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City of Saskatoon - Financial Report 2003
 

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    City of Saskatoon - Financial Report 2003 City of Saskatoon - Financial Report 2003 Document Transcript

    • City of Saskatoon (Saskatchewan, Canada) Financial Report Year Ended December 31, 2003 Prepared by: CORPORATE SERVICES DEPARTMENT Finance Branch
    • City of Saskatoon Financial Report 2003 Table of Contents Page Introductory Section Letter of Transmittal Mayor and City Council 1 Organizational Chart 2 City of Saskatoon: Geography 3 History 3-5 2003 Highlights 5-6 Financial Management and Control 7-8 Services Provided by City Departments 9 - 18 Financial Section Auditors’ Report 19 Consolidated Statement of Financial Position 20 Consolidated Statement of Financial Activities 21 Consolidated Statement of Changes in Financial Position 22 Notes to Financial Statements 23 - 34 Schedules: 1. Schedule of Funds to Offset Taxation or User Charges 35 2. Schedule of Capital Operations 36 3. Schedule of Reserves 37 - 39 4. Schedule of Revenues and Expenditures 40 Appendices: 1. Schedule of Revenues 41 - 43 2. Schedule of Expenditures 44 - 46 3. Water - Statement of Revenues and Expenditures 47 4. Electrical - Statement of Revenues and Expenditures 48 5. Transit - Statement of Revenues and Expenditures 49 6. Wastewater - Statement of Revenues and Expenditures 50 7. Storm Water Management – Statement of Revenues and Expenditures 51
    • City of Saskatoon Financial Report 2003 Table of Contents (cont’d) Page Trust Funds Auditors’ Report 52 Trust Funds Balance Sheet 53 Trust Funds Statement of Changes in Net Assets 54 Notes to Trust Funds Financial Statements 55 - 56 Statistics Summary of Source and Application of Capital Funds (1999 - 2003) 57 Summary of Revenues (1999 - 2003) 58 Summary of Expenditures (1999 - 2003) 59 Summary of Expenditures by Object Code (2000 - 2003) 60 Summary of Reserves and Surpluses (1999 - 2003) 60 Summary of Public Utilities Operating Results (1999 - 2003) 61 Summary of Debenture Debt and Required Sinking Fund (1999 - 2003) Consolidation of All Obligations 62 By Responsibility Center 63 Debenture Maturity Schedule 64 Summary of Property Assessment and Tax Levy 65 General Economic Statistics - City of Saskatoon 66
    • City of Saskatoon (Saskatchewan, Canada) Introductory Section
    • April 2, 2004 His Worship Mayor D. Atchison and Members of Council of the City of Saskatoon Your Worship and Members of Council: I am pleased to submit the City of Saskatoon’s 2003 Annual Financial Report and to comment on the fiscal year then ended, as well as review the City’s overall financial position. The attached financial statements are prepared on a consolidated basis. Note 1a) of the Notes to the Consolidated Financial Statements identifies the consolidated entities. The purpose of this report is to provide financial, statistical and other relevant information about the City of Saskatoon to enable readers to familiarize themselves with the City and the City’s finances. The preparation and presentation of the financial statements, statistics and other financial information contained in this annual report is the responsibility of the management of the City of Saskatoon. The City maintains a system of internal controls, including an internal audit function, designed to safeguard assets and ensure the timeliness, completeness, and accuracy of the financial records. While such systems have inherent limitations, I believe that our system achieves the above goals efficiently and effectively. The accompanying statements have been subject to review by our external audit firm of Deloitte & Touche, Saskatoon, whose unqualified audit report has been reproduced in these statements. The City of Saskatoon also has an Audit Committee whose responsibility is to recommend the appointment of External Auditors as well as review recommendations and observations of both the internal auditor and external auditor regarding the management effectiveness and financial controls within the Civic Administration. The City of Saskatoon prepares its annual financial statements based on recommendations from the Public Sector Accounting Board (PSAB) of the Canadian Institute of Chartered Accountants. These recommendations are continually updated as PSAB completes its research on projects that address various reporting issues. Notes to the financial statements are integral to the attached report and explain any changes to the previous year’s comparative numbers as the result of implementing PSAB recommendations. The attached financial statements reveal that the City ended the year with a surplus of $1,178,000. The primary reasons for this surplus relate to increased revenues, most specifically franchise fees, utility grants in lieu of taxes, licenses and permits, and fines and penalties, reduced expenditures resulting from position vacancies, and the deferral of some operating maintenance in lieu of capital work. In addition to the surplus, there were a number of transfers to reserves in excess of budget (consistent with financial policies), including additional interest earnings and building permit revenue. City Council has a past practice of transferring surpluses to the City’s Revenue Stabilization Reserve to be used to offset any future revenue deficiencies. The 2003 surplus will be transferred accordingly. The City’s 2003 capital program included expenditures totaling $68,680,000. These expenditures were financed from reserves, development levies, Federal/Provincial Infrastructure grants, and capital funds provided through taxation.
    • The City continues to receive positive reviews from Standard and Poor’s (S & P) which reconfirmed the City’s AAA rating. In its 2003 report, S & P states that “the ratings take into account its low level of debt, healthy level of available cash and investments, very impressive operating performances, and a superior level of fiscal flexibility”, with an expectation that the city will maintain very strong operating performances and that the local economy and population base will continue their slow but steady growth. The City’s 2002 financial report was awarded the Canadian Award for Financial Reporting by the Government Finance Officers Association of the United States and Canada (GFOA). This award acknowledges municipalities whose annual financial reports achieve the high program standards for Canadian Government accounting and financial reporting. The 2003 financial report has been prepared on a similar basis and incorporates suggestions for improvement provided by the GFOA. Bernie Veltkamp, General Manager Corporate Services Department
    • City of Saskatoon Financial Report 2003 His Worship Mayor Donald J. Atchison Saskatoon City Council - 2003 Councillor Councillor D. Birkmaier O. Fortosky (Ward 1) (Ward 2) Councillor Councillor Councillor Councillor M. Neault M. Heidt G. Wyant E. Hnatyshyn (Ward 3) (Ward 4) (Ward 5) (Ward 6) Councillor Councillor Councillor Councillor T. Alm G. Penner T. Paulsen B. Dubois (Ward 7) (Ward 8) (Ward 9) (Ward 10) The City of Saskatoon is governed by an act of legislation of the Province of Saskatchewan known as The Cities Act. The Mayor is the Chief Executive Officer of the City. Administrative powers and duties have been delegated to the City Manager who is appointed by City Council. The Council consists of the Mayor and ten Councillors, elected for a period of three years. 1
    • C i t y of S a s k a t oon O r g a n i za t i on C h a r t T h e Ma yor Boards and Commissions: SaskPlace, Mendel Art Gallery, Committees of Council and Centennial Auditorium, Saskatoon Board of Police Commissioners, Saskatoon C i t y C ou n c i l Public Library Board Communications City Solicitor's Office City Clerk's Office City Manager's Office Branch Theresa Dust Janice Mann City Manager's Office Phil Richards Chris Dekker Phil Richards Community Services Corporate Services Fire & Protective Infrastructure Services Utility Services Department Department Services Department Department Department Paul Gauthier Bernie Veltkamp Brian Bentley Stewart Uzelman Bill Hewitt
    • City of Saskatoon Financial Report 2003 City of Saskatoon Geography Saskatoon, a commercial and educational centre in the Province of Saskatchewan, is situated on the banks of the South Saskatchewan River in Townships 36 and 37, Range 5 and Township 36, Range 6, West of Third Meridian. The City lies 348 kilometres north of the boundary between the United States and Canada, 225 kilometres from the Western boundary and 346 kilometres from the eastern boundary of the Province. It is the only large city between Winnipeg and Edmonton, being 708 kilometres northwest of Winnipeg and a little over 483 kilometres southeast of Edmonton. Seven bridges cross the river within the City limits. Five of these bridges are for vehicular and pedestrian traffic, and the other two serve the Canadian Pacific and Canadian National Railways. History The Saskatoon area has been inhabited for some 5,000 to 8,000 years. Buffalo kill sites, teepee rings, and a medicine wheel can still be seen today and form an important link with the past. The name ‘Saskatoon’ is derived from the Cree Indian name ‘Mis-sask-quah-toomina’. These words are the plural. The singular is secured by dropping the final ‘a’. The name was given by Indians to the berry which is found in such profusion in this vicinity. According to a member of the original town site survey party, the Indians used to gather large quantities of these berries and walk through the camps selling them, crying what sounded to the members of the party ‘Saskatoons, Saskatoons’. The town site was surveyed in 1883, but the first railway did not come in until 1890. The first settlers arrived in the summer of 1883, traveling by railway from Ontario to Moose Jaw and then over land in horse-drawn carts to the piece of prairie that would become the community of Saskatoon. By 1899, Saskatoon consisted of a few houses on the east side of the river and on the west side was the station house, the section foreman's house, the Mounted Police barracks, a stone building, a hotel, and about six other houses and shacks. About this time, property in what is now the central part of the City sold at $45 for 75 feet. In 1901, Saskatoon was incorporated as a village and in 1902, the first weekly newspaper was published bearing the title of “The Phoenix”. In 1903, the town charter was obtained. Following the formation of the Province in the year 1905, the location of the capital and of the University became live questions. It was believed at that time 3
    • City of Saskatoon Financial Report 2003 that Saskatoon was to be chosen as the capital, but eventually a compromise was reached whereby Regina became the seat of the Government and the provincial University was placed at Saskatoon. For several years, Saskatoon remained a small, isolated settlement of only a few hundred people but, by 1906, it had grown large enough to become a city with a population of about 5,000. Saskatoon's aggressive business community persuaded other railway companies to locate here, allowing both people and goods to reach the City and surrounding district more easily. By 1911, the population had more than doubled and Saskatoon had become what it is still today, a major distribution centre for the surrounding agricultural district. Municipal services expanded rapidly in this period, providing water and electrical services and, in 1913, a public transit system. With its dependence on agriculture, Saskatoon has experienced many ‘booms and busts’ throughout its history. The expansion of the mining industry in the 1970's and 1980's diminished this to some extent and the future promises continued diversification through the emergence of more advanced technology industries and an increase in manufacturing, primarily to service the resource sector. Moving into the 21st century, Saskatoon continues to be a dynamic, vibrant community poised for a resurgence in economic growth and activity. Saskatoon is the largest centre in the province with a current population of 205,300 and serves a metropolitan area (census metropolitan area) of 231,000. Saskatoon is recognized as the provincial centre for business, education, health, finance, food processing, mining, microelectronics, metal fabricating, textiles, and research and development. Saskatoon is home to the University of Saskatchewan, a major university with over 15,000 full-time and 4,000 part-time students, as well as housing the Kelsey campus for the Saskatchewan Institute of Applied Science & Technology. Owing to Saskatoon's strategic location within the province, our community serves as the supply and distribution centre. A network of highways and convenient air and railway services make Saskatoon a very accessible location for business travel and shipment of goods. In Saskatoon, the quality of life and the insatiable sense of community pride are second to none. Saskatoon is culturally alive, sophisticated, and one of the most beautiful, people-oriented cities in Canada. Recalling that Saskatoon's pioneers originated from Ontario and Great Britain, the city is now home to people from around the world. This ethnic diversity is an integral component of the rich and diverse culture which makes Saskatoon a unique and exciting place to live and work. Residents are very proud of the clean, wide, tree-lined streets, the numerous parks throughout the city, and the 300 acres of beautiful riverbank joined by jogging and cycling paths running right through the downtown core. History comes alive in the city's many museums and heritage centres such as Boom Town 1910 in the Western Development Museum, Wanuskewin Heritage Park, the Ukrainian Museum of Canada, and the John G. Diefenbaker Centre. Saskatoon boasts 4
