Town council received its 2023 year-end reporting at its most recent regular meeting.
That data included its audited consolidated financial statements, financial indicators, building services annual statement, the development charge reserve funds statement and the 2023 parkland dedication reserve statement.
Town administration was authorized to post the 2023 consolidated financial statements to the municipality’s website.
Cynthia Swift, who represented KPMG at the council meeting said they were in a position to issue an unmodified audit opinion. She said they met with the town’s audit and finance committee in October on the matter and also had “full co-operation from management” when preparing the documentation.
“We noted in there materiality which is fairly consistent with the prior year,” she said. “There was one new audit standard that management adopted and that’s with respect to asset retirement obligations so we went through the details with management. As well, we had one other deficiency to note in that report and that’s with respect with financial reporting timeline and issues with some of the software and documenting those procedures. It is quite extensive to move from your cash financial accounting numbers for budget purposes over to the public sector accounting standards that are required by the ministry.”
Swift added that Amherstburg is “in strong financial position” with total financial assets of over $81 million, an increase from $74 million. Tangible capital assets total over $276 million, Swift said.
“You did pay down your municipal debt by almost $2 million and that was based on the required payment,” she told town council.
The accumulated surplus is $278 million with $40 million in reserves, said Swift.
Councillor Diane Pouget said she viewed the October meeting of the audit and finance committee and she shared the concern of the some of the people on the committee about the lateness of the audited statements.
“I understand that you were supposed to do it by May. Apparently, you had trouble with something and you weren’t able to get it to us until Oct. 2. Is that correct?” Pouget asked Swift.
Swift said that was “partially correct” as there wasn’t a trial balance until later in the process. She noted they went back-and-forth with administration due to “balancing issues” with the financials.
“There’s a number of funds on the financial statements between capital, operating and reserves,” said Swift. “The general ledger has the transactions posted by basically a cash basis. It takes time for management to go through and book all the accruels, and get an actuarial valuation for the employee future benefits. We went back and forth with the new accounting standard on asset retirement obligations,” said Swift.
Swift added the other deficiency KPMG noted was to do with inner-fund transfers.
“In past years, Amherstburg has always done one entry – two accounts as opposed to four,” she said. “We recommended they try to do that second set to try and balance that. The funds weren’t balancing and that was the issue.”
Pouget added there was an issue about reporting financials to the province, with documentation supposed to be filed in July but submitted in October. Swift said she believed that to be the financial information return, with that not being something KPMG looks at.
Pouget asked if late filing would impact the town’s ability to get grants, with Swift stating her opinion is that it wouldn’t be a deterrant to giving grants.
“I can say, there are a number of municipalities that have not issued their statements, either,” said Swift.
Two audit and finance committee members voted in favour of a motion to review the town’s financial controls but Pouget said the motion failed. She asked Swift if that was a fair question to come before council and “if we should be asking for it.” Swift said it was a fair ask but noted “there is quite a realm” of financial control reviews in place.
“You have to look at cost benefits,” she said.
Swift said there are opportunities to have groups or departments of an organization to review issues to see how it can be reviewed.
“You have to look at the cost benefit for a lower tier municipality and the money you’re spending. Staffing is tight and they are already full of items they have to do in their daily jobs,” she said.
A second failed motion from the October audit and finance committee meeting was also referenced by Pouget, and that was that the committee was to support KPMG’s recommendations and to recommend to council to have capital reserve funds reconciled from the accounts. “Would that to be our benefit at all?” she asked Swift.
Treasurer Tracy Prince said the capital reserves are balanced to the bank accounts on a monthly basis. She said they are reconciled and matched in the capital budget.
“The financial statement is the actual final balance at the end of the year,” said Prince. “In the capital budget, it reflects what council has already committed. It balances to it, but it’s not the same number because council may have committed funds that had not been expended by year-end.”
Councillor Linden Crain, who chairs the audit and finance committee, called the report from KPMG “a very positive report.” He said cash has increased by $4.4 million with a lesser reliance on a line of credit. Tangible capital assets will increase year-over-year, he said.
“There’s a lot of good news in this report,” Crain said.
Crain added municipal debt went down, adding there “was a lot of great conversation on the finance committee.” Pouget countered by stating while there “rah-rah” about paying the debt down $2 million, but “in actuality, we’re entering serious debt.”
Pouget said there is $31 million in upgrades coming for the water treatment plant, new pickleball courts, the need to upgrade town hall and a new fire truck coming. She the new fire hall is over $11 million but said with 30-year debentures, that swells to $21.6 million.
“In one night, we spent $25 million,” she said in reference to the fire truck, fire hall and pickleball courts. Combined with other debts and projects, Pouget projected the town’s debt to rise to near $82 million.
“I don’t want to think we’re doing really, really good,” said Pouget. “Actually, we’re proceeding into a big debt.”Crain asked for confirmation on the $82 million figure Pouget said and wanted the debt total. Prince said the top amount they apply for on the fire hall is the $11 million figure.
“Yes, when you make payments over 30 years, that total debt would be $21 million. That’s no different than a mortgage. When you buy your house and you pay a mortgage for 25-30 years, you pay considerably more than the original purchase price,” said Prince.
Prince said the debt ratio will always remain no more than 20 per cent, Prince added. She said under water and wastewater, it increased to 25 per cent.
“When I brought that report forward, we noticed there was some debt from the water and wastewater facilities that was eroding the ability of the tax. We separated the two allowing the water and wastewater to come to 25 per cent,” she said.
Prince said everything that comes forward with regards to debt to make sure they are always in those factors.
Councillor Molly Allaire asked if Amherstburg was in line with debt compared to other municipalities. Swift said the debt “is a lot lower than it was five years ago” but the town has to balance the debt. She noted there is a limit based on the Municipal Act and the town has to apply to make sure debt payments are “an appropriate” amount of the budget.
“When you are looking at capital projects, you have to determine how you are financing them,” she said. “You are not out of the realm with respect to your current debt as of Dec. 31.”
Town council receives 2023 year-end reporting data
By Ron Giofu
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