2021 Annual Financial Report & Community Update

Financial Report & Community Update

Town of Rocky Mountain House

This annual Financial Report and Community Update has been prepared and compiled by the Town of Rocky Mountain House Corporate Services department, with support from Communications and all other Town departments.

Please contact the Town of Rocky Mountain House for additional copies:

Town of Rocky Mountain House 5116-50 Avenue

Rocky Mountain House, Alberta T4T 1B2 Call 403-845-2866 Email town@trmh.ca Or visit www.rockymtnhouse.com

Town of Rocky Mountain House

Government Finance Officers Association of the United States and Canada (GFOA) awarded a Canadian Award for Financial Reporting to the Town of Rocky Mountain House for its annual financial report for the fiscal year ended December 31, 2020. The Canadian Award for Financial Reporting program was established to encourage municipal governments throughout Canada to publish high quality financial reports and to provide peer recognition and technical guidance for officials preparing these reports.

In order to be awarded a Canadian Award for Financial Reporting, a government unit must publish an easily readable and efficiently organized annual financial report, whose contents conform to program standards. Such reports should go beyond the minimum requirements of generally accepted accounting principles and demonstrate an effort to clearly communicate the municipal government’s financial picture, enhance an understanding of financial reporting by municipal governments, and address user needs.

A Canadian Award for Financial Reporting is valid for a period of one year only. We believe our current report continues to conform to the Canadian Award for Financial Reporting program requirements, and we are (will be) submitting it to GFOA to determine its eligibility for another award.

AUDITED FINANCIAL STATEMENTS

Audited Financial Statements

Management's Responsibility for Financial Reporting

Independent Auditor's Report

Statement of Financial Position

Statements of Operations and Accumulated Surplus

Statement of Change in Net Financial Assets

Statement of Cash Flows

Schedule of Changes in Accumulated Surplus

Schedule of Tangible Capital Assets

Schedule of Property and Other Taxes

Schedule of Government Transfers

Schedule of Consolidated Expenditures by Object

Schedule of Segmented Disclosure

Notes to the Financial Statements

STATISTICAL INFORMATION (Unaudited)

Five-year summary

Assessed Values for General Municipal Purposes

Tax Collection and Principal Corporate Taxpayers

Consolidated Revenues by Object

Consolidated Revenues by Function

Consolidated Expenses by Object

Consolidated Expenses by Function

Consolidated Annual Surplus (Deficit)

Consolidated Accumulated Surplus

Consolidated Change in Net Financial Assets

Consolidated Net Financial Assets

Consolidated Long Term Debt

Consolidated Tangible Capital Assets

Consolidated Equity in Tangible Capital Assets

Consolidated Government Transfers

Business Licences and Development Permits Issued

Building Permit Values and Building Permits Issued

Building Permits vs New Dwelling Units and Dwellings

The Town of Rocky Mountain House acknowledges that the land on which we gather is Treaty 6 territory and a traditional home and meeting ground for many Indigenous Peoples, including Blackfoot, Cree, Saulteaux, Stoney and Métis.

Message from the Mayor

Town of Rocky Mountain House Council is proud to share this 2021 annual community report.

This report will reflect on some of the challenges and triumphs of the 2021 fiscal year. 2021 was another unprecedented year for municipalities. The Municipal Government Act legislates everything we do, yet many factors, such as property assessments, provincial requisitions and available grant funding all play a role in Town business.

The global COVID-19 pandemic continued to interrupt business and personal lives, but the Town of Rocky Mountain House was still able to make some real strides in 2021.

The $847,000 capital water meter replacement program converted all remaining town water meters to current technology.

Residential curbside organics collection program launched in July, achieving a major goal of our Waste Reduction Strategy.

We signed tri-council waste agreements with our closest neighbouring municipalities; Clearwater County and Village of Caroline.

We also reached a Community Service Support Agreement with Clearwater County, the first of its kind in Alberta. The agreement allows both municipalities to share the burden of providing municipal services to tax-exempt properties such as schools, hospitals, churches and non-profit organizations.

We marked National Indigenous Peoples Day by raising Treaty 6 and Métis Territory flags at the Town office. These flags will fly permanently alongside the flags of Canada, Alberta and the Town, as a symbol of reconciliation and an inclusive community.

We also held a general municipal election, electing the current Town Council in the fall of 2021.

Each aspect of this report – financial statements, departmental budgets and overviews, Town initiatives and more – have always been available to the public, the annual community publication compiles all reportable aspects of Town business into a single document.

The Town’s inaugural report in 2019 earned the Government Finance Officers Association Canadian Award for Financial Reporting, an honour we received again in 2020. The publication of this 2021 report is a commitment to citizens that we are being responsible, practical, fair and consistent with the Town’s legislative and fiscal functions.

Debbie Baich Mayor

Council sets policy and bylaws to govern the Town of Rocky Mountain House in accordance with the Municipal Governance Act and other Provincial and Federal legislation.

In 2021, municipalities continued to respond to the global COVID-19 pandemic while maintaining essential services for residents and businesses. A general municipal election in October 2021 elected a new Mayor & Council to serve Rocky Mountain House through 2025.

Organizational Chart

Mayor & Council

CAO

Corporate Services Planning & Community Development Engineering & Operations Recreation & Community Services

Corporate Services Finance

Human Resources Information Systems

Records Management

Planning & Community Development

Planning & Development

Economic Development Tourism

Community Enforcement

Occupational Health & Safety

Legislative Services Municipal Emergency Management

Engineering & Operations Engineering Roads

Utilities & Environment Parks & Trails

Cemetery

Recreation & Community Services

Recreation Facilities Recreation Programming

Sport fields & playgrounds

Community Centre Building Maintenance

RCMP

Policing Committee Communications Airport

Social Housing

Regional or Shared Services

Regional Fire Services Library FCSS

Message from the CAO

I am pleased to again introduce this comprehensive annual community financial report on behalf of Administration for the Town of Rocky Mountain House.

This report outlines Town operations for the 2021 calendar year. It builds on the 2020 report and showcases, again, streamlined governance and accounting that meets or exceeds all our legislative obligations and strategic plan goals.

I give my utmost gratitude to the staff who work diligently to maintain our finances and operations at this high level. Across all departments, we are constantly reviewing service level expectations with Council, finding efficiencies, and reducing costs. This is an ongoing process to ensure the needed and wanted services in our community are provided in the best way.

I am proud to be a part of the Town of Rocky Mountain House team going into 2022 and I look forward to reflecting on even more progress and achievements in the years to come.

Dean Krause CLGM

Chief Administrative Officer

CPT

Legislative Services

Legislative Services ensures the direction of Council is carried out in accordance with the Municipal Governance Act and other Provincial and Federal legislation.

In 2021, Legislative Services was charged with administering the 2021 General Municipal Election, as well as conducting provincial referendum and senate nominee votes on behalf of the Government of Alberta.

Departmental

Recreation & Community Services

Director Wes Amendt

The Recreation and Community Services department manages all recreation and town facilities. Residents and visitors of Rocky Mountain House, Clearwater County and Village of Caroline access Town facilities every day. COVID-19 introduced new challenges to municipal recreation facilities, and staff continues to adapt to public health guidelines in 2021.

1,068 316 153

Arena session rentals.

Outdoor sport field rentals.

Centennial Campground site rentals.

735 7,053 282

Credit Union Co-op Aquatic Centre memberships sold.

Fitness centre admissions. Indoor facility rentals.

Engineering & Operations

Director Rob Shanks

Engineering and Operations is responsible for 56 kilometres of paved roads, a network of alleys and underground water distribution and wastewater pipelines. It manages the Class 3 Water Treatment Plant, wastewater treatment facility, parks, grounds and playgrounds and the town's fleet of vehicles and equipment.

892,958 m3 (892,958,000 litres) of potable water...

...enough to fill the Credit Union Co-op Aquatic Centre pool nearly 2,000 times!

868,651 m3 (868,958,000 litres) of sewage...

...the equivalent of 65,830,151 conventional toilet flushes!

Arrowhead Park replacement.

Message from Director of Corporate Services

It is my pleasure to present the third Annual Financial Report for the Town of Rocky Mountain House. The 2021 Annual Report is intended to provide an informative and easy-to-read update on the activities and financial status of the Town of Rocky Mountain House. By expanding on the audited financial statements, a reader will develop a broad understanding of Town activities and initiatives and how all of this relates to the financial statements.

All municipalities in Alberta are required under section 276 of the Municipal Government Act (MGA) to undergo an audit and prepare audited statements in accordance with the Public Sector Accounting Board (PASB) of the Chartered Professional Accountants of Canada principles and standards. This ensures that the financial activities are reported consistently, and that reliance can be placed on the information presented.

It is management’s responsibility to prepare accurate, complete and objective financial statements that fairly represent the activities of the Town. This includes the financial information as well as disclosures in the financial statements. This financial information provides valuable insight to the users, both internally and externally, into how the Town undertakes to provide services and how successful it is in achieving its objectives.

As a municipal employee, my goal is to bring value to the stakeholders and make sure that the funds we are entrusted with are used to delivery high quality services as effectively as possible. Providing sound financial information gives staff the ability to manage their operations and be a leader in municipal service delivery.

B.Comm. CPA, CMA

LEGISLATIVE AUTHORITY AND SERVICES PROVIDED

As defined in the MGA the purpose of a municipality is to provide a good government through the provision of services, facilities and programs that are necessary or desirable for the community while fostering the wellbeing of the environment which will enhance the development and maintenance of safe and viable communities. In addition, they are required to work collaboratively with neighboring municipalities to plan, deliver and fund intermunicipal services.

There are several major areas that services are provided to achieve the mandates laid out in the MGA:

◊

General Government - Mayor and Council and all administrative functions necessary to operate a business the size of a municipality. This includes administration, legislative services, communications, finance, information technology, human resources and risk management.

◊

Protective Services – policing, fire services, community/bylaw enforcement, occupational health and safety and disaster services.

◊

Operations – roads maintenance, snow removal, fleet maintenance, airport and storm sewer operations.

◊

Environmental Services – water supply and distribution, wastewater collection, treatment and distribution, solid waste and environmental stewardship.

◊

Social Services – Clearwater Regional Family and Social Services, social housing programs and cemetery.

◊

Planning & Development – Community planning and development, subdivision and land use bylaw development and management, building inspections and economic development.

◊

Recreation and Cultural Services – recreational programs, arena, pool, parks, sports fields, community centre and library operations.

