1. finance
2. personal finance
3. insurance

2 0 1 4 A NN UA L
REPORT
SASKATCHEWAN ASSOCIATION OF RURAL
MUNICIPALITIES
Contents
Message from the SARM Executive Director .......3
Insurance and Benefits Department........................4
Legal Services .......................................................................9
Community Planning Services .................................. 10
Trading Department....................................................... 10
Conventions & Division Meetings............................ 11
Awards and Scholarships ............................................ 13
Strategic Initiatives .......................................................... 14
SARM Administered Programs .................................. 16
Policy Department .......................................................... 22
Financial Reports .............................................................. 49
2
MESSAGE FROM THE SARM EXECUTIVE DIRECTOR, JAY MEYER
It has been a busy 109th year with some noteworthy highlights for SARM. Our membership events, including Midterm and Annual
Conventions enjoyed excellent attendance with record breaking numbers at our March Convention with at 2115. This speaks to the
quality of speakers, topics discussed and networking opportunities we provide at these events and we hope to continue to build on this
momentum in future years. June Division Meeting attendance continued to struggle in 2014 so we hope to refresh their purpose as more
of a “SARM Bear-Pit” session in 2015 to encourage more attendance.
SARM also continues to evolve its communication efforts. In 2014 we upgraded the look and feel of our “Rural Councillor Magazine”
and are now offering it for on-line reading. We once again offered our online election reporting website for RMs to enter their 2014 RM
election results and launched a new application to be downloaded onto smartphones and tablets to enhance our annual convention.
Our Board of Directors welcomed new faces in 2014 and said good bye to some long-standing members. Don Taylor, SARM’s Director
for Division 1 retired after 20 years at SARM. Carmen Sterling was elected as Director for Division 1 and Judy Harwood was elected as
Director for Division 5. David Marit stepped down as SARM’s esteemed President of 10 years to seek a provincial nomination and Ray
Orb became SARM’s Acting President and Doug Steele Acting Vice President.
The SARM Board invests so much time and effort into the decisions they make and guidance and support they provide to RM members
and our SARM Staff. They truly have the best interests of rural Saskatchewan at heart and strive to focus our strategic direction to ensure
RMs have what they need to embrace and prosper from the unprecedented growth we continue to experience in our Province.
It also goes without saying that the programs and services we offer our RMs would not be possible without the first-rate efforts of our
SARM staff, as they truly go above and beyond to ensure our members needs are met. In 2014 SARM had some staff changes and
added some new positions to ensure we continue to deliver this level of service. This included my incoming as SARM’s Executive Director
in September, which has been a truly rewarding undertaking for me.
SARM also continues to draw strength from its partnership with the Board of Directors for the Rural Municipal Administrators Association
(RMAA). RMAA President Tim Leurer sits as an ex-officio member of the SARM Board and brings an administrator’s perspective and
invaluable insight to help guide the decisions we make as a board.
Finally, thank you to our members for their continued advice, support and encouragement. Member feedback has helped ensure SARM
remains focused and continues to provide the kinds of support our members find valuable. The success of SARM is a testament to the
strength of our individual members and rural Saskatchewan as a whole, and we thank members for that.
I hope you enjoy this annual report and I look forward to continuing to work on behalf of rural Saskatchewan in 2015.
3
INSURANCE AND BE NEFITS DEPARTMENT
The following is a report on the activities of the self-insurance plans and the group benefit programs of the Saskatchewan Association of
Rural Municipalities for the year 2014.
SARM BENEFITS PLAN
The SARM Benefits Plan is self-insured by the rural municipalities that choose to participate in the plan. It provides short-term disability
benefits, death benefits, vision care benefits, maternity benefits, and accidental death and dismemberment benefits, to participating
municipalities on behalf of their employees and their elected and appointed officials.
Premium rates for 2014 were unchanged from 2013 levels. Current premium rates for the SARM Benefits Plan are shown below.
Premium Rate
Inside employees:
1.5% of insured salary
Outside employees:
1.75% of insured salary
Individual Elected Officials:
2% of insured coverage amount
Elected and Appointed Officials: $300 for $30,000 coverage
Group Coverage (per RM):
$550 for $40,000 coverage
$800 for $50,000 coverage
At the end of 2014, 295 rural municipalities (including SARM) were participating in the SARM Benefits Plan, with 1,881 employees enrolled.
