discounts are amortized on a straight line basis over the
term to maturity. Interest income is recorded as it accrues. When the value of any
portfolio investment is impaired, the carrying amount is adjusted to the estimated
realizable amount and any adjustments are included in investment income in the period
01
Attachment 5 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Notes to the Consolidated Financial Statements
December 31, 2022
1. Significant accounting policies (continued)
b. Basis of accounting (continued)
iii. Investments (continued)
the impairment is recognized.
iv. Non -financial assets
Non -financial assets are not available to discharge existing liabilities and are held for
use in the provision of services. They have useful lives extending beyond the current
year, and are not intended for sale in the ordinary course of operations. The change in
non -financial assets during the year, together with the excess of revenues over
expenses, provides the Changes in Net Financial Assets for the year.
(a) Tangible capital assets ("TCA")
Tangible capital assets are recorded at cost, which includes all amounts that are
directly attributable to acquisition, construction, development or betterment of the
asset. The cost, less residual value, of the tangible capital assets are amortized on
a straight-line basis over their estimated useful lives as follows:
Land improvements
20-75 years
Buildings
5-75 years
Vehicles
7-20 years
Equipment
3-25 years
Linear road and related
7-75 years
Linear storm sewers
40-75 years
Amortization
The Municipality uses the straight line method of amortization. For pooled assets
and networks such as roads and storm sewers, one half of the annual amortization
is charged in the year of acquisition or in-service date and in the year of disposal.
For individual assets, if acquired (or in-service) in the first half of the year, the full
year of the amortization is charged. If acquired (or in-service) in the second half of
the year, one half of the annual amortization is charged. Similarly in the year of
disposal, if the asset is disposed of in the first half of the year, one half of the
amortization is charged but if disposed of in the second half of the year the full
annual amortization is charged. Assets under construction are not amortized until
the asset is available for productive use, at which time they are capitalized.
Contribution of tangible capital assets
Tangible capital assets received as contributions are recorded at their fair value at
the date received/assumed and that fair value is also recorded as revenue.
go]
Attachment 5 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Notes to the Consolidated Financial Statements
December 31, 2022
1. Significant accounting policies (continued)
b. Basis of accounting (continued)
iv. Non -financial assets (continued)
(b) Inventories
Inventories held for consumption are recorded at the lower of cost or replacement
cost.
V. Reserves and reserve funds
Certain amounts, as approved by Council, are set aside in reserves and reserve funds
for future operating and capital purposes. Transfers to and/or from reserves and
reserve funds are an adjustment to the respective fund when approved. Reserves and
reserve funds form part of the Municipality's accumulated surplus.
vi. Deferred revenues
Deferred Revenues, which include advance payments for tickets, building permits and
program registration fees; contributions from developers according to Section 37 of the
Planning Act; and revenues set aside for specific purposes (obligatory reserve funds),
represent fees which have been collected, but for which the related services have not
yet been provided. Revenue is recognized when the related activity occurs or the
service is performed.
vii. Employee future benefits
The present value of the cost of providing employees with future benefits programs is
expensed as employees earn these entitlements through service. The cost of the
benefits earned by employees is actuarially determined using the projected benefit
method prorated on service and management's best estimate of retirement ages of
employees and expected health care and dental costs. Actuarial gains or losses are
amortized on a straight-line basis over the expected average remaining service life of
all employees covered.
viii. Contaminated sites
Contaminated sites are the result of contamination being introduced in air, soil, water
or sediment of a chemical, organic, or radioactive material or live organism that exceed
an environmental standard. A liability for remediation of contaminated sites is
recognized, net of any expected recoveries, when all of the following criteria are met: a)
an environmental standard exists; b) contamination exceeds the environmental
standard; c) the organization is directly responsible or accepts responsibility for the
liability; d) future economic benefits will be given up; and e) a reasonable estimate of
the liability can be made. Changes in this estimate are recorded in the Municipality's
statement of operations. As of December 31, 2022, there was no liability recorded on
11
Attachment 5 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Notes to the Consolidated Financial Statements
December 31, 2022
1. Significant accounting policies (continued)
b. Basis of accounting (continued)
viii. Contaminated sites (continued)
the statement.
ix. Revenue Recognition
Taxation
Property tax billings are prepared by the Municipality based on assessment rolls issued
by the Municipal Property Assessment Corporation ("MPAC"). Tax rates are
established annually by Council, incorporating amounts to be raised for local services
and amounts the Municipality is required to collect on behalf of the Regional
Municipality of Durham and the Province of Ontario in respect of education taxes.
Taxes are recorded at estimated amounts when they meet the definition of an asset,
have been authorized and the taxable event occurs. For property taxes, the taxable
event is the period for which the tax is levied. As taxes recorded are initially based on
management's best estimate of the taxes that will be received, it is possible that
changes in future conditions, such as reassessments due to audits, appeals and court
decisions, could result in a change in the amount of tax revenue recognized. Taxes
receivable are recognized net of an allowance for anticipated uncollectible amounts.
A normal part of the assessment process is the issuance of supplementary
assessment rolls which provide updated information with respect to changes in
property assessment. Once a supplementary roll is received, the Municipality
determines the taxes applicable and renders supplementary tax billings. Assessments
of the related property taxes are subject to appeal. Any supplementary billing
adjustments made necessary by the determination of such changes will be recognized
in the fiscal year they are determined and the effect shared with the Region of Durham
and school boards, as appropriate.
Government transfers
Government transfers are recognized as revenue in the financial statements when the
transfer is authorized and any eligibility criteria are met, except to the extent that
transfer stipulations give rise to an obligation that meets the definition of a liability.
