At their Monday, October 21 meeting, Meaford’s council received the draft report outlining the audited financial statements for 2023, provided by independent auditor Traci Smith of BDO Canada.
“We have audited the consolidated financial statements of the Corporation of the Municipality of Meaford (“the Municipality”), which comprise the consolidated statement of financial position as at December 31, 2023, and the consolidated statements of operations and accumulated surplus, changes in net financial assets and cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies,” Smith told council in her report. “In our opinion, except for the possible effects of the matter described in the Basis for Qualified Opinion section of our report, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Municipality as at December 31, 2023, and its consolidated results of operations, consolidated changes in net financial assets and consolidated cash flows for the year then ended in accordance with Canadian public sector accounting standards.”
The audit of the 2023 financial statements found no issues aside from the noted basis for qualified opinion. The municipal operating surplus for 2023, was $545,000, which has been transferred into reserves for future use.
The “basis for qualified opinion” noted in Smith’s report relates to asset retirement obligations.
“Effective January 1, 2023, the Municipality was required to adopt PS 3280 Asset Retirement Obligations which requires the recognition of legal obligations associated with the retirement of tangible capital assets by public sector entities. Under the modified retroactive application method, the asset retirement obligation on transition is to be recorded using assumptions as of January 1, 2023. The corresponding asset retirement cost is added to the carrying value of the related tangible capital assets adjusted for amortization since the time the legal obligation was incurred. The net adjustment is charged to accumulated surplus. Comparative figures are to be restated to reflect this change in accounting policy. Management has not completed its assessment of the tangible capital assets for potential asset retirement obligations,” Smith explained in her report. “As a result, it is not possible to quantify the impact of this departure from Canadian public sector accounting standards on expenses and annual surplus for the years ended December 31, 2023 and 2022, tangible capital assets and the asset retirement obligation as at December 31, 2023 and 2022, and accumulated surplus as at January 1 and December 31 for both the 2023 and 2022 years.”
Members of council were pleased with the audit report presented at Monday’s meeting. Councillor Harley Greenfield noted that it was a good news report overall, though many challenges lie ahead.
“The audit from BDO tells us our surplus has increased, our cash has increased, our investment interest has increased, our reserve and reserve funds have increased; the only downside, and it’s still an increase, but that’s our long-term liabilities, and that I think we have to keep in mind,” Greenfield told council. “The numbers look great, the numbers look huge, but I have to wonder in today’s world how a small municipality such as ourselves, and there are many in the province, how can we sustain our forward progress? It’s really, really going to be a challenge. We’re getting some revenues from the province, we’re getting limited revenues from the federal government, and yet we are being asked, or told, to get involved in healthcare, involved in our hospitals, involved in housing, mental health, social issues, it just goes on and on, but we’re the ones that have to deal with the bare bones in the municipality, the roads, the bridges, the water, and the wastewater treatment, and it is going to be a huge challenge going forward. Right now I think we are in reasonably good shape, but it’s going to be difficult.”
Deputy Mayor Shirley Keaveney expressed concern about budgeted projects that were not completed in 2023.
“My biggest concern is the contracts from 2023, totalling $6,712,595, with $3,252,487 remaining to be spent, so to me that means, as we know, some projects didn’t get completed, those got carried into 2024, and now we’re looking at 2024 projects getting pushed into 2025, and I know we’ll discuss this more in our budget, but I’m really concerned about this trend of us basically taking on more than we can chew,” Keaveney told council.
Councillor Tony Bell reminded his fellow councillors of the responsibility entrusted to them by Meaford ratepayers. Bell noted that there are $191 million in assets that the municipality is responsible for managing and maintaining.
“Inside that report, there’s a line in there that says we have approximately $191 million worth of assets that we are responsible for. So it’s not just our budget of $35 million, it’s all the roads, and all the corporate buildings, and everything, all the machinery, about $191 million that we’re responsible for, so I found that line to be very much of interest,” Bell told council.