FINANCIAL MANAGEMENT

There is a comprehensive system in place that governs the financial process and ties it to the goals and objectives of Council, as well as translating the financial plan into a functional operational plan. Council has a strategic plan that identifies is strategic goals and objectives. This is reviewed annually and tied to a comprehensive service level review document. Council meets annually with senior administration to review the service levels and identify changes that will further the strategic plan and meet the needs of the community The budget document is then prepared and includes any changes identified in the service level review. This includes a current operating budget and four-year forecast and a current capital budget along with a five-year capital plan.

A key component of the budget is a review and balancing of the financing required for the operating capital plans for five-year period to ensure that the plans are viable and sustainable. This is very important because it considers the grants available, projected taxation and any increases being considered as well as what debt servicing is needed to meet these objectives. This helps create priority driven capital development by identifying the funds available over the longer term and making sure that community property taxes are reasonable and can accommodate future financing requirements.

The entire process becomes a blend of balancing requests for services with the ability to finance them and the reasonability of tax rates. The ultimate goal of Council is providing a community with a blend of services that cover the range of safety, functionality, recreational and future planning.

Performance against these three documents is monitored and reported to Council throughout the year to ensure there is progress and determine if any adjustments or corrections are required. This includes quarterly financial reporting and variance analysis and updates on actions identified during the service level review.

This culminates in the annual year end audit which reviews municipal financial activity and produces the audited financial statements. The role of the external auditor and managements responsibilities are outlined in detail in the independent auditors' report which forms part of the audited financial statements.

Financial information is critical in providing insight to all stakeholders to determine if the original goals and objectives of the strategic plan have been achieved.

REGIONAL RELATIONSHIPS

The Town operates independently but has close a close relationship with several entities that provide services to the region. Partnering with these groups enhances the services provided to the entire region. Major current partnerships include Clearwater County, Parkland Regional Library Board, the Village of Caroline. There are also numerous other service groups that the Town works with and where possible shares resources or information to enhance service delivery.

FINANCIAL POLICIES

A comprehensive system of financial policies and internal controls are in place to monitor financial activity, safeguard municipal assets and ensure compliance with Canadian public sector accounting standards. Financial policies that have been developed include:

Restricted Surplus Funds

Liability for Contaminated Sites

Tangible Capital Assets

Corporate Credit Cards

Community Grants

Council Remuneration

SIGNIFICANT ACTIVITIES NOT EVIDENT FROM THE FINANCIAL SECTION

2021 continued to challenge the world due to the Covid-19 pandemic. Fortunately, operations were able to open and restart during the summer and fall of this year. This event impacted municipalities significantly as we strived to provide information and leadership to our community. Municipalities worked by following directives and recommendations from Alberta Health Services and the Provincial and Federal governments. It had a huge impact on recreational facilities and financially the Town had to respond to lost revenue and closing of programs. The facilities that were hardest hit were arenas, pools, fitness facilities and meeting spaces. We responded by reallocating staff where possible to other services and reducing costs to counteract the lost revenue.

Overall, the Town was very successful in mitigating the financial effects of Covid-19 by reducing expenditures to match the losses in revenue.

The Waste Reduction strategy continues to progress. The 2019 Waste Reduction Strategy is guiding the Town of Rocky Mountain House towards increased diversion and overall reduction of waste going to Rocky Regional Landfill. Curbside organics was added in 2021 as a new service, and curbside recycling is coming in 2022. This is in effort to increase recycling behaviors from residents and reduce the activity at our Eco Centre. Diverting organics and recyclable materials will decrease the volume of waste being transported to the landfill which will both reduce costs and assist with CO2 emission reductions.

Ultimately, this will flow through the financial statements as success should enable the Town to reduce costs for landfill management and any future obligations or liabilities this could create.

Another major area currently under review that does not readily show in the financial statements is working with our neighbouring communities to review and update partnership agreements. The Town and Clearwater County have reached new agreements for fire services and waste management. A new Community Support Services agreement was also signed in 2021 which was a significant milestone to support regional collaboration and shared services.

Another unique long-term relationship is the partnership with our Twin Town of Kamikawa, Japan. This relationship was formalized in 1984 and continues through strong social ties and friendships. Additionally, Mayor and Council participate in meetings with provincial officials and Japanese envoys to explore partnerships for mutual economic benefit.

There is a continuous improvement cycle adopted by Council to review and improve processes and activities wherever possible to recognize the economy, position the Town for future growth and ensure strong value for dollar.

SIGNIFICANT LOCAL ECONOMIC EVENTS

There are two major economic drivers in this region being energy and tourism throughout Clearwater County. The last five years has seen a downturn in the oil and gas sector throughout all of Canada and in particular, Alberta. This has been challenging as it impacts many residents and businesses in this area. This focus has been designed to recognize the economic downturn and to ensure better value per dollar in service delivery. 2021 is the third year that Council has maintained the property tax increase at zero in an effort to recognize the financial impact of the downturn in oil and gas.

The Covid-19 pandemic also had a significant impact on all areas in 2021. The Town dealt with closed facilities and reduced services, managing the financial impact of revenue losses and at the same time followed provincial health guidelines to continue provide safety for staff members and services to the public.

PROSPECTS FOR THE FUTURE

The Town of Rocky Mountain House continues to provide sound financial stewardship to the residents and business of this municipality. The last three years have laid a groundwork of strong financial practices and improved levels of budgeting and financial operations. A 10-year financial capital plan that is fully funded has been developed and approved. This enables the Town to continue maintaining infrastructure and services while knowing that the financial base required is being preserved for the future.

Council’s strategic planning, service level review and budgeting process allows the Town to ensure its own operations are running as efficiently as possible. When new opportunities arise, the Town is able to react quickly.

Message from the Finance Manager

Once again, the Town of Rocky Mountain House has prepared a comprehensive annual report. The annual report includes additional information beyond the audited financial statements including analysis, five year comparative financial information, and additional economic data.

The Town’ s corporate services department is responsible for the functions of internal financial reporting, which includes quarterly updates to council, working with the auditor through several audit engagements, working with various departments in setting appropriate internal control, and further working with the departments in compiling and monitoring the budget at the direction of council’s objectives.

Finance Manager

B.Comm. CPA, CA

FINANCIAL POSITION & OPERATING RESULTS

The Town ended 2021 in a strong financial position with net financial assets of $17.1 million. Accumulated surplus rose from $105.9 million to $112.5 million. In addition, the Town maintained healthy restricted surplus reserves of $19.0 million.

Assets consist mainly of cash and temporary investments, receivables, and land held for resale. Liabilities consist mainly of bank indebtedness, accounts payable, deferred revenue, long term debt, and an assumed landfill closure and post closure costs liability.

Consolidated Financial Position

in 000s 2021 2020

Assets 37,715 26,053 Liabilities 20,581 14,011 Net Financial Assets 17,135 12,042 Non-Financial Assets

Tangible Capital Assets (Net) 95,210 93,708 Inventory, Prepaid Expenses & Deposits 135 125

Total Non-Financial Assets 95,345 93,833

Accumulated Surplus 112,480 105,875

The 2021 Consolidated Statement of Operations provides a summary of the revenues earned by the Town and the expenditures for municipal services. It shows an excess of revenue of $104,000 before other activities. The other activities consist of gain on sale of fixed assets, funds from the gain on the dissolution of the Regional Waste Authority and government transfers for capital. This results in an excess of revenue over expenses of $6,604,599.

2021 Consolidated Operating Results

in 000s Revenues Expenses

Subtotal before Other Other

Gain on disposal of TCA 252 (265) Gain on dissolution of Regional Waste Authority 3,433 Government Transfers for Capital 6,598 3,333 Total Other Excess of Revenue over Expenses

FINANCIAL POSITION OUTLOOK

Budget 2021 20,54220,607 21,041 20,503 (499) 104 6,850 6,501 6,351 6,605

Over the next few years, the Town has planned significant capital projects, lead by construction of a regional wastewater treatment facility. This project plan includes dipping into existing reserves and taking on additional debt. Council is further considering options for certain aging buildings, while dealing with the challenge of maintaining reasonable annual capital projects with uncertainty around the future of Province’s Municipal Sustainability Initiative program.

The Town’s participation in the Clean Energy Improvement Program, a program planned as a cost recovery program will begin 2022. Grants will be received to cover administrative costs, and an interest free loan and a line of credit of credit will drawn, to be paid by loans receivable by future Clean Energy Improvement Tax. This will result in additional liabilities (debt) offset by additional assets (loans recoverable as clean energy improvement tax), and grant revenue to cover administrative costs.

Additional financial challenges facing the Town include managing through high inflation and rising costs, rising interest rates, and growth and economic uncertainty.

REVENUES

Revenues aligned reasonably to budget, with some variances offsetting within various functions.

Municipal services was under budget because recreation facilities remained closed for extended periods during 2021, which was offset slightly by some budget overages in airport fuel flowage and a busy year in cemetery sales.

Utility revenue was also under budget, resulting from the solid waste function of Clearwater County not participating in the Eco Centre.

Grants exceeded budget resulting from the use of a Provincial Covid 19 support grant, unbudgeted Alberta Community Partnership grant, and other government transfers received exceeding budget, where the budget was prepared conservatively.

in 000s (unaudited)

Budget Actual Variance Variance %

Taxation 9,425 9,150 275 97% Municipal Services 1,335 1,102 233 83% Franchise Fees 1,271 1,219 52 96%

Licenses & Fines 449 344 105 77% Investment Income 135 154 (19) 114% Utilities 5,180 4,860 320 94% Grants 2,747 3,778 (1,031)) 138%

Total Revenues 20,542 20,607 (65) 100%

OPERATING EXPENSES

Expenses arrived under budget during 2021 at 97% of budget.

Recreation and culture ended 2021 under budget largely caused by extended Covid 19 facility closures during 2021.

Various functions, including protective services, utilities, and operations included staff vacancies resulting in savings to budget in those functions. Protective services includes a contingent accrual related to the Town’s policing contract for retro active RCMP pay and increases in the contracted cost of policing services.

Administration included an unbudgeted restructuring study, which is offset by an unbudgeted Alberta Community Partnership grant, as identified in the revenue analysis.

A significant project arose during the year which was supported by the Town in the Hwy 11A realignment project, which resulted in an unbudgeted $300,000 expense. Otherwise, operations was under budget during the year from savings in various sub functions.

Within the utilities functions, contract repairs and maintenance budgets have been reduced for 2022 and there were vacancies resulting in savings in salaries and benefits.

in 000s (unaudited)

Budget

Actual Variance %

2,215 2,356 (141) 106% Protective Services 3,699 4,045 (346) 109% Operations 3,379 3,584 (205) 106% Utilities 5,147 4,580 567 89% Social Services 850 926 (76) 109% Planning & Development 892 828 64 93% Recreation & Culture 4,859 4,185 674 86%

Administration

Total Expenses 21,041 20,504 537 97%

The Municipal Government Act requires that Council appoints an independent auditor to review the financial activity every year. Baker Tilly WCR LLP , a local firm, has been the auditor to the Town of Rocky Mountain House for many years. It was recently the successful candidate in a request for proposal for the upcoming audit term.

