That was
I'll keep it.
8:00.
So, I to order this special council
meeting of Thursday, May 17th.
And we will start with the adoption of
our agenda. I don't know if there's
don't think there's any
changes from the agenda.
Nope, not seeing anything from staff.
Councillor Wyatt.
>> I'll move the agenda.
» I'll move the agenda.
>> Seconded by Councillor Southcott. Not
» Seconded by Councillor Southcott. Not
seeing any discussion, all in favor?
That is unanimous.
And I can get someone to do number three
minutes.
>> I move
» I move
I move that council move into a closed
meeting to discuss matters covered by
the community charter under Section 90
1A, personal information about an
identifiable individual who holds or is
being considered for a position as an
officer, employee, or agent of the
municipality or another position
appointed by the municipality.
Um
Is that I or L?
L.
Discussions with municipal officers and
employees respecting municipal
objectives, measures, and progress
reports for the purposes of preparing an
annual report under section 98, annual
municipal report.
>> Moved by Councillor Southcott.
» Moved by Councillor Southcott.
All in favor.
That is unanimous. We
reconvene at 3:30 for the rest of the
open agenda.
» Mhm.
» Good to go, Carson?
Yep.
All right, we will resume our special
council meeting for Monday, sorry
Monday, Thursday May the 14th.
Uh the mayor is away with leave today.
Councillor Isaacson is tuning in
remotely. I'd like to acknowledge that
we're holding these meetings on the
traditional territory of the Tla'amin
people.
Who have stewarded this land for
thousands of years.
And we already had our agenda cleared
up, so that moves us to our public input
period.
Um there's nobody in the gallery. Mr.
Sercia, do we have anyone online for
public input?
All right, wonderful.
That moves us to 7.1, the draft 2025
financial statements and related
results. We'll turn it over to the
uh interim chief financial officer, Mr.
Beauregard.
>> Thank you, uh Acting Mayor. Um
» Thank you, uh Acting Mayor. Um
in terms of sequence, uh
our auditor, Brian Zabor, is going to
present us audit finding report first.
And then, [snorts] um
Ryan will give a brief uh PowerPoint
presentation on the statements and the
highlights of those statements.
And then, we'll ask uh
entertain questions and then ask council
to consider the motion to approve the
draft financial statements. So, I'll
turn things over to Brian first.
>> Uh thank you very much. I appreciate the
» Uh thank you very much. I appreciate the
opportunity to be here,
kind of here, with you today, uh
presenting the financial or the audit
report on the financial statements.
Um so, if you are following along in in
your package, uh and if there's a
presentation up on the uh the board,
it's uh I'm starting on page four of our
report.
And uh on page four, it's uh starts with
uh at a glance and it describes
uh the materiality levels that were
applied uh to the city's audit.
Um the overall materiality level that's
applied to capital activities remained
at 4.3 million. The uh consolidated
materiality with respect to operating
activities remained at 1.3 million. And
then the specific component materiality
that applies to the individual entities
um the city as an individual entity, the
Powell River Forest Limited, and the
Powell River Public Library was 1.251
million. Now, those specific materiality
levels that were applied to those audits
specifically may and well and and may
well have been and in fact for the
library was definitely lower than that,
but we set that as kind of the highest
um amount that can be set for
materiality level at the component
level.
Um for on page five, we provide a
snapshot of the status of the audit. Uh
the audit was uh complete uh the
fieldwork was completed a couple of
weeks ago. We finished off getting some
questions answered and going through
some uh some final matters with uh
management, but we are complete now and
uh subject to approval of the financial
statements by council, we will be ready
to issue the auditor's report. We have
received the signed management
representation letter and we did perform
our subsequent events questions up to
today's date, so we are ready to issue
upon council's approval of the financial
statements.
Uh on page six
we describe uh what we call group
matters because uh there are two
entities that are consolidated into the
financial statements being the forestry
company
and uh the library. We do consider this
to be a group audit. Um we do audit the
library as well, so that part of it is
uh fairly straightforward. But, because
there's another firm of auditors that
audits the Powell River Community Forest
Company,
we do have to communicate with them and
ensure that their procedures are being
undertaken as though we are doing the
audit. So, we really oversee their audit
work. And we are in communication with
them. We do confirm with them that they
are adhering to the same standards that
we do. And then we do use their audit
opinion in in the incorporation of of
the results of operations of the
forestry company into the cities.