Group coverage for elected and appointed officials is available at three coverage levels. Coverage at $30,000 was taken by 170
municipalities; 19 municipalities chose coverage at $40,000; and 37 municipalities opted for coverage at $50,000. The group coverage is
limited to a disability arising out of an injury which occurred, or to death occurring, while the official is engaged in official municipal
business; and is a top-up to Workers’ Compensation coverage.
4
Municipalities can also insure any of their elected officials for disability and death benefits, on an individual, 24-hour basis, for a premium
rate of 2% of the annual coverage amount. Only 15 individuals were insured under this individual coverage in 2014. The breakdown of
claims paid for 2014 is as follows:
Disability Benefits
$1,482,045
Vision Care Benefits
$139,362
Maternity Benefits
$10,000
Death Benefits
$25,000
Accidental Death & Dismemberment
$0
__________
$1,656,407
Disability benefits claims continued to be unusually high, there were five death benefit claims and no accidental death benefit claims
were paid. Only the vision care benefits and maternity benefits claims remained average. The total amount paid for all claims was the
2nd highest ever for the plan, resulting in an operating loss of $229,964 for the year 2014; and bringing the net assets of The SARM Benefits
Plan to $3,147,353.
GROUP BENEFIT PROGRAMS
The following group benefit programs are currently underwritten by outside insurers. SARM is the Policyholder of each program and
administers the enrollment of members. A brief description and participation numbers for each program are included in this report.
Long-Term Disability Benefits
Long-Term Disability (LTD) Benefits for all employees have been available since January 1, 1995. This program is currently underwritten by
Standard Life.
Coverage for the Administrator of the municipality is mandatory, with the exception of those administrators who are currently exempt
under the RMAA Bylaws. Coverage for other employees is optional, however, as it is a group plan, a municipality must cover all their
eligible employees and these employees must also be covered under the short-term SARM Benefits Plan.
5
The LTD benefit is the lesser of 65% of gross monthly earnings and 85% of inflation-indexed, pre-disability net earnings. The benefit is
payable to age 65, provided the individual remains disabled according to the terms of that policy. Beginning in 2008, the maximum
monthly benefit was increased from $3,000 to $10,000 per month, to better reflect what many employees are actually earning.
At the end of 2014, 246 rural municipalities (which includes SARM) were covering all their employees bringing the total enrollment to
1,477.
Extended Health and Dental Benefits
The Extended Health and Dental Benefits program has been available to rural municipal employees, elected and appointed officials,
and their families since January 1, 1997. The program was designed to give employees and councils maximum flexibility in choosing their
coverage levels, while still maintaining the concept of group insurance.
This program is currently underwritten by Saskatchewan Blue Cross. Premiums for the SARM group policy are based primarily on the
claims experience of our group and tend to fluctuate year by year. For 2014, there was a decrease of 5% to the health care premiums
and the dental care premiums decreased by 4%.
Participation in this program increased slightly in 2014 with 264 rural municipalities (including SARM) covering 1,973 individuals for Health
and Dental Benefits.
Optional Life Insurance
Optional Term Life Insurance at group rates has been available to rural municipal employees and their spouses; and to elected or
appointed officials and their spouses since January 1, 1997. This program is also currently underwritten by Standard Life.
Life Insurance coverage is available in units of $10,000 from a minimum of $50,000 to a maximum of six times annual salary or $500,000,
whichever is less.
At the end of 2014, 132 individuals were insured under the SARM Optional Life Insurance program.
Group Life Insurance
6
In response to a request from the Rural Municipal Administrators Association, SARM added Group Life Insurance to the line of benefit
programs available to rural municipalities for their employees. This program began January 1, 2012 and is also underwritten by Standard
Life with SARM self-administering the enrolment.
The amount of Life Insurance coverage is $25,000.00 per person up to age 65. For employees age 65 to 70, the coverage amount is
reduced to $12,500.00 and terminates at age 70. No medical underwriting is required, as this is a group program. The premium rate for
the first two years of the program, 2012 and 2013, was $82.50 per person, per year; or $41.25 if age 65 to 70. For 2014, the premium rate
increased slightly to $97.42 and $48.71 and remains unchanged for 2015.
The RMAA amended its bylaws to make participation in the Group Life Insurance Program mandatory for all its active members, as is the
case for the LTD benefit. The program is optional, on a RM group basis, for all other permanent RM employees.