Transfers are recognized as deferred revenue when transfer stipulations give rise to a
liability. Transfer revenue is recognized in the statement of operations as the stipulation
liabilities are settled.
Government transfers and developer contributions -in -kind related to capital
acquisitions are required to be recognized as revenue in the consolidated financial
statements in the period in which the tangible capital assets are acquired.
12
Attachment 5 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Notes to the Consolidated Financial Statements
December 31, 2022
1. Significant accounting policies (continued)
b. Basis of accounting (continued)
ix. Revenue Recognition (continued)
User fees and service charges
User charges are recognized when the services are performed or goods are delivered
and there is reasonable assurance of collection.
Other
Other revenue is recorded when it is earned and collection is reasonably assured.
Investment income
Investment income earned on operating surplus funds and reserve funds (other than
obligatory reserve funds) are recorded as revenue in the period earned. Investment
income earned on obligatory reserve funds are recorded directly to each respective
fund balance and forms part of the deferred revenue — obligatory reserve funds
balance.
X. Inventory for resale
Inventory for resale is valued at the lower of cost or net realizable value on an average
cost basis.
xi. 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. These have been made using careful judgment. Actual
results could differ from these estimates.
2. Trust funds
Trust funds administered by the Municipality amounting to $2,132,080 (2021 — $2,006,827) have
not been included in the "Consolidated Statement of Financial Position" nor have their financial
activities been included in the "Consolidated Statement of Operations".
3. Operations of school boards and The Regional Municipality of Durham
Further to Note 1(a)(iii), requisitions were made by the Regional Municipality of Durham and
School Boards requiring the Municipality of Clarington to collect property taxes and payments in
lieu of property taxes on their behalf. The amounts levied and remitted are summarized below:
13
Attachment 5 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Notes to the Consolidated Financial Statements
December 31, 2022
3. Operations of school boards and The Regional Municipality of Durham (continued)
Regional
School Municipality
Boards of Durham
2022
Property taxes
Taxation from other governments
$
33,318,506
184,430
$101,516,824
3,108,946
Total
$
33,502,936
$104,625,770
2021
Property taxes
Taxation from other governments
$
32,531,062
83,839
$ 96,914,320
2,951,157
Total
$
32,614,901
$ 99,865,477
4. Investments
Total investments of $158,112,846 (2021 - $96,426,970) reported on the Consolidated Statement
of Financial Position at cost plus accrued interest, have a market value of $152,309,075 (2021 -
$99,985,087 ) at the end of the year. The investments consist of investments pursuant to
provisions of the Municipality's investment policy and comprise government bonds and
guaranteed investment certificates (GICs) issued by various financial institutions. It is the
Municipality's intention to hold these investments until maturity.
2022 Cost
2022 Market
Value
2021 Cost
2021 Market
Value
GICs
$ 61,779,802
$ 62,383,849
$ 46,840,154
$ 49,755,193
Bonds
88,890,283
82,098,502
42,362,106
41,990,209
Pooled Funds Equity
2,983,725
3,878,133
2,835,624
4,143,342
Pooled Funds Bonds
4,459,036
3,948,591
4,389,086
4,096,343
Total
$158,112,846
$152,309,075
$ 96,426,970
$ 99,985,087
The Municipality holds investments with a maturity of less than 90 days, in a High Interest
Savings Account. This value is reported within cash and cash equivalents, due to the highly liquid
nature of these investments. Total investments, with a maturity of less than 90 days, have a value
of $31,084,106 (2021 - $35,168,036) on the Consolidated Statement of Financial Position.
14
Attachment 5 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Notes to the Consolidated Financial Statements
December 31, 2022
5. Taxes receivable
The balance in taxes receivable, including penalties and interest, is comprised of the following:
2022
2021
Current year taxes
$
7,936,311
$
6,660,373
Previous year taxes
2,507,824
2,274,847
10,444,135
8,935,220
Allowance for uncollectible taxes
(50,000)
(150,000)
$
10,394,135
$
8,785,220
6. Promissory notes receivable
2022
2021
Promissory note receivable from Elexicon Corporation due on
demand and bearing interest at the Ontario Energy Board
deemed long-term debt rate on an annual basis to maturity
(4.13% for the current year).
$
2,355,000
$
2,355,000
Promissory note receivable from Elexicon Energy Inc. maturing
November 1, 2039 and bearing interest at the Ontario Energy
Board deemed long-term debt rate on a annual basis to
maturity (4.13% for the current year).
5,966,000
5,966,000
$
8,321,000
$
8,321,000
Interest revenue earned from these notes receivable totaled $343,657 (2021 - $343,657). The
Municipality has waived its right to demand repayment of any portion of the principal of the
promissory notes payable before the date of January 1, 2024.
15
Attachment 5 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Notes to the Consolidated Financial Statements
December 31, 2022
7. Investment in Elexicon Corporation
a. Investment in Elexicon Corporation
The Municipality of Clarington, along with the City of Pickering, the Town of Ajax, and the
City of Belleville own 68% of Elexicon Corporation. The Town of Whitby owns the remaining
32% of Elexicon Corporation. The Municipality of Clarington holds a 9.248% share of
ownership. The Municipality is accounting for this investment using a modified equity basis
in these financial statements. The financial impact to the Municipality of Clarington's
investment and equity are reported below.