The role of Baker Tilly WCR LLP is to review the financial activity and present an independent audit opinion that the consolidated statement presents fairly the financial position of the Town, and that the statements are prepared in accordance with Canadian Public Sector Accounting Standards.

The audit committee contains all members of Council and it is their responsibility to appoint the auditor, review and approve the terms of engagement every year, meet with the auditor prior to the audit to discuss the scope of the audit and to review the final audited statements as well as any audit findings and to accept and approve the audited financial statements. They are also responsible to ensure that management is completing its responsibilities in managing the entire financial process including the audit.

Quarterly financial statements are presented to Council for March, June and October each year and a year end analysis is presented once the financial statements are complete.

TOWN OF ROCKY MOUNTAIN HOUSE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2021

MANAGEMENT'SRESPONSIBILITYFOR FINANCIALREPORTING

Management of the Town of Rocky Mountain House is responsible for the preparation, accuracy, objectivity and integrity of the accompanying consolidated financial statements and all other information contained within this Financial Report. Management believes that the consolidated financial statements present fairly the Town's financial position as at December 31, 2021 and the results of its operations for the year then ended.

The consolidated financial statements have been prepared in accordance with Canadian public sector accounting standards (PSAS).

The consolidated financial statements include certain amounts based on estimates and judgments. Such amounts have been determined on a reasonable basis in order to ensure that the consolidated financial statements are presented fairly in all material respects.

In fulfilling its responsibilities and recognizing the limits inherent in all systems, management has designed and maintains a system of internal controls to produce reliable information and to meet reporting requirements on a timely basis. The system is designed to provide management with reasonable assurance that transactions are properly authorized and assets are properly accounted for and safeguarded.

These systems are monitored and evaluated by management and reliable financial information is available for the preparation of the consolidated financial statements.

The Town Council carries out its responsibilities for review of the consolidated financial statements principally through its Audit Committee. This committee meets regularly with management and external auditors to discuss the results of audit examinations and financial reporting matters.

The external auditors have full access to the Audit Committee with and without the presence of management. The Town Council has approved the consolidated financial statements.

The consolidated financial statements have been audited by Baker Tilly WCR LLP, Chartered Professional Accountants, independent external auditors appointed by the Town. The accompanying Independent Auditor's Report outlines their responsibilities, the scope of their examination and their opinion on the Tawn's co solidated financial statements.

Redacted under Section 17 of the FOIP Act.

Redacted under Section 17 of the FOIP Act.

To the Mayor and Council of the Town of Rocky Mountain House

Dean Krause

Date Chief Administrative Officer

Betty Quinlan

Date Director of Corporate Services

BAKER TILLY WCR LLP

Suite #201, 5133 - 49 Street P.O. Box 100 Rocky Mountain House, AB Canada, T4T 1A1

O: 1 (403) 845-3226

F: 1 (403) 845-5666

INDEPENDENT AUDITORS' REPORT

To the Mayor and Councilof the Town of RockyMountain House Opinion

We have audited the accompanying consolidated financial statements of the Town of Rocky Mountain House (the "Town"), which comprise the consolidated statement of financial position as at December 31, 2021, and the consolidated statements of operations, 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 and other explanatoryinformation.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects the consolidated financial position of the Town as at December 31, 2021, and the results of its consolidated operations, change in net financial assets and cash flows for the year then ended in accordance with Canadian public sector accounting standards.

Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Consolidated Financial Statements section of our report.

We are independent of the Town in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Other Information

Management is responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the consolidated financial statements and our auditors' report thereon. The Annual Report is expected to be made available to us after the date of this auditors' report.

Our opinion on the consolidated financial statements does not cover the other information and we will not express anyform of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statement or our knowledge obtained in the audit, or otherwise appears to be materially misstated. When we read the annual report, if we conclude that there is a material misstatement of this other information, we are required to report that fact to the Mayor and Council.

Responsibilities of management and Council for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with Canadian public sector accounting standards, and for such internal control as management determines is necessary to enable preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Town's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate or to cease operations, or has no realistic alternative but to do so.

Councilis responsible for overseeing the Town's financial reporting process.

Auditors' responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: 

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. 

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Town's internal control. 

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made bymanagement. 

Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Town's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Town to cease to continue as a going concern. 

Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

INDEPENDENT AUDITORS' REPORT (Continued)

We communicate with Council regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including anysignificant deficiencies in internal control that we identifyduring our audit.

RockyMountain House, Alberta Chartered Professional Accountants October 19, 2022

TOWN OF ROCKY MOUNTAIN HOUSE

CONSOLIDATED STATEMENT OF FINANCIAL POSITION DECEMBER 31,2021

2021

FINANCIAL ASSETS

Cash and temporary investments (Note 2) $ 26,106,426

Receivables

Taxes receivable (Note 3) 339,077 Trade and other receivables (Note 4) 7,918,584

Land for resale inventory 1,623,434 Long-term receivable (Note 5) 117271967 371715,488

LIABILITIES

2020 $ 18,364,024 389,146 4,432,482 1,623,434 1,243,968 26,053,054

Bank demand loan (Note 6) $ 1,596,511

Accounts payable and accrued liabilities 2,843,220

Accounts payable tangible capital assets 309,317

Employee benefit obligations (Note 7) 383,633

GST Payable 72,582

Payroll remittances payable 61,851

Security deposits (Note 8) 160,389 Deferred revenue (Note 9) 8,647,877 Long term debt (Note 10) 5,388,995 Landfill closure and post-closure costs(Note 11) 111161183 2015801558

NET FINANCIAL ASSETS 171134,930

NON- FINANCIAL ASSETS

Tangible capital assets (Schedule 2) 95,210,328 Inventory for consumption 61,426 Prepaid expenses and deposits 73,375 95,345,129

ACCUMULATED SURPLUS (Schedule 1, Note 14) $ 112.480,059

Contractual Rights, Contractual Obligations and Contingencies See Note 15

$ 2,754,085 420,527 409,928 49,776 45,134 188,294 3,923,821 6,219,163 14,010,728 12,042,326 93,707,585 53,205 72 344 93,833,134 $ 105,875,460 Redacted under Section 17 of the FOIP Act. Redacted under Section 17 of the FOIP Act.

Seeaccompanying schedules and notes to the financial statements.

TOWN OF ROCKY MOUNTAIN HOUSE

CONSOLIDATED STATEMENT OF OPERATIONS YEAR ENDED DECEMBER

31, 2021

Budget (Unaudited) 2021 2020

REVENUE

Net municipal taxes (Schedule 3)

$ 9,186,455 $ 9,128,114 $ 9,190,480

Local improvements 238,200 22,075 22,075

User fees and sale of goods 5,628,948 5,218,854 5,212,830

Government transfers for operating (Schedule 4) 2,746,739 3,777,696 3,315,736

Investment income 135,000 153,835 203,732

Penalties and costs of taxes 309,300 173,468 162,296

Franchise and concessions 1,271,124 1,218,602 1,176,591

Licenses and permits 139,600 171,434 148,732

Advertising and sponsorships 144,800 94,373 104,350

Rentals 741,500 618,091 493,846

Other revenues - 30,736 536,170

Total Revenue 20,541,666 20,607,278 20,566,838

EXPENSES

Legislative 372,529 293,830 298,825

Administration 1,842,400 2,061,718 1,683,285

Protective services 3,698,947 4,044,773 3,264,601 Roads, streets, walks, lighting 3,378,579 3,583,775 3,533,443

Water supplyand distribution 2,374,685 2,249,573 2,021,605 Wastewater treatment and disposal 1,169,975 1,017,201 1,062,645 Waste management 1,602,518 1,312,889 1,286,677

Familyand communitysupport 681,380 759,608 751,615 Planning and development 891,969 828,195 896,295 Parks and recreation 4,291,788 3,641,485 3,953,284 Culture 567,329 543,400 546,877 Public health 168,716 166,881 138,111

Total Expenses 21,040,815 20,503,328 19,437,263

TOWN OF ROCKY MOUNTAIN HOUSE

CONSOLIDATED STATEMENT OF CHANGE IN NET FINANCIAL ASSETS YEAR ENDED DECEMBER 31, 2021

Budget (Unaudited) 2021 2020

EXCESS OF REVENUES OVER EXPENSES

$ 6,351,222 $ 6,604,599 $ 5,086,246

Acquisition of tangible capital assets (10,307,900) (5,982,676) (2,693,633)

Acquisition of construction-in-progress - 736,088 (4,381,433)

Proceeds on disposal of tangible capital assets - 179,000 73,000 Amortization of tangible capital assets 3,175,600 3,299,771 3,413,908 (Gain)/Loss on disposal of tangible capital assets (252,600) 265,076 109,855 (7,384,900) (1,502,741) (3,478,303)

Net use of supplies inventories - (8,223) 132,333 Net acquisition of prepaid assets - (1,031) 232,899 - (9,254) 365,232

DECREASE IN NET DEBT (1,033,678) 5,092,604 1,973,175

NET FINANCIAL ASSETS, BEGINNING OF YEAR 12,042,326 12,042,326 10,069,151

NET FINANCIAL ASSETS, END OF YEAR $11,008,648 $17,134,930 $12,042,326

See accompanying schedules and notes to the financial statements.