    • City of Saskatoon Financial Report 2003 an active cultural scene which is fostered by the Mendel Art Gallery. Several professional and amateur theatres, a Symphony Orchestra, and a dance series are a tribute to the city's artistic community. Numerous festivals and special events are celebrated year-round. Saskatoon provides an abundance of recreational opportunities such as the Meewasin Valley Trail and the Beaver Creek Conservation area. Indeed, Saskatoon offers all of the amenities of a large metropolitan centre, yet retains the spirit and warm, friendly enthusiasm of a smaller closely-knit community. 2003 Highlights While financial constraints and eroding infrastructure continue to be among the most pressing issues of this decade, the City was able to proceed with new and innovative programs and much needed infrastructure improvements in 2003. Expanding the City’s goal to provide responsive and flexible customer service, three new online services were introduced including “ExpressAddress” - a convenient and simple way to connect, transfer, or disconnect residential utility services and update addresses; “Utility Bill Online” – where customers are now able to review their utility billing and consumption information online, and; “Employment Application” where those looking to start a career with the City are now able to apply for employment online. A steering committee was established in 2003 to examine and prioritize opportunities to implement more services to the public using internet technology over the next few years. Major roadway improvements in 2003 included the widening and rehabilitation of Warman Road, Preston Avenue, and McOrmond Drive. Functional planning studies for the south and north river crossings also began in 2003. The South River Crossing Study will involve the preparation of preliminary designs for the completion of Circle Drive. There will be a significant amount of public consultation in order to achieve consensus prior to commencing the design component of the study. Initial contacts have begun with stakeholders (community associations and local areas businesses) for the south river crossing, and public consultations will begin in early 2004. Progress on the development of South Downtown in 2003 included the sod turning for an exciting riverfront development. Designed to be a major riverfront focus adjacent to downtown, the park’s features could eventually include a riverwalk, a river tributary and garden including a suspension bridge, a site for a feature building, a new dock to support and enhance river activities and events, a children’s water play area, and two amphitheatres to support performances and other events. 5
    • City of Saskatoon Financial Report 2003 Recognizing that the mitigation of noise pollution is critical to the quality of life in certain neighbourhoods, the City constructed approximately two kilometres of sound attenuation walls. Walls were constructed in conjunction with the widening of Warman Road between Primrose Drive and Assiniboine Drive, Warman Road from Circle Drive to 7th Avenue North, and along Circle Drive from Ruth Street to Glasgow Street. For the growing number of youth and young adults who take to “wheels” as a form of entertainment and exercise, the City constructed a world-class outdoor skate facility in Victoria Park in partnership with the Lions Club. And, while the country braced itself for the relentless advance of the West Nile virus, the City’s mosquito control program assisted in minimizing the occurrence of the disease in Saskatoon and area without having to resort to widespread chemical spraying. 6
    • City of Saskatoon Financial Report 2003 Financial Management and Control Corporate Planning Process City Council’s current Strategic Plan sets out a vision for the community, a mission statement, and a set of corporate values and strategies for the period 2000-2003. The Administration’s three- year Corporate Business Plan is updated annually to support the Strategic Plan. On March 10, 2003, City Council received the current Corporate Business Plan identifying specific initiatives for implementation during the 2003-2005 timeframe. In addition, three-year departmental business plans were developed to ensure progress is made towards the achievement of Council’s strategies. Business plans are used to develop annual budgets. The Capital Budget makes decisions and choices (based on Council’s priorities) on which projects will proceed over which timeframe. Long-term capital planning (through the five-year plan) and reserve policies attempt to match required funds to required projects. The Operating Budget allocates resources under the principle of continuing to deliver existing services and service levels. In addition, it recommends service level changes for specific programs based on a number of factors (usage, demand, ability to pay, growth, legislative change, business case, etc.). Choices are put before Council on issues that have been raised by Council, raised by the public, and/or identified by Administration. Annual Financial Reports A number of annual financial reports are submitted to City Council for their information and review, including the financial reports, capital project status reports, performance measurement reports and the public accounts. The annual Financial Report includes the consolidated financial statements prepared in accordance with generally accepted accounting principles for local governments, as recommended by the Public Sector Accounting Board of the Canadian Institute of Chartered Accountants. These statements are audited by the City’s appointed external auditor. 7
    • City of Saskatoon Financial Report 2003 Financial Policies The City of Saskatoon operates under a number of financial policies, some of which have received formal approval by City Council; others are based on fiscal responsibility. Property Tax Policies In 2001, City Council resolved that commercial property be taxed at 1.75 times the residential rate (to be shifted over a 10 year period) and that the effective tax rate between residential, condominium, and multi-family residential classes by equalized. Investment Policy City Council has approved a policy on portfolio management, which ensures that City portfolios are invested to primarily achieve the preservation of capital, the maintenance of liquidity sufficient to meet on-going financial requirements, and to maximize return on investment. Specific guidelines are outlined regarding the type of securities approved for purchase, investment limitations, and term structure. Reserve Policies City Council has established reserves through bylaw to fund capital projects, and through policy to provide a source of funds to stabilize specific user pay programs and/or general revenue variances. The majority of capital work undertaken by the City is funded through dedicated reserves. The purpose, funding source and withdrawal criteria is specifically outlined within bylaw. City Council approval is required for all withdrawals. The remaining reserves are specifically outlined in policy; a majority of these are used to stabilize specific programs either funded through user fees (golf courses), are dependent upon weather (snow and ice management) or are used to fund overall operations against revenue variances (interest earnings). Debt Management Policies The City of Saskatoon has operated primarily under a “pay-as-you go” philosophy whereby its facilities and infrastructure are built based on current and projected reserve balances. The City Council-approved policy on borrowing for capital projects specifically outlines borrowing only if sufficient funds are not otherwise available in existing reserves or through external sources, if funds will be recovered from future operating revenues or operating savings, and/or it would be equitable to extend the capital financing through borrowing for major capital initiatives to future users. 8
    • City of Saskatoon Financial Report 2003 Services Provided By City Departments OFFICE OF THE CITY MANAGER The City Manager is the chief administrative officer of the City of Saskatoon. The position is responsible for planning, directing, supervising, coordinating, and controlling all municipal operations as approved by City Council. The City Manager's responsibilities include providing assistance and advice on various aspects of municipal operations, investigating and reporting on all matters referred by City Council and its committees, and submitting the capital and operating budgets to City Council for review. The City Manager chairs the Management Committee (comprised of all General Managers) which is responsible for coordination of all city-wide management and operational matters. The City Manager is the direct supervisor of all General Managers and through them, all Branch Managers and civic employees (except for those boards and commissions which are responsible to City Council). This includes the appointment, promotion, demotion, and suspension of employees of the City, except those employees appointed directly by City Council. Communications Branch The Communications Branch plans and directs all corporate communication activities for the civic administration including the development and implementation of public, employee, and media relation strategies. The Branch operates in a consultative capacity to Senior Management on communication issues, and acts as an internal consultant for departments who do not have resources dedicated to marketing and communications. The Communications Branch manages various corporate communication activities including advertising, the distribution of news releases, organization of public meetings, brochure development, and the production of the employee newsletter “Currents”. COMMUNITY SERVICES DEPARTMENT The Community Services Department provides programs, services and resources to create a community in which people of all ages and cultural backgrounds want to live, work, play and visit. 9
    • City of Saskatoon Financial Report 2003 Through community consultation and the dedication of our employees, we continue to strive for excellence. Land Branch The Land Branch plans, services and sells residential, commercial and industrial lots owned by the City of Saskatoon. Building Standards Branch The Building Standards Branch issues building and plumbing permits and administers inspection programs related to regulations contained in the Building Bylaw, the Swimming Pool Bylaw, the Uniform Building and Accessibility Standards Act, the National Building Code and the Plumbing and Drainage Regulations. Development Services Branch The Development Services Branch reviews and issues business licenses, facilitates the orderly use and development of property, and supports the conservation of heritage properties. City Planning Branch The City Planning Branch is responsible for the preparation and maintenance of the City of Saskatoon Development Plan and corresponding Land Use Map. The Development Plan is a legal bylaw, which is used to define and control development in Saskatoon to ensure orderly, rational change and growth. The Branch is also responsible for Local Area Planning, administration of the City’s Affordable Housing Program, and race relations policy and program development. Community Development Branch The Community Support Branch serves as a catalyst to bring the community together to provide neighbourhood-based recreation programs, supports volunteers in the delivery of those programs, and creates a network of volunteers capable of addressing other issues that affect the quality of life in their community. Leisure Services Branch The Leisure Services Branch ensures that a broad range of sport, culture, parks, and recreation opportunities are available and affordable to residents and visitors. Programming is offered through leisure centres, rinks, a zoo, golf courses, a campground, a speed skating oval, and various park locations. 10