The following table provides condensed supplementary financial information of Elexicon
Corporation and its subsidiaries for the year ended December 31:
2022
2021
Financial position
Assets
Current
$ 103,438,000
$ 104,266,000
Capital and intangibles
661,146,000
584,949,000
Other
4,340,000
341,000
Regulatory balances
58,573,000
44,905,000
Total assets and regulatory balances
827,497,000
734,461,000
Liabilities
Current
283,588,000
85,153,000
Long-term debt
122,513,000
258,526,000
Other
148,489,000
132,520,000
Total liabilities
554,590,000
476,199,000
Shareholders' equity
Share capital
97,692,000
97,692,000
Contributed capital
25,000
25,000
Retained earnings
165,161,000
153,398,000
Regulatory balances
10,029,000
7,147,000
Total shareholders' equity and regulatory balances
272,907,000
258,262,000
Total liabilities, equity and regulatory balances
827,497,000
734,461,000
91
Attachment 5 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Notes to the Consolidated Financial Statements
December 31, 2022
7. Investment in Elexicon Corporation (continued)
a. Investment in Elexicon Corporation (continued)
2022 2021
Financial activities
Revenues 514,713,000 501,355,000
Other income 15,458,000 9,978,000
Expenses (524,157,000) (507,085,000)
Net movements in regulatory balances, net of tax 15,170,000 13,242,000
Net income for the year $ 21,184,000 $ 17,490,000
b. Municipality's equity is represented by:
Promissory notes receivable (Note 6)
Initial investment in shares of the Corporation
Accumulated net income
Net increase in value of investment
2022 2021
$ 8,321,000 $ 8,321,000
10,146,495
23,691,145
400,126
10,146,495
21,732,048
400,126
Accumulated dividends received (13,978,832) (13,133,543)
Total equity 28,579,934 27,466,126
Municipality of Clarington's investment represented by:
Investment in Corporation 20,258,934 19,145,126
Promissory notes receivable 8,321,000 8,321,000
$ 28,579,934 $ 27,466,126
C. Contingencies and guarantees of Elexicon Corporation (the "Corporation") as
disclosed in their financial statements are as follows:
(i) Insurance claims
The Corporation is a member of the Municipal Electric Association Reciprocal Insurance
Exchange ("MEARIE") which was created on January 1, 1987. A reciprocal insurance
exchange may be defined as a group of persons formed for the purpose of exchanging
reciprocal contracts of indemnity or inter -insurance with each other. MEARIE provides
general liability insurance to member electric utilities. MEARIE also provides vehicle and
property insurance to the Corporation.
17
Attachment 5 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Notes to the Consolidated Financial Statements
December 31, 2022
7. Investment in Elexicon Corporation (continued)
C. Contingencies and guarantees of Elexicon Corporation (the "Corporation") as
disclosed in their financial statements are as follows: (continued)
Insurance premiums charged to each member electric utility consist of a levy per $1,000
of service revenue subject to a credit or surcharge based on each electric utility's claims
experience. The maximum coverage is $40,000,000 per occurrence, for liability
insurance, $21,000,000 for vehicle insurance and $206,572,000 for property insurance
and $12,000,000 for privacy, cyber, and network security insurance.
(ii) Contractual obligation - Hydro One Networks Inc.
The Corporation's subsidiary, Elexicon Energy Inc. (EEI), is party to a connection and
cost recovery agreement with Hydro One related to the construction by Hydro One of a
transformer station designated to meet EEI's anticipated electricity load growth.
Construction of the project was completed during 2007 and EEI connected to the
transformer station during 2008.
To the extent that the cost of the project is not recoverable from future transformation
connection revenues, EEI is obliged to pay a capital contribution equal to the difference
between these revenues and the construction costs allocated to EEI. The construction
costs allocated to EEI for the project are $19,950,000.
Hydro One has performed a true -up based on actual load at the end of the tenth
anniversary of the in-service date and is expected to perform a true -up based on actual
load at the end of the fifteenth anniversary of the in-service date.
d. Lease commitments - Elexicon Corporation
Future minimum non -cancellable lease payment obligations under finance leases are as
follows:
2023
$ 177,000
2024
124,000
2025
95,000
2026
71,000
2027
45,000
$ 512,000
9.01
Attachment 5 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Notes to the Consolidated Financial Statements
December 31, 2022
8. Employee future benefits liabilities
a. Accumulated sick leave entitlement
(i) Firefighters
The Municipality provides two sick leave accumulation plans for firefighters. Plan A
accumulates at the rate of one day per month of completed years of service to a
maximum of 182 days. These employees may become entitled to a cash payment on
retirement, early retirement, termination or death, at the rate of 50% of the accumulated
credit, to a maximum of one-half a year's salary. Plan B accumulates at the rate of one
day per month once the employees complete five years of service. The estimated liability
at December 31, 2022 was $1,156,136 (2021 - $1,096,690).
(ii) Other
During the 1993 fiscal year, the Municipality negotiated an agreement with all employees
(except firefighters) to terminate the sick leave benefit plan which had been in effect for
many years. The Municipality agreed to pay to those employees covered by the plan and
who had at least five -years' service with the Municipality a cash equivalent of 50% of sick
leave days accumulated to July 1, 1993 to a maximum of 120 days of salary.
Remuneration for the buying out of sick days identified will be available to the employee
at any time up to the time that the employee either leaves the Corporation or retires, at
the rate of remuneration in effect at July 31, 1993. The estimated liability at December
31, 2022 amounted to $20,372 (2021 - $17,154).
b. Post -employment benefits - other
The Municipality makes available to qualifying employees who retire before the age of 65
(firefighters - age 60) the opportunity of continuing their coverage for benefits such as
medical (extended health), dental, and life insurance benefits. Coverage ceases at age 65.
Dependent upon the eligibility, the cost of this coverage may be a shared responsibility
between the Municipality and the retired employees.
An actuarial valuation was performed as at December 31, 2022 based on data as at the
valuation date and plan provisions. The accrued benefit obligation and net benefit costs (i.e.
the expense) for the 2022 fiscal year end was determined by this valuation.