At the end of 2014, 128 rural municipalities (including SARM) were participating in the program for their permanent employees. The total
number of Administrators and other employees enrolled in the Group Life Insurance program was 1,052.
SARM FIDELITY BOND SELF-INSURANCE PLAN
The Fidelity Bond Self-Insurance Plan commenced January 1, 1994. For the year 2014 there were 293 rural municipalities participating in
this plan. The primary coverage is the Fidelity Bond coverage, which protects the RM against theft or fraudulent acts by its employees.
Coverage limits range from $10,000 to $200,000. Also included is Money & Securities coverage for $2,500, which insures the RM for theft
by someone other than an employee; and Registered Mail coverage for $50,000, for those municipalities that send their bank deposits
by Registered Mail.
In 2014, there was one claim paid under the Fidelity Bond Coverage for $15,000 and two claims under the Money & Securities Coverage,
both for office break-ins with theft of cash for a total payment of $1,890.60. The Plan had a surplus of $22,602 bringing the total net assets
to $327,213.
SARM LIABILITY SELF-INSURANCE PLAN
The SARM Liability Self-Insurance Plan officially went into operation on October 1, 1987 with 214 rural municipalities participating. Current
participation is 278 rural municipalities and SARM itself. This plan provides comprehensive liability insurance to the RM, its council and its
7
employees, for generally all activities a rural municipality can legally be involved in, with very few exceptions. The premium formula that
is used was also developed specifically for the risks associated with a typical rural municipality.
In 2014 we opened 104 new claim files, which is about average for the last ten years. Claims expense for the Liability Self-Insurance Plan
for 2014 was $168,535.53. This amount includes claims paid out during the year and amounts that have been accrued or set aside for
unresolved claims and that we estimate might be paid out. These unresolved claims include some which are subject to ongoing legal
action. When combined with other expenses incurred by the plan, such as the administration fee, legal and adjusting fees, this resulted
in a loss of $253,930.87 which was distributed amongst the Reserve Accounts of the participating RMs, based on the premium each RM
paid in 2014. Three reserve withdrawals for prior year claims, one from 2012, and two from 2013, totalling $50,585.58 were charged to the
reserve accounts of the RMs participating in those years. Interest totalling $726,469.65 was also distributed to the RM’s Reserve Accounts.
Overall, there was an increase of $433,857.59, bringing the total Reserve Fund for the Liability Self-Insurance Plan up to $13,331,727.28.
Excess Liability Insurance, which is intended to increase the RM’s limit of insurance for certain types of coverage only, over and above
the $3 million limit provided by the SARM Plan, continues to be available from another insurer for those RMs who want a higher limit. In
2014, 123 rural municipalities plus SARM itself purchased Excess Liability Insurance.
SARM PROPERTY SELF-INSURANCE PROGRAM
The SARM Property Self-Insurance Program took effect on December 31, 2002 with 134 rural municipalities participating initially. At the
end of 2014 there were 213 rural municipalities plus SARM itself participating in their own property insurance program.
As with the Liability Self-Insurance Plan, each municipality has its own ledger account for the Property Self-Insurance Program. At the end
of each year a portion of the profit or loss from operations for the year is allocated to each municipality’s ledger account based on the
premium paid in that year. Investment income earned in that year is also distributed to each participant’s account, based on the
participant’s ledger account balance.
Claims expense for 2014 was $695,218, a 53% ‘claims-to-premium’ ratio, which is about average for the program. Other expenses for the
program include the administration fee, claims adjusting fees, and excess insurance from an outside insurer. This policy was first obtained
in 2012 and protects the program against large losses exceeding $500,000 and would cover the loss above that amount to a maximum
of $4,500,000.
8
After these other expenses, there was an operating surplus of $172,684.21 which, along with investment income of $136,953.91, was
distributed among the ledger accounts of all participants. The total reserve for the SARM Property Self-Insurance Program at the end of
2014 was $2,391,523.
For further information on the SARM Insurance Plans and Group Benefits programs, contact:
Craig Williams, BBA, CIP
Manager of Insurance and Benefit Programs
LEGAL SERVICES
The following is a report on the SARM Legal Services Department for 2014.
In 2014 our primary responsibility continued to be providing advice and representation to the SARM Liability Self
Bond Self
48% of Andrew’s Svenson’s time.