    • City of Saskatoon Financial Report 2003 CORPORATE SERVICES DEPARTMENT The City of Saskatoon currently employs 2,400 full-time equivalent positions. One of the key roles of the Corporate Services Department is to provide support services to the Corporation to allow it to perform its functions in an efficient and cost-effective manner. The department is responsible for financial planning, the accounting of corporate revenues and expenditures, the hiring, training, and compensation of employees, managing the corporate computer network, labour relations, property assessment, purchasing and inventory management, and other corporate support systems including photocopying, and internal and external mail services. This is achieved through the five branches that form the department. Finance Branch The Finance Branch protects the financial assets of the Corporation, provides advice and direction on financial matters, and prepares and issues financial statements and reports. The Branch is organized into three teams: a) Office of the City Assessor This office is responsible for providing the assessment of all real property located in the City of Saskatoon through compliance with provincial legislation, and to defend such assessments before the Board of Revision and the Saskatchewan Municipal Board. b) Office of the City Comptroller This office is responsible for providing corporate financial recording, reporting and control; supplier payments; administration of the City’s Operating and Capital Budget process; employee payroll and benefits; and payments to superannuants. In addition, general financial management services are provided to all departments, boards and commissions. c) Office of the City Treasurer This office is responsible for the collection, control, and disbursement of all corporate funds. This includes responsibility for the billing and collection of taxes, property taxes, electrical, water and sewer utility services, and matters related to municipal licensing. Corporate Information Services Branch The mandate of the CIS Branch is to ensure the effective management of the City’s information assets and supporting technologies, and to provide professional Supply Management Services to the City. The Branch’s mission is ‘to assist and enable Civic Departments to meet their goals and objectives through leadership in technology services and solutions. 11
    • City of Saskatoon Financial Report 2003 The organization of the Branch consists of a Management Team and three sections: • Applications Delivery Services • Corporate Support Services • Technology Integration Services a) Corporate Information Services Management This team is responsible for the overall management of the Branch. CIS is a service branch whose goal is to ensure that we have the technology and related services in place to meet the City’s business needs. The duties include corporate IT Planning, setting corporate IT standards, procedures, and guidelines, planning and implementing the technical and architectural direction for the IT infrastructure. The team also manages vendor relationships, establishment and administration of Service Level Agreements, delivery of Corporate IT and administrative services, delivery of Supply Management services, budgeting, Branch workload, and customer relationships. In order to meet the increasing demands of the Citizens, an Electronic Service Delivery and a Smart Card committee have been formed. The mandate of these committees is to identify the services that the Citizens of Saskatoon require and to formulate an implementation strategy. b) Application Delivery Services This section is responsible for supporting all of the current corporate information systems, the customization of these systems to meet the City’s business needs; development of new applications; the testing (with the client) of new application releases, the implementation and support of Geographic Information Systems, and corporate data administration. This section is also responsible for the Project Office. c) Corporate Support Services This section is responsible for the CIS Branch’s administration, the running of production computer systems, high speed printing (utility bills etc.), corporate mail and printing (photocopying) services, computer related training, the corporate help desk, and corporate supply management services. d) Technology Integration Services This section is responsible for providing the technology services required for maintaining and evolving our IT technical infrastructure; planning for future growth, security, database administration, the setup and maintenance of corporate servers, e-Mail services, backup of the production environment, as well as management of the corporate network. The group plans and facilitates upgrades to the “corporate desktop” through the rollout of applications, operating 12
    • City of Saskatoon Financial Report 2003 systems and the office suite. The group also provides technology integration services such as advanced function printing, and Web services design and administration. Labour Relations Branch The Labour Relations Branch is responsible for collective bargaining with all unions and associations representing civic employees, implementation, administration and interpretation of collective agreements, grievance decisions and arbitration awards, and timely and accurate advice and counsel to City Council and management regarding labour relations issues. Employment and Compensation Branch The Employment and Compensation Branch acts as a central resource for employee recruitment. The Branch oversees and administers job evaluations and classifications, employment equity, and conducts research in the area of employment compensation. Employee Services Branch The Employee Services Branch provides services to individual employees, work groups, and civic departments. The Branch is organized into three teams. a) Employee Benefits Team This team provides in-house expertise and administration of employee benefit plans and entitlements, including superannuation, group life insurance, dental insurance, and disability income. b) Organization and Staff Development Team This team assists others to improve performance through a variety of management processes including strategic planning, staff training and development, coaching and counseling, and workplace problem resolution. c) Organizational Health and Safety Team This team is responsible for safety training, work site inspections, accident investigations, administration of Workers' Compensation claims, and occupational health initiatives. FIRE AND PROTECTIVE SERVICES DEPARTMENT Saskatoon Fire and Protective Services effectively and efficiently responds to and mitigates emergencies involving the rescue of persons, incidents of fire, unplanned releases of dangerous goods, and pre-hospital emergency medical incidents. The department strives to provide community-based, customer-focused service to create a safe and comfortable environment for 13
    • City of Saskatoon Financial Report 2003 the residents of Saskatoon. We protect the City’s tax base and support economic development through extensive inspection, prevention, and enforcement programs. Also, education programs are aimed at eliminating fire and safety hazards in the home and workplace. Members of Saskatoon Fire & Protective Services pride themselves on providing a very progressive service to residents in Saskatoon and area. INFRASTRUCTURE SERVICES DEPARTMENT The Infrastructure Services Department is responsible for the planning, operation, and maintenance of many of the City's assets including those involved with water distribution, sanitary sewage collection, storm water collection, roadways, bridges, parks and open spaces, public cemeteries, vehicle and equipment fleet, and City-owned buildings and structures. The Department is organized into five Branches. Municipal Engineering Branch The Municipal Engineering Branch provides planning, design, construction, and regulatory services. Major activities include network planning for municipal services, functional and detailed designs, land development, traffic management and operations, parking controller and enforcement, constructions and project management services, technical support services, and regulatory control through bylaw enforcement. Public Works Branch The Public Works Branch is responsible for the operation, maintenance, and preservation of roads, lanes, sidewalks, water mains, sanitary sewer mains, and storm sewer mains. Parks Branch The Parks Branch is responsible for preserving the City of Saskatoon's investment in its park system and civic grounds. This is accomplished through policy development, conceptual planning, design and construction inspection for civic parks and open spaces, as well as project management. The responsibility of the Branch extends to maintenance of civic green space, parks and boulevards, as well as maintenance and operation of the Woodlawn and Nutana Pioneer Cemeteries, the Greenhouse/Conservatory program, and the Urban Forestry Program. Facilities Branch The Facilities Branch is responsible for the City's buildings and structures, the City-owned vehicle and equipment fleet, and the City's radio communications system. As such, the Branch provides for building operation and maintenance of leisure facilities, fire halls, transit buildings, and City office buildings. Project management services for any capital or maintenance projects are 14
    • City of Saskatoon Financial Report 2003 provided, including design, contract tendering and award, and construction management. Energy management, space management, and accommodation planning are also provided. The Facilities Branch is responsible for the purchase, repair and maintenance of the City’s vehicle and equipment fleet, including the mobile and hand-operated parks and turf equipment. Included as part of this are operator certification, training, and equipment safety courses. Business Administration Branch The Business Administration Branch is responsible for providing support services to the department in the areas of financial, systems, clerical, administrative, and human resource services. UTILITY SERVICES DEPARTMENT A 'utility' is simply a service provided to the public for a fee such as electricity, water, or transportation. This Department brings together the majority of utilities that generate revenue from fees charged directly to the user. Utility Services is divided into six branches. Water Treatment Branch The Water Treatment Branch is responsible for the collection, treatment, and pumping of potable water, and the installation and maintenance of the City's water meters. Electrical Services Branch The City of Saskatoon operates an electric utility providing electrical service to the area of Saskatoon which lies generally within the 1958 City boundary. Bulk electrical power is purchased from the provincial crown utility, SaskPower and, through a system of substations, distribution lines, and transformers, this power is supplied to customers on demand at locations and at voltages appropriate to their needs. The Utility is also responsible for the street lighting system. Wastewater Treatment Branch The Wastewater Treatment Branch is responsible for the treatment of sewage, disposal of residual solids, and the operation and maintenance of the sewage collection pumping stations. Transit Services Branch The Transit Services Branch operates and maintains Saskatoon’s public transit system. Environmental Compliance Branch 15