And so, based on the above,
an unmodified audit opinion was issued
by MNP. And we do use that as audit
evidence for the cities' financial
statements.
The next several pages, 7, 8, and 9
cover our audit findings. And this
should be read in conjunction
with
the planning report that was presented
in January.
The first page covers management
override of internal controls. We do
perform procedures to address that risk
and did not note any instances of
override of internal controls, including
in journal entries,
risk of fraudulent revenue recognition.
We have rebutted that risk just due to
the nature of the revenue streams at the
city. However, there is still a
complexity to the revenue recognition at
the city. So, we do
confirm grant funding and we do ensure
that any funding received and other
transactions that are recorded for
revenue are recorded properly in
accordance with the standards.
Page 8 covers employee future benefits
and development cost charges. Again, two
areas that that entail some complexity.
And so, we do spend a fair amount of
time
examining these areas and all the
procedures that were performed were done
so without any issues noted.
And then finally on page nine we address
the contingent liability with respect to
the wastewater treatment plant. This is
an item that carries over from the prior
year and the litigation is ongoing
remains unresolved. At this time there
have been no amounts recorded in the
financial statements in respect of this
item
simply because the ability to predict
the outcome is not there and any amounts
if any that might be payable in respect
of this cannot be estimated at this
time.
And at the time that this becomes more
clear in terms of its resolution and the
amount payable if any
it will be recorded in the financial
statements.
The next page 10 covers internal control
matters. We did not note any
deficiencies in internal controls.
If we did we would be required to
communicate those to you
but the fact that we are not
communicating any significant
deficiencies doesn't mean there are no
deficiencies. We do not test all
internal controls nor all instances of
internal controls.
We test the the controls that we deem
relevant to the audit so those are the
significant controls that management
performs that impact our audit work.
The next page 11 adjusted and unadjusted
differences. There were no adjustments
made during the course of the audit as a
result of the audit procedures and there
are no
misstatements that we detected that
remain uncorrected in the financial
statements.
The next two pages 12 and 13 cover a
number of matters that if they were to
occur or noted by us, we would be
required to report them to you. The
first three items are responsibilities
under auditing standards, our audit
strategy and scope, and fraud risk
factors applicable to the city were
included in our planning report. And uh
there were no other matters that were
required to be reported to you other
than the fact that we do use uh Georgian
Bell, the uh firm of actuaries in
determining the uh amount of the
employee future benefits, and of course
our reliance on MNP's report on the
forestry company.
Um the next page outlines a number of
recommended resources for you. The red
boxes are all links to our website and
uh include a num- a bunch of uh really
very interesting information, and the
one on the right there is probably
something that uh I think uh management
and uh council might want to to uh
explore is uh the prevention of
procurement fraud risks.
Um this is something that we we do see
now and then on the increase, and and
just with uh today's kind of economic
environment, um probably warrants
another look just to ensure that uh all
your controls are in place.
Uh the next page covers a a new
accounting standard that will be
effective for your fiscal 2027 year.
Uh it's really a a revision to the
presentation of the financial
statements, particularly the statement
of financial position. Um for those of
you who are are used to private company
financial statements that usually have a
balance sheet rather than the uh city's
uh statement of financial position, uh
this will be more familiar to you. It is
going back more to a a balance sheet
format, and uh introduces the concept of
financial liabilities as well. So, there
will be some changes, and and there will
be a fair bit of work
involved in in getting to that place and
we'll be communicating with management
over the course of the next year and a
half or so to to ensure that
they're on track and and if they have
any questions on application we're happy
to to help with those.
And then finally in the appendices the
representation letter I mentioned that
we have received this already signed
from management. We are required to
obtain this in writing a number of
matters that we ask about during the
course of our audit and just telling us
that they've provided us with all the
material that we've asked for anything
relevant to the financial statements and
to the city's operation that they're not
aware of any additional fraud risk
factors or specific fraud
and just a number of other general
representations
that that we request and there's nothing
in in particular in this year's letter
that is a standout that would not be
included in other years letters or other
local government letters so it's all
it's all fairly standard.