The significant actuarial assumptions employed for the valuation are as follows:
(i) Discount rate will be 2.50% per annum, increasing to 4.4% in 2023.
(ii) Future inflation rates will be 2.75%.
(iii) Dental cost trend rates will escalate at 5.00% in fiscal 2022 and remain stable at
that level until 2027.
(iv) Extended health care trend rates will be 5.60% in fiscal 2022; and remain stable
at that level until 2027.
Wel
Attachment 5 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Notes to the Consolidated Financial Statements
December 31, 2022
8. Employee future benefits liabilities (continued)
C. Information about the Municipality's employee future benefits liabilities is as follows:
Accrued benefit obligation
Balance, beginning of year
Employer current service cost
Interest cost
Benefits paid
Actuarial (gain) loss
Balance, end of year
Unamortized net actuarial gains
2022 2021
$ 10,200,559 $ 10,714,959
568,651 604,985
261,114 208,588
(574,032) (496,608)
(2,351,278) (831,365)
8,105,014 10,200,559
1,797,882 (658,420)
Employee future benefits liabilities, end of year $ 9,902,896 $ 9,542,139
9. Pension agreements
The Municipality makes contributions to the Ontario Municipal Employees Retirement Fund
("OMERS"). OMERS is a multi -employer defined benefit pension plan which provides pensions for
employees of Ontario municipalities, local boards, public utilities and school boards. The pension
plan is financed by equal contributions from participating employers and employees, and by the
investment earnings of the fund. The most recent actuarial valuation of the Plan was conducted at
December 31, 2022. The results of this valuation disclosed total going concern actuarial liabilities
of $130,306 million with respect to benefits accrued for service with actuarial assets at that date
of $123,628 million indicating an actuarial deficit of $6,678 million. Because OMERS is a multi -
employer plan, any Plan surpluses or deficits are the joint responsibility of Ontario municipal
organizations and their employees. As a result the Municipality does not recognize any share of
the Plan surplus or deficit.
The Municipality recognizes the expense related to this plan as contributions are made. The
contribution rates and year's maximum pensionable earnings (YMPE) are outlined in the table
below.
NRA 65 up NRA 65 up NRA 60 up NRA 60
Year YMPE to YMPE to YMPE to YMPE over YMPE
2022 $ 64,900 9.00 % 14.60 % 9.20 % 15.80 %
2021 $ 61,600 9.00 % 14.60 % 9.20 % 15.80 %
The amount contributed to OMERS for 2022 was $3,396,079 (2021 — $3,364,678) for current
services and is included as an expense on the statement of operations.
all
Attachment 5 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Notes to the Consolidated Financial Statements
December 31, 2022
10. Debenture Debt
The debenture debt consists of several debentures that mature in the years 2023 to 2042.
a. Debenture debt details
At the end of the year, the outstanding principal amount of this liability is $32,312,792 (2021
- $7,686,715).
Maturity Date
Interest Rate %'
Regional
By-law #
2022
2021
August 21, 2022
4.60 to 4.75
07-2007
$ - $
1,000,000
July 2, 2024
1.95 to 3.35
38-2014
313,000
464,000
July 2, 2029
1.95 to 3.80
38-2014
3,344,600
3,766,600
October 17, 2031
1.25 to 2.80
48-2016
625,000
688,000
April 13, 2032
1.70 to 3.30
56-2017
713,128
774,413
April 13, 2032
1.70 to 3.30
56-2017
915,064
993,702
July 5, 2042
3.35 to 4.75
32-2022
20,000,000
-
July 5, 2032
3.35 to 4.30
32-2022
6,402,000
-
$ 32,312,792 $
7,686,715
1 Interest rates gradually increase to the upper limits noted in the table.
b. Principal repayments
Of the municipal debt reported in (a) of this note, principal payments are payable from
general municipal revenues follows:
2023
$ 1,975,103
2024
2,039,737
2025
1,946,826
2026
2,014,915
2027
2,089,457
Thereafter
22,246,754
$ 32,312,792
C. Principal and interest
21
Attachment 5 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Notes to the Consolidated Financial Statements
December 31, 2022
10. Debenture Debt (continued)
C. Principal and interest (continued)
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.
d. Interest expense
Total interest expense related to the net long-term liabilities amounted to $759,772 (2021 -
$280,509) and is reported on the Consolidated Statement of Operations.
11. Internal Loans
As a means of funding various capital acquisitions, funds are borrowed from the Municipal Capital
Reserve Fund. These funds are secured by promissory notes with interest rates ranging from
2.20% to 3.30% and payment terms of 15 years. The financing arrangements and ultimate
repayment are approved by Council through the budget process.