    • City of Saskatoon Financial Report 2003 The Environmental Compliance Branch is responsible for the collection and disposal of solid waste, the operation of the Department's laboratories, and the monitoring necessary to meet environmental regulatory requirements. Business Administration Branch This Branch is responsible for the business functions of the Department, including utility rate design and analysis. BOARDS AND COMMISSIONS Saskatoon Police Service The Police Service is under the control of a separate executive authority called the Board of Police Commissioners. This Board consists of the Mayor and six other persons appointed annually by City Council, two of whom shall be members of Council and four of whom shall be chosen from the public at large. The Board is subject to the legislative jurisdiction of the City Council to the extent only that the amount expended for upkeep of the service must not exceed the amount fixed by the current estimates of the Council for that purpose. The Police Service is equipped and trained for the most current needs in the delivery of a police service in the partnership with the community. They also offer emergency services, take complaints of crime, conduct follow-up investigations and preventative activities throughout the city on a 24-hour basis. Saskatchewan Place Saskatchewan Place, Western Canada’s most versatile and exciting trade, sports, and entertainment centre was built to eventually accommodate over 16,000 patrons. After opening with a fixed seating capacity of 7,700, Saskatchewan Place expanded in the fall of 1990 to 11,300 permanent seats. In the building’s short history it has been the site of World and Canadian sporting championships, major concerts and trade shows, and is the home of the Saskatoon Blades of the Western Canadian hockey league. The hosting of these events brings over 700,000 through Saskatchewan Place on an annual basis. Saskatoon Centennial Auditorium and Convention Centre 16
    • City of Saskatoon Financial Report 2003 The Centennial Auditorium was a project to commemorate the centennial of the founding of the Dominion of Canada. It is an imposing and beautiful building on two acres of land in the heart of the city, adjacent to a major shopping complex, steps away from first-class hotels, restaurants, boutiques, and parking facilities for 2,000 cars. The facility is equipped with sophisticated aids for audio, visual, stage, or exhibit requirements, maintains an in-house catering/banquet service, and is part of a province-wide box office. The Centennial Auditorium’s 2,000 soft-seat concert theatre has brought heartwarming praise from numerous world class entertainers and artists, touring companies, ballet companies, and local and international performing art groups, and is home of the Saskatoon Symphony. The Centennial Auditorium provides Saskatoon with a first-class convention center in the newly renovated Grand Regal area and the Centennial hall. The facility has established an outstanding reputation within the meeting and convention industry and attracts numerous provincial, national and international organizations to the City. In addition, the Centennial Auditorium Box Office is part of the Ticketmaster ticket distribution system which sells tickets not only for the Auditorium but also Saskatchewan Place and other venues across Canada. The Centennial Auditorium is owned by the City of Saskatoon and is operated by the Saskatoon Centennial Auditorium and Convention Centre Corporation. The Corporation, as well as the Saskatoon Centennial Auditorium and Convention Centre Foundation, consists of a Board of Directors with representation from City Council and the general public. Saskatoon Public Library The Saskatoon Public Library, which first opened for circulation in May 1913 in the basement of the Oddfellow’s Hall, is now a city-wide system consisting of the central library, six branches, and one book trailer. The Library is supported by city taxation and provincial government grants, but direct service to each Saskatoon resident is free of charge. The Library is a community resource centre, offering books, records, compact discs, video cassettes, CD-ROM’s, magazines, newspapers, maps, audio cassettes, telephone books, pamphlets, government documents, trade directories, indexes, and other informational materials to meet public informational, educational, and recreational needs. City Council minutes, reports, studies, and other civic material are available and may be consulted in the Library. An automated circulation system operates in the main library, branches, and book trailer. The host computer is housed in the Frances Morrison (Main) Branch Library. This facility makes the entire book collection more accessible to all Library users and allows the Library a much more accurate inventory of the location of materials at any given moment. The Mendel Art Gallery and Civic Conservatory 17
    • City of Saskatoon Financial Report 2003 The Mendel Art Gallery and Civic Conservatory was opened in 1964 and named to honour Fred S. Mendel, industrialist and art connoisseur, who established his business and home in Saskatoon in 1940. Selections from the Gallery's collection are exhibited regularly, along with regularly scheduled contemporary and historical exhibitions of local, national/international origin. Each year more than twenty-five exhibitions are presented without charge for the benefit of Saskatonians and visitors to the city. The Mendel Art Gallery and Civic Conservatory is operated as a civic corporation under a board of appointed trustees. 18
    • City of Saskatoon (Saskatchewan, Canada) Financial Section
    • Deloitte & Touche LLP Chartered Accountants Auditors’ Report His Worship the Mayor and City Council: We have audited the Consolidated Statement of Financial Position of the City of Saskatoon as at December 31, 2003 and the Consolidated Statements of Financial Activities and Changes in Financial Position for the year ended. These financial statements are the responsibility of the City’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the City of Saskatoon as at December 31, 2003 and the results of its operations and its changes in financial position for the year then ended in accordance with Canadian generally accepted accounting principles. Chartered Accountants Saskatoon, Saskatchewan April 2, 2004 19
    • City of Saskatoon Financial Report 2003 Consolidated Statement of Financial Position As at December 31, 2003 (in thousands of dollars) 2002 2003 (restated, Note 17) FINANCIAL ASSETS Cash and Short-Term Investments (Note 2) $ 76,979 $ 72,569 Taxes Receivable (Note 3) 10,605 10,418 Accounts Receivable and User Charges (Note 3) 37,411 41,695 Land Inventory for Resale 14,375 28,636 Other Current Assets 2,287 3,597 Long-Term Investments (Note 4) 101,850 108,860 Accrued Pension Asset (Note 6) 110,177 109,317 Total Financial Assets 353,684 375,092 FINANCIAL LIABILITIES Accounts Payable and Accrued Liabilities (Note 7) 46,196 50,611 Deferred Revenue - Development Charges (Note 1B(viii)) 12,343 13,674 Total Long-Term Liabilities (Note 9) 36,834 29,892 Employee Benefits Payable (Note 8) 17,305 17,213 Total Financial Liabilities 112,678 111,390 Total Net Financial Assets 241,006 263,702 MUNICIPAL POSITION Fund Balances (Note 10) 296,408 313,927 Amounts to be recovered (Note 11) (38,097) (33,012) Unfunded Employee Benefits (Note 8) (17,305) (17,213) Total Net Municipal Position $241,006 $263,702 See accompanying notes. 20
    • City of Saskatoon Financial Report 2003 Consolidated Statement of Financial Activities For the Year Ended December 31, 2003 (in thousands of dollars) 2002 2003 2003 Actual Budget Actual (restated, (unaudited) Note 17) REVENUES Taxation $ 94,678 $ 97,717 $ 97,684 Grants in Lieu of Taxes 3,664 3,966 3,705 User Charges 165,737 165,369 172,755 Federal Grants 2,757 3,769 3,575 Provincial Grants 10,154 11,885 12,186 Investment Income 9,243 8,839 9,836 Contribution from Developers 27,319 3,539 26,829 Other 40,896 38,722 42,841 Total Revenues (Note 16) 354,448 333,806 369,411 EXPENDITURES General Government 19,421 18,319 21,400 Protection of Persons and Property 58,076 67,371 65,307 Transportation 53,377 60,786 61,019 Environmental Health 35,338 41,321 46,533 Social and Family Services 3,450 4,057 4,295 Planning & Development 14,622 14,935 15,245 Recreation and Cultural Services 42,757 46,289 49,144 Property Purchases and Development 10,664 12,720 9,351 Electrical Utility 66,592 69,752 71,312 Debt Servicing Costs 3,653 2,720 3,109 Total Expenditures (Note 17) 307,950 338,270 346,715 Excess of Revenues over Expenditures 46,498 (4,464) 22,696 Adjustment Due to Accounting Change Applied Retroactively 12,731 - - Prior Period Adjustment (Note 17) 205 - Net fund balances at the beginning of the year 224,167 - 296,408 Change in amount to be recovered Long-Term Liabilities 12,003 - (6,305) Inventory (1,557) - 1,220 Change in unfunded employee benefits 2,361 - (92) Net fund balances at the end of the year $ 296,408 $ (4,464) $ 313,927 See accompanying notes. 21
    • City of Saskatoon Financial Report 2003 Consolidated Statement of Changes in Financial Position For the Year Ended December 31, 2003 (in thousands of dollars) 2002 2003 (restated, Note 16) Operating Activities: Excess of Revenues over Expenditures $ 46,498 $ 22,696 Adjustment Due to Accounting Change Applied Retroactively 12,731 - Prior Period Adjustment (Note 17) 205 - Changes in Non-Cash Items Taxes Receivable 978 187 Accounts Receivable and User Charges (809) (4,284) Land Inventory for Resale (14,375) (14,261) Other Current Assets (847) (1,310) Accrued Pension Asset (22,685) 860 Accounts Payable and Accrued Liabilities 2,986 4,415 Deferred Revenue - Development Charges 2,743 1,331 Employee Benefits Payable 2,361 (92) Cash From Operations 29,786 9,542 Investing Activities Net Increase in Long-Term Investments (6,476) (7,010) Financing Activities Debentures issued 17,000 - Long-Term net debt repaid (4,924) (6,942) 12,076 (6,942) Increase (Decrease) in Cash and Short-Term Investments 35,386 (4,410) Opening Cash and Short-Term Investments 41,593 76,979 Closing Cash and Short-Term Investments $ 76,979 $ 72,569 22
    • City of Saskatoon Financial Report 2003 Notes to the Consolidated Financial Statements For the Year Ended December 31, 2003 1. ACCOUNTING POLICIES The consolidated financial statements of the City of Saskatoon (the City) are prepared by management in accordance with generally accepted accounting principles for local governments, as recommended by the Public Sector Accounting Board of the Canadian Institute of Chartered Accountants. Significant aspects of the accounting policies adopted by the City are as follows: A) Basis of Consolidation i) The consolidated financial statements reflect the assets, liabilities, revenue, expenditures and fund balances of the reporting entity. The reporting entity is comprised of all organizations and enterprises accountable for the administration of their financial affairs and resources to the City and which are owned or controlled by the City, namely: General Revenue and Capital Funds Board of Police Commissioners Wastewater Utility Storm Water Management Utility Water Utility Electrical Utility Transit Utility Mendel Art Gallery Centennial Auditorium Saskatchewan Place Saskatoon Public Library Reserve Funds All interfund loans, other than normal trade accounts payable/receivable, have been eliminated through the consolidation. Schedule 4, and supporting Appendices 1 to 6, include only those revenues and expenditures reflected in the City’s annual Operating Budget, which is prepared to identify the City’s property tax requirements. Excluded from this Schedule are the operations of the Mendel Art Gallery, Centennial Auditorium, Saskatchewan Place, Saskatoon Public Library, and the Sinking Fund. ii) Trust funds (see Note 14) and pension funds and their related operations administered by the City are not reflected in the consolidated financial statements. 23