And then finally our independence letter
which provides you with confirmation
that we are independent from the city
there is
five criteria there that that we note in
terms of what we look to to ensure that
we are
with the last bullet point really being
the the one that's most
common in in the public sector
the provision of services that are
incompatible with with our role as
auditors that might put us into a
position of auditing our own work or if
there's
things that we are doing services that
we are providing that that might be
multiples of our our audit fee and I can
assure you that there's no such
activities like that. So we do confirm
that that we are independent from the
city.
So, I'm happy to respond to any
questions.
» Questions, Council?
Wow, you have Oh, I thought you were
going to set a record, Mr. Zabel.
Counselor Dought.
>> I don't want to be accused of coming to
» I don't want to be accused of coming to
a 3-minute meeting, so
>> [laughter]
» [laughter]
>> going to maybe stretch it out a little
» going to maybe stretch it out a little
bit here. But, I just you know, I got an
email this week from a from a taxpayer
who was telling me that the city is
bankrupt. And since the auditors are
here, I thought that might be a good
question to ask the auditors. Do you
think we're the city's anywhere close to
being bankrupt?
>> Well, I I think that's probably a
» Well, I I think that's probably a
question that should be answered during
the presentation of the financial
statements. I'm not I'm not sure what
you know, bankrupt can mean a lot of
different things. Um I don't certainly
don't see the city as as being
bankrupt,
but I think what you'll you'll find is
when the financial statements are
presented that the city has adequate
resources to continue operations.
>> Thank you. I thought that was what you
» Thank you. I thought that was what you
would say.
» Thank you, Counselor Dought. Anyone
else?
Seeing none, thank you, Mr. Zabel for
your presentation.
>> Thank you. I will just I'll hang on the
» Thank you. I will just I'll hang on the
meeting until Council has an opportunity
to approve the statements.
>> Sounds good.
» Sounds good.
>> Thank you.
» Thank you.
>> Um Mr. Youngman, I believe you're next.
» Thank you.
I always have to adjust this microphone
here.
So, the purpose of this report is to
summarize the city's financial results
and to present the draft 2025 financial
statements for Council's approval, which
is required for the auditors to sign off
on the audit.
>> [clears throat]
» [clears throat]
>> So, the report goes into quite a bit of
» So, the report goes into quite a bit of
detail, so I'm just going to focus on
the key points, but if there's any
questions on the presentation, the
report, or any part of the financial
statements, I'll be happy to answer them
at the end of the presentation.
So, starting with some background
information, the financial statements
and the audit are being big undertaking
by staff, um
but uh ultimately the financial
statements are prepared by management in
accordance with public sector accounting
standards.
As we've heard from the city's external
auditor, BDO, the auditors have
substantially completed their audit and
have scrutinized the city's accounts,
processes, and financial statements and
have a draft clean audit opinion, which
is called an unmodified opinion, so
we're pleased about that.
>> [clears throat and cough]
» [clears throat and cough]
>> So, the first statement that I'd like to
» So, the first statement that I'd like to
bring to your attention is the
consolidated statement of financial
position, which provides a snapshot of
the city's finances at a point in time.
So, we're looking at December 31st of
2025 compared to the previous year.
So, the first line item I'd like to
bring to your attention is cash and cash
equivalents, which increased by 5.2
million to 69.1 million, primarily due
to the 2024 dividend from the Powell
River Community Forest of 3.7 million
that was deposited during the year.
Dividends receivable from the Powell
River Community Forest fluctuate
depending on the activity in the
corporation, and the dividend receivable
increased decreased by 2 million to 1.7
million, which is larger than the
budgeted dividend of $1 million.
The investment in Powell River Community
Forest, which is the equity the city
owns of the entity, increased by $2
million to $3 million, primarily due to
higher net income in the company.
So, overall, the net financial assets
came in at 23.9 million.
Looking at the non-financial assets, um
the tangible capital assets decreased by
$1 million, primarily due to
amortization, but uh is pretty
consistent with the prior year.
Resulting in accumulated surplus of 240
million.
The next statement I'd like to bring to
your attention is the consolidated
statement of operations. So, this
provides a summary of the financial
results from uh the year ended December
31st of 2025 as compared to the prior
year.