As at year
‐In su ra n c e Pla n
ime
‐In suand
ra n c e Pla n , Em p lo y
‐e n d a to ta l o f 50 c la im s file s re m a in e d o p e n , o f w h ic h 6 w e re
The number of requests for advice from RMs remains steady. Responding to these requests accounted for 12% of Mike’s time and 24% of
Andrew’s time in 2014.
With the addition of Ray Petrich to the SARM Legal Services Department in 2013, we have made progress in eliminating the backlog of
inquiries from RMs, allowing us to devote more time to claims under the Liability Self-Insurance Plan and to respond to requests for advice
in a more timely manner. Ray is a lawyer recently retired from the Ministry of Justice, who advised the Ministry of Government Relations.
He is working part-time with SARM, on a contract basis.
9
We trust this is satisfactory and look forward to continuing to work with you in 2015.
Respectfully yours,
Michael Morris, Andrew Svenson and Teresa Edwards
SARM Legal Services Department
COMMUNITY PLANNING SERVICES
SARM’s Community Planning Services continues to serve member municipalities, inter-municipal groups and non-member municipalities
with a broad spectrum of planning services including bylaw creation, planning advice, and development officer assistance.
Currently SARM’s Community Planning department is working to support approximately 25 municipalities with the adoption of new
planning bylaws. Various issues throughout Saskatchewan have prompted municipalities to require or desire new bylaws and SARM is
happy to be able to assist municipalities provide growth policies and regulations for their community. The department also responds to
requests for subdivision review, development permit review, servicing agreement assistance, bylaw amendments, and general inquiries.
SARM’s Community Planning Services employs two community planners, Autumn Dawson (Registered Professional Planner) and Robin
Baxter (Candidate Planner).
TRADING DEPARTMENT
The SARM Trading Department offered a variety of products during 2014, from stationary and sundry sales, road signs, tires, rat poisons to
gopher poisons. It was another successful year, for both our customers and our suppliers. We look forward continually to being able to
provide RMs the opportunity to purchase all their supplies conveniently and cost-effectively.
I would like to take this time to thank all our members for their support through 2014 and recognize their patience and cooperation
through the changes that continue to occur in the Trading Department. I look forward to working with everyone to better meet all your
supply needs in 2014!
10
Meghan Dobranski
Manager
Trading Department
CONVENTIONS & DIVISION MEETINGS
2014 Annual Convention
SARM held its 109th Annual Convention from March 10-13 at the Queensbury Convention Centre, Evraz Place in Regina. The annual
tradeshow officially opened Monday evening with approximately 147 exhibitors including 18 large equipment displays. The convention
officially opened on Tuesday morning. There were 1,093 Reeves, Councillors and Administrators present, representing 288 rural
municipalities from across the province. The total registration, including guests, speakers and tradeshow participants was 2,115.
SARM President David Marit delivered his annual address to the delegates. Some of the important topics mentioned in his address
included rail safety and level of service, Building Canada Fund, Disaster Assistance, Alternative Enforcement and the SARM Infrastructure
Committee.
The Honourable Don McMorris, Minister of Highways and Infrastructure and the Honourable Jim Reiter, Minister of Government Relations
addressed the delegates on the first day of convention followed by an address by Premier Brad Wall and a bear pit session with the
Provincial Cabinet on day 2.
Convention Workshop topics included information on landfills, managing oil and gas development, community planning and risk
management. Other convention presentations included information on the Canadian Centre for Health and Safety in Agriculture,
Canada Grains Council, Collaborative Emergency Centre Project and Civic Addressing.
Corey Chamblin, Coach of the Saskatchewan Roughriders, was this year’s key note speaker and was sponsored by SaskTel. Chamblin
coached the team to its fourth Grey Cup Championship before a home crowd in 2013.
11
Annual Division meetings were held Thursday afternoon and the SARM Board of Directors welcomed 2 newly elected directors: Carmen
Sterling, Division 1 and Judy Harwood Division 5.
The Honourable Gerry Ritz, Minister of Agriculture and Agri-Food closed convention in his presentation where he covered topics including
record crops, rail service, CETA, Growing Forward 2, Western Livestock Price Insurance Program and the Agriculture Growth Act.