    • City of Saskatoon Financial Report 2003 Notes to the Consolidated Financial Statements For the Year Ended December 31, 2003 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. Amounts due to/from school boards are reported on the consolidated Statement of Financial Position as accounts payable/accounts receivable. B) Basis of Accounting i) Revenues are accounted for in the period in which the transactions or events occurred that gave rise to the revenues. Funds from development charges for services that have not yet been provided at the time the charges are collected are accounted for as deferred revenue until used for the purposes specified. Expenditures are accounted for in the period the goods and services are acquired and a liability is incurred or transfers are due. ii) Property tax revenue is based on assessments determined in accordance with Saskatchewan legislation and the formulas, principles and rules in the Saskatchewan Assessment Manual. Tax mill rates are established annually. Taxation revenues are recorded at the time tax billings are issued. Assessments are subject to appeal. A provision has been recorded in Accounts Payable and Accrued Liabilities for potential losses on assessment appeals outstanding as of December 31, 2003 iii) Inventories held for re-sale are valued at the lower of cost or net realizable value. Cost is determined using average laid-in costs. Inventories of materials and supplies represent amounts to be financed in future years as these inventories are consumed (see Note 11). iv) Land for Resale: Land for resale is recorded at the lower of adjusted cost and net realizable value. Adjusted cost includes amounts for land acquisition and improvements to prepare the land for sale. Land is available for resale when approved for sale by the Land Bank Committee and when all municipal services have been completed. v) Capital Outlay Financed by Long-term Liabilities to be Recovered in Future Years: Capital outlay financed by long-term liabilities to be recovered in future years represents the outstanding principal portion of unmatured long-term liabilities for municipal expenditures, less Sinking Fund requirements (see Note 9). 24
    • City of Saskatoon Financial Report 2003 Notes to the Consolidated Financial Statements For the Year Ended December 31, 2003 vi) Physical Assets: The historical cost and accumulated depreciation for physical assets are not recorded for municipal purposes. Physical assets are reported as an expenditure on the Consolidated Statement of Financial Activities in the year of acquisition. The proceeds from debt issues for those physical assets financed by long-term indebtedness are reported on the Consolidated Statement of Financial Activities as amounts to be recovered. vii) All investments are recorded at cost less any amounts written off to reflect a permanent decline in value. Premiums and discounts are not amortized over the life of the investment because the City deems these amounts to be immaterial. Investment transactions are accounted for at the settlement date. Investment income is recorded on the accrual basis. viii) Deferred Revenue - Development Charges: The City receives, either from private developers or as a result of the sale of its own developed properties, levies for services which have not yet been provided at the time the levies are collected. These revenues are not recognized until the applicable expenditures for such services are incurred. ix) The City is one of the primary property developers in the municipality. Expenditures relating to the servicing of new subdivisions within the City are charged against the prepaid services account (which forms part of the unexpended capital financing – see Note 10). Proceeds from the sale of lots are credited to the prepaid services reserve for that portion attributable to services, and to the Property Realized Reserve for the portion attributable to land. Any property purchased for future land development is funded by the Property Realized Reserve. x) Government transfers are recognized in the financial statements as revenues in the period in which events giving rise to the transfer occur, providing the transfers are authorized, eligibility criteria have been met, and reasonable estimates can be made. xi) The City of Saskatoon makes contributions to the General Superannuation, Part-Time and Seasonal Employee Superannuation, Police Superannuation, and Fire and Protective Services Department Superannuation Plans on behalf of its staff. Pension expenditures are recorded based on current service requirements and have been included as an expenditure in the current year. xii) The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of 25
    • City of Saskatoon Financial Report 2003 Notes to the Consolidated Financial Statements For the Year Ended December 31, 2003 contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures for the year. Actual results could differ from those estimates. 2. CASH AND SHORT-TERM INVESTMENTS (Dollars in Thousands) Cost Market 2002 2003 2002 2003 Cash (overdraft) $(52) $2,491 $(52) $2,491 Treasury bills, provincial promissory notes, bankers acceptance, commercial paper 77,031 70,078 77,310 70,312 $76,979 $72,569 $77,258 $72,803 Stated interest rates are 2.59% to 4.09%. 3. RECEIVABLES It is the normal practice of the City to review its accounts receivable on a regular basis and write off, against current operating revenues, any accounts which are considered to be uncollectable. A general allowance of $2,121,000 (2002 - $1,624,000) for uncollectable taxes is included in the balance of Taxes Receivable. 4. LONG-TERM INVESTMENTS (Dollars in Thousands) Cost Market 2002 2003 2002 2003 Federal, provincial, municipal, federal government agency, corporate bonds, $101,850 $108,860 $107,564 $113,358 banker’s acceptance, and commercial paper. Maturities are between 2004 - 2015 with stated interest rates of 2.60% to 5.06%. 26
    • City of Saskatoon Financial Report 2003 Notes to the Consolidated Financial Statements For the Year Ended December 31, 2003 5. NET TAXES AVAILABLE FOR MUNICIPAL PURPOSES (Dollars in Thousands) 2002 2003 Taxation Revenue $220,165 $228,344 Taxes collected on Behalf of Others: Saskatoon School Division No. 13 80,351 83,967 St. Paul’s Roman Catholic Separate School Division No. 20 40,937 42,443 Business Improvement Districts 535 545 Net taxes available for municipal purposes $98,342 $101,389 Comprised of: Municipal 94,678 97,684 Grants in Lieu of Taxes 3,664 3,705 $98,342 $101,389 The Education Act and The Cities Act set out the manner in which collection of taxes and trailer license fees are to be submitted to the School Boards and the Business Improvement Districts. As the City is acting as agent only for the collection of such taxes, these amounts are not reflected in the Schedule of Revenue and Expenditures, nor are the Assets, Liabilities, and Fund Balances of these Boards included in the consolidated financial statements. 6. PENSION PLANS The City of Saskatoon administers four employee pension plans - the General Superannuation Plan, the Police Superannuation Plan, the Firefighters’ Superannuation Plan, and the Part-Time and Seasonal Employee Superannuation Plan. Combined, these plans provide pension benefits for all eligible staff of the City. General, Police, and Firefighters’ Plans are contributory defined benefit plans. The Seasonal Plan is a defined contribution plan. In all Plans, contributions are made by Plan members and the City of Saskatoon as stipulated by pension agreements. The defined benefit plans provide for a benefit that is integrated with CPP, and is based on years of contributory service times a percentage of average earnings as defined by each plan. The Part-Time and Seasonal Employee Superannuation Plan provides a benefit based on the annuity that can be purchased with the funds in an employee’s account (i.e. a money purchase plan). 27
    • City of Saskatoon Financial Report 2003 Notes to the Consolidated Financial Statements For the Year Ended December 31, 2003 The accrued pension asset reflects the three main plans – the Retirement Plan for Employees of the City of Saskatoon Board of Police Commissioners, the Retirement Plan for Employees of the Fire Department of the City of Saskatoon, and the General Superannuation Plan for City of Saskatoon employees not covered by the Police and Fire and Protective Services Departments’ Superannuation Plans. The General Plan provides for partial inflation protection on benefits accrued to December 31, 2000. Fire and Police plans have provided for partial ad hoc indexing from time to time in the past. The latest partial increase for the Fire Plan will take effect January 1, 2004. The average age of the 2,436 employees accruing service under the Plans is 44. There are 50 former employees who are entitled to deferred pension benefits. At present, the Plans provide benefits for 1,155 retirees and surviving spouses; benefit payments were $29 million in 2003. Employees make contributions of approximately 5.5 percent of salary (7.0 percent for Police Plan members) and the City (Board of Police Commissioners) contributes an equal amount. In 2003, total contributions for current service were $14 million. A separate pension fund is maintained for each Plan. Pension fund assets are invested entirely in marketable investments of organizations external to the City of Saskatoon. The pension liability at December 31 includes the following components: (Dollars in Thousands) 2002 2003 Accrued Benefit obligation $565,393 593,692 Pension fund assets Marketable securities 654,442 657,884 (89,049) (64,192) Unamortized actuarial gains (loss) (24,318) (46,646) Accrued benefit asset (113,367) (110,838) Valuation allowance 3,190 1,521 Net carrying value of accrued benefit asset $(110,177) $(109,317) Actuarial valuations for accounting purposes are performed at least triennially using the projected benefit method prorated on services. The most recent valuations were prepared by AON Consulting for the General and Firefighters’ Plans as at December 31, 2002 and for the Police Plan as at December 31, 2000. The accrued benefit obligations shown for 2003 is based on an extrapolation of the 2000 and 2002 valuations. There is a net unamortized actuarial loss to be amortized on a straight-line basis over the expected average remaining 28
    • City of Saskatoon Financial Report 2003 Notes to the Consolidated Financial Statements For the Year Ended December 31, 2003 service life of the related employee groups applicable to each of the plans (15.07 years on average). The actuarial valuations were based on a number of assumptions about future events, such as inflation rates, interest rates, wage and salary increases, and employee turnover and mortality. The assumptions used represent the City’s best estimates. The expected inflation rate is 3.5 percent (4.0 percent for the Fire Department Plan). The discount rate used to determine the accrued benefit obligation is 6.5 percent (7.0 percent for the Fire Department Plan). Pension fund assets are valued using a market-related value which amortizes realized and unrealized gains and losses over a five-year period. The expected rate of return on Plan assets is 6.5 percent (7.0 percent for the Fire Department Plan). The actual rate of return on Plan assets in 2003 was 2.92 percent. The market value of assets at January 1, 2003 and December 31, 2003 was $617,488,000 and $671,299,000 respectively. The total expenditures related to pensions in 2003 include the following components: (Dollars in Thousands) 2002 2003 Current period benefit cost $18,099 $19,830 Less: Employee contributions (6,225) (6,735) Amortization of actuarial (gain) loss (412) 1,740 Increase (decrease) in valuation allowance (20,517) (1,669) Pension expenditure (9,055) 13,166 Interest cost on the average accrued benefit obligation 34,873 36,874 Expected return on average pension plan assets (42,278) (42,476) Pension interest expenditure (7,405) (5,602) Total expenditures (revenues) related to pensions $(16,460) $7,564 The total pension expenditures related to pensions are included in the Consolidated Statement of Financial Activities. 7. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Included in liabilities is $2,126,000 (2002 - $2,752,000) of the estimated total landfill closure and post closure care expenditures of $2,283,000. The balance is included under Reserves 29