a. The following is a summary of the individual loans:
Major Parking Lot Rehabilitation
$ 1,357,019
LED Street lighting Conversion
2,016,981
$ 3,374,000
b. Of the internal loans reported in (a) of this note, principal payments are as follows:
2023
$ 263,000
2024
271,000
2025
279,000
2026
287,000
2027
296,000
Thereafter
1,978,000
$ 3,374,000
22
Attachment 5 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Notes to the Consolidated Financial Statements
December 31, 2022
12. Deferred revenue - obligatory reserve funds
The continuity of "deferred revenue - obligatory reserve funds" of the Municipality is summarized
as follows:
2022
2021
Balance, beginning of year
$ 69,404,094
$ 61,435,647
Contributions:
Contributions from developers
12,553,477
11,868,622
Investment Income
2,106,347
787,978
Canada community -building
2,918,206
5,723,561
Provincial infrastructure
3,866,848
1,893,429
21,444,878
20,273,590
Utilization:
Transfer to operating
4,083,503
634,085
Acquisition of TCA - construction
4,576,592
11,671,058
8,660,095
12,305,143
Change in deferred revenue during the year
12,784,783
7,968,447
Balance, end of year
82,188,877
69,404,094
Balance, end of year - analyzed as follows:
Parkland cash -in -lieu
6,874,492
5,183,960
Canada community -building
4,525,798
4,181,454
Building code act
2,462,343
2,847,931
Provincial infrastructure
4,348,686
1,204,275
Development charges (Note 13)
63,977,558
55,986,474
Total deferred revenue — obligatory reserve funds
$ 82,188,877
$ 69,404,094
M3
Attachment 5 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Notes to the Consolidated Financial Statements
December 31, 2022
13. Continuity of development charges reserve funds
Balance at the beginning of the year
Development charges collections
Investment income
Tangible capital assets acquisitions and construction
Operating expenses
2022 2021
$ 55,986,474 $ 50,015,215
11,290,994
10, 640,407
1,694,340
625,190
(1,957,747)
(3,587,431)
(3,036,503)
(1,706,907)
Balance at the end of the year $ 63,977,558 $ 55,986,474
14. Contingencies
Various legal actions and claims have been initiated by and against the Municipality, the
outcomes of which cannot be determined at the time of reporting. Accordingly, no provision has
been made in these consolidated financial statements for any liability which may result. Should
any gain or loss occur as a result of the above legal actions the Municipality will account for the
gain/loss when it is likely that such a gain/loss will occur and the amount is measurable.
15. Contractual commitments
During the year the Municipality had work done on several major projects with contract values
totaling approximately $38,354,707 (2021 - $36,339,591). These contracts relate to the
construction and expansion of certain permanent facilities. As at December 31, 2022, $8,613,197
(2021 - $7,722,307) relating to these contracts had not been expended.
16. Related party transactions and balances - Elexicon Corporation
Transactions
Dividends received
Interest earned on promissory notes
Property taxes
Energy and services purchases
Balances
Promissory notes receivable
Accounts payable and accrued liabilities
2022 2021
$ 845,288 $ 1,053,347
343,657 343,657
34,413
492,128
8,321,000
83,078
33,929
485,981
8,321,000
78,193
0
Attachment 5 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Notes to the Consolidated Financial Statements
December 31, 2022
17. Guarantees
In the normal course of business, the Municipality enters into agreements which contain
guarantees. The Municipality's primary guarantees are as follows:
(i) The Municipality has provided indemnities under lease agreements for the use of various
facilities or land. Under the terms of these agreements the Municipality agrees to indemnify
the counterparties for various items including, but not limited to, all liabilities, losses, suits, and
damages arising during, on or after the term of the agreement. The maximum amount of any
potential future payment cannot be reasonably estimated.
(ii) The Municipality indemnifies employees and elected officials for various items including, but
not limited to, all costs to settle suits or actions due to association with the Municipality,
subject to certain restrictions. The Municipality has purchased liability insurance to mitigate the
cost of any potential future suits or actions. The term of the indemnification is not explicitly
defined, but is limited to the period over which the indemnified party served as an employee or
elected official of the Municipality. The maximum amount of any potential future payment
cannot be reasonably estimated.
(iii) The Municipality has entered into agreements that may include indemnities in favour of third
parties, such as purchase and sale agreements, confidentiality agreements, engagement
letters with advisors and consultants, outsourcing agreements, leasing contracts, information
technology agreements and service agreements. These indemnification agreements may
require the Municipality to compensate counterparties for losses incurred by the counterparties
as a result of breaches in representation and regulations or as a result of litigation claims or
statutory sanctions that may be suffered by the counterparty as a consequence of the
transaction. The terms of these indemnities are not explicitly defined and the maximum
amount of any potential reimbursement cannot be reasonably estimated.
The nature of these indemnification agreements prevents the Municipality from making a
reasonable estimate of the maximum exposure due to the difficulties in assessing the amount of
liability which stems from the unpredictability of future events and the unlimited coverage offered
to counterparties. Historically, the Municipality has not made any significant payments under such
or similar indemnification agreements and therefore no amount has been accrued in these
consolidated financial statements with respect to these agreements.
18. Tangible capital assets
The continuity of the historical cost and accumulated amortization for various categories of
tangible capital assets can be found in Schedule 1.
Further information relating to tangible capital assets is as follows:
a. Contributed tangible capital assets
The Municipality of Clarington records all tangible assets contributed by an external party at
P41
Attachment 5 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Notes to the Consolidated Financial Statements
December 31, 2022
18. Tangible capital assets (continued)
a. Contributed tangible capital assets (continued)
fair value on the earlier of the date received or of the transfer of risk and responsibility.
Typical examples are roadways, parks, land, and storm sewer lines installed by a developer
as part of a subdivision agreement. For subdivision assets, the recorded date is considered
to be the date of acceptance with the exclusion of streetlights with the recorded date as the
date of completion. In 2022, there were contributed assets of $7,524,869 (2021 -
$2,425,232).
b. Works of Art and Historical Treasures
The Municipality has one historical collection. The Clarington Museums and Archives
collection is currently insured for $238,500. Also included in historical treasures are the
cenotaphs located in Bowmanville, Newcastle, Orono and Newtonville. Due to the rural
history, there are several abandoned cemeteries located throughout the Municipality. All
associated physical items, including historical signs and cairns, or concrete structures build
for old headstones, are considered a historical treasure.