36 Resolutions (including Point of Privilege) were carried at the Annual Convention.
2014 June Division Meetings
The 2014 Division Meetings took place in Swift Current, Moose Jaw, Kipling, Kelvington, North Battleford and Saskatoon from June 17 to
26. SARM Staff provided updates regarding: SARM Programs; the Environmental Code; Civic Addressing; multi-material recycling; PFRA
Pastures, recent activities of the SARM Resources and Economic Development Committee, Agriculture Committee and Infrastructure
Committee and ongoing legislation reviews.
Presentations were delivered on topics including Master Road Crossing Agreements, the Provincial Disaster Assistance Program, the Fire
Safety Act and Alternative Enforcement, to name a few. Each division meeting concluded with an opportunity for delegates to provide
feedback to the SARM Board in a bear-pit session. A number of comments were made including delegates’ thoughts on signage
regarding civic addressing, discussion surrounding road maintenance agreement rates and comments regarding drainage and water
related issues.
2014 Midterm Convention
The two day convention officially opened on the morning of Thursday, November 13th in Saskatoon, SK at TCU Place. There were 667
RM delegates present, representing 221 rural municipalities from across the province.
SARM Acting President, Ray Orb, opened the Convention in an address to the delegates. Acting President Orb opened by
congratulating former SARM President Dave Marit on his Sask Party nomination win. He also spoke about a 4 year P3 program for rural
based natural resource road infrastructure projects that SARM is proposing and how SARM is asking for a 2 year provincial funding
commitment for the Municipal Roads for the Economy Program (MREP). Acting President Orb continued by highlighting the Federal
Pre-Budget submission asks from SARM that included P3s, disaster mitigation and the New Building Canada Fund (NBCF). The opening
remarks were concluded by informing the delegates of the new format for the 2015 June Division meetings.
12
We were fortunate to have the Honourable Bill Boyd, Minister of the Economy and the Honourable Jim Reiter, Minister of Government
Relations address the delegates at this year’s Convention.
Presentations included information on water management reform, emergency preparedness, alternative policing, waste management
and water management. The SAMA elections were also held during the Midterm Convention.
SARM’s 2014 Midterm Convention Charity raffle went in support of the Shock Trauma Air Rescue Society.
AWARDS AND SCHOLARSHIPS
Saskatchewan Municipal Awards (SMA)
The SMA program is a joint partnership between New North, the Saskatchewan Association of Rural Municipalities (SARM), the
Saskatchewan Urban Municipalities Association (SUMA), the Rural Municipal Administrators’ Association of Saskatchewan (RMAA), the
Urban Municipal Administrator Association of Saskatchewan (UMAAS), and the Ministry of Government Relations (GR).
The winners of this year’s Saskatchewan Municipal Awards were announced in November.:
First Place: Regional Municipal Plaza - RMs of Baildon, Hillsborough, Rodgers, Moose Jaw, and Caron
Second Place: Revitalization of Merchants Bank of Canada Building - City of Humboldt
Third Place: Water Conservation Measures Bylaw - Town of Lumsden
Regional Cooperation Award: Moose Jaw - Regina Industrial Corridor Committee Inc. - Cities of Moose Jaw and Regina, Town of Pense,
Villages of Grand Coulee and Belle Plaine, and RMs of Sherwood, Pense, and Moose Jaw
Rural Municipal Scholarship
Every year SARM sponsors and awards three scholarships of $1000 to worthy recipients enrolled in the Local Government Authority
Program at the University of Regina to help promote graduates into the field of Rural Administration.
SARM awarded these three scholarships in October 2014 to Rosalyn Pilsner, Petra de Winter and Sherry Guenther.
13
Lieutenant Governor’s Award
The Lieutenant Governor of Saskatchewan, the Honourable Vaughn Solomon Schofield awarded Mr. Joseph Beckman the Lieutenant
Governor’s Award for Outstanding Service to Rural Saskatchewan during the opening ceremonies at the March 2014 Annual SARM
Convention.
STRATEGIC INITIATIVES
Rural Municipal Administrators Internship Program and Promoting the Profession
The Rural Municipal Administrators Internship Program (Rural MAIP) continues to be an important program to assist RM members with their
succession planning efforts to address the forecasted municipal administrator shortfall expected in the next decade. In 2014 the Rural
MAIP Internship Program saw the completion of 2 internships and a further 9 were approved to start and will finish in 2015. SARM offered
a train- the trainer course in June 2014 for host RM administrators.