TOWN OF ROCKY MOUNTAIN HOUSE

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2021

NET INFLOW (OUTFLOW) OF CASH RELATED TO THE FOLLOWING TRANSACTIONS

OPERATING

2021 2020

Excess Of Revenues Over Expenses $ 6,604,599 $ 5,086,246

Non-cash items included in excess of revenues over expenses: Amortization of tangible capital assets 3,299,771 3,413,908 (Gain) loss on sale of investments 265,076 109,855

Non-cash charges to operations (net change):

Decrease (increase) in taxes receivable 50,069 95,703 Decrease (increase) in trade and other receivables (3,486,105) (885,813)

Decrease (increase) in inventoryfor consumption (8,223) 132,333

Decrease (increase) in prepaid expenses (1,031) 232,899 Decrease (increase) in long term receivables (483,999) (1,243,968)

Increase (decrease) in accounts payable and accrued liabilities (8,844) 14,958

Increase (decrease) in deferred revenue 4,724,056 (337,119)

Increase (decrease) in securitydeposits (27,905) 23,008

Increase (decrease) in landfill closure and post-closure costs 1,116,183

Cash provided byoperating transactions 12,043,647 6,642,010

CAPITAL

Purchase of tangible capital assets (5,982,676) (2,693,633) Acquisition of construction-in-progress 736,088 (4,381,433)

Proceeds on sale of tangible capital assets 179,000 73,000 Cash applied to capital transactions (5,067,588) (7,002,066)

FINANCING

Long-term debt issued - 1,824,000

Long-term debt repaid (830,168) (752,496) Proceeds from demand loans 1,596,511 Cash provided byfinancing transactions 766,343 1,071,504

TOWN OF ROCKY MOUNTAIN HOUSE

CONSOLIDATED SCHEDULE OF PROPERTY AND OTHER TAXES FOR THE YEAR ENDED DECEMBER 31, 2021 SCHEDULE 3

Budget (Unaudited) 2021 2020

TAXATION

Residential land and improvements $ 8,168,798 $ 8,151,748 $ 8,121,365

Land and improvements (Excluding M&E) 3,587,769 3,507,242 3,516,122

Linear property 161,000 170,269 161,994

Machineryand equipment 2,740 2,824 2,740

Farm land 770 831 772

Federal Government taxes in lieu 17,500 18,784 18,841

Provincial Government taxes in lieu 50,000 62,435 115,632 11,988,577 11,914,133 11,937,466

REQUISITIONS

Alberta School Foundation Fund 2,718,782 2,699,508 2,665,246 WestviewLodge 83,340 86,511 81,740 2,802,122 2,786,019 2,746,986

NET MUNICIPAL TAXES

$9,186,455 $9,128,114 $9,190,480

TOWN OF ROCKY MOUNTAIN HOUSE

CONSOLIDATED SCHEDULE OF GOVERNMENT TRANSFERS FOR THE YEAR ENDED DECEMBER 31, 2021 SCHEDULE 4 Budget (Unaudited) 2021 2020

TRANSFERS FOR OPERATING

Other Local Governments $ 1,749,596 $ 1,987,401 $ 1,688,754 Provincial Government 997,143 1,774,545 1,614,382 Federal Government - 15,750 12,600 2,746,739 3,777,696 3,315,736

TRANSFERS FOR CAPITAL

Other Local Governments 435,200 49,598 1,190,123 Provincial Government 6,162,571 3,098,502 2,876,403 Federal Government 184,246 6,597,771 3,332,346 4,066,526

TOTAL GOVERNMENT TRANSFERS $9,344,510 $7,110,042 $7,382,262

TOWN OF ROCKY MOUNTAIN HOUSE

SCHEDULE OF CONSOLIDATED EXPENSES BY OBJECT FOR THE YEAR ENDED DECEMBER 31, 2021 SCHEDULE 5

Budget (Unaudited) 2021 2020

CONSOLIDATED EXPENSES BY OBJECT

Salaries, wages and benefits

$ 7,640,766 $ 7,092,947 $ 6,976,435

Contracted and general services 7,578,524 5,754,485 4,515,768

Materials, goods and utilities 66,580 1,914,356 1,615,721

Bank charges and short term interest 20,500 12,169 12,330

Interest on long-term debt 198,835 194,270 202,940

Provision for Allowances - 125,769 6,930

Transfers to local boards and organizations 2,360,010 2,109,561 2,693,231

Amortization of tangible capital assets 3,175,600 3,299,771 3,413,908

$21,040,815 $20,503,328 $19,437,263

TOWN OF ROCKY MOUNTAIN HOUSE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2021

The Townof RockyMountain House (the Town) is a municipalityin the Province of Alberta, Canada and operates under the provisions of the Municipal Government Act, R.S.A., 2000, c. M-26, as amended (MGA).

1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements (the financial statements) of the Town are the representations of management prepared in accordance with generally accepted accounting principles for local governments established by the Public Sector Accounting Board of the Chartered Professional Accountants of Canada. Significant aspects of the accounting policies adopted by the Town are as follows:

(a) Reporting Entity

The financial statements reflect the assets, liabilities, revenues and expenses, changes in fund balances and change in financial position of the reporting entity. This entity is comprised of municipal operations plus all the organizations that are owned or controlled bythe Townand are, therefore, accountable to the TownCouncil for the administration of their financial affairs and resources.

Included in these financial statements are fifty percent of the Rocky Mountain House Municipal Airport assets, liabilities, revenues and expenses.

The schedule of taxes levied also includes operating requisitions for education, health, social and other external organizations that are not part of the municipal reporting entity.

The statements exclude trust assets that are administered for the benefit of external parties. Interdepartmental and organizational transactions and balances are eliminated.

(b) Basis of Accounting

The financial statements are prepared using the accrual basis of accounting. The accrual basis of accounting records revenue as it is earned and measurable. Expenses are recognized as they are incurred and measurable based upon receipt of goods or services and/or the legal obligation to pay.

Funds from external parties and earnings thereon restricted by agreement or legislation are accounted for as deferred revenue untilused for the purpose specified.

Government transfers, contributions and other amounts are received from third parties pursuant to legislation, regulation or agreement and may only be used for certain programs, in the completion of specific work, or for the purchase of tangible capital assets. In addition, certain user charges and fees are collected for which the related services have yet to be performed. Revenue is recognized in the period when the related expenses are incurred, services performed or the tangible capital assets are acquired.

TOWN OF ROCKY MOUNTAIN HOUSE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2021

1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(c) Use of Estimates

The preparation of the financial statements in conformity with Canadian public sector accounting principles requires management to make estimates and use assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures during the reporting period. Where estimation uncertainty exists, the financial statements have been prepared within reasonable limits of materiality. Actual results could differ from estimates. The amounts recorded for valuation of tangible capital assets, post non-vesting employee benefit liabilities, post closure costs, contingent liabilities and commitments are areas where management makes significant estimates and assumptions in determining the amounts to be recorded in the financial statements.

(d) Cash and temporaryinvestments

Cash and temporary investments include items that are readily convertible to known amounts of cash, are subject to an insignificant risk of change in value, and have a maturity of three months or less at acquisition.

(e) Debt Charges Recoverable

Debt charges recoverable consist of amounts that are recoverable from municipal agencies or other local governments with respect to outstanding debentures or other long-term debt pursuant to annexation orders or joint capital undertakings. These recoveries are recorded at a value that equals the offsetting portion of the un-matured long-term debt, less actuarial requirements for retirement of any sinking fund debentures.

(f) Long-term Receivables

Long-term receivables are initially measured at cost with valuation allowances subsequently used to reflect loans receivable at the lower of cost and net recoverable value. Changes in valuation allowances are recognized as expenses in the statement of operations. Interest revenue is recognized when earned, to the extent the collectibilityof the loan and interest is reasonablyassured.

TOWN OF ROCKY MOUNTAIN HOUSE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2021

1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(g) Requisition Over-levyand Under-levy

Over-levies and under-levies arise from the difference between the actual property tax levy made to cover each requisition and the actual amount requisitioned.

If the actual levy exceeds the requisition, the over-levy is accrued as a liability and property tax revenue is reduced. Where the actual levy is less than the requisition amount, the under-levy is accrued as a receivable and as propertytax revenue.

Requisition tax rates in the subsequent year are adjusted for any over-levies or under-levies of the prior year.

(h) Land for Resale Inventory

Land held for resale is recorded at the lower of cost or net realizable value. Cost includes costs for land acquisition and improvements required to prepare the land for servicing such as clearing, stripping and leveling charges. Related development costs incurred to provide infrastructure such as water and wastewater services, roads, sidewalks and street lighting are recorded as physical assets under the respective function.

(i) Revenue

The Townfollows the accrual method of accounting for revenues and expenses. Revenues are recognized in the year in which theyare earned and measurable. Funds from external parties and earnings thereon restricted byagreement or legislation are accounted for as deferred revenue untilused for the purpose specified.

Propertytax revenue is based on market value assessments determined in accordance with the Municipal Government Act. Tax rates are established annually. Taxation revenues are recorded at the time tax billings are issued. Assessments are subject to appeal.

User fees and sales of goods are recognized in the period in which the goods are provided, or the services are rendered. Revenues from sponsorships are recognized over the terms of the sponsorship agreements. Rental revenue is recognized in the relevant tenancyperiod.

Government transfers and grants are recognized in the consolidated financial statements as revenues in the period that the events giving rise to the transfer occurred, providing the transfers are authorized, and eligibilitycriteria have been met bythe Town, and reasonable estimates of the amounts can be made. Prior to that, anyamounts received are recorded as deferred revenue.

Investment income is recorded as revenue in the period earned. When required bythe funding government or related act, investment income earned on deferred revenue is added to the investment and forms part of the deferred revenue balance.

Requisitions operate as a flowthrough and are excluded from municipal revenue.

TOWN OF ROCKY MOUNTAIN HOUSE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2021

1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(j) Prepaid Local Improvement Charges

Construction and borrowing costs associated with local improvement projects are recovered through annual special property assessments during the period of the related borrowings. These levies are collectible from propertyowners for work performed bythe municipality.

Where a taxpayer has elected to prepay the outstanding local improvement charges, such amounts are recorded as deferred revenue. Deferred revenue is amortized to revenue on a straight-line basis over the remaining term of the related borrowings.

In the event that the prepaid amounts are applied against the related borrowings, the deferred revenue is amortized to revenue byan amount equal to the debt repayment.

(k) Employment benefits liabilities

The Townrecognizes liabilities for post-employment benefits and compensated absences that vest or accumulate during the period in which the employment services are rendered, assuming payment of benefits is probable and the amounts can be reasonablyestimated. Accumulating, vesting benefits liabilities are measured at cost. Accumulating, non-vesting benefits liabilities are recognized at cost to the extent theyare expected to be used byemployees.

(l) Pension

The Townparticipates in a multi-employer defined benefit pension plan. Contributions for current and past service pension benefits are recorded as expenses in the year in which theybecome due. See Note 20 for details of the pension plan.

(m) Government Transfers

Government transfers are the transfer of assets from senior levels of government that are not the result of an exchange transaction, are not expected to be repaid in the future, or the result of a direct financial return.

Government transfers are recognized in the financial statements as revenue in the period in which events giving rise to the transfer occur, providing the transfers are authorized, any eligibility criteria have been met, and reasonable estimates of the amounts can be determined.

TOWN OF ROCKY MOUNTAIN HOUSE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2021

1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(n) Non-Financial Assets

Non-financial assets are not available to discharge existing liabilities and are held for use in the provision of services. They have useful lives extending beyond the current year and are not intended for sale in the normal course of operations. The change in non-financial assets during the year, together with the excess of revenues over expenses, provides the consolidated Change in Net Financial Assets (Debt) for the year.

