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2009 Report from Financial Operations We are pleased to present excerpts from the town's 2009 Consolidated Financial Statements (see schedules and charts). These statements present the source, allocation and use of the town's financial resources throughout the reporting period and reflects the combined operations of the operating fund, non-asset related capital project spending, reserve and reserve funds for the town and its local boards (Oakville Public Library, Downtown, Bronte and Kerr Business Improvement Areas and Oakville Galleries). They also indicate how the town financed its activities; confirm that resources obtained were used in accordance with the town's approved budgets; and adhere to the financial management and planning policies of the town. The town's external auditors have expressed an unqualified opinion that the consolidated statements are free from material misstatement and present fairly, in all material respects, the financial position of the town as at December 31, 2009. The town continues to maintain a solid financial position, with net assets available to discharge its current liabilities, despite being impacted by the downturn in the economy. Commencing January 1, 2009, the town like all Canadian municipalities was required to value all of its tangible capital assets and record them on the Consolidated Statement of Financial Position and expense the use of those assets through an amortization expense in the Consolidated Statement of Operations. This requirement has drastically changed the look of the financial statements; therefore, 2008 has been restated for comparative purposes. Instead of reporting on individual fund balances, we now report an "Accumulated Surplus" position, however, this new terminology cannot be construed as "cash or funds" available for spending as the majority of the value is for "non financial" assets, which are not available to discharge existing or future liabilities, but rather are held for use in the provision of services. The new statement format makes it increasingly difficult to compare to the annual operating and capital budgets, as they are prepared and approved on a cash basis for the purposes of deriving the tax levy. Thank you to Town Council, commissioners, department heads and staff in all the town's departments for all their efforts in ensuring the town remains in a strong financial position. We especially would like to thank staff in the Financial Operations and Financial Planning departments. This group of professionals is dedicated to ensuring the town's financial affairs are handled responsibly and with integrity, and consistently go the extra mile. 15 · Thursday, July 15, 2010 OAKVILLE BEAVER · www.oakvillebeaver.com Consolidated Statement of Financial Position December 31, 2009, with comparative figures for 2008 (In thousands of dollars) Financial assets Cash and cash equivalents Accounts receivable Taxes receivable Other Investments Investment in Oakville Hydro Corporation 2009 12,224 23,039 19,018 132,001 150,037 $336,319 2008 (Restated) 39,280 16,525 19,584 147,756 165,713 $388,858 Financial liabilities Accounts payable and accrued liabilities Other current liabilities Deferred revenue obligatory reserve funds Deferred revenue Long-term liabilities Post employment benefit liability WSIB liability Net financial assets 32,441 13,864 33,651 24,573 29,086 16,013 2,211 $151,839 $184,480 35,356 11,758 69,200 24,694 34,107 14,626 1,965 $191,706 $197,152 Non-financial assets Tangible capital assets Prepaid expenses and inventory Accumulated surplus 1,281,170 2,134 $1,283,304 $1,467,784 1,234,954 1,318 $1,236,272 $1,433,424 Analysis of accumulated surplus Invested in tangible capital assets Other Equity in Oakville Hydro Unfunded liabilities: Post employee benefits Long-term liabilities Reserves set aside for specific purposes by Council Reserve funds set aside for specific purposes by Council Accumulated surplus 1,281,170 659 154,573 (18,224) (29,086) 56,750 21,942 $1,467,784 1,234,954 14,498 169,682 (15,891) (34,107) 45,761 18,527 $1,433,424 Tangible capital assets Net book value Land Land improvements Buildings Equipment Vehicles Road network Environmental network Communications and technology network Work in progress 480,207 70,428 112,592 11,714 31,298 323,980 174,041 6,706 $1,210,966 70,204 $1,281,170 475,075 67,328 115,863 12,116 27,223 329,884 176,150 5,630 $1,209,269 25,685 $1,234,954 Lynn Horlor Deputy Treasurer and Director of Financial Operations Gord Lalonde Commissioner of Corporate Services and Treasurer Expenditures by function Planning and Development 5% General government 14% Expenditures by object Revenues by source Oakville Hydro 4% Amortization expense 18% Transfers and interest 2% Salaries, wages and benefits 52% Grants 4% User fees 14% Recreation and Cultural Services 28% Taxation 50% Protection to persons and property 16% Other 3% Transportation Services 34% Materials and services 28% Other revenue 28%