City of Edmonton 2008 Financial Statements - Additional Information

City of Edmonton 2008 Financial Statements - Additional Information

Recommendation:
That the June 22, 2009, Finance and Treasury Department report 2009FTF050 be received for information

Report Summary

This report provides a response to questions asked at the April 17, 2009, Audit Committee meeting with respect to the 2008 audited consolidated financial statements for the City of Edmonton.

Previous Council/Committee Action

At the April 17, 2009, Audit Committee meeting, the following motion was passed.

That Administration report back to the June 29, 2009, Audit Committee meeting on:

  1. A breakdown on the land additions for municipal purposes,identified in section 25 – Tangible Capital Assets, Attachment 2, of the April 9, 2009, Finance and Treasury Department report 2009FTF002.
  2. The accuracy of the 2008 salaries, wages and benefits as they relate to the 2009 budget, section 16 – Expenditures by Object, Attachment 2, of the April 9, 2009, Finance and Treasury Department report 2009FTF002.

3.A breakdown of the current debt approved by Council,an analysis of what might come under debt from our utilities in the next three years, section 9 – Long-term Debt, b) Debt and debt service limits, Attachment 2, of the April 9, 2009, Finance and Treasury Department report 2009FTF002.) Debt and debt service limits.

Report

The following responses are provided for questions raised at the April 17, 2009, Audit Committee meeting. Note references are in relation to the notes to the City of Edmonton audited consolidated financial statements, included as Attachment 2 to the April 9, 2009 Finance and Treasury Department report.

Land Additions

Note 25 sets out the land opening balance, additions, disposals and ending balance for 2008, consistent with the revised public sector accounting requirements for tangible capital assets. Additions of $95.8 million were reported for the year. A table in Attachment 1 provides additional detail with respect to the more significant land additions for the year, their area and their value.

Personnel Expenditures

Note 16 is a summary of the 2008 expenditures by object, with comparative information for 2007. Attachment 2 of this report provides further detail for salaries, wages and employee benefits by program, comparing actual 2008 amounts to the 2008 and 2009 approved budgets.

Debt Limits

Note 9 b) provides the legislative limits for debt and debt services as set out under Regulation 271 of the Municipal Government Act(MGA), and indicates the actual debt and debt service applied as at December 31, 2008.These measures as reported are for debt already in place and do not include amounts approved but not yet borrowed.

The table in Attachment 3 provides an analysis of the additional debt approved but not yet borrowed for each of the next 5 years. Assumptions have had to be applied as outlined in the notes to the table. This analysis tends to portray the upper limit of debt based on approvals to date. Typically not all expenditures or borrowing follows the budget timeline.

Notes to the table provide a projected debt limit calculation for each of 2009, 2010 and 2011. The borrowing approved for the City utilities, Sanitary and Land Drainage and Waste Management, as approved in the 2009 – 2011 Capital Budget has been included in notes to the table.

Policy

Finance and Treasury Department report 2009FTF050 contributes to meeting legislative reporting requirements outlined in the MGA.

Focus Area

This report supports the Governance – organizational capacity focus area.

Attachments

  1. 2008 Land Additions
  2. 2008 Personnel costs compared to budget
  3. Debt - Outstanding and Approved

Page 1 of 2

Attachment 1

2008 Land Additions

The following table sets out the significant land additions for future municipal use made throughout 2008.

Description / Address / Area
(acres) / Department / $ Amount (millions)
Heavy maintenance facility / 18.82 / Fleet Services
Rampart industrial / 124.29
South-west integrated site / 44.50 / various
Transfer from resale land for development / 84.70 / Future use including roadway
Kennedale integrated services site / 23.47 / various
Silver Berry / 23.58 / School site
Servicing and development costs on AMPW land for future municipal purposes / AMPW
Rampart industrial / 7.49
Other –numerous small additions
$ 95.8

Note: Due to s.25 of the Freedom of Information and Protection of Privacy Act the address and dollar figures have not been provided. This information can be provided to Committee in private.

