Financial Report for the year ended December 31, 2012

2014-04-14

Presented on November 18, 2013 by Mayor William Steinberg

In compliance with Article 474.1 of the Cities and Towns Act it is my pleasure to present the annual report on the financial situation of the Town of Hampstead. This report includes:

  1. Highlights of the 2012 Financial Statements
  2. Three-year program of capital expenditures
  3. Preliminary information regarding the financial situation for 2013
  4. General orientation for the 2014 budget
  5. Remuneration of elected officers
  6. List of all contracts involving an expenditure exceeding $25,000
  7. Concluding Remarks
  8. Documents for download



Highlights of the 2012 Financial Statements

The financial statements for 2011 were audited by the Town’s external auditors “Goudreau Poirier”, who confirmed that these portrayed, in all important aspects, a true picture of the financial situation of the municipality for the fiscal year ended December 31st, 2012. Their report was tabled at the Regular Meeting of the Town Council held on Monday, May6, 2013.

Unrestricted operating surplus
Per the 2012 Financial Statements, the surplus for the 2012 fiscal year was $2.97M made up of an operational surplus of $1.72M plus another $1.25M for items not related to operations (leftover proceeds from the sale of the MacDonald site subsequent to capital expenditures).

This amount was added to the accumulated surplus from which the following were appropriated:

  • $390 thousand to clear the capital portion of debt for BL 748 at its refinancing.

Taking into consideration the Town’s working fund of $162 thousand, the overall accumulated surplus is $4.587M.

Long-term debt
At the end of 2012 the Town of Hampstead’s debt stood at $12.759 M. From this amount a net debt figure of $11.985 M results when we net out the grants to be received for certain projects.

The table below provides estimated payment on long-term debt and the long-term debt evolution since 2006:

MATURITY AMOUNT
2013 $ 793,800
2014 $ 824,100
2015 $ 857,200
2016 $ 891,300
2017 $ 891,300
2018 and + $ 8,501,700
TOTAL $ 12,759,400
GRANTS TO BE RECEIVED ( $ 774,100)
TOTAL NET LONG-TERM DEBT $ 11,985,300

Note: The numbers are based on the 2012 financial statements as of December 31, 2012. In fact, due to a pay down of debt in 2013, as well as a set aside to pay down more debt in 2014, the future payments are expected to be lower than shown in the table.

Per the latest MAMROT statistics, Hampstead debt service ratio for 2012 stood at 5.72%. The average debt service ratio for other municipalities with a comparable population range in the agglomeration of Montreal was at 8.40%.

Capital expenditures
As the restoration of our infrastructures remains one of the top priorities, capital expenditures in 2012 totalled $5.25 M and spanned a variety of different projects, mainly roads & sidewalks and water mains & sewers.

The table below provides details of 2012 capital expenditures and the capital investments evolution since 2006:

CATEGORY INVESTMENT
Information technology
(Software - public security & public works
(Hardware - computers & server)
  
$41,412
$56,734
Municipal installations
(Town beautification projects - Sprinkler system)
(Town Hall & Community centre building renovations)
  
$97,662
$59,633
Infrastructure rehabilitation
(Water mains rehabilitation)
(Street light rehabilitation)
(Road rehabilitation & resurfacing)
  
$869,693
$23,181
$4,053,773
Vehicles & equipment
(Public security camera & air conditioning units)
(Furniture/equipment - DG, CSR & Council)
  
$18,349
$10,721
Urban planning
(Tree inventory study)
  
$16,868
CAPITAL INVESTMENTS $5,248,026


Pension deficit
Pursuant to an updated actuarial evaluation of the Town's pension plan, and additional voluntary contribution of $126.8 thousand was made over and above the $101.6 thousand minimum contribution required by law, to cover the deficit position.

Overall, the 2012 financial results indicate that the Town has fulfilled its commitments with respect to the budget adopted and finished the year with an operating surplus of $1.72M, and this, with the local tax increase held to only 1.9% for the average single-family home while the Agglomeration tax had a 3.3% increase.



Three-Year Program of Capital Expenditures

The principal investments planned in the current three-year capital expenditures program reflect our desire for a diverse and vibrant development of the Town. The projects for 2013 are nearing completion with some final work extending into the coming fiscal year. The orientations for the 2014 – 2016 capital expenditures program are being formulated.

This summer, Hampstead has continued the infrastructure renewal program, focussing on water main rehabilitation and walking path reconstruction. Also, Hampstead moved to improve the beautification of the town. Financing for these projects came from the $5.5M revenue from the sale of the MacDonald site as well as the 2010-2013 Excise tax grant program.