    • City of Saskatoon Financial Report 2003 Notes to the Consolidated Financial Statements For the Year Ended December 31, 2003 (Landfill Reserve). The estimated liability for these expenditures is recognized as the landfill site’s capacity is used and the reported liability represents the portion of the estimated total expenditures recognized as at December 31, 2003, based on the cumulative capacity used at that date, compared to the total estimated landfill capacity. Estimated total expenditures represent the sum of the discounted future cash flows for closure and post closure care activities discounted at the City’s average long-term borrowing rate of 5.59 percent. Landfill closure and post closure care requirements have been defined in accordance with industry standards and include final covering and landscaping of the landfill, pumping of ground water and leachates from the site, and ongoing environmental monitoring, site inspection, and maintenance. The reported liability is based on estimates and assumptions with respect to events extending over a forty-year period using the best information available to management. Future events may result in significant changes to the estimated total expenditures, capacity used or total capacity and the estimated liability, and would be recognized prospectively, as a change in estimate, when applicable. The estimated remaining capacity of the landfill is 22.7 percent of its total estimated capacity and its estimated remaining life is 8 years, after which the period for post closure care is estimated to be 40 years. 8. EMPLOYEE BENEFITS PAYABLE Vacation leave is credited to employees on a monthly basis based on contractual obligations. Such credits are accumulated from the period April 1 to March 31 and may not be taken in advance. Therefore, credits earned from April 1, 2003 to December 31, 2003 would normally be available to employees after April 1, 2004. The City operates a number of Sick Leave Benefit Plans as stipulated within agreements with the various Unions and Associations of employees. These plans are based on the accumulation of sick leave credits to a specified maximum, or are guaranteed long-term disability plans. For those Unions with accumulated sick leave plans, the employee is entitled to a cash payment under specified circumstances, including retirements, based upon a formula stipulated in the union agreements. Employee benefits payable are recorded as long-term liabilities on the Consolidated Statement of Financial Position, offset by a reduction in fund balances. The total of these liabilities is as follows: (Dollars in Thousands) 2002 2003 30
    • City of Saskatoon Financial Report 2003 Notes to the Consolidated Financial Statements For the Year Ended December 31, 2003 a) Vacation leave accrual $10,870 $10,868 b) Sick leave credits 6,435 6,345 $17,305 17,213 9. NET LONG-TERM LIABILITIES A) Debt (Dollars in Thousands) 2003 2003 2003 2002 Year Repayable Debentur Sinking Fund Total Total e Debt Debt Debt Debt 2003 0 0 0 6,941 2004 6,373 327 6,700 6,701 2005 6,808 650 7,458 7,458 2006 1,619 1,434 3,053 3,053 2007 1,628 662 2,290 2,290 2008 1,703 949 2,652 2,652 2009 1,788 0 1,788 1,788 2010 1,880 0 1,880 1,880 2011 1,981 0 1,981 1.981 2012 2,090 0 2,090 2,090 Total Debt $25,870 $4,022 $29,892 $36,834 Sinking funds accumulated to retire debt (3,107) (3,744) Net Debt $26,785 $33,090 Interest rates range from 3.125% to 13.5%. All long-term debt instruments have been issued in Canadian Funds. B) Of the total long-term liabilities of $29,892,000 (2002 - $36,834,000) the following are held by the City as long-term investments: (Dollars in Thousands) 2002 2003 i) Consolidated Funds $3,636 $3,554 ii) Bus Replacement Fund 0 998 iii) Cemetery Perpetual Care Fund 100 0 iv) Sinking Fund 1,437 827 31
    • City of Saskatoon Financial Report 2003 Notes to the Consolidated Financial Statements For the Year Ended December 31, 2003 $5,173 $5,379 C) The regulations under The Cities Act require that individual debenture issue bylaws be submitted, reviewed, and approved by the Saskatchewan Municipal Board (SMB) with the exception that an urban municipality with a population greater than 30,000 can apply to the SMB for a debt limit. The City of Saskatoon’s debt limit is $298,000,000 as approved by the SMB. 10. FUND BALANCES (Dollars in Thousands) 2002 2003 Funds to offset taxation or user charges in future years (Schedule 1) $109,603 $108,705 Unexpended capital financing (Schedule 2) 65,485 59,234 Reserves (Schedule 3) 121,320 145,988 $296,408 $313,927 11. AMOUNTS TO BE RECOVERED (Dollars in Thousands) 2002 2003 Capital outlay financed by long-term liabilities to be recovered in future years (Note 1b(v)) $33,090 $26,785 Inventory of materials and supplies 5,007 6,227 $38,097 $33,012 12. CONTINGENCIES A) Various lawsuits and claims are pending by and against the City. It is the opinion of management that final determination of these claims will not materially affect the financial position of the City. B) Contractual Obligations - The City of Saskatoon has not entered into any long-term contractual obligations, the recognition of which would materially affect these financial statements. 32
    • City of Saskatoon Financial Report 2003 Notes to the Consolidated Financial Statements For the Year Ended December 31, 2003 13. PROPERTY REALIZED RESERVE The Property Realized Reserve, which is included on Schedule 3, is reported net of all withdrawals. This practice does not recognize the value of assets for property purchased but not yet sold, or repayable advances of funds. At December 31, 2003, the gross value of the Property Realized Reserve is estimated to be $59,817,000 (2002 - $55,020,000) itemized as follows: (Dollars in Thousands) 2002 2003 Net balance of Reserve, December 31 $20,808 $26,667 Advances Repayable From Future Revenue Fund Provisions 11,114 10,574 Property Purchased from Reserve and not yet re-sold (at estimated cost) 23,098 22,576 Gross Value of Reserve, December 31 $55,020 $59,817 14. TRUST FUNDS The City administers two trust funds, the Cemetery Perpetual Care Fund and the Group Insurance Trust Fund. The reserve balances in these trusts are $2,667,000 (2002 - $2,592,000) and $816,000 (2002 - $1,343,000) respectively. 15. EXPENDITURES BY OBJECT The following is a summary of the expenditures reported on the Consolidated Statement of Financial Activities by object of expenditures: (Dollars in Thousands) 2002 2003 Wages and benefits $116,835 $147,137 Contracted and general services 46,488 46,991 Materials, goods, supplies, and utilities 77,302 82,564 Finance charges 3,619 2,634 Capital expenditures 63,706 67,389 $307,950 $346,715 34
    • City of Saskatoon Financial Report 2003 Notes to the Consolidated Financial Statements For the Year Ended December 31, 2003 16. COMPARATIVE FIGURES Certain of the comparative figures have been reclassified to conform with the financial statement presentation adopted for the current year. 17. PRIOR PERIOD ADJUSTMENT Payments made to the Group Insurance Trust fund in the amount of $451,000 were in excess of the actual amount required for the years 2000 to 2003. The following adjustment was made retroactively for the year ended December 31, 2003: Consolidated Statement of Financial Position (Dollars in Thousands) 2002 2003 FINANCIAL ASSETS Accounts Receivable and User Charges $336 $115 MUNICIPAL POSITION Fund Balances 336 115 Consolidated Statement of Financial Activities EXPENDITURES General Government 131 115 Revisions to Net fund balances at the beginning of the period $205 $0 35
    • City of Saskatoon Financial Report 2003 Schedule 1 Schedule of Funds to Offset Taxation or User Charges in Future Years For the Year Ended December 31, 2003 (in thousands of dollars) 2002 2003 Balance, Beginning of Year $ 85,837 $ 109,603 Transfer from (to) Revenue Stabilization Reserve (913) (718) Transfer from (to) Reseve for Capital Expenditures - (1,000) Transfer from (to) Special Needs Transportation - (124) Prior Period Adjustment (Note 17) 205 - Increase (Decrease) in Accrued Pension Asset 22,685 (860) Decrease (Increase) in Landfill Closure/Post Closure Care Liability (184) 626 Surplus for the Year (Schedule 4) 1,973 1,178 Balance, End of the Year $ 109,603 $ 108,705 35
    • City of Saskatoon Financial Report 2003 Schedule 2 Schedule of Capital Operations For the Year Ended December 31, 2003 (in thousands of dollars) 2002 2003 2003 Actual Budget Actual SOURCES OF FUNDS Province of Saskatchewan $ 145 $ 486 $ 588 Government of Canada - - 298 Transport Canada - - 230 Canada-Saskatchewan Infrastructure Program 1,938 3,133 2,440 Western Economic Diversification Program - - - Canada/Agriculture Infrastructure Program - - - Taxation 965 300 300 Debentures 17,000 - - Contributions from Developers, Benefitting - - - Property Owners and Other Users 4,811 3,539 4,744 Appropriations - - - From Reserves 59,498 59,933 57,690 84,357 67,391 66,290 EXPENDITURES General Government 3,817 3,280 4,101 Protection of Persons and Property 3,950 2,005 1,189 Transportation 22,965 23,854 24,113 Environmental Health 9,156 11,702 16,217 Social and Family Services 10 - 288 Planning & Development 2,895 2,211 2,747 Recreation and Cultural Services 3,299 2,938 3,483 Property Purchases and Development 11,434 12,720 13,095 Elec Utility Expansion and Replacements 7,224 8,681 7,308 64,750 67,391 72,541 Increase (Decrease) in Unexpended Capital Financing 19,607 (6,251) Unexpended Capital Financing, Beginning of Year 45,878 65,485 Unexpended Capital Financing, End of Year $ 65,485 $ 59,234 36
    • City of Saskatoon Financial Report 2003 Schedule 3 Schedule of Reserves For the Year Ended December 31, 2003 (in thousands of dollars) 2002 2003 REPLACEMENT Albert Community Centre $ 59 $ 64 Automated Garbage Containers 117 167 Boards: Centennial Auditorium 414 592 Saskatoon Public Library 840 1,032 Mendel Art Gallery 57 56 Saskatchewan Place 572 645 Buildings and Grounds Equipment 398 423 Bus Replacement 4,044 5,735 Civic Vehicles and Equipment 3,129 3,038 Electrical Distribution 9,348 10,050 Electronic Machines 131 73 Fire Equipment 50 23 Fire Apparatus 38 38 Infrastructure Replacement: Surface Improvements 2 - Water and Sewer Replacements 941 1,673 Parks - 85 Storm Water Management - 25 Landfill 1,666 693 Landfill - Buildings and Equipment 111 120 Leisure Services Equipment 335 392 Photocopy Machine 213 254 Police - Vehicle/Radio - 2 Wastewater Collection/Treatment 553 1,235 Water Utility 249 1,678 Weigh Scales 181 181 Balance, End of Year $ 23,448 $ 28,274 37
    • City of Saskatoon Financial Report 2003 Schedule of Reserves Cont'd For the Year Ended December 31, 2003 (in thousands of dollars) 2002 2003 FUTURE EXPENDITURES Animal Trading - Zoo $ 83 $ 83 Affordable Housing-Capital 104 104 Affordable Housing-Operating 2,269 2,644 Boards: Centennial Auditorium 796 776 Saskatoon Public Library 4,077 4,708 Mendel Art Gallery 81 66 Saskatchewan Place (250) (131) Building Permits/Inspections 842 1,008 Campsite 22 57 Cemetery Stabilization 7 43 Civic Buildings Comprehensive Maintenance 2,796 2,927 Community Support Grant 77 38 Corporate Information Systems Development 399 660 Dedicated Lands 113 910 Dedicated Roadways 429 483 Downtown Housing 94 124 Electrical Distribution Extension 2,196 1,478 Electrical Revenue Stabilization 1,000 839 Fire Department Uniforms 73 116 Forestry Farm Park Development 8 (3) Forestry Farm Auditorium 2 1 General Voting 122 22 Golf Courses Stabilization - - Golf Courses Capital 291 568 Heritage Fund 203 226 Holiday Park Golf Course Development - 110 Insurance Deductible 427 132 Interest Stabilization 3,326 3,477 Kinsmen Park Rides 80 73 Land Operations 1,522 1,448 Neighborhood Park Enhancement 271 288 Parking Facilities 1,340 1,273 Pest Control 68 52 Police Facilities Major Repair 171 31 Police Equipment 1 152 Subtotal to next page $ 23,040 $ 24,783 38
    • City of Saskatoon Financial Report 2003 Schedule of Reserves Cont'd For the Year Ended December 31, 2003 (in thousands of dollars) 2002 2003 Subtotal from Previous Page $ 23,040 $ 24,783 Planning Levy 180 135 Prepaid Services 38,303 44,563 Property Realized 20,808 26,667 Public Works Buildings 30 70 Reserve for Capital Expenditures 1,512 1,768 Revenue Stabilization 3,125 3,843 Sinking Fund 2,868 3,142 Snow and Ice Management Contingency 1,703 1,701 Special Events 29 22 Spectator Ball Fields 16 15 Sports Participation 18 41 Storm Water Management Utility Stabilization 136 369 Streetscape 541 788 Sundry 2,559 3,032 Traffic Noise Attenuation - - Transit Capital 101 16 Transit Stabilization 126 200 Transportation Infrastructure Expansion - 926 Vehicle and Equipment Acquisition 903 546 Vehicle and Equipment Stabilization 294 34 Waste Minimization 100 100 Wastewater Collection/Treatment Capital (3) 116 Water and Wastewater Utility Stabilization 1,500 2,118 Water Capital Projects (17) 2,719 Balance, End of Year $ 97,872 $ 117,714 Total Reserves, End of Year $ 121,320 $ 145,988 39
    • City of Saskatoon Financial Report 2003 Schedule 4 Schedule of Revenues and Expenditures For the Year Ended December 31, 2003 (in thousands of dollars) 2002 2003 2003 Actual Budget Actual REVENUES Taxation $ 83,959 $ 87,009 $ 86,996 Grants in Lieu of Taxes 19,237 19,642 19,769 Services Provided to Other Governments 1,284 1,267 1,477 Sale of Services 16,614 17,038 16,977 Other Revenue from Own Sources 28,902 29,226 30,501 Transfers from Other Governments 9,391 10,986 11,024 Other Transactions 16,831 17,330 17,330 Total Revenues for the Year (Appendix 1) 176,218 182,498 184,074 EXPENDITURES General Government 24,970 25,462 25,017 Protection of Persons and Property 62,091 65,993 67,216 Transportation & Communications 37,101 38,708 38,418 Environmental Health 5,276 5,326 5,412 Social and Family Services 3,710 4,057 4,071 Planning and Development 13,471 13,285 13,047 Recreation and Cultural Services 24,997 26,426 26,456 Debt Servicing Costs 2,629 3,241 3,259 Total Expenditures for the Year (Appendix 2) 174,245 182,498 182,896 SURPLUS $ 1,973 $ - $ 1,178 40