Page 1 of 1Report: 2009FTF050 Attachment 1

Attachment 2

2008 Personnel Costs Compared to Budget

in $000's / 2008 / 2009
Actual (1) / Budget / Budget (2)
Tax-supported
Economic Development Corporation / $ 14,269 / $ 10,330 / $ 11,127
Police Service / 183,769 / 187,613 / 203,595
Public Library / 23,561 / 23,985 / 26,270
Other (3) / 3,047 / 721 / 725
Asset Management and Public Works / 54,887 / 57,096 / 63,715
Capital Construction / 4,206 / 5,650 / 15,313
Community Services / 193,409 / 195,887 / 187,663
Corporate Services / 67,313 / 67,153 / 73,983
Finance and Treasury / 17,875 / 17,495 / 20,218
Mayor and Councillor Offices / 1,983 / 1,844 / 1,917
Office of the City Auditor / 1,568 / 1,707 / 1,719
Office of the City Manager / 896 / 918 / 972
Office of the DeputyCity Manager / 10,926 / 12,314 / 12,854
Planning and Development / 43,175 / 43,310 / 46,438
Transportation / 200,124 / 199,165 / 214,315
Total Tax-supported / 821,008 / 825,188 / 880,824
Municipal Enterprises and Utilities
Asset Management and Public Works - Drainage Services / 52,840 / 51,785 / 50,864
Asset Management and Public Works - Waste Management / 18,686 / 19,346 / 25,418
Corporate Services - Mobile Equipment Services / 43,846 / 45,576 / 51,476
Total Municipal Enterprises and Utilities / 115,372 / 116,707 / 127,758
Grand Total / $ 936,380 / $ 941,895 / $ 1,008,582
Notes:
(1) Note 16 - Expenditures by Object is compiled using personnel costs from the City's financial system (SAP), adjusted for personnel costs as per the audited financial statements of Edmonton Economic Development Corporation and the Edmonton Public Library upon consolidation. 2008 personnel costs as per Note 16 were $936,380.
(2) Represents Council approved 2009 budget as of May 31, 2009.
(3) Other includes vehicle for hire personnel costs, income replacement payments, supplementary pension adjustment and other miscellaneous benefit expenditures.

Page 1 of 1Report: 2009FTF050 Attachment 2

Attachment 3

Debt – Outstanding and Approved

The following analysis accumulates outstanding debt and approved but not yet borrowed amounts as at December 31, 2008 and then projects forward annually, assuming additional debt equal to the approved capital expenditures within the 2009 – 2011 Capital Budget, offset by estimated principal repayments. All amounts are in thousands of dollars.

($000) / Tax-supported / Self- Liquidating / Total
Debt outstanding at December 31, 2008 / $ 550,111 / $ 493,327 / $1,043,438
Debt approved at December 31, 2008 but not borrowed / 381,950 / 219,170 / 601,120
2009 – 2011 Approved Capital Budget – 2009 year / 452,906 / 151,175 / 604,081
Repayments - 2009 / (40,906) / (37,331) / (78,237)
2009 Balance / 1,344,061 / 826,341 / 2,170,402
2009 – 2011 Approved Capital Budget – 2010 year / 356,474 / 122,160 / 478,634
Repayments - 2010 / (66,090) / (50,880) / (116,970)
2010 Balance / 1,634,445 / 897,621 / 2,532,066
2009 – 2011 Approved Capital Budget – 2011 year / 273,020 / 97,318 / 370,338
Repayments - 2011 / (79,397) / (56,918) / (136,315)
2011 Balance / 1,828,068 / 938,021 / 2,766,089
2009 – 2011 Approved Capital Budget – 2012 year / 96,395 / 41,692 / 138,087
Repayments - 2012 / (87,206) / (60,742) / (147,948)
2012 Balance / 1,837,257 / 918,971 / 2,756,228
2009 – 2011 Approved Capital Budget – 2013 year / 40,020 / 35,787 / 75,807
Repayments - 2013 / (90,090) / (62,874) / (152,964)
2013 Balance / $ 1,787,187 / $ 891,884 / $ 2,679,071

Notes:

  1. Debt outstanding as at December 31, 2008 is consistent with Note 9 b) to the 2008 audited consolidated financial statements.
  1. This analysis and projection has not been adjusted to integrate changes relating to the Gold Bar transfer to EPCOR, effective March 31, 2009.
  1. Administration is reviewing the bylaws and projects relating to debt approved but not yet borrowed at December 31, 2008. Certain amounts may no longer be needed and will be cancelled. This table assumes that all borrowing approved as at December 31, 2008 but not yet borrowed takes place in 2009.
  1. The timing of future borrowing has been assumed to be mid year following the annual cash flows in the approved 2009-2011 approved Capital Budget.
  1. Borrowing in 2012 and 2013 relates to expenditures approved in the 2009 – 2011 Capital Budget which extend beyond 2011. In addition, $15 million has been included for each of 2012 and 2013 relating to the Great Neighbourhoods capital programas approved. A further $75 million has been approved financed by borrowing for years 2014 through 2018 which has not been shown here.
  1. Revenues for purposes of calculating the debt limit in 2008, as defined in Note 9 b), were $3,336,350. Assuming revenue growth of 5 percent each year, the total debt balance applied as a percentage of the revenue level available under the debt limit calculation would be as follows, for each of the years 2009 through 2011:

2009$ 2,170,402 / $ 3,503,168 = 61.96 per cent

2010$ 2,532,066 / $ 3,678,326 = 68.84 per cent

2011$ 2,766,089 / $ 3,862,242 = 71.62 per cent

  1. Utility borrowing forms part of the self-liquidating column above. The City utilities of Sanitary and Land Drainage and Waste Management have the following total self-liquidating debt-financed capital expenditures approved within the 2009 – 2011 Capital Budget:

2009$ 149,075

2010$ 120,660

2011$ 97,318

Page 1 of 2Report: 2009FTF050 Attachment 3