So, taxation came in pretty much as
expected at 30.2 million. The minor
variance is due to the
you know, to the budget is due to the
supplementary assessment from BC
Assessment that it that are issued.
Government transfers was 3.3 million,
which was 5.2 million below budget
primarily due to actual grant revenue
recognized being lower as there are
projects that did not progress as
planned for various reasons.
Uh the most significant was the complex
thermal ice heat plant recovery project
that had a grant budget of 1.8 million,
but didn't proceed during the year.
And then also, when we look at the prior
year, there was a large portion of grant
funding that was recognized due to the
airport rehabilitation project.
So, overall revenue came in at 54.2
million, which is lower due to the
government transfers from the prior
year.
So, looking at the expenses, uh one
thing to note is we're required on the
financial statements to report the
original budget that was adopted. So,
any budget amendments that were made
during the year are not in the budget
column here.
So, [clears throat] uh budget amendments
like the CUPE collective agreement, for
example, which was signed in 2025 is not
in here.
Um so, protective [clears throat]
services increased by 1.2 million to 9.4
million primarily due to police costs
increasing almost 1 million as RCMP
contract costs increased and there were
more members year over year.
The protective services overall was over
budget by 429,000
due to the fire department incurring
overtime to cover long-term injury and
illness for a significant portion of the
year.
Recreation parks and cultural services
increased to 7.4 million and was 239,000
over the original budget primarily due
to higher wages driven by the new KIP
wage agreement or the collective
agreement. But having said that, if we
look at the budget amendments that were
um
uh approved during the year, that they
were actually under budget.
So, there was a loss on disposal on
disposal of tangible capital assets of
723,000
which was primarily related to the
disposal of old asphalt pavement that
was replaced during the airport paving
project.
And overall, the annual surplus was 4.5
million which was lower than the prior
year and budget primarily due to lower
government transfers.
Thank you. If there's any questions or
comments, I'd be happy to answer them.
» I just noticed you didn't highlight it
there, but the development planning and
building services was higher than 24 but
a million lower than what the budget
was. Are those just development and
permit fees and things?
>> Uh so, for the uh environmental and
» Uh so, for the uh environmental and
public health, which sorry, which one
were you looking at there?
>> The development planning and building
» The development planning and building
services right under the recs and parks.
>> Yeah, so that's 1.9 million that it came
» Yeah, so that's 1.9 million that it came
in at versus uh
2.9 million and um it's primarily
related to
uh lower staff levels than than
budgeted. So,
makes sense.
Does that really help?
>> So, we're talking about government
» So, we're talking about government
transfers and and projects we didn't
start. So, does that mean we didn't
receive grants we expected to receive
and they're gone now or we will receive
them in a different year or did I
misunderstand you?
>> Yeah, I know, it's a good question. So,
» Yeah, I know, it's a good question. So,
basically um
how how it works is as projects proceed,
that's when we recognize grant revenue
cuz as we spend eligible grant money,
that's when we recognize the grant
revenue. So, uh it doesn't mean that
we've um releasing grants. In some
cases, we might have grants, but we have
to record them as deferred revenue until
the project starts. Uh in some cases, we
put um
you know, government transfers grant
revenue or not grant revenue, but we
budget for that grant revenue. Um and we
haven't even actually been approved for
the grant yet, but we're just putting in
the budget hoping that it's going to get
approved. So, yeah, there's it doesn't
mean that we're losing out on grant
opportunities. It's just projects are
not proceeding as planned.
>> So, we haven't turned back grants.
» So, we haven't turned back grants.
It's not grants that we turned back cuz
we couldn't do the project in time or
something.
>> Um I mean, I can think of one situation
» Um I mean, I can think of one situation
where that's that's happened um where
basically the project couldn't
uh couldn't proceed. So, um the it just
didn't happen and then the grant the
grant money uh will be returned to the
granter. Yeah.
Mr. Shelton?
» Just two more questions.
I'm specifically curious about the
Rec Complex [clears throat]
uh thermal facilities uh grant federal
grant. Was that the one that was
returned
or expired?
>> Yeah, so my understanding with that
» Yeah, so my understanding with that
project is uh there are some funding
challenges with that project and so um
it's in the budget for 2027. So, it's
still you know, hope to proceed, but
it's just uh yeah, there there's been a
bit of delay on it. So,
>> So, that money that federal money is
» So, that money that federal money is
still waiting to
be applied. Is it?