19. Accumulated surplus
Accumulated surplus is comprised of the following:
Investment in tangible capital assets
General surplus
Capital Surplus
Inventory - surplus land
Debenture debt
Unfunded employee benefits and post -employment liabilities
Reserves set aside for specific purposes by Council:
Acquisition of capital assets
Legal / consulting
Election expenses
Fire prevention
Burketon park improvements
Samuel Wilmot nature area
Secondary plans
Clarington Heritage committee board
Library and Musuem
2022 2021
$461,450,953
$461,278,530
6,842,796
6,954,091
52,543,426
24,336,869
146,349
146,349
(32,312,792)
(7,686,715)
(1,906,715)
(2,323,287)
7,852,477 5,825,242
2,169,447 2,261,174
143,419
347,338
304,552
304,552
7,569
7,569
1,301
595
109,769
128,340
5,151
6,151
1,597,025
-
al
Attachment 5 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Notes to the Consolidated Financial Statements
December 31, 2022
19. Accumulated surplus (continued)
2022
2021
Reserve funds set aside for specific purposes by Council:
General municipal purposes
8,285,492
7,597,010
Rate stabilization
10,111,424
9,376,171
Stategic capital
10,283,908
10,351,048
Recreation programs and facilities
814,070
883,425
Debenture repayment
867,433
651,771
Industrial development
676,947
614,607
Other cultural
159,706
149,301
Acquisition of capital assets
11,090,560
8,634,885
Newcastle Waterfront study
45,913
45,127
Municipal capital works
6,414,306
4,854,567
Other capital - unspecified
-
982,334
Road contributions
3,391,756
3,138,028
Port Granby LLRW
320,918
315,420
Community improvement plan
1,194,442
152,622
Business improvement areas
140,320
137,919
Hampton Union Cemetery
117,069
115,065
Community emergency management
623,733
691,476
Equity in Elexicon Corporation
28,579,934
27,466,126
Accumulated surplus
$582,072,658
$567,743,700
20. Segmented information
The Municipality provides a wide range of services to its residents. Distinguishable functional
segments have been separately reported on Schedule 2. For each segment, revenues and
expenses represent amounts that are directly attributable to each segment. Tax revenues are
reported as part of general government.
The nature of the segments and the activities they encompass are as follows:
a. General government services
General government is comprised of all departments that support the corporate governance,
management and program support for the Municipality.
b. Protection services
27
Attachment 5 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Notes to the Consolidated Financial Statements
December 31, 2022
20. Segmented information (continued)
b. Protection services (continued)
Protection services includes protection to persons and property and is comprised of
Emergency and Fire Services, Municipal Law Enforcement, Animal Services and Building
Inspection / Enforcement services. Emergency and Fire Services includes responsibility for
emergency management, fire prevention and public education, fire suppression,
communication, and training.
C. Transportation services
Transportation services includes services provided by the Public Works department. The
primary responsibilities include the inspection, planning and maintenance of the roads,
bridges, sidewalks, streetlights, roadsides, winter snow clearing, subdivision planning, traffic
engineering, development, and municipal servicing reviews. Other services include fleet
maintenance, parking and school crossing guards.
d. Environmental services
Environmental services includes storm -water management, erosion control and resale of
waste diversion goods.
e. Health services
Health services includes the maintenance and operation of the Municipality's active and
abandoned cemeteries and crematorium, cemetery records management and the sale of
cemetery plots, permits and headstones.
Recreation and cultural services
Recreation and cultural services includes the administration, operation and maintenance of
all recreational, aquatic, arena, community recreational facilities, parks and trails. Clarington
Libraries, Museums and other external cultural agencies are also included in this segment.
g. Planning and development services
Planning and development services includes the development of planning policies, urban
design, development approvals, heritage preservation, real estate services and geomatics.
This segment further includes business improvement areas and tourism activities.
21. Budget amounts
The budget figures reflected in these consolidated statements are those approved by Council on
February 5, 2022. Budget figures have been translated to reflect Public Sector Accounting Board
standards (PSAS).
28
Attachment 5 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Notes to the Consolidated Financial Statements
December 31, 2022
22. Comparative figures
Certain comparative figures have been reclassified to conform to the financial statement
presentation adopted in the current year.
c7
Attachment 5 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Consolidated Schedule of Tangible Capital Assets - Schedule 1
For the Year Ended December 31, 2022
2022
General
Infrastructure
Land
Linear Road
Linear Storm