As in past years, a constant rejuvenation of our vehicle fleet, heavy equipment and computer hardware/software led to an enhanced efficiency of operations. There were also park safety upgrades which continue to be prioritized.

In summary, we will continue to focus on our longer-term plan to recover and build a renewed infrastructure while ensuring that our Town is kept clean, attractive and safe.



Preliminary Information Regarding the Financial Situation for 2013

We continue to keep a close control over our expenses while maintaining the quality of services offered to, and expected by, Hampstead residents. Of equal importance, we continue to prioritize open and frequent communication to ensure that our residents are informed and involved in our many Town initiatives.

We expect that revenues for the year 2013 will be in line with those budgeted. Regarding the expenses we forecast savings on:

  • Infrastructure maintenance, due to 2012 major infrastructure improvements;
  • Dump site costs, due to less water main breaks
  • Claim settlements.

It should be noted that a surplus amount of $2.09M has been reserved for:

  • $862 thousand for debt repayment in 2014 for BL 770;
  • $450 thousand for ash borer tree disposal and replacement;
  • $781 thousand for capital expenditures.

Further to Council’s decision to be more aggressive towards the pension deficit, an additional contribution of $52 thousand over and above the legal minimum requirement is being made this year.


General Orientation for 2014 Budget

The Director General of the Town in cooperation with Council and upper management is actively preparing the 2014 budget based on identified needs while keeping under consideration our resident’s limited capacity for tax increases. The coming budget will concentrate on historically demonstrated requirements and the credit allocations will be in sync with objectives and key results expected from each department.

We will take advantage of this opportunity to review and assess requests addressed to the Town Council by residents in order to improve the quality of life in the community. As in the past, our objective is not only to maintain that which has been acquired but to go one better in response to current financial and environmental realities. The final results will subsequently be presented to you during a special meeting in January where the budget forecast for 2014 and the next three-year capital expenditures program will be discussed.

We will take into consideration all necessary priorities and needs not only to ensure a sustainable and beneficial development but to promote an enviable quality of life for our residents while controlling tax increases. Nonetheless, a challenge we are still faced with in the upcoming year is to manage price hikes occurring in such areas as the employee pension plan deficit, dumpsite charges for Town materials, fuel requirements, and to a diminishing extent legal claims due to water main breaks.



Remuneration of Elected Officers

As members of the Town Council, an annual remuneration plus an annual allowance for expenses related to these functions is received. This remuneration is in accordance with the provisions of the Act respecting the remuneration of elected municipal officers.

The table below provides details on the 2013 renumeration and allowances:

Title Town Remuneration Town Expense Allowance Agglomeration Remuneration Public Security Commission Remuneration
(note 1)
Mayor $ 32,091 $ 15,662 $ 10,772 $ 10,772
Councillors (6) $ 10,612 $ 5,306 - -
Note 1: Maximum remuneration to be received should all meetings be attended in the current year.



List of All Contracts Involving an Expenditure Exceeding $25,000

In accordance with the law, we have deposited with the Public Affairs and Registry Departmentthe list of all contracts involving expenditures of more than $ 2,000 concluded during the period October 2012 to November 2013, with the same contractor when all these contracts include a total cost exceeding $ 25,000. This list shows for each contract, the name of each contractor, the purpose of the contract and the amount of consideration.

To view this list, please click here.



Concluding Remarks

As shown in this report the financial health of the town is excellent. While we face some financial challenges (pay equity payments, a reduction of our municipal QST rebates, slowing house sales) as we enter 2014, I remain confident that we will keep local tax increases below inflation as we have for the past six years. However, we will have to be extra vigilant and scrutinize all expenditures carefully in order to secure the quality of services and the sound management of public funds rightfully expected by our residents.

In order to increase knowledge of and accessibilitlifeipal management, we are continuing to develop our communication tools and approaches. Please rest assured that we will spare no effort to ensure that Hampstead remains a peaceful, happy, healthy, and safe community. Let us continue to build a better tomorrow, together. Your councillors and I sincerely thank you for your support.

And last but not least, the success of this Town is built on the contributions and hard work of its employees. I take this opportunity to emphasize the work of all our Town employees, the able employees at Town Hall, the blue collars who maintain our streets, the Recreation staff for our programs, and our Public Security Agents who keep our Town safe. I thank them all for making Hampstead the wonderful community that we enjoy so much.


Documents for Download:

To view the report in its entirety, please click here.


Sincerely,


Dr. Bill Steinberg
Mayor, Town of Hampstead