>> Um
» Um
to be honest, I can't remember the exact
status of it, but I just know yeah, it's
in the 2027 budget and it was the
project was going to cost more than was
uh anticipated.
>> Right.
» Right.
Okay, thank you.
>> Mr. Palm.
» Mr. Palm.
>> Mr. Chair, just for further
» Mr. Chair, just for further
clarification, you were talking about
the the roof replacement.
Which fund Which funding were you to uh
The the
That wasn't Community Forest funds in
old was it?
>> No.
» No.
It's a
federal grant.
>> For the uh the heat exchanger projects,
» For the uh the heat exchanger projects,
I I can't remember what the funding
source was uh for that. I'm not sure if
uh CFO Bajergaard remembers, um but I I
can speak to the uh the
uh complex the pool roof. I I remember
that one. So, that's uh
that's partially Community Forest funded
and uh we're waiting on that one for um
to determine whether or not uh the grant
application was successful for the
Strategic Priorities Fund, which I
believe we're uh supposed to expect in a
couple months.
>> Yep.
» Yep.
>> Councillor Isaacson.
» Thank you, Chair. Um I'm wondering if
you can speak to I think it's always a
curiosity different organizations treat
um annual surpluses. And so, when I look
at our statement of operations, the
annual surplus this year was um
um over $4 million. And so, that feels
like a lot of money that was taxed for
that wasn't put to use. And so, can you
speak to how how we
um what we do with those funds and ways
to tax to the levels that we expect to
to spend operationally annually.
» Yeah, through the chair. So, there
actually will be a report coming forward
in the near future um discussing
surplus. So, it'll go into more detail,
but uh yeah, surplus is used to put into
reserves to save for the future, um and
it's also used to you know, fund
tangible capital assets as well. So, um
you know, you see a $4 million
surplus there, but uh it you know, it's
it's being allocated and saved for the
future, right?
>> Through the chair, maybe I could just
» Through the chair, maybe I could just
address that question in part.
We have to be careful to distinguish
between the accrued surplus versus cash
surplus.
So, that figure that you're noting is
based on an accrual and it includes
non-cash items such as amortization,
things like that. So, a truer picture is
when you look at the cash surplus, which
is identified in the financial
statements.
And there's a surplus related to the
water fund,
the sewer fund, and the general fund.
And the overall cash surplus went down
by $400,000.
» Thank you for the clarification, Mr.
Berglund.
Any further questions from council?
Being none, anything else on the
presentation, Mr. Youngren?
» That's it for me.
Actually, one thing I'll just mention
just about the question about
bankruptcy. I mean, one of the things
that we have to answer every year is
going concern, right? So, is the city
operating on a going concern basis,
which means that we believe that it's
going to continue operating into the
future, and the auditors have to assess
that as well. So, there's no concern on
my end about the city's ability to
continue operating as a going concern.
>> Through the chair, maybe I could address
» Through the chair, maybe I could address
that question as well.
Um
>> Go ahead.
» Go ahead.
>> You know, the
» You know, the
the city has
fairly healthy reserves that went up by
3 million during the year.
You know, a good percentage of those
reserves, of course, are the community
forest money says well.
And as we know, you know, they are
designated more for capital
and cannot be used for operations, but
overall, I think the city's financial
picture from a reserve point of view is
has improved from 2024 to 2025.
And um
you know, at the end of the day um
you know, a surplus and reserves will
grow over time if we have a disciplined
approach
to saving money.
Um
and I think that's what long-term
financial planning does for you. It
allows you to set aside money is on a
disciplined basis to get into a better
financial position over time.
» Thank you, Mr. Mayor. You're good.
Counselor Doep.
>> Now, I'm going to move the motion that
» Now, I'm going to move the motion that
council approve
the City of Powell River's draft 2025
financial statements as presented. And
if there's a second here, I'll speak on
it momentarily.
>> Okay, Counselor Doep. Go ahead,
» Okay, Counselor Doep. Go ahead,
Counselor Doep.