Assets under
Land Improvements
Buildings
Vehicles Equipment
Land
& Related
Sewers Buildings
Vehicles
Equipment construction
Total
Cost
Balance, beginning
of year
$ 72,538,814 $ 43,139,415
$108,998,027 $
9,148,357 $ 15,023,754 $
7,999,830
$416,276,929
$ 99,853,088 $ 2,260,968 $
15,534,566 $
144,802 $ 15,291,542
$806,210,092
Add: additions
during the year
384,000 1,152,082
504,518
- 1,106,661
495,900
19,247,959
869,699 -
1,784,146
188,344 8,986,977
34,720,286
Less: disposals
during the year
(99,440) (88,158)
(495,855)
(525,098) (904,678)
(5,176)
(3,615,326)
(608) -
(535,372)
- (11,201,368)
(17,471,079)
Balance, end of year 72,823,374
44,203,339
109,006,690
8,623,259
15,225,737
8,490,554 431,909,562
100,722,179
2,260,968 16,783,340
333,146 13,077,151 823,459,299
Accumulated
amortization
Balance, beginning
of year -
16,431,328
56,049,464
6,982,536
9,320,006
- 221,878,134
22,974,350
1,619,684 9,654,413
21,647 - 344,931,562
Add: amortization
during the year -
1,349,094
3,175,273
475,645
1,323,651
- 13,960,219
1,346,637
77,591 1,067,115
28,673 - 22,803,898
Less: accumulated
amortization on
disposals -
(88,158)
(449,856)
(525,098)
(892,433)
- (3,371,277)
(576)
- (399,716)
- - (5,727,114)
Balance, end of year _ 17,692,264 58,774,881 6,933,083 9,751,224 - 232,467,076 24,320,411 1,697,275 10,321,812 50,320 - 362,008,346
Net book value of
tangible capital
assets $ 72,823,374 $ 26,511,075 $ 50,231,809 $ 1,690,176 $ 5,474,513 $ 8,490,554 $199,442,486 $ 76,401,768 $ 563,693 $ 6,461,528 $ 282,826 $ 13,077,151 $461,450,953
0(
Attachment 5 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Consolidated Schedule of Tangible Capital Assets - Schedule 1
For the Year Ended December 31, 2022
2021
General
Infrastructure
Land
Linear Road
Linear Storm
Assets under
Land Improvements
Buildings
Vehicles
Equipment
Land
& Realated
Sewers
Buildings
Vehicles
Equipment
construction
Total
Cost
Balance, beginning
of year $
72,613,814 $
41,359,390
$108,167,018 $
9,318,854 $
14,617,085 $
6,007,350
$411,072,716
$ 98,614,861
$ 2,260,968 $
14,575,223 $
56,191
$ 12,379,100
$791,042,570
Add: additions
during the year
-
2,152,344
961,454
-
1,151,572
1,992,480
7,582,341
1,239,755
-
1,063,551
88,611
9,843,572
26,075,680
Less: disposals
during the year
(75,000)
(372,319)
(130,445)
(170,497)
(744,903)
-
(2,378,128)
(1,528)
-
(104,208)
-
(6,931,130)
(10,908,158)
Balance, end of year
72,538,814
43,139,415
108,998,027
9,148,357
15,023,754
7,999,830
416,276,929
99,853,088
2,260,968
15,534,566
144,802
15,291,542
806,210,092
Accumulated
amortization
Balance, beginning
of year
-
15,439,682
52,946,077
6,621,609
8,760,163
-
211,151,194
21,648,700
1,536,911
8,835,079
10,283
-
326,949,698
Add: amortization
during the year
-
1,275,651
3,202,830
531,424
1,297,645
-
12,915,586
1,327,178
82,773
923,542
11,364
-
21,567,993
Less: accumulated
amortization on
disposals
-
(284,005)
(99,443)
(170,497)
(737,802)
-
(2,188,646)
(1,528)
-
(104,208)
-
-
(3,586,129)
Balance, end of year
-
16,431,328
56,049,464
6,982,536
9,320,006
-
221,878,134
22,974,350
1,619,684
9,654,413
21,647
-
344,931,562
Net book value of
tangible capital
assets $
72,538,814 $
26,708,087
$ 52,948,563 $
2,165,821 $
5,703,748 $
7,999,830
$194,398,795
$ 76,878,738
$ 641,284 $
5,880,153 $
123,155
$ 15,291,542
$461,278,530
31
Attachment 5 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Consolidated Schedule of Segmented Information - Schedule 2
For the Year Ended December 31, 2022
2022
General
government
services
Protection
services
Transportation
services
Environmental
services
Recreation and
Health services cultural services
Planning and
development
Consolidated
Operating revenue
Taxation and user charges
$ 75,768,278 $
2,516,807 $
1,444,763 $
156,763 $
458,371 $ 4,444,877 $
3,058,448 $
87,848,307
Grants
162,337
110,244
71,050
-
- 628,741
621,261
1,593,633
Other
7,037,427
464,976
5,537,337
60,676
317,870 2,877,585
287,402
16,583,273
Elexicon Corporation
1,959,096
-
-
-
- -
-
1,959,096
Contributed tangible capital assets
-
-
5,427,384
1,217,585
- 879,900
-
7,524,869
Other income
5,911
-
-
-
- 388
-
6,299
Loss on disposal of tangible capital assets
-
55,000
(270,946)
(32)
- (55,591)
-
(271,569)
Total operating revenue
84,933,049
3,147,027
12,209,588
1,434,992
776,241
8,775,900
3,967,111
115,243,908
Operating expenses
Salaries and wages
5,054,606
17,492,153
9,312,864
485,267
326,256
14,585,698
4,079,141
51,335,985
Operating materials and supplies
887,458
973,891
4,954,014
669,866
341,559
5,790,416
309,576
13,926,780
Contract services
743,552
1,178,984
2,854,600
849,269
-
2,911,962
2,017,984
10,556,351
Rent and financial expenses
347,408
-
15,320
-
-
74,908
-
437,636
External transfers to others
-
750
-
-
-
982,981
-
983,731
Amortization expense
1,032,647
1,113,036
14,898,962
1,730,357
4,444
3,985,967
38,485
22,803,898
Interest on long-term liabilities
29,103
-
235,355
-
-
606,111
-
870,569
Total operating expenses
8,094,774
20,758,814
32,271,115
3,734,759
672,259
28,938,043
6,445,186
100,914,950
Annual surplus (deficit)
$ 76,838,275 $
(17,611,787) $
(20,061,527) $
(2,299,767) $
103,982 $
(20,162,143) $
(2,478,075) $
14,328,958
KA