(i) Tangible Capital Assets

Tangible capital assets are recorded at cost which includes all amounts that are directly attributable to acquisition, construction, development or betterment of the asset. The cost, less residual value of the tangible capital assets is amortized on a straight-line basis over the estimated useful life as follows:

Land Improvements 15-20 years Buildings 25-50 Engineered structures Water System - 35-75 Wastewater System 35-75 Other engineered structures 15-40 Machineryand equipment 5-20 Vehicles 10-25

No amortization is charged in the year of acquisition and a fullyear of amortization is taken in the year of disposal. Assets under construction are not amortized until the asset is available for productive use.

(ii) Contributions of Tangible Capital Assets

Tangible capital assets received as contributions are recorded at fair value at the date of receipt and also are recorded as revenue.

(iii) Leases

Leases are classified as capital or operating leases. Leases which transfer substantially all of the benefits and risks incidental to ownership of property are accounted for as capital leases. All other leases are accounted for as operating leases and the related lease payments are charged to expenses as incurred.

(iv) Inventories

Inventories held for consumption are recorded at the lower of cost determined on a specific identification basis and net realizable value.

TOWN OF ROCKY MOUNTAIN HOUSE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2021

1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(o)

Contaminated Sites Liability

Contaminated sites are a result of contamination being introduced into air, soil, water or sediment of a chemical, organic or radioactive material or live organism that exceeds an environmental standard. A liabilityfor remediation of a contaminated site is recognized when the town is either directlyresponsible or accepts responsibilityand is management's estimate of the cost of post-remediation including operation, maintenance and monitoring.

(p) Landfill and Post-Closure Liability

Pursuant to an agreement and the Alberta Environmental Protection and Enhancement Act, the Townis required to fund the closure of 34.5% of a landfill site and provide for post-closure care of the facility. Closure and post-closure activities include the final claycover, landscaping, as wellas surface and ground water monitoring, leachate control, and visual inspection.

(q)

Cash Flow Reporting

The Townfollows the indirect method in reporting its cash flows from operating activities.

2.CASH AND TEMPORARY INVESTMENTS

2021 2020

Cash $26,106,426 $ 18,364,024

Cash includes amounts held in a chequing bank account earning interest at graduated rates ranging from the bank's prime rate less 1.90% - 1.45% (2020 - 1.90% to 1.55%) per annum. Effective rate at year end is 0.55% - 1.0% (2020 - 0.50% - 0.90%) per annum. Cash also includes amounts held in a savings account earning interest at 0.90% (2020 - 0.50%) per annum.

3.TAXES RECEIVABLE

2021 2020

Current taxes $ 296,616 $ 290,091 Arrears taxes 42,461 99,055 $339,077 $ 389,146

TOWN OF ROCKY MOUNTAIN HOUSE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2021

4.TRADE AND OTHER RECEIVABLES

2021 2020

Other trade receivables $ 643,108 $ 446,098 School under-levy 1,170 3,113 Utilities receivable 608,730 534,063 Government grants for operating costs 680,242 335,238 Government grants for capital costs 1,464,031 2,670,531 Other receivable for capital costs (Note 15) 551,600 335,239 Receivable on dissolution of the Regional Waste Authority 4,188,696 Allowance for doubtful accounts (218,994) (148,661) $7,918,584 $4,432,482

5.LONG TERM RECEIVABLE

Long term receivables consist of amounts owed to the Town for the developer's portion of costs relating to a long-term construction project. The amount is receivable with interest. Effective interest at December 31, 2021 is 3.45%. The amount is due at the later of the following dates: May 1, 2024 or four years after the issuance of a construction completion certificate.

6.BANK DEMAND LOAN

To fund the 54 street construction project, The Town has a revolving demand loan available to a maximum of $2,390,000 payable on demand, bearing interest at prime plus 1.0% per annum, secured by a general security agreement covering all assets of the Town. At December 31, 2021 $1,596,511 (2020 - $-) was borrowed against this loan. Annual interest payments are required to be made twelve months after the first advance, with periodic principal payments to be made from receipt of grant funds earmarked for this project. This loan is associated with the long term receivable described in note 5

The total cash payments for interest on the bank demand loan paid in 2021 was $19,755 (2020 - $-).

TOWN OF ROCKY MOUNTAIN HOUSE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2021

7.EMPLOYEE BENEFIT OBLIGATIONS

Included in accounts payable and accrued liabilities are employee benefits totaling: 2021 2020

Bank time $ 5,283 $ 9,978 Vacation and incentive time 268,881 225,089 Personal time 109,469 174,861 $383,633 $ 409,928

Vacation and incentive time

The vacation and bank time liability is comprised of the vacation and overtime that employees are deferring to future years. Employees have either earned the benefits (and are vested) or are entitled to these benefits within the next budgetaryyear.

Personal time

The personal time liabilityis management's estimate of the cost of sick time that has accrued to employees and willbe taken in future years as paid time off. Employees can accrue and carryover up to 320 hours (2020 - 320 hours) of sick time but are not entitled to pay-in-lieu of unused sick time upon termination of their employment. Management expects that 35% (2020 -34%) of the accrued sick hours will be used.

8.SECURITY DEPOSITS

Security deposits consist of financial deposits for private development, rental deposits and deposits on utilityaccounts.

Private development deposits are held by the Town to ensure that the development has been completed to the required specifications. Deposits are for items such as landscaping, fencing, paving and service connections.

Rental deposits are held by the Town to ensure that rental spaces and properties are left clean and in good repair after the rental period.

Utility account deposits are for rental properties where utility bills are in the tenant’s name. Utility deposits are for unpaid utilities.

TOWN OF ROCKY MOUNTAIN HOUSE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2021

9.DEFERRED REVENUE

Inflows and outflows of restricted resources during the year were as follows:

Balance 2020 Increases Decreases Balance 2021

Prepaid local improvements $ 43,838 $ $ (8,768) $ 35,070

Deferred projects 87,057 59,582 (2,239) 144,400 Deferred operating revenue 842,733 360,226 (593,748) 609,211

Deferred capital grants 2,950,193 8,495,123 (3,586,120) 7,859,196 $3,923,821 $8,914,931 $(4,190,875) $8,647,877

Prepaid local improvement charges are being amortized to revenue over the useful life of the corresponding debentures with a term of 5 years.

Deferred projects are funds received in advance for specific projects and will be recognized as operating revenue or capital revenue in the year the expenditure occurs.

Deferred operating revenue relates to monies received for goods or services which have not yet been delivered, and willbe recognized as revenues when provision of the goods or services is completed.

Deferred capital grants relate to government and other funding received for specific capital projects that are not yet completed, and will be recognized as revenues when the projects are completed in the case of government grants, or on the same basis as the capital asset is amortized in the case of other contributions. Deferred capital grants is comprised of:

Balance 2020 Increases Decreases Balance 2021

Municipal SustainabilityInitiative Grant $ 1,502,581 $ 1,792,034 $ (1,433,303) $ 1,861,312 Federal Gas Tax Fund 288,853 776,883 (1,113,000) (47,264) Municipal Stimulus Program Grant 100,000 689,892 (696,368) 93,524 Gruber Street Light Reserve 13,188 13,188

Investing in Canada Infrastructure Program - Provincial Grant 5,044,868 (152,003) 4,892,865 Investing in Canada Infrastructure Program - Federal Grant - 184,246 (184,246)Other Provincial Government Grants 7,200 (7,200) ShellCanada donation 1,000,000 1,000,000 Other deferred capital revenues 45,571 45,571 $2,950,193 $8,495,123 $(3,586,120) $7,859,196

TOWN OF ROCKY MOUNTAIN HOUSE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2021

10.LONG TERM DEBT

2021 2020

$ 2,673,414 $ 2,998,271 Self supported debentures 2,715,581 3,220,892 $5,388,995 $6,219,163

Tax supported debentures

The current portion of the long-term debt amounts are $856,977 (2020 - $830,168).

Principal and interest repayments are due as follows:

PRINCIPAL INTEREST TOTAL

2022 $ 856,977 $ 171,256 $ 1,028,233 2023 884,737 143,495 1,028,232 2024 700,281 114,748 815,029 2025 468,086 93,041 561,127 2026 444,605 75,825 520,430 Thereafter 2,034,309 173,509 2,207,818 $5,388,995 $771,874 $6,160,869

Debenture debt is repayable to Alberta Capital Finance Authorityand bears interest at rates ranging from 2.03% to 4.91% per annum and mature in periods 2025 through 2035. The average annual interest rate is 3.91% (2020 - 4.20%).

Debenture debt is issued on the credit and securityof the Townof RockyMountain House at large. The total cash payments for interest on debenture debts paid in 2021 were $198,065 (2020 - $204,890).

TOWN OF ROCKY MOUNTAIN HOUSE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2021

11.LANDFILL CLOSURE AND POST CLOSURE COSTS

Pursuant to an agreement the Town has accepted partial responsibility for a post closure liability. The Townhas agreed to fund 34.5% of future closure and post closure costs of a landfill.

Alberta environmental law requires closure and post-closure care of landfill sites, which includes final covering and landscaping, pumping of ground water and leachates from the site, and ongoing environmental monitoring, site inspections and maintenance.

The estimated total liability is based on the sum of discounted future cash flows for closure and postclosure activities for 25 years after closure using a discount rate of 3.46% and assuming annual inflation of 2.00%.

The accrued liability portion is based on the cumulative capacity used at year end compared the the estimated total landfill capacity. The total capacity of the site is estimated at 2.305 million cubic metres. The estimated used capacity of the landfill site is 2.305 million cubic metres. There is no estimated remaining life in years.

Post closure care is estimated to be required until 2061.

12.DEBT LIMITS

Section 276(2) of the Municipal Government Act requires that debt and debt limits as defined by Alberta Regulation 255/00 for the Townof RockyMountain House be disclosed as follows:

2021 2020

Total Debt Limit $ 30,910,917 $ 30,850,257 Total debt 5,388,995 6,219,163

Amount of debt limit unused $25,521,922 $24,631,094

Debt servicing limit $ 5,151,820 $ 5,141,710 Debt servicing 2,624,744 1,028,233

Amount of debt servicing limit unused $2,527,076 $4,113,477

The debt limit is calculated at 1.5 times revenue of the municipality (as defined in Alberta Regulation 255/00) and the debt service limit is calculated at 0.25 times such revenue. Incurring debt beyond these limitations requires approval by the Minister of Municipal Affairs. These thresholds are guidelines used by Alberta Municipal Affairs to identify municipalities that could be at financial risk if further debt is acquired. The calculation taken alone does not represent the financial stability of the municipality. Rather, the financial statements must be interpreted as a whole.