    • City of Saskatoon Financial Report 2003 Appendix 1 Schedule of Revenues For the Year Ended December 31, 2003 (in thousands of dollars) 2002 2003 2003 Actual Budget Actual TAXATION Property Levy $ 83,015 $ 86,204 $ 86,129 Local Improvements Levy 334 259 259 Municipal Services Agreement 82 83 93 Trailer Occupancy 76 75 74 Amusement 508 468 500 Tax Discounts (56) (80) (59) 83,959 87,009 86,996 GRANTS IN LIEU OF TAXES Senior Governments and Agencies 3,664 3,941 3,942 Senior Governments and Agencies-Supplementary - 25 (237) Own Utilities Water 1,758 1,833 1,908 Electrical 13,099 13,122 13,386 Transit 134 135 135 Wastewater 582 586 635 19,237 19,642 19,769 SERVICES PROVIDED TO OTHER GOVERNMENTS R.M. of Corman Park 53 53 60 Federal Government 696 714 777 Provincial Government 535 500 640 1,284 1,267 1,477 41
    • City of Saskatoon Financial Report 2003 Schedule of Revenues Cont'd (in thousands of dollars) 2002 2003 2003 Actual Budget Actual SALE OF SERVICES Legal Fees $ 118 $ 118 $ 124 Tax Searches and Enforcement 151 170 153 Police 719 584 736 Fire 86 42 105 Engineering 31 21 36 Parking 2,736 2,698 2,744 Solid Waste Management 1,520 1,442 1,311 Transportation 102 112 107 Recycling 134 116 141 Cemetery 678 759 700 Planning 175 219 196 Tourist Campsite 204 204 208 Forestry Farm Park 241 264 252 Kinsmen Park Rides 132 145 141 Albert Community Centre 118 104 118 Marr Residence 2 1 1 Swimming Pools 295 300 338 Golf Courses 2,170 2,598 2,442 Skating Rinks 1,247 1,331 1,323 Recreation/Competitive Facilities: Rentals 2,657 2,681 2,711 Programming 2,914 2,937 2,891 Ball Fields 43 41 42 Outdoor Sports Fields 141 151 157 16,614 17,038 16,977 OTHER REVENUE FROM OWN SOURCE Licenses and Permits 2,307 2,074 2,329 Fines and Penalties 3,826 3,742 3,954 Property Rentals 430 466 488 Franchise Fees 12,454 12,573 13,117 Interest Earnings 8,388 8,809 9,015 Tax Penalties 1,329 1,400 1,422 Other Revenue 168 162 176 28,902 29,226 30,501 42
    • City of Saskatoon Financial Report 2003 Schedule of Revenues Cont'd (in thousands of dollars) 2002 2003 2003 Actual Budget Actual TRANSFERS FROM OTHER GOVERNMENTS Federal: Employment $ 3 $ 4 $ 5 Police - Special Programs 149 208 219 Fire - Special Programs 117 128 79 City Clerk's - Special Programs 9 7 7 Race Relations - Special Programs 5 - - Provincial: Revenue Sharing 6,928 8,266 8,253 West Nile Virus Control - - 100 Police - Special Programs 1,621 1,775 1,745 Special Needs Transportation 559 598 596 Dutch Elm Disease - - 20 9,391 10,986 11,024 OTHER TRANSACTIONS Own Utilities Surplus (Deficit): Electrical (Appendix 4) 15,189 15,649 15,649 Administration Recovery 1,642 1,681 1,681 16,831 17,330 17,330 TOTAL REVENUE $ 176,218 $182,498 $184,074 43
    • City of Saskatoon Financial Report 2003 Appendix 2 Schedule of Expenditures For the Year Ended December 31, 2003 (in thousands of dollars) 2002 2003 2003 Actual Budget Actual GENERAL GOVERNMENT Legislative $ 650 $ 747 $ 697 Administrative 5,130 5,459 5,406 Financial 4,791 4,726 5,190 Assessment 1,919 2,121 2,085 Common Services 12,321 11,868 11,687 General Payroll Costs 137 516 (67) Local Improvement Tax on Exempt Property 22 25 19 24,970 25,462 25,017 PROTECTION OF PERSONS AND PROPERTY Police 36,703 39,747 40,072 Prov of Saskatchewan - Court Costs 884 864 866 Fire 21,671 22,748 23,287 Emergency Measures 114 131 123 Inspections 1,825 1,586 1,776 Animal and Pest Control 894 917 1,092 62,091 65,993 67,216 TRANSPORTATION Engineering 1,981 2,161 2,074 Roads and Streets 2,662 2,764 2,805 Drainage and Snow Removal 2,726 2,866 2,730 Street Cleaning 1,183 1,208 1,211 Bridges, Crossings and Subways 414 462 463 Street Lighting 3,971 4,116 4,117 Transportation Services 10,932 11,238 11,122 Parking 2,608 2,482 2,485 Transit Operations (Appendix 5) 10,624 11,411 11,411 37,101 38,708 38,418 44
    • City of Saskatoon Financial Report 2003 Schedule of Expenditures Cont'd (in thousands of dollars) 2002 2003 2003 Actual Budget Actual ENVIRONMENTAL HEALTH Waste Collection and Disposal $ 4,952 $ 4,983 $ 4,980 Recycling 324 343 432 5,276 5,326 5,412 SOCIAL AND FAMILY SERVICES Cemetery 834 913 855 Burial of Indigents 26 25 23 Special Needs Transportation 1,897 2,070 2,048 Social Housing 164 156 179 White Buffalo Youth Lodge 100 100 100 Safer City 50 63 36 Detoxification Centre 50 50 50 Grants 589 680 780 3,710 4,057 4,071 PLANNING AND DEVELOPMENT Planning 1,988 2,218 2,159 Buildings and Grounds Maintenance 8,302 8,558 8,411 Tourist Campsite 204 204 208 Tourism Saskatoon 294 344 344 Economic Development 1,196 1,216 1,181 Meewasin Valley Authority 557 612 612 Business Improvement Districts 80 81 81 Urban Design 50 52 51 Canadian Light Source 800 - - 13,471 13,285 13,047 45
    • City of Saskatoon Financial Report 2003 Schedule of Expenditures Cont'd (in thousands of dollars) 2002 2003 2003 Actual Budget Actual RECREATIONAL AND CULTURAL SERVICES Administration $ 1,664 $ 1,772 $ 1,762 Forestry Farm Park 1,322 1,355 1,362 Community Services 1,794 1,903 1,903 Kinsmen Park Rides 132 145 141 Albert Community Centre 199 197 189 Marr Residence 11 16 15 Swimming Pools 1,503 1,607 1,563 Golf Courses 2,219 2,598 2,531 Skating Rinks 1,412 1,507 1,502 Recreation/Competitive Facilities Rentals 4,724 4,863 4,902 Programming 4,162 4,365 4,332 Ball Fields 166 182 182 Outdoor Sports Fields 227 237 237 Boards Saskatchewan Place 673 454 656 Centennial Auditorium 1,096 1,256 1,256 Mendel Art Gallery 1,268 1,366 1,366 Building Maintenance 418 509 501 Program Development 1,024 1,078 1,040 Subsidy - Minor Sports 779 832 832 Wanuskewin Heritage Park 204 184 184 24,997 26,426 26,456 DEBT SERVICING Debt Charges 1,996 2,743 2,777 Interest Paid to Utilities 520 358 358 Banking Services 113 140 124 2,629 3,241 3,259 TOTAL EXPENDITURES $ 174,245 $ 182,498 $ 182,896 46
    • City of Saskatoon Financial Report 2003 Appendix 3 Water Utility Statement of Revenues and Expenditures For the Year Ended December 31, 2003 (in thousands of dollars) 2002 2003 2003 Actual Budget Actual REVENUES Metered $ 19,022 $ 20,378 $ 21,214 Infrastructure Levy 2,752 2,752 2,915 Miscellaneous 91 105 110 Fire Protection Charge 585 603 602 Late Payment Penalties 135 119 105 22,585 23,957 24,946 EXPENDITURES General 4,055 4,186 4,390 Treatment and Pumping 5,592 5,346 5,590 Buildings and Grounds 331 406 338 Meters 731 900 876 Watermains 3,564 3,366 4,476 Hydrants 451 801 398 Services 1,144 1,041 1,417 Contribution to Capital Reserves 6,771 7,633 7,939 Debt Charges 336 278 278 22,975 23,957 25,702 SURPLUS (DEFICIT) BEFORE TRANSFER TO RESERVE (390) - (756) TRANSFER (TO) FROM STABILIZATION RESERVE 390 - 756 SURPLUS (DEFICIT) $ - $ - $ - 47
    • City of Saskatoon Financial Report 2003 Appendix 4 Electrical Utility Statement of Revenues and Expenditures For the Year Ended December 31, 2003 (in thousands of dollars) 2002 2003 2003 Actual Budget Actual REVENUES Metered Revenue $ 96,035 $ 96,204 $ 98,146 Service Connection Fees 488 488 508 Miscellaneous 529 252 242 Tax Collection Commission 2 2 2 Late Payment Penalties 224 198 174 97,278 97,144 99,072 EXPENDITURES General 17,064 16,203 16,428 Power Purchased 52,991 52,655 53,952 Buildings and Grounds 373 396 383 Poles, Lines and Feeders 2,472 2,667 3,063 Substations 441 623 547 Street Lighting 616 613 820 Meters 736 769 804 System Operations 144 139 157 Provision for Capital Extension 2,434 2,409 2,292 Provision for Capital Replacement 4,781 5,021 5,138 82,052 81,495 83,584 SURPLUS BEFORE TRANSFER TO RESERVE 15,226 15,649 15,488 TRANSFER (TO) FROM STABILIZATION RESERVE (37) - 161 SURPLUS $ 15,189 $ 15,649 $ 15,649 48
    • City of Saskatoon Financial Report 2003 Appendix 5 Transit Utility Statement of Revenues and Expenditures For the Year Ended December 31, 2003 (in thousands of dollars) 2002 2003 2003 Actual Budget Actual REVENUES Mail Carriers $ 26 $ 28 $ 28 Passes 3,599 3,811 3,677 Cash Fares 2,158 2,146 2,059 Ticket Sales 1,554 1,661 1,698 Charter 730 750 774 Senior Citizens Passes 359 348 345 General Services Operating Allowance 10,624 11,411 11,411 Advertising 242 269 278 Miscellaneous 21 - - 19,313 20,424 20,270 EXPENDITURES General 1,486 1,532 1,531 Transportation Planning 213 259 297 Operating 10,430 10,943 10,925 Supervision 953 951 1,034 Customer Services 579 628 615 Equipment Servicing 1,078 2,709 2,606 Equipment Repair 1,662 515 347 Stores 91 98 94 Buildings 922 742 699 Contribution to Capital Reserves 1,682 1,719 1,719 Debt Charges 293 328 328 19,389 20,424 20,195 SURPLUS (DEFICIT) BEFORE TRANSFER TO (FROM) RESERVE (76) - 75 TRANSFER (TO) FROM STABILIZATION RESERVE 76 - (75) SURPLUS (DEFICIT) $ - $ - $ - 49
    • City of Saskatoon Financial Report 2003 Appendix 6 Wastewater Utility Statement of Revenues and Expenditures For the Year Ended December 31, 2003 (in thousands of dollars) 2002 2003 2003 Actual Budget Actual REVENUES Metered $ 18,047 $ 18,361 $ 19,343 Infrastructure Levy 3,801 3,801 4,026 Late Payment Penalties 90 79 70 Miscellaneous Revenue 307 300 374 22,245 22,541 23,813 EXPENDITURES General 2,393 2,504 2,582 Lift Stations 630 638 654 Pollution Control Plant 3,500 3,775 3,814 Sludge Handling & Disposal 1,042 852 1,167 Sewer Engineering 259 262 286 Sewer Inspections 206 311 134 Sewer Maintenance 1,720 2,020 1,689 Service Connections 1,289 1,400 1,109 Contribution to Capital Reserves 4,526 4,918 5,143 Debt Charges 6,187 5,861 5,861 21,752 22,541 22,439 SURPLUS (DEFICIT) BEFORE TRANSFER TO (FROM) RESERVE 493 - 1,374 TRANSFER (TO) FROM STABILIZATION RESERVE (493) - (1,374) SURPLUS (DEFICIT) $ - $ - $ - 50
    • City of Saskatoon Financial Report 2003 Appendix 7 Storm Water Management Utility Statement of Revenues and Expenditures For the Year Ended December 31, 2003 (in thousands of dollars) 2002 2003 2003 Actual Budget Actual REVENUES Metered $ 2,379 $ 2,406 $ 2,413 Late Payment Penalties 9 8 7 2,388 2,414 2,420 EXPENDITURES General 167 205 210 Storm Sewer Engineering 101 117 117 Storm Sewer Maintenance 656 701 479 Drainage 224 287 277 Contribution to Capital Reserves 1,104 1,104 1,104 2,252 2,414 2,187 SURPLUS (DEFICIT) BEFORE TRANSFER TO (FROM) RESERVE 136 - 233 TRANSFER (TO) FROM STABILIZATION RESERVE (136) - (233) SURPLUS (DEFICIT) $ - $ - $ - 51
    • City of Saskatoon (Saskatchewan, Canada) Trust Funds
    • Deloitte & Touche LLP Chartered Accountants Auditors’ Report His Worship the Mayor and City Council: We have audited the Balance Sheet of the Trust Funds of the City of Saskatoon as at December 31, 2003 and the Statement of Changes in Net Assets for the year then ended. These financial statements are the responsibility of the City’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. In our opinion these financial statements present fairly, in all material respects, the financial position of the Trust Funds of the City of Saskatoon as at December 31, 2003 and the results of its operations and the changes in its financial position for the year then ended in accordance with Canadian generally accepted accounting principles. Chartered Accountants Saskatoon, Saskatchewan April 2, 2004 52
    • City of Saskatoon Financial Report 2003 Trust Funds Balance Sheet As at December 31, 2003 (in thousands of dollars) 2002 2003 2003 2003 CEMETERY GROUP TOTAL PERPETUAL INSURANCE (restated, CARE TRUST TOTAL Note 4) ASSETS Cash and Short-Term Investments $ 996 $ 722 $ 704 $ 1,426 Accounts Receivable 342 2 22 24 Accrued Interest 41 28 2 30 Investments (Note 2) 2,581 1,935 500 2,435 $ 3,960 $ 2,687 $ 1,228 $ 3,915 LIABILITIES AND NET ASSETS Accounts Payable $ 361 $ 20 $ 454 $ 474 Net Assets 3,599 2,667 774 3,441 $ 3,960 $ 2,687 $ 1,228 $ 3,915 See accompanying notes. 53
    • City of Saskatoon Financial Report 2003 Trust Funds Statement of Changes in Net Assets For the Year Ended December 31, 2003 (in thousands of dollars) 2002 2003 2003 2003 CEMETERY GROUP TOTAL PERPETUAL INSURANCE (restated, CARE TRUST TOTAL Note 4) INCREASES IN ASSETS Sale of Cemetery Plots $ 69 $ 75 $ - $ 75 Interest Earned 191 154 41 195 Experience Refund 339 - 22 22 599 229 63 292 DECREASES IN ASSETS Experience Deficiency - - - - Transfer to Revenue Fund 586 154 296 450 586 154 296 450 Increase (Decrease) in Net Assets 13 75 (233) (158) Prior Period Adjustment (Note 4) (205) - - - Net Assets at Beginning of Year 3,791 2,592 1,007 3,599 Net Assets at End of Year $ 3,599 $ 2,667 $ 774 $ 3,441 See accompanying notes. 54