Attachment 5 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Consolidated Schedule of Segmented Information - Schedule 2
For the Year Ended December 31, 2022
2021
General
government
Protection
Transportation
Environmental
Recreation and
Planning and
services
services
services
services
Health services cultural services
development
Consolidated
Operating revenue
Taxation and user charges
$ 72,211,175 $
3,577,400 $
1,135,785 $
232,299 $
420,075 $ 2,295,093 $
1,348,349 $
81,220,176
Grants
2,832,310
57,239
173,918
-
- 348,338
37,021
3,448,826
Other
4,726,193
(463,810)
10,451,331
357,768
55,770 3,252,599
7,483
18,387,334
Elexicon Corporation
1,617,475
-
-
-
- -
-
1,617,475
Contributed tangible capital assets
-
-
1,132,016
757,216
- 536,000
-
2,425,232
Other income
68
-
1,800
-
- -
1,002,389
1,004,257
Loss on disposal of tangible capital assets
-
10,576
(171,341)
-
- (116,934)
(75,000)
(352,699)
Total operating revenue
81,387,221
3,181,405
12,723,509
1,347,283
475,845
6,315,096
2,320,242
107,750,601
Operating expenses
Salaries and wages
4,506,014
16,839,769
8,680,540
487,152
314,515
12,861,762
4,154,528
47,844,280
Operating materials and supplies
695,541
825,376
4,407,537
430,849
201,776
4,885,505
327,757
11,774,341
Contract services
499,808
1,192,052
4,144,215
723,571
-
2,391,147
1,218,235
10,169,028
Rent and financial expenses
(363,106)
-
11,414
-
-
144,236
-
(207,456)
External transfers to others
-
7,750
-
-
-
1,083,600
-
1,091,350
Amortization expense
1,041,888
1,068,514
13,823,949
1,692,562
3,956
3,934,261
2,863
21,567,993
Interest on long-term liabilities
30,866
-
254,087
-
-
113,019
-
397,972
Total operating expenses
6,411,011
19,933,461
31,321,742
3,334,134
520,247
25,413,530
5,703,383
92,637,508
Annual surplus (deficit)
$ 74,976,210 $
(16,752,056) $
(18,598,233) $
(1,986,851) $
(44,402) $
(19,098,434) $
(3,383,141) $
15,113,093
4191
Attachment 5 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Consolidated Schedule of Segmented Information - Schedule 3
For the Year Ended December 31, 2022
2022 - Budget
General
government
Protection
Transportation
Environmental
Recreation and
Planning and
services
services
services
services
Health services cultural services
development
Consolidated
Operating revenue
Taxation and user charges
$ 74,897,981 $
2,059,800
$ 1,136,500
$ 168,300
$ 354,400 $ 4,688,831 $
1,257,970 $
84,563,782
Grants
-
22,000
-
-
- 112,481
-
134,481
Other
2,003,000
275,216
16,970,309
-
- 1,805,851
6,000
21,060,376
Contributed tangible capital assets
-
-
5,427,384
1,217,585
- 879,900
-
7,524,869
Total operating revenue
76,900,981
2,357,016
23,534,193
1,385,885
354,400
7,487,063
1,263,970
113,283,508
Operating expenses
Salaries and wages
5,120,130
18,247,720
10,369,140
482,454
417,182
15,012,635
4,893,908
54,543,169
Operating materials and supplies
908,991
1,038,974
5,959,468
783,722
209,153
5,897,269
593,677
15,391,254
Contract services
630,675
1,366,586
3,617,072
826,232
-
2,970,715
796,282
10,207,562
Rent and financial expenses
218,250
-
11,653
-
-
69,048
-
298,951
External transfers to others
-
10,000
-
-
-
782,845
-
792,845
Amortization expense
1,078,017
1,560,448
14,173,454
1,685,084
3,418
3,988,744
2,863
22,492,028
Interest on long-term liabilities
29,512
-
201,040
-
-
77,235
-
307,787
Total operating expense
7,985,575
22,223,728
34,331,827
3,777,492
629,753
28,798,491
6,286,730
104,033,596
Annual surplus (deficit)
$ 68,915,406 $
(19,866,712) $
(10,797,634) $
(2,391,607) $
(275,353) $
(21,311,428) $
(5,022,760) $
9,249,912
0,1
Attachment 5 to Report FSD-030-23
The Corporation of the Municipality of Clarington
Consolidated Schedule of Segmented Information - Schedule 3
For the Year Ended December 31, 2022
2021 - Budget
General
government
Protection
Transportation
Environmental
Recreation and
Planning and
services
services
services
services
Health services
cultural services
development
Consolidated
Operating revenue
Taxation and user charges
$ 71,692,681 $
2,054,800
$ 1,025,800
$ 168,300
$ 351,100
$ 4,327,289 $
1,114,991
$ 80,734,961
Grants
903,000
22,000
697,000
-
-
112,481
-
1,734,481
Other
3,265,000
415,500
8,621,240
-
-
3,862,756
15,500
16,179,996
Contributed tangible capital assets
-
-
1,132,016
757,216
-
536,000
-
2,425,232
Total operating revenue
75,860,681
2,492,300
11,476,056
925,516
351,100
8,838,526
1,130,491
101,074,670
Operating expenses
Salaries and wages
4,781,266
16,706,911
9,785,520
487,563
395,131
14,138,084
4,589,673
50,884,148
Operating materials and supplies
844,230
1,067,066
5,611,193
464,506
125,335
5,999,426
609,521
14,721,277
Contracted services
351,825
1,196,073
4,666,643
768,048
-
2,587,341
1,642,747
11,212,677
Rent amd financial expenses
205,000
-
11,472
-
-
56,984
-
273,456
Enternal transfers to others
-
10,000
-
-
-
1,236,223
-
1,246,223
Amortization expense
1,003,657
1,240,104
13,523,816
1,608,392
2,442
3,823,832
2,863
21,205,106
Interest on long-term liabilities
30,866
-
206,843
-
-
113,019
-
350,728
Total operating expense
7,216,844
20,220,154
33,805,487
3,328,509
522,908
27,954,909
6,844,804
99,893,615
Annual surplus (deficit)
$ 68,643,837 $
(17,727,854)
$ (22,329,431)
$ (2,402,993)
$ (171,808)
$ (19,116,383) $
(5,714,313)
$ 1,181,055
35