TOWN OF ROCKY MOUNTAIN HOUSE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2021

13.EQUITY IN TANGIBLE CAPITAL ASSETS

2021 2020

Capital Assets (Schedule 2) $ 160,308,901 $ 155,547,717

Accumulated amortization (Schedule 2) (65,098,573) (61,840,132)

Long-term debt (Note 10) (5,388,995) (6,219,163) Long-term operating debt 476,149 521,727 $90,297,482 $88,010,149

14.ACCUMULATED SURPLUS

Accumulated surplus consists of restricted and unrestricted amounts and equity in tangible capital assets as follows:

2021 2020

Unrestricted surplus $ 2,386,499 $ 2,750,314 Restricted surplusCapital Reserves 12,672,569 9,258,715 UtilityReserves 6,640,290 5,401,345 Offsite LevyReserves 483,219 454,937 Equityin tangible capital assets (Note 13) 90,297,482 88,010,149 $112,480,059 $105,875,460

TOWN OF ROCKY MOUNTAIN HOUSE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2021

15.CONTRACTUAL RIGHTS, CONTRACTUAL OBLIGATIONS AND CONTINGENCIES

In 2014 the Town entered into a financial contribution agreement with the Rocky Curling Club (the "Club") wherebythe Club agreed to contribute a total of $1,500,000 toward renovations to the curling rink building. In 2018 the Town also advanced the Club $37,100 for exterior renovations. The balance receivable is measured at cost. Annual payments are due in November of each year. There are no terms regarding interest, forgiveness nor security. In 2020, the annual receipt from the curling club was deferred. Subsequent to year end, this agreement was extended to a 15 year period. The Future receipts under this agreement are detailed in the table below. Pursuant to a cost sharing agreement, Clearwater Countywill pay50% of anyamounts defaulted bythe Club.

2022 $ 39,400 2023 39,400 2024 39,400 2025 39,400 2026 39,400 Thereafter 354,600 $551,600

On January 1, 2021 a new agreement between the Town and Clearwater County was signed for the period January 1, 2021 to December 31, 2025. The County committed to make annual payments to the Town calculated as (Town Service Property Tax - County Service Property Tax) x County percentage. In 2021 the payment is $406,644.

In 2010, the Town and Countyas joint landlords entered into a triple net lease agreement for the lease of a municipally owned building. The monthly payment of $9,243 is shared 50% between the Town and County. The Town's share of the monthly lease payment is $4,621. Estimated maximum future receipts under this agreement are:

2022 $ 55,458 2023 55,458 2024 55,458 2025 27,729 $194,103

15.

TOWN OF ROCKY MOUNTAIN HOUSE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2021

CONTRACTUAL RIGHTS, CONTRACTUAL OBLIGATIONS AND CONTINGENCIES

(Continued)

Contractual Obligations

RCMP Contract

On April 1, 2012 the Town entered into an agreement with the Government of Canada for the employment of the Royal Canadian Mounted Police to provide policing serices during the term of the agreement which ends March 31, 2032. The policing services expenses for 2021 are $2,904,504. (In 2020 the Town recognized $2,048,067). The Town received Provincial grants to assest with the cost sharing in the amount of $353,313. (In 2020 the Townrecognized $353,080).

Land Development

The Town has entered in to an agreement to develop a parcel of land. The total project is estimated to cost $4,025,580. The Town has agreed to contribute 46% of total expenditures. As of December 31, 2021, the Town's portion of expenditures made is $1,712,515 (2020 - $1,144,861). The Town's portion of estimated future expenditures is $139,353 (2020 - $424,192). The project is anticipated to be completed in 2022.

Contingencies

RCMP Retroactive Pay

As part of a collective agreement with the National Police Federation the Town has an obligation to make a retroactive payment for the fiscal years from 2017-2021. Management has estimated this liability as $402,000 and an accrual has been included in these financial statements. The Town is exposed to liabilityin excess of this amount up to $20,000.

Lawsuits

From time to time, the Town is a defendant in various lawsuits. When the outcome of a claim against the Town is considered likely to result in a loss and the amount of the loss can be reasonablyestimated, accrued liabilities have been recorded. When the resulting potential losses, if any, cannot be determined or the occurrence of future contingent events is unknown, accrued liabilities have not been recorded.

16.TRUST FUNDS

The Townof RockyMountain House administers

17.CONTAMINATED SITES LIABILITY

The Townhas adopted PS 3260 Liabilityfor Contaminated Sites. The Town did not identifyany financial liabilities in 2021 (2020 - nil) as a result of this standard.

TOWN OF ROCKY MOUNTAIN HOUSE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2021

18.SALARY & BENEFITS DISCLOSURE

Disclosure of salaries and benefits for municipal officials, the chief administrative officer and designated officers as required byAlberta Regulation 313/2000 is as follows: 2021 2020

COUNCILORS

HONORARIUM SALARY 1 BENEFITS & ALLOWANCES 2 TOTAL TOTAL

Jason Alderson $ 2,385 $ 200 $ 2,585 $ 36,561

David Auld 26,465 2,386 28,851 27,829

Debbie Baich 11,602 600 12,202

Shane Boniface 4,718 414 5,132

RandyBrown 20,636 1,911 22,547 33,362

TammyBurke 43,778 2,227 46,005 59,832

MarleyCapraro 5,973 483 6,456 Merrin Fraser 32,015 2,689 34,704 34,511 Tina Hutchinson 7,994 593 8,587 Michelle Narang 21,581 2,163 23,744 32,423 Len Phillips 33,625 2,776 36,401 33,667 $210,772 $16,442 $227,214 $258,185

CAO - Dean Krause $189,726 $33,364 $223,090 $220,572

1. Salary includes regular base pay, bonuses, overtime, lump sum payments, gross honoraria, compensated absences and anyother direct cash remuneration.

2. Benefits for Council include a communication benefit for cell phones, internet and CPP deductions. Benefits for the CAO includes employer's share of all employee benefits and contributions or payments made on behalf of employees including pension, health care, dental coverage, vision coverage, group life insurance, accidental disability and dismemberment insurance, long and shortterm disabilityplans, professional memberships and tuition.

19.RELATED PARTY TRANSACTIONS

Prior to the dissolution noted in note 21, the Town of Rocky Mountain House was related to the Rocky Mountain Regional Solid Waste Authority by having two of six board members in common. During the year, fees for services were paid to the RockyMountain Regional Solid Waste Authorityin the amount of Nil. (In 2020 the Town recognized $1,011,960).

As at December 31, 2021 included in accounts payable is Nil (2020 - $1,023,089) due to the Rocky Mountain Regional Solid Waste Authority.

As at December 31, 2021 included in accounts receivable is $4,188,696 (2020 - nil).

TOWN OF ROCKY MOUNTAIN HOUSE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2021

20.LOCAL AUTHORITIES PENSION PLAN

Employees of the Town of Rocky Mountain House participate in the Local Authorities Pension Plan (LAPP), which is covered by the Alberta Public Sector Plans Act. The Plan serves about 274,151 people and about 420 employers. It is financed by the employer and employee contributions and investment earnings of the LAPP Fund.

Contributions for current service are recorded as expenditures in the year in which theybecome due.

The Town is required to make current and past service contributions to the LAPP of 9.39% (20209.39%) of pensionable earnings up to the year's maximum pensionable earnings under the Canada Pension Plan and 13.84% (2020 - 13.84%) on pensionable earnings above this amount. Employees of the town are required to make current service contributions of 8.39% (2020 - 8.39%) of pensionable salary up to the year's maximum pensionable salary and 12.84% (2020 - 12.84%) on pensionable salary above this amount.

Total current and past service contributions by the Town to the Local Authorities Pension Plan in 2021 were $466,634 (2020 - $465,514 ). Total current and past service contributions by the employees of the Townto the Local Authorities Pension Plan in 2021 were $420,267 (2020 - $414,150).

At December 31, 2021 the LAPP disclosed an actuarial surplus of $11.9 billion (2020 - $4.9 billion surplus).

21.THE ROCKY MOUNTAIN REGIONAL SOLID WASTE AUTHORITY

Members of the Rocky Mountain Regional Solid Waste Authority (the Waste Authority). The Town of Rocky Mountain House, Clearwater County and the Village of Caroline were party to an agreement that dissolved the Waste Authority. Effective January1, 2021 operations ceased.

As a result of the dissolution, the Town is entitled to receive a proportionate share of the residual assets and liabilities of the Authority. The Town has also undertaken responsibilityfor the solid waste collection and recycling for the residents of the Town of RockyMountain House.

The Town has received tangible capital assets consisting of land, machinery and buildings valued at $360,865. The Town has accepted a post closure liability of $1,116,183 representing 34.5% of the estimated post closure costs for a landfill. A receivable of $4,188,696 has been recorded, consisting of the cash distribution that the Town expects to receive upon final settlement of the dissolution.

A gain on the dissolution of the Waste Authority of $3,433,379 has been recorded in these financial statements.

TOWN OF ROCKY MOUNTAIN HOUSE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2021

22.SEGMENTED DISCLOSURE

The Town of Rocky Mountain House provides a range of services to its ratepayers. For each reported segment, revenues and expenses represent both amounts that are directly attributable to the segment and amounts that are allocated on a reasonable basis. The accounting policies used in these segments are consistent with those followed in the preparation of the financial statements as disclosed in note 1.

Refer to the Schedule of Segmented Disclosure (schedule 6).

General government includes council and other legislative, and general administration. Protective services includes bylaw enforcement, police and fire. Transportation includes roads, streets, walks and lighting. Planning and development includes land use planning, zoning and subdivision land and development. Public health and welfare includes familyand communitysupport. Recreation and culture includes parks and recreation, libraries, museums and halls. Environmental use and protection includes water supplyand distribution, wastewater treatment and disposal, and waste management.

23.BUDGET RECONCILIATION

The budget information presented in these consolidated financial statements is based on the operating and capital budgets approved bythe Town of RockyMountain House council on December 8, 2020.

The reconciliation belowreconciles the approved financial plan to the figures reported in these consolidated financial statements.

Operating deficit per financial statements

Gain on disposal of tangible capital assets Government transfers for capital Excess of revenues over expenses

Amortization

Acquisitions of tangible capital assets

Proceeds on long term debt Other contributions for capital Repayment of long term debt

Gain on disposal of tangible capital assets

$ (499,149) 252,600 6,597,771 6,351,222 3,175,600 (10,307,900) 970,000 159,550 (830,166) (252,600) (1,846,287)

Transfers to reserves - operating Transfers from reserves - capital 2,580,581 $-

24.COMPARATIVE FIGURES

Certain comparative figures have been restated to conform with the current year's presentation.

