Financial Report for the year ended December 31, 2011

2012-11-06

Presented on November 5, 2012 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 2011 Financial Statements
  2. Three-year program of capital expenditures
  3. Preliminary information regarding the financial situation for 2012
  4. General orientation for the 2013 budget
  5. Remuneration of elected officers
  6. List of all contracts involving an expenditure exceeding $25,000
  7. Final Words


Highlights of the 2011 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, 2011. Their report was tabled at the Regular Meeting of the Town Council held on Monday, July 9, 2012.

Unrestricted operating surplus
Per the 2011 Financial Statements, the surplus for the 2011 fiscal year was $601.9 thousand made up of an operational surplus of $256.0 thousand plus another $345.9 thousand for items not related to operations.

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

  • $150 thousand for operating activities and
  • $350 thousand for capital asset activities.

Taking into consideration the Town’s working fund of $128.7 thousand, the overall accumulated surplus is $1.72M.

Long-term debt
At the end of 2011 the Town of Hampstead’s debt stood at $13,57 M. From this amount a net debt figure of $12.73 M results when we net out the grants to be received for certain projects.

MATURITY AMOUNT
2012 $ 811,900
2013 $ 775,700
2014 $ 809,400
2015 $ 845,000
2016 $ 881,700
2017 and + $ 9,448,100
TOTAL $ 13,571,800
GRANTS TO BE RECEIVED ( $ 844,032)
TOTAL NET LONG-TERM DEBT $ 12,727,768

 

Per the latest MAMROT statistics, Hampstead debt service ratio for 2011 stood at 8.06%. The average debt service ratio for other municipalities with a comparable population range in the agglomeration of Montreal was at 12.46%.

Capital expenditures
As the restoration of our infrastructures remains one of the top priorities, capital expenditures in 2011 totalled $1.2 M and spanned a variety of different projects, mainly roads & sidewalks and water mains & sewers.

CATEGORY INVESTMENT
Roads, sidewalks & street lighting
(Traffic calmer,sidewalk rehabilitation, Fleet road embellishment)
$ 708,332
Water mains & sewers
(2010-2013 excise tax grant)
$ 230,082
Parks & playgrounds $ 83,803
Buildings & office $ 63,510
Vehicles $ 56,688
Machinery & equipment $ 40,400
TOTAL $ 1,182,815

Pension deficit
With Hampstead’s municipal pension plan running a significant deficit on account of negative market conditions, particularly in 2008, council decided to contribute over and above the minimum legal requirement and injected an additional voluntary contribution of 150 thousand to the plan.

Overall, the 2011 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 $256 thousand, and this, with the local tax increase held to only 1.9% for the average single-family home while the Agglomeration tax had a 4.6% 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 2012 are nearing completion with some final work extending into the coming fiscal year. The orientations for the 2013 – 2015 capital expenditures program are being formulated.

This summer, Hampstead undertook the most significant infrastructure renewal program in decades principally on road and water main rehabilitation. 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.

For a complete project list and status, please refer to the Town web site.

As in past years, a constant rejuvenation of our vehicle fleet, heavy equipment and computer hardware / software offer an enhanced efficiency of operations. Along with 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 system while ensuring that our Town is kept clean, attractive and safe.

 

Preliminary Information Regarding the Financial Situation for 2012

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 2012 will exceed those budgeted. The main positive variances will come from sources such as duties on transfers of properties, interest on bank accounts and tax revenues generated from the Macdonald site’s new status as a taxable property.

It should be noted that a surplus amount of $389,600 has been reserved to settle the balance of the capital portion due per by-law 748 upon its refinancing dated October 28, 2013.

Further to Council’s decision to be more aggressive towards the pension deficit, an additional contribution of $127 thousand over and above the legal minimum requirement is being made this year.


The Director General of the Town in cooperation with Council and upper management is actively preparing the 2013 budget based on identified needs while keeping under consideration our resident’s capacity for tax payment fluctuations. 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 December where the budget forecast for 2013 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.

Title Town Remuneration Town Expense Allowance Agglomeration Remuneration Public Security Commission Remuneration
(note 1)
Mayor $ 31,744 $ 15,310 $ 10,551 $ 5,275
Councillors (6) $ 10,373 $ 5,187 - -
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 Department the list of all contracts involving expenditures of more than $ 2,000 concluded during the period November 2011 to October 2012, 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.

Appendix 4 provides the list details.

 

Final Words

Year after year the economic health of our Town remains strong. Nonetheless, vigilance and foresight are this Council’s raison d’être. It will continue to be so, in order to secure the quality of services and the sound management of public funds expected by our residents.

In order to increase knowledge of and accessibility to municipal life, 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.


Sincerely,


Dr. Bill Steinberg
Mayor, Town of Hampstead