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Page 15, News, Tuesday, June 11, 1991 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 1990 1._Accounting policies The consolidated financial statements of the Municipality are the representation of management prepared in accordance with accounting policies prescribed for Ontario municipalities by the Ministry of Municipal Affairs. 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 judgements. (a) (i) Basis of consolidation; These consolidated statements reflect the assets, liabilities, sources of financing and expenditures of the revenue fund, capital fund, reserve fund and reserves and include the activities of all committees of Council and the following boards which are under the control of Council: Terrace Bay Recreation Committee Terrace Bay Public Library Board All inter-fund assets and liabilities and sources of financing and expenditures have been eliminated with the exception of loans or advances between reserve funds and any other fund of the Municipality and the resulting interest income and expenditures. (ii) Non-consolidated entities: The following local boards, joint local boards, municipal enterprises and utilities are not consolidated: District of Thunder Bay Home for the Aged Thunder Bay District Health Unit North Shore Family Resource Centre Thunder Bay Area Emergency Measures Organization Township of Terrace Bay Electrical Utility (iii) Accounting for school board transactions: The taxation, other revenues, expenditures, assets and liabilities with respect to the operations of the school boards are not reflected in the municipal fund balances of these financial statements. Overlevies (underlevies) are reported on the consolidated balance sheet as other current liabilities (other current assets). Trust funds and their related operations administered by the Municipality are not consolidated, but are reported separately on the trust funds statement of continuity and balance sheet. (b) Basis of accounting: ing and expenditures are reported on the accrual basis of accounting with the exception of principal and interest charges on long-term liabilities which are charged against operations in the periods in'which they are paid: eT TT (ii) The accrual basis of accounting recognizes revenues as they become available and measurable. Expenditures are recognized as they are incurred and measurable as a result of receipt of goods or services and the creation of a legal obligation to pay. (iii) The historical cost and accumulated depreciation of fixed assets are not reported for municipal purposes. Fixed assets are reported as an expenditure on the consolidated statement of operations in the year of acquisition. (iv) Capital outlay to be recovered in future years, which represents the outstanding principal portion of unmatured long-term liabilities for municipal expenditures or capital funds transferred to other organizations, is reported on the consolidated balance sheet. 2. Municipal fun lan he end of th r The balances on the consolidated statement of operations of municipal equity of $46,925 (1989, $39,700),and unexpended capital financing of $13,768 at the end of the year are comprised of the following: 1990 1989 - for general reduction of taxation $43,286 $42,811 - to be recovered from ooperations of the local boards for the following year 3,639 (3,111) ___46,925. - funds availiable for the aquisition of fixed assets 13,768 te $60,693 $39,700 3. Reserve and reserve funds The total balance of reserve and reserve funds of $160,000(1989 - $160,000) and $418,018 (1989, $368,842), respectively, are made up of the following: 1990 1989 Reserves set aside for specific purpose by Council: - for working capital $160.000 $160,000 Total Reserve $160.000 $160,000 Reserve funds set aside for specific purpose by Council - for acquisition of fixed assets $364,144 $337,351 - for planning studies 46,179 21,870 - for sick leave liability 7.695 9.621 Total reserve funds $418,018 $368,842 SE 4. rations of school boar Further to note 1(a) (iii), the taxation, other revenues, expenditures and overlevies (underlevies) of the school boards are comprised of the following: 1990 1989 $2,247,866 $1 ,983,881 803 1,140 _2,248,669 _ 1,985,021 Taxation Grants in lieu of taxes Requisitions 2,244,369 1 982,977 Supplementary taxes 4,726 2,021 2,249,095 1,984,998 Overlevies (underlevies) for the year (426) 23 Underlevies, beginning of year (26) (49) Underlevies, end of year $(452) $(26) 5. Contribution to unconsolidated joint Boards: Further to note 1(a) (ii), the following contributions were made by the municiapality to these boards: 1990 1989 District of Thunder Bay Homes for the Aged $77,734 $61,712 Thunder Bay District Health Unit 14,797 13,906 North Shore Family Resource Centre 7,942 4,270 Thunder Bay Area Emergency Measures Organization 1,678 1,798 $102,151 $81,686 The Municipality's share of the accumulated surpluses (deficits) of these joint boards is as follows: 1990 1989 District of Thunder Bay Homes for the Aged (14.5%) $(5,938) $(11,406) Thunder Bay District Health Unit(1.7%) 496 418 $(5,442) $(10,988) 6.__Trust funds: Trust funds administered by the Municipality amounting to $20,975 (1989, $18,804) have not been included in the consolidated balance sheet nor have their operations been included in the consolidated statement of operations. 7._Pension agreement The Municipality makes contributions to the Ontario Municipal Employees Retirement Fund (OMERS), which is a multi-employer plan, on behalf of 30 members of its staff. The plan is a defined benefit plan which specifies the amount of the retirement benefit tobe received by the employees based on the length of service and rates of pay. The amount contributed to OMERS for 4990 was $65,855 (1989, $57,895) for current service and is included as an expenditure on the consolidated statement of operations. _ Liability for v ick leave benefits: Under the sick leave benefit plan, unused sick leave accumulated before January 1, 1985 may be taken by qualified employees in the form of a cash payment. The liability for these accumulated days, to the extent that they have vested and could be taken in cash by an employee, amounted to $5,862 (1989, $5,588) at the end of the year. An amount of $7,695 (1989, $9,621) has been provided in a reserve fund for this liability, and is reported on the consolidated balance sheet. 9. Commitments: 2 In 1986 the Municipality entered into an agreement for lease of police communications equipment until 1991. Annual rental for the next year is $14,263 and the total outstanding commitment as at December 31, 1990 under this agreement is $13,886 (1989, $28,149). Ontario Municipal Board Approval of this agreement has been obtained. : in 1989 the Municipality entered into an agreement for servicing of the Recreation Centre mechanical equipment until 1995. Annual payment over the next five years is $7,250 and the total outstanding commitment as at December 31,1990 under this agreement is $24,168. Ontario Municipal Board approval of this agreement has been obtained. 1990-1989 MILL RATES RESIDENTIAL COMMERCIAL AND FARM AND 1 INDUSTRIAL 1990, 1990 Township Purposes 40.176 47.266 Public School . 27.858 32.774 Separate School 27.487 32.338 Secondary School 23.464 27:605 1989 1989 Township Purposes 37.403 44.004 Public School 24.204 28.475 Separate School 24.189 28.458 Secondary School 20.980 24.682