TOWN OF ROCKY MOUNTAIN HOUSE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2021

25.FINANCIAL INSTRUMENTS

The Town of Rocky Mountain House's financial instruments include cash and temporary investments, taxes receivable, trade and other receivables, accounts payable and accrued liabilities, accounts payable - tangible capital assets, and long term debt. Transacting in financial instruments exposes the Townto certain financial risks and uncertainties. These risks include:

Credit risk

Credit risk is the risk that one partyto a financial instrument will cause a loss for the other partybyfailing to discharge its obligations. The Town is exposed to some credit risk due to the possibility that taxpayers and entities to which the town provides services may experience financial difficulty and be unable to fulfil their obligations. The large number and diversity of taxpayers and customers minimizes the Town's exposure to credit risk. The Town is exposed to some possible credit risk due to the concentration of credit to the extent that 87% of the amounts receivable is due from four entities (202075%; three entities).

Liquidityrisk

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The Town manages liquidity risk by maintaining a line of credit that is available when needed and continuously monitoring cash flows. It is management's opinion that the town is not subject to liquidityrisk.

Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk.

Currencyrisk

Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Town does not transact in foreign currencies.

Interest rate risk

Interest rate risk is the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Town is exposed to interest rate risk to the extent that the carrying value of some cash and long-term debts are at fixed rates of interest. The Town is exposed to interest rate risk to the extent that some cash and cash equivalents, revolving operating loan and bank demand loan have floating interest rates, which if the rate changes would affect future cash flows.

Other price risk

Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market. The town does not have significant exposure to other price risk.

TOWN OF ROCKY MOUNTAIN HOUSE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2021

26.BUDGET AMOUNTS

The budget amounts included in these financial statements have not been audited; accordinglyno assurance is expressed thereon.

27.APPROVAL OF FINANCIAL STATEMENTS

These financial statements are approved byCouncil and management October 19, 2022.

Property

Taxes Levied

URPOSES

2021 2020 2019 2018 2017

Residential $ 8,151,748 $ 8,121,365 $ 8,179,115 $ 8,101,880 $ 7,819,130

Industrial and Commercial 3,507,242 3,516,122 3,513,093 3,320,373 3,155,454

Linear Property 170,269 161,994 161,173 159,946 148,476

Railway 5,539 6,161 4,260

Machinery and Equipment 2,824 2,740 2,703 2,618 1,765

Farm Land 831 772 686 605

Federal Government Taxes in Lieu 18,784 18,841 18,718 16,134 8,930

Provincial Government Taxes in Lieu 62,435 115,632 111,416 97,151 92,325 $ 11,914,133 $ 11,937,466 $ 11,992,443 $11,704,868 $11,230,340

Requisitions:

Alberta School Foundation Fund $ 2,699,508 $ 2,665,246 $ 2,734,177 $ 2,699,465 $ 2,624,552

Westview Lodge 86,511 81,740 80,593 80,005 74,728

Other Requisition Transfers 919 $ 2,786,019 $ 2,746,986 $ 2,815,689 $ 2,779,470 $ 2,699,280 Net

Municipal Purposes $ 9,128,114 $ 9,190,480 $ 9,176,754 $ 8,925,398 $ 8,531,060

Population 6,765 6,635 6,635 6,635 6,635 Taxes Levied 11,914,133 11,937,466 11,992,443 11,704,868 11,230,340 Taxes Levied Per Capita $ 1,761 $ 1,799 $ 1,807 $ 1,764 $ 1,693

Tax Levied Per Dwelling 2021 2020 2019 2018 2017

Total Dwellings 3,075 3,056 3,055 3,035 3,002

Taxes Levied 11,914,133 11,937,466 11,992,443 11,704,868 11,230,340

Taxes Levied Per Dwelling $ 3,875 $ 3,906 $ 3,926 $ 3,857 $ 3,741

Mill Rates 2021 2020 2019 2018 2017 (restated)

Residential and Farmland 9.7618 9.2718 9.1870 8.9276 8.8832

Vacant Residential 11.8018 11.3118 11.2270 9.9097 8.8832

Non Residential Commercial Improved 11.7388 11.2488 11.1640 9.5052 9.3832

Non Residential Commercial Vacant 14.7458 14.2558 14.1710 11.8815 9.3832

Non Residential Large Business 14.7458 14.2558 14.1710 13.7276 9.3832

Non Residential Large Business Industrial & Linear 14.7458 14.2558 14.1710

Machinery & Equipment Large Business 14.7458 14.2558 14.1710 13.7276

Provincial Grant in Lieu 11.8018 11.2488 11.6400

Taxable Assessments 2021 2020 2019 2018 2017

Residential and Farmland $631,024,410 $665,771,450 $671,624,420 $688,538,080 $683,913,970

Vacant Residential 9,588,370 9,054,420 9,348,660 9,261,820

Non Residential Commercial Improved 157,791,160 145,974,890 148,871,900 116,512,980 241,072,110

Non Residential Commercial Vacant 5,839,260 5,636,020 5,560,650 8,704,180

Non Residential Large business 46,841,170 64,029,070 62,813,830 121,685,750

Non Residential Large Business Industrial & Linear 11,118,470 11,304,810 11,696,510

Machinery & Equipment Large Business 191,500 192,220 190,730 190,730 188,000

Provincial Grant in Lieu 10,170,770 10,279,470 9,980,140

Exempt Properties 1,774,920

2021 2020 2019 2018 2017

Taxation Levied $11,914,133 $ 11,937,466 $ 11,992,443 $ 11,704,868 $ 11,230,340

Taxes Receivable Current 296,616 290,091 400,698 132,838 300,922

Taxes Receivable Arrears 42,461 99,055 84,151 396,731 132,302

Total Taxes Receivable Dec. 31 339,077 389,146 484,849 529,569 433,224

Total Property Taxes Collected Year Levied $11,575,056 $ 11,647,375 $ 11,591,745 $ 11,572,030 $ 10,929,418

Percentage of Taxes Collected by Dec. 31 97.15% 97.57% 96.66% 98.87% 97.32%

Percentage of Taxes Outstanding by Dec. 31 2.56% 2.49% 3.46% 1.15% 2.75%

2021 2020 2019 2018 2017

Local Improvements $ 22,075 $ 22,075 $ 85,408 $ 85,408 $ 48,628

2017 2021 Taxes Levied and Collected

12,000,000

10,000,000

8,000,000

6,000,000

4,000,000

2,000,000

14,000,000 2021 2020 2019 2018 2017

11,914,133 $11,937,466 $11,992,443 $11,704,868 $11,230,340 339,077 389,146 484,849 529,569 433,224 -

Taxes Levied Taxes Receivable Dec. 31

2021 TOP 5 PRINCIPAL CORPORATE TAXPAYERS

Roll Number

Assessed Value

7240000 $4,034,360 30240000 $4,117,860 30210000 $4,637,350 27230000 $5,388,570 31600000 $6,292,880

ONSOLIDATED REVENUES BY OBJECT

Net Taxes Available for Municipal Purposes

2021 2020 2019 2018 2017

$ 9,128,114 $ 9,190,480 $ 9,176,754 $ 8,925,398 $ 8,482,432

Local Improvements 22,075 22,075 85,408 85,408 48,628

User Fees and Sale of Goods 5,218,854 5,212,830 5,057,952 4,136,845 4,724,049

Government Transfers Capital & Operating 7,110,042 7,382,262 7,850,742 5,191,490 4,154,330

Gain on Dissolution of Regional Waste Authority 3,433,379

Investment Income 153,835 203,732 304,186 199,340 130,548

Penalties and Costs of Taxes 173,468 162,296 285,219 316,097 97,479

Franchise and Concessions 1,218,602 1,176,591 1,194,236 1,111,185 1,193,948

Licenses and Permits 171,434 148,732 152,194 133,542 131,882

Advertising and Sponsorship 94,373 160,285 183,948 144,968 154,968

Rentals 618,091 493,846 685,009 787,392 761,505

Other Revenues 30,736 480,235 523,096 76,906 $ 27,373,003 $ 24,633,364 $ 25,498,744 $ 21,108,571 $ 19,879,769

CONSOLIDATED REVENUES BY FUNCTION

General Government

$ 11,337,209 $ 10,842,206 $ 11,561,402 $ 11,074,266 $ 11,094,867 Protective Services 839,301 835,757 852,434 1,145,816 807,213

Transportation Services 2,757,483 2,816,437 3,061,187 504,311 235,196 Environmental Services 8,545,981 4,867,676 4,684,974 3,638,045 3,672,974

812,726 820,970 1,002,478 799,024 779,466

492,065 429,930 491,018 352,989 607,363

2,588,238 4,020,388 3,845,251 3,594,120 2,682,690

27,373,003 $ 24,633,364 $ 25,498,744

CONSOLIDATED EXPENSES BY O

(UNAUDITED)

Salaries, Wages and Benefits

Bank Charges and Short Term Interest Contracted and General Services Materials, Goods and Utilities

BJECT

2021 2020 2019 2018 2017

$ 7,092,947 $ 6,976,436 $ 7,527,481 $ 6,792,769 $ 5,869,060 12,530 19,259 23,459 74,656 65,481 5,754,483 4,514,508 5,205,089 4,738,488 6,271,646 1,914,356 1,616,982 2,116,783 2,159,599 1,762,996 193,909 202,940 214,266 287,843 329,547 2,109,561 2,693,230 2,438,837 2,324,718 856,820 3,299,771 3,413,908 3,151,082 3,244,693 3,472,279

Interest on Long Term Debt Transfers to Local Boards and Organizations Amortization of Tangible Capital Assets Gain on Disposal of Tangible Capital Assets 390,847 109,855 232,023 9,446 (83,559) $ 20,768,404 $ 19,547,118 $ 20,909,020 $ 19,632,212 $ 18,544,270

CONSOLIDATED EXPENSES BY FUNCTION

(UNAUDITED)

2021 2020 2019 2018 2017 $ 293,830 $ 298,825 $ 352,170 $ 260,107 $ 247,643 2,061,718 1,683,285 2,230,059 2,221,364 2,312,885 4,044,773 3,264,601 3,099,727 3,128,730 2,990,900 3,583,775 3,533,443 3,778,512 3,274,234 3,084,268 4,579,663 4,370,927 3,946,185 4,054,589 3,692,184 926,489 889,726 1,027,747 805,897 876,299 828,195 896,295 1,128,335 776,344 709,381 4,184,885 4,500,161 5,114,257 5,101,501 4,714,269

ONSOLIDATED ANNUAL SURPLUS (DEFICIT)

(UNAUDITED)

Excess (Shortfall) of Revenues Over Expenditures $ 103,950 $ 1,129,575 $ 783,322 $ (91,688) $ 646,854

Contributed Assets 18,552 76,906

of

of

(109,855) (232,023) (9,446) 83,559

4,066,526 4,019,871 1,500,587 605,086

5,086,246

4,589,722 $ 1,476,359 $ 1,335,499

CONSOLIDATED ACCUMULATED SURPLUS

(UNAUDITED)