>> Well, I'm I appreciate the presentation
» Well, I'm I appreciate the presentation
of staff and the auditors today. I'm
glad uh that we're in a a reasonably
strong financial position as a city to
go forward. I appreciate that. And it's
the work of a lot of people on staff and
council to try to make sure that we have
a plan going forward in the future to
take care
of the services that council hopes to
provide. So, I'm in favor of accepting
this and I think it's a good report.
>> Counselor Elliott.
» Counselor Elliott.
>> Thank you. I'm in favor of the motion. I
» Thank you. I'm in favor of the motion. I
just wanted to comment on um
the financial position that the city is
um if if someone is worried about taxes
continuing to increase, a disciplined
model of savings has, you know, a
certain percentage of increase each
year. So, we're not looking at decreases
in any time soon in order to get our
reserves to where they're meant to be to
support a city with the infrastructure
of the size that we have. And so, that
is um the reality of having a city such
as ours with lots of
infrastructure that's aging. So um I I
am in favor of the motion. I don't
believe our city is going bankrupt, but
I do believe it is um requiring extra
savings to deal with the assets that we
have. Thanks.
>> It's a problem.
» It's a problem.
>> Yeah, thank you, Mr. Chair. I appreciate
» Yeah, thank you, Mr. Chair. I appreciate
all the information that has been uh
discussed
uh
today and the work by staff and our
auditor.
I guess the one major concern on a
go-forward basis in terms of the uh
comment that Councillor Doughty received
is
um
the condition of our roads and what's
underneath uh the pavement in terms of
uh
our infrastructure.
That is going to be something that uh
is has to be dealt with sooner or later
and it's uh long overdue.
I don't think our reserves are anywhere
near the where they should be in that
regard and uh
that's something that we have to keep in
in mind uh as the city goes forward.
Thank you, Chair.
>> Okay. Well, before I call the vote,
» Okay. Well, before I call the vote,
because I might forget if I don't do
this now, I want to thank staff and
especially thank uh Mr. Beauregard who's
uh served as our interim CFO for the
last uh 6 7 months. Today is his uh
final day and his final duty here. So,
thank you for uh your service to our
city for this brief period of time in
this transition. We welcome our new CFO
and uh we wish you the best in your
future endeavors.
>> Thank you.
» Thank you.
>> And I'll call the question. All in
» And I'll call the question. All in
favor.
That is unanimous.
>> Through the chair, could I just provide
» Through the chair, could I just provide
a few remarks?
>> Sounds good.
» Sounds good.
>> I just like to acknowledge uh the work
» I just like to acknowledge uh the work
of staff in completing year end and the
financial statements. Um
throughout the year um
there were staff shortages in finance,
but they persevered and produced the
financial statements
in a fairly timely manner.
And under Ryan's leadership, they
gelled together to produce the
statements and to provide a clean audit
opinion, which I think is to be
commended.
» Good to hear.
We have a great team.
So.
>> Uh, moving into public clarification,
» Uh, moving into public clarification,
Mr. Glinsky.
» Uh, good afternoon, Chair. Thank you for
the opportunity. Um, I was watching Mr.
Youngman's presentation and
with great interest and I was looking in
the agenda package and I did not see it
there. Am I missing something?
>> Well, the presentation, yeah, the slides
» Well, the presentation, yeah, the slides
weren't part of the package, so.
» Uh, that would be wonderful, Chair. I'll
make arrangements with Mr. Youngman.
Yes.
>> Councillor Elliott has some comments.
» Councillor Elliott has some comments.
>> Thank you. So, I was following along in
» Thank you. So, I was following along in
um, slides that were a part of appendix
B
of the BDO presentation. And so, maybe
that's where it's at.
>> He's referring to Mr. Youngman's
» He's referring to Mr. Youngman's
presentation.
>> Oh, okay.
» Oh, okay.
>> I believe most of the data was in
» I believe most of the data was in
appendix A, but not in the slide format,
so.
>> Right. Okay, yeah, they're part of the
» Right. Okay, yeah, they're part of the
finance, yeah.
» That's awesome. Thank you, Chair. I
appreciate the opportunity.
>> Okay, Mr. Glinsky.
» Okay, Mr. Glinsky.
Uh, any callers online, Mr. Sian?
There's no one online and seeing that, I
believe I can just adjourn.
Yeah, meeting is adjourned. Thank you,
everyone.