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Penetanguishene received the town’s 2023 consolidated financial statements in a recent presentation for a resulting clean audit.
With ‘no significant issues to report’, according to the report by auditors Baker Tilly, the financial statements were ‘free from material misstatement’. The presentation to council was provided through Jay Anstey, partner with Baker Tilly.
Operating revenue for the town was approximately $21.6 million while operating expenses were $22.5 million resulting in net expenses of roughly $1 million. Through capital and other revenues of roughly $3.6 million, the annual surplus for the town was nearly $2.7 million in 2023.
The actuals differed from the budget in several areas such as the budgeted operating revenue of $19.3 million. Nearly $500,000 more government grants were received last year along with other smaller grants and the Ontario Municipal Partnership Fund for an over-budgeted revenue; total investment incomes were also $600,000 more than budgeted.
Operating expenses were listed as having a budget of $16 million, but Anstey emphasized that of the $6.5 million over-budget amount, $4 million was a result of amortization expense of tangible capital assets as an accounting entry on actuals, and “that the town did not overspend by that $4 million compared to budget.”
Anstey added: “One other area that we did see over-budget though throughout the 2023 year were just over $900,000 of expenditures on the remediation of 78 Main Street. Obviously an unbudgeted, unexpected item there.”
While budgeting for $3.2 million of in net revenue, Anstey noted the $4-million in tangible capital assets were the main cause of the $950,000 in expenses and otherwise was “fairly in line with budget”.
Commenting on the overall financial positions, Anstey said that Penetanguishene had remained “very consistent year-over-year” with low risk as investment in tangible capital assets continued.
Of the town’s $19.6 million in total financial assets, nearly $14.7 million in cash was described as “very healthy and is able to cover the accounts payable three times over, where a low risk you would only have to have enough to cover your accounts payable – 50 per cent of your accounts payable – a very low risk there”.
Total liabilities amounted to $23.5 million were on par with the 2022 amount, raised slightly “due to timing because of several projects that were ongoing at year end, as well as the purchase of a tanker truck right near the 2023 year end,” said Anstey. Long-term liabilities amounted to $11.8 million, keeping Penetanguishene (3.7%) better than the provincial average (5.7%) for risk in debt servicing costs as a percentage of own revenues.
“We do see a decrease in (general area taxation),” said Anstey, “and that is mainly from the deficit during the year and specifically related to the Main Street reconstruction where the expenses have been incurred but the revenue is yet to be collected and recovered as of the 2023 year end.”
New accounting policies were implemented in 2023 as requirements from the CPA of Canada as public sector accounting standards.
While financial instruments and foreign currency translation resulted in no change to the financial statement, asset retirement obligations included Penetanguishene’s former landfill site; a decrease of $660,000 to solid waste landfill closure and post-closure liability and increase of $850,000 to the structure capital asset account representing the original undiscounted obligation.
Following the presentation Mayor Doug Rawson thanked Anstey, adding: “A good news story, it sounds like overall.”
The 2023 audited financial statements, including slideshow and accompanying reports, can be located on the agenda page of the Town of Penetanguishene website.
Meetings of Penetanguishene council are held on the second Wednesday of each month, and can be watched live on Rogers TV cable 53 when available, or on the Rogers TV website.
Archives of council meetings are located on the Town of Penetanguishene YouTube channel.