2021 2020 2019 2018 2017

Accumulated Surplus, Beginning of Year $ 105,875,460 $ 100,789,214 $ 96,199,490 $ 96,199,490 $ 94,723,131 Annual Surplus (Deficit) 6,604,599 5,086,246 4,589,724 1,476,359 1,335,499

Accumulated Surplus, End of Year $ 112,480,059 $ 105,875,460 $ 100,789,214 $ 96,199,490 $ 94,723,130 2021 2020 2019 2018 2017

A

Excess of Revenues Over Expenditures $ 6,604,599 $ 5,086,246 $ 4,589,722 $ 1,476,359 $ 1,335,499

Acquisition of Tangible Capital Assets (5,982,676) (2,693,633) (5,482,385) (874,457) (1,761,190)

Acquisition of Construction in Process 736,088 (4,381,433) (525,845) (1,582,369)

Contributed Tangible Capital Assets (18,552) (76,906)

Proceeds on Disposal of Tangible Capital Assets 179,000 73,000 127,995 73,875 174,842

Amortization of Tangible Capital Assets 3,299,771 3,413,908 3,151,082 3,244,693 3,472,279

Loss (Gain) on Disposal of Tangible Capital Assets 265,076 109,855 232,023 35,446 (83,559) $ (1,502,741) $ (3,478,303) $ (2,515,682) $ 820,282 $ 1,802,372

Net use of Supplies Inventories (8,223) 132,334 32,768 3,237

Net Acquisition of Prepaid Assets (1,031) 232,899 (253,508) (26,003) (20,959)

Net Acquisition of Tangible Capital Assets in Progress (49,251) $ (9,254) $ 365,233 $ (220,740) $ (22,766) $ (70,210)

Decrease (Increase) in Net Debt 5,092,600 1,973,176 1,853,300 2,273,875 3,067,661

Net Financial Assets, Beginning of Year 12,042,326 10,069,150 8,215,850 5,941,975 2,874,311

Net Financial Assets, End of Year $ 17,134,930 $ 12,042,326 $ 10,069,150 $ 8,215,850 $ 5,941,972

Financial Assets

SSETS

$ 37,715,488 $ 26,053,054 $ 23,307,528 $ 22,265,132 $ 18,397,220

Financial Liabilities 20,580,558 14,010,728 13,238,377 14,049,282 12,455,247

$40,000,000

$35,000,000

$30,000,000

$25,000,000

$20,000,000

$15,000,000

$10,000,000

$5,000,000

$ 17,134,930 $ 12,042,326 $ 10,069,151 $ 8,215,850 $ 5,941,973 $-

Assets Liabilities

Tax Supported Debentures

2021 2020 2019 2018 2017

$ 2,673,414 $ 2.998.271 $ 3,309,335 $ 2,255,508 $ 2,660,912

Self Supported Utility Debentures 2,715,581 3,220,892 1,838,324 3,704,348 4,080,787

Total Long Term Debt $ 5,388,995 $ 6,219,163 $ 5,147,659 $ 5,959,856 $ 6,741,699

Debt Limits:

Total Debt Limit 30,827,499 30,850,257 32,190,482 29,160,966 28,912,025

Total Debt 5,388,995 6,219,163 5,147,659 5,959,856 6,741,699

Amount of Debt Limited Unused 25,438,504 $ 24,631,094 $ 27,042,823 $ 23,201,110 $ 22,170,326

Percentage of Debt Limits Used 17.48% 20.16% 15.99% 20.44% 23.32%

Debt Service Limit:

Debt Servicing Limit 5,137,917 5,141,710 5,365,080 4,860,161 4,818,671

Debt Servicing 2,624,744 1,028,233 1,030,245 1,030,245 1,030,245

Amount of Debt Servicing Limit Unused $ 2,513,173 $ 4,113,477 $ 4,334,835 $ 3,829,916 $ 3,788,426

Percentage of Debt Service Limit Used 51.09% 20.00% 19.20% 21.20% 21.38%

Population 6,765 6,635 6,635 6,635 6,635 Debt Per Capita 797 937 776 898 1,016

Total Private Dwellings 3,075 2,954 2,954 2,954 2,954 Debt Per Dwelling 1,753 2,105 1,743 2,018 2,282

$6,741,699

$5,000,000

$4,000,000

$3,000,000

$2,000,000

$1,000,000

$5,388,995

$6,219,163 $5,147,659

$5,959,856

$7,000,000 2021 2020 2019 2018 2017

$6,000,000 84

TANGIBLE CAPITAL ASSETS

Land $ 5,786,759 $ 6,108,604 $ 6,108,604 $ 6,022,368 $ 6,022,368

Land Improvements 9,484,102 8,021,510 8,021,510 6,914,507 6,938,427

Buildings 28,207,169 28,251,209 28,414,768 28,695,377 28,411,232

Engineering Structures 105,352,519 102,017,032 97,550,809 91,815,664 91,531,351

Machinery and Equipment 8,405,388 8,076,400 5,569,115 5,380,651 5,263,876

Vehicles 3,072,964 3,072,964 3,036,407 2,940,645 3,082,686

Total Acquisition on Tangible Capital Assets $ 160,308,901 $ 155,547,719 $ 148,701,213 $ 141,769,212 $ 141,249,940

Accumulated Amortization 65,098,573 61,840,132 58,471,928 55,687,230 52,765,306

Net Book Value $ 95,210,328 $ 93,707,587 $ 90,229,285 $ 86,081,982 $ 88,484,634

Capital

Assets 2021 2020 2019 2018 2017 Capital Assets $ 160,308,901 $ 155,547,719 $ 148,701,211 $ 141,769,212 $ 141,249,940 Accumulated Amortization (65,098,573) (61,840,132) (58,471,928) (55,687,230) (52,765,306)

Long term Debt (5,388,995) (6,219,163) (5,147,659) (5,959,856) (6,741,699) Long term Operating Debt 476,151 521,725 565,415 607,293 647,435 Total Equity In Tangible Capital Assets $ 90,297,484 $ 88,010,149 $ 85,647,039 $ 80,729,419 $ 82,390,370

Transfers for Operating:

Other Local Governments

$ 1,987,401 $ 1,688,754 $ 2,453,037 $ 2,615,866 $ 2,149,994

Provincial Government 1,774,545 1,614,382 1,373,632 983,893 1,397,054

Federal Government 15,750 12,600 4,200 2,196

Total Transfers for Operating $ 3,777,696 $ 3,315,736 $ 3,830,869 $ 3,599,759 $ 3,549,244

Transfers for Capital:

Other Local Governments $ 49,598 $ 1,190,123 $ 453,815 $ 70,972 $ 359,256

Provincial Government 3,098,502 2,876,403 3,566,056 1,429,615

Federal Government 184,246 245,830

Total Transfers for Capital $ 3,332,346 $ 4,066,526 $ 4,019,871 $ 1,500,587 $ 605,086

Total Government Transfers $ 7,110,042 $ 7,382,262 $ 7,850,740 $ 5,100,346 $ 4,154,330

2021 Government Transfers Operating

Federal Government 0%

Provincial Government 47%

Other Local Governments 53%

2021 Government Transfers for Capital

Federal Government 6%

Other Local Governments 1%

Provincial Government 93%

Unrestricted Surplus

$ 2,386,497 $ 2,750,315 $ 7,815,608 $ 8,740,640 $ 3,888,306

Restricted Surplus 19,796,078 15,114,997 7,326,567 6,729,429 4,918,946

Equity in Tangible Capital Assets 90,297,482 88,010,147 85,647,039 80,729,420 85,915,883

Total Accumulated Surplus

Restricted Surplus:

$ 112,480,057 $ 105,875,459 $ 100,789,214 $ 96,199,489 $ 94,723,135

Operating Contingency $ $ $ 1,139,316 $ 796,773 $

Road Reserve 5,749,449 3,528,131

Storm Reserve 533,965 527,339

Vehicle Reserve (51,682) 193,483

Land Improvement Reserve (19,685) 141,251

Equipment Reserve 310,226 50,386 277,099 370,353 620,165

Recreation Reserve 98,901 43,577 43,577

Council Contingency 97,394 93,847 95,347

Computer Reserve 32,350 31,014 31,014

Post House Reserve 26,967 25,853 25,853

Creekside Housing Reserve 16,550 15,868 15,867

Snow Reserve 103,477 99,204 99,204

Building Reserve 4,207,222 2,679,753 501,957 481,228 481,228

Environmental Sustainability Reserve 976,426 981,057 1,000,556 806,829 628,806

Airport Equipment 34,749 31,166 77,724 73,799 105,182

Water, Sewer and Solid Waste 6,480,535 4,420,288 2,293,343 1,968,995 879,180

Land Development 1,018,162 1,128,845 848,407

Off Site Levies 483,219 454,936 583,271 793,244 776,929

Deferred Project Reserve 1,091,654 2,107,207 59,500

Other Reserves 268,187

Total Restricted Surplus

$ 19,796,078 $ 15,114,997 $ 7,326,567 $ 6,729,429 $ 4,918,946

POPULATION

2021, 2016, 2011, 2006, & 2001 CENSUS STATISTICS CANADA (UNAUDITED)

2021 2016 2011 2006 2001

POPULATION BY AGE

2021 & 2016 CENSUS STATISTICS CANADA (UNAUDITED)

2021 2016 0 19 1,840 1,720 20 39 1,705 1,850 40 69 2,425 2,320 70+ 795 745 6,765 6,635

EMPLOYMENT RATE

2016 CENSUS STATISTICS CANADA

2021 CENSUS RELEVANT DATA NOT RELEASED A TIME OF PUBLICATION (UNAUDITED)

2016 2011

Rocky Mountain House 62.0% 71.9% Alberta 65.4% 69.0% Canada 60.2% 75.3%

UNEMPLOYMENT RATES

2016 CENSUS STATISTICS CANADA

2021 CENSUS RELEVANT DATA NOT RELEASED A TIME OF PUBLICATION (UNAUDITED)

2016 2011 2006 2001

Rocky Mountain House 12.7% 6.8% 5.0% 5.5% Alberta 9.0% 5.8% 4.3% 5.2% Canada 7.0% 7.5% 6.3% 7.2%

HOUSEHOLD INCOME

2021 & 2016 CENSUS STATISTICS CANADA (UNAUDITED)

Average

HOUSEHOLD TOTAL INCOME GROUPS FOR PRIVATE HOUSEHOLDS

2021 & 2016 CENSUS STATISTICS CANADA (UNAUDITED)

2020 2015 107,800 112,330 89,600 92,150

2020 2015

70,000 79,999 190 160 80,000 89,999 170 155 90,000 99,999 140 140 100,000 + 1,060 1,075