    • City of Saskatoon Financial Report 2003 Notes to the Financial Statements (Trust Funds) For the Year Ended December 31, 2003 1. ACCOUNTING POLICIES Basis of Accounting The Trust Funds operate on the accrual basis of accounting. Any interest earned but not received as at December 31 has been recorded in Accrued Interest. 2. INVESTMENTS The total of investments of $2,435,000 (2002 - $2,581,000) recorded on the Balance Sheet at cost, have a market value of $2,727,000 (2002 - $2,876,000) at December 31. Investments consist of federal, provincial, and municipal government bonds with a stated interest rate ranging from 2.6% to 5.06%. 3. FUND PURPOSE A) Group Insurance Trust Fund Premiums are shared equally between the employer and the employee. Surpluses are generated when premiums exceed administration charges and claims payments by the carrier. A portion of the accumulated funds are used to reduce both the employer’s and employee’s premiums. Under the Terms of the Underwriting Agreement, the claims Fluctuation Reserve held by the Group Insurance Trust Fund for 2003 must be at least 25% of premiums paid, or $143,540. B) Cemetery Perpetual Care Trust Fund The Perpetual Care Fund is intended to provide the necessary annual funding for the maintenance services to the cemetery in perpetuity. 55
    • City of Saskatoon Financial Report 2003 4. PRIOR PERIOD ADJUSTMENT Payments received from the City of Saskatoon in the amount of $451,000 were in excess of the actual amount required for the years 2000 to 2003. The following adjustment was made retroactively for the year ended December 31, 2003: Trust Funds Balance Sheet (Dollars in Thousands) 2002 2003 LIABILITIES AND NET ASSETS Accounts Payable $336 $115 Net Assets (336) 0 Trust Funds Statement of Changes in Net Assets DECREASE IN ASSETS Transfer to Revenue Fund $131 $115 Revision to Net Assets at the beginning of the period $(205) $0 56
    • City of Saskatoon (Saskatchewan, Canada) Statistics
    • Summary of Source and Application of Capital Funds For the Years 1999 to 2003 (in thousands of dollars) 1999 2000 2001 2002 2003 SOURCES OF FUNDS Canada/Saskatchewan Infrastructure Program 1,497 2,216 4,995 1,938 2,440 Government of Canada - 298 Transport Canada - 230 Province of Saskatchewan - 56 25 145 588 Saskatchewan Lottery 40 - - - Western Economic Diversification Program 455 21 - - Canada/Agriculture Infrastructure Program 311 - - - User Charges Taxation - - 965 300 Debentures 75 - 17,000 - Contribution from Developers, Benefitting Property Owners & Other Users 2,918 4,334 3,000 4,811 4,744 Appropriations Reserves 50,524 66,640 65,748 59,498 57,690 Reserve Funds 396 187 - - - 55,335 74,314 73,789 84,357 66,290 APPLICATION OF FUNDS General Government 1,225 1,457 2,881 3,817 4,101 Protection of Persons and Property 1,099 3,299 5,063 3,950 1,189 Transportation 18,839 20,702 32,743 22,965 24,113 Environmental Services 7,301 9,749 10,515 9,156 16,217 Social and Family Services 218 833 215 10 288 Environmental Development 2,375 3,046 2,720 2,895 2,747 Recreation and Cultural Services 3,803 6,151 3,646 3,299 3,483 Property Purchases and Development 5,989 9,853 10,622 11,434 13,095 Utility Expansion and Replacements 12,851 14,665 10,783 7,224 7,308 53,700 69,755 79,188 64,750 72,541 Unexpended Capital Financing, Beginning of Year 45,083 46,718 51,277 45,878 65,485 Unexpended Capital Financing, End of Year $ 46,718 $ 51,277 $ 45,878 $ 65,485 $ 59,234
    • City of Saskatoon Financial Report 2003 Statistics For the Year Ended December 31, 2003 Summary of Revenues For the Years 1999 to 2003 2003 Transfer from Other Other Transactions Governments 10% 5% Other Revenue from Own Sources Taxation 16% 47% Sale of Services 10% Governments Grants in Lieu of 1% Taxes 11% 1999 2000 2001 2002 2003 Taxation $ 74,090 $ 75,894 $ 79,790 $ 83,959 $ 86,996 Grants in Lieu of Taxes 16,857 17,518 18,476 19,237 19,769 Services Provided to Other Governments 608 623 1,269 1,284 1,477 Sale of Services 15,672 16,252 16,509 16,614 16,977 Other Revenue from Own Sources 24,515 26,317 28,331 28,902 30,501 Transfer from Other Governments 7,140 7,184 7,481 9,391 11,024 Other Transactions 15,415 15,615 15,348 16,831 17,330 $ 154,297 $ 159,403 $ 167,204 $ 176,218 $ 184,074 58
    • City of Saskatoon Financial Report 2003 Statistics For the Year Ended December 31, 2003 Summary of Expenditures For the Years 1999 to 2003 2003 Recreation and Cultural Services Debt Servicing Costs General Government Planning and 14% 2% 14% Development 8% Social and Family Services 2% Environmental Health 3% Transportation Protection of Persons 21% and Property 36% 1999 2000 2001 2002 2003 General Government $ 17,582 $ 15,926 $ 22,552 $ 24,970 $ 25,017 Protection of Persons and Property 54,225 55,905 58,392 62,091 67,216 Transportation 26,128 26,701 36,972 37,101 38,418 Environmental Health 4,954 4,967 5,053 5,276 5,412 Social and Family Services 2,487 2,747 3,625 3,710 4,071 Planning and Development 12,987 13,753 12,782 13,471 13,047 Recreation and Cultural Services 20,646 21,769 24,665 24,997 26,456 Debt Servicing Costs 3,992 2,918 2,250 2,629 3,259 Transfers to Reserves 10,722 12,846 - - - $ 153,723 $ 157,532 $ 166,291 $ 174,245 $ 182,896 59
    • City of Saskatoon Financial Report 2003 Statistics For the Year Ended December 31, 2003 Consolidated Summary of Expenditures (by object code) For the Years 2000 to 2003 (in thousands of dollars) 2000 2001 2002 2003 W ages and Benefits $126,649 $129,849 $116,835 $147,137 Contracted and general services 38,032 39,293 46,488 46,991 Materials, goods, supplies, and utilities 68,953 73,203 77,302 82,564 Finance Charges 4,764 5,409 3,619 2,634 Capital Expenditures 69,287 80,120 63,706 67,389 $307,685 $327,874 $307,950 $346,715 Summary of Reserves and Surplus For the Years 1999 to 2003 (in thousands of dollars) 1999 2000 2001 2002 2003 RESERVES: Property Realized $ 12,816 $ 12,235 $ 13,424 $ 20,808 $ 26,667 Replacement 17,223 19,871 20,974 23,448 28,274 Future Expenditures 53,175 49,396 58,054 77,064 91,047 SURPLUS (DEFICIT) 574 1,871 913 1,973 1,178 $ 83,788 $ 83,373 $ 93,365 $123,293 $147,166 60
    • City of Saskatoon Financial Report 2003 Statistics For the Year Ended December 31, 2003 Summary of Public Utilities Operating Results For the Years 1999 - 2003 (in thousands of dollars) 1999 2000 2001 2002 2003 Net surplus after deducting operating expenses, debt charges and contributions to reserves: Water Supply (21) (26) - - - Electrical Distribution $ 13,897 $ 14,074 $ 13,748 $ 15,189 $ 15,649 Transit System (before contribution from General Revenue) (9,613) (9,946) (10,511) (10,624) (11,411) Wastewater Collection & Disposal - - - - - Storm Water Management - - - - - Net Surplus $ 4,263 $ 4,102 $ 3,237 $ 4,565 $ 4,238 Amount contributed by Utilities to Revenue as grant in lieu of taxes $ 13,467 $ 13,832 $ 14,789 $ 15,573 $ 16,064 61
    • Summary of Debenture Debt and Required Sinking Fund Consolidation of All Obligations For the Years 1999 to 2003 1999 2000 2001 2002 2003 Total Debenture Debt $ 37,623,622 $ 30,300,079 $ 24,758,057 $ 36,833,475 $ 29,892,732 Less Sinking Fund 4,321,023 3,571,744 3,670,885 3,744,094 3,107,228 Net Debt $ 33,302,599 $ 26,728,335 $ 21,087,172 $ 33,089,381 $ 26,785,504 Population Estimate at Dec. 31 (1) 206,200 205,100 204,000 204,600 205,300 Gross Debt Per Capita $ 182 $ 148 $ 121 $ 180 $ 146 Net Debt Per Capita $ 161 $ 130 $ 103 $ 162 $ 130 Mill Rate Supported Debt $ 17 $ 5 $ 2 $ 83 $ 76 (1) Population data is provided by the City Planning Branch, derived from Statistics Canada census data. Prior years' population numbers have been revised to be consistent with the Statistics Canada census data.
    • Summary of Debenture Debt and Required Sinking Fund By Responsibility Centre For the Years 2002 and 2003 Sinking Fund Sinking Fund 2002 At Dec 31/02 2003 At Dec 31/03 Waterworks Utility $ 3,387,152 $ 2,526,224 $ 2,806,400 $ 2,306,113 Sewer Utility 14,547,560 (16,978) 10,068,561 (15,255) Local Improvements - Property Share (1) 1,900,927 1,234,869 1,445,347 1,322,546 Total Debt Not Supported by Civic Mill Rate $ 19,835,639 $ 3,744,115 $ 14,320,308 $ 3,613,404 Total Civic Mill Rate Debt $ 16,997,836 $ (21) $ 15,572,427 $ 57,481 Total Debenture Debt $ 36,833,475 $ 29,892,732 Total Sinking Fund 3,744,094 3,107,228 Net Debt (2) $ 33,089,381 $ 26,785,504 Population Estimate at Dec. 31 (3) 204,600 205,300 Gross Debt Per Capita $ 180 $ 146 Net Debt Per Capita $ 162 $ 130 Mill Rate Supported Debt $ 83 $ 76 (1) Including City Share of Water and Wastewater Local Improvements (2) All Figures are Based on Book Values and Have Not Been Adjusted For Foreign Currency Exchange (3) Population data is provided by the City Planning Branch, derived from Statistics Canada census data. Prior years' population numbers have been revised to be consistent with the Statistics Canada census data.
    • City of Saskatoon Financial Report 2003 Statistics For the Year Ended December 31, 2003 Debentures Maturing With Percentages As at December 31, 2003 Percentage Debentures Percentage Reduction Year Maturing Yearly Accumulated 2004 6,700,486 22.4% 22.4% 2005 7,458,023 24.9% 47.3% 2006 3,052,897 10.2% 57.5% 2007 2,290,320 7.7% 65.2% 2008 2,652,006 8.9% 74.1% 2009 1,788,000 6.0% 80.1% 2010 1,880,000 6.3% 86.4% 2011 1,981,000 6.6% 93.0% 2012 2,090,000 7.0% 100.0% $ 29,892,732 100% 64
    • Summary of Property Assessment and Tax Levy For the Years 1999 to 2003 1999 2000 2001* 2002 2003 Gross Assessment - Land $ 1,781,081,653 $ 1,788,952,481 $ 2,134,141,067 $ 2,184,680,008 $ 2,157,645,436 - Improvements 4,508,984,484 4,604,091,949 6,421,236,170 6,517,876,858 6,672,062,083 Total Assessment 6,290,066,137 6,393,044,430 8,555,377,237 8,702,556,866 8,829,707,519 Exemptions 1,228,269,734 1,216,219,395 2,090,763,655 2,136,154,680 2,131,792,805 Assessed Value for Taxation $ 5,061,796,403 $ 5,176,825,035 $ 6,464,613,582 $ 6,566,402,186 $ 6,697,914,714 Mills Mills Mills Mills Mills Tax Rate: General 14.3485 14.4901 12.3991 12.5911 12.9327 Library 1.7144 1.7394 1.4716 1.4790 1.5579 Education: Public Board/Separate Board 20.2400 20.5217 17.2200 17.7000 18.2200 Total 36.3029 36.7512 31.0907 31.7701 32.7106 $ 195,695,306 $ 200,348,480 $ 210,571,965 $ 218,754,230 $ 229,252,892 Tax Collections: Current $ 188,295,884 $ 192,579,717 $ 205,883,332 $ 216,550,749 $ 223,544,797 Arrears 7,462,830 7,908,842 7,534,695 7,013,536 5,946,134 Total Collected $ 195,758,714 $ 200,488,559 $ 213,418,027 $ 223,564,285 $ 229,490,931 Percentage of Levy Collected: Current 95.00% 96.12% 96.87% 98.25% 96.76% Current and Arrears 92.60% 93.85% 95.32% 97.16% 95.87% Taxes Outstanding: Current $ 7,399,422 $ 7,768,763 $ 6,629,624 $ 5,351,983 $ 6,196,488 Arrears 5,869,232 3,560,346 3,039,043 2,988,342 3,021,481 Net Outstanding $ 13,268,654 $ 11,329,109 $ 9,668,667 $ 8,340,325 $ 9,217,969 * Re-Assessment
    • City of Saskatoon Financial Report 2003 Statistics For the Year Ended December 31, 2003 Saskatoon Economic Statistics For the Years 1999 to 2003 1999 2000 2001 2002 2003 Saskatoon population (December 31)* 206,200 205,100 204,000 204,600 205,300 Annual change +2.74% -0.54% -0.54% +0.30% +0.35% Saskatoon inflation rate - annual average 2.1% 2.6% 2.9% 2.8% 2.2% Saskatoon unemployment rate - annual average 6.3% 5.6% 6.2% 7.7% 7.6% No. of Persons Employed in Saskatoon 113,600 116,700 115,600 119,400 121,200 Saskatoon building permits: Total number 2,460 2,368 2,213 2,424 2,345 Total value ($Millions) $ 177.9 $ 201.4 $ 226.3 $ 250.0 $ 231.6 Annual change +9.3% +13.2% +12.4% +10.48% -7.36% * Population data is provided by the City Planning Branch, derived from Statistics Canada census data. Prior years' population numbers have been revised to be consistent with the Statistics Canada census data. SOURCES OF INFORMATION: Statistics Canada City of Saskatoon - Planning Branch, Community Services Department MAJOR TAXPAYERS IN SASKATOON 2003 Taxable Assessment (in 000's) Cadillac Fairview Corporation Limited $ 70,489 Centre at Circle & 8th Property Inc. 50,189 Boardwalk Equities Inc. 49,706 Westfair Properties Ltd. 37,065 The Trust Company of Bank of Montreal 35,680 Mitchell's Gourmet Foods Inc. 29,617 101042414 Saskatchewan Ltd. 23,852 Saskatoon Airport Authority 23,123 RioCan Property Services 19,912 Preston Crossing Properties Inc. 17,410 CNH Canada Ltd. 16,944 First Line Properties Ltd. 16,622 66