SARM provided financial assistance in 2014 to the Rural Municipal Administrators Association (RMAA) for participation at career fairs
where they have promoted the profession of being a rural administrator. This included participation in fairs at SIAST, UofR, UofS as well as
email information sent to Saskatchewan high schools and post-secondary institutions.
Safety Training and Planning
In 2014 SARM partnered with the Heavy Construction Safety Association of Saskatchewan to deliver Module 1 of their four module
"Safety Excellence Leadership Program" at our Annual Convention for RM Outside Workers to take. The program focuses on developing
and implementing a safety plan, training, investigation and reporting to contribute to a safe workplace for outdoor worker in rural
municipalities. Module 1 that was offered in 2014 was oversubscribed and Module 2 will be offered at our March 2015 Annual
Convention followed by 3 and 4 in successive years. Since offering Module 1 in 2013 SARM now has over 70 operators who are asking for
SARM to offer another Module 1 training session.
Alternative Bridge Design, Management, and Long-Term Financial Planning (NEQ Bridge)
In 2014 work continued with the Engineering Department of the University of Saskatchewan on new Truck Loading Model.
Undergraduate student conducted research in various areas over the summer of 2013 and 2014. Meetings with industry regarding new
types of bridge design. Work to be completed on more effective processes to help better management the existing bridge inventory,
including bridge evaluation, structural health monitoring, and regular inspections & life cycle costing. Panel Presentation was organized
for November 2014 SARM Convention to provide update to RMs on committee work and promote the benefits of regular bridge
inspections and exploring new bridge technologies where it makes sense to do so. A video was posted on SARM’s Youtube page
detailing an intensive municipal bridge structure inspection which in turn was shared with all RMs.
14
Asset Management
Asset management (AM) working group began with a variety of consultants that offer AM services/software.
• Pilot projects with various RMs
• Working group, as of Jan 2015, is down to 3 remaining consultants: Vemax + NAMS, Lexcom and Municipal DataWorks
• Keeping in contact with Ministry of GR in regards to their AM with the northern municipalities
• Working group will make a recommendation on vendor to Infrastructure Committee prior to 2015 Annual Convention
• Long Term Infrastructure(LTI) Plan Sub Committee to develop inventory of AM resources & information and push AM in province;
avenue for MCDP to potentially take over SMAMS
• PTA’s to develop business case for AM to give to Infrastructure Canada for funding consideration. Association of Municipalities
Ontario the lead. Similar to LTI work.
Election Reporting
Election reporting tool developed for SARM website. Used for 2012 elections, adjusted and used again for 2013 elections and was
adjusted and used for October 2014 elections. There will be no RM elections in 2015.
SARM Infrastructure Committee
• Working on development of a ‘Got Gravel? Strategies to Secure Gravel for RMs’ document;
• Polled Members on asset management, gravel costing and supply, use of new technologies and best practices, funding models
and other infrastructure challenges;
• Gathering data on actual costs of road maintenance;
• On-going dialogue and relationship building with industry i.e. SK Heavy Construction Association; and
• Development of initial proposal for Public-Industry Partnership Program (PIPP).
Resource and Economic Development Committee
• Consultations with oil & gas RMs and industry in Spring/Summer 2014;
• Developing Road Construction Handbook for RMs;
• On-going dialogue and relationship building with industry;
• SARM and Canadian Association of Petroleum Producers (CAPP) signed MOU to work together to better development climate in
Saskatchewan;
• Surveyed members on upfront costs incurred because of oil and gas development – RM new to development, mid-range and
long-term;
• Assistance and advice to RMs on resource development; and
• Work continues with industry and the Building Standards Branch to develop a more streamlined and cost effective process for
approval of large industrial projects such as potash mines.
15
•
•
•
•
•
•
•
Consultations with oil & gas RMs and industry in Spring/Summer 2014;
Developing Road Construction Handbook for RMs;
On-going dialogue and relationship building with industry;
SARM and Canadian Association of Petroleum Producers (CAPP) signed MOU to work together to better development climate in
Saskatchewan;
Surveyed members on upfront costs incurred because of oil and gas development – RM new to development, mid-range and
long-term;
Assistance and advice to RMs on resource development; and
Work continues with industry and the Building Standards Branch to develop a more streamlined and cost effective process for
approval of large industrial projects such as potash mines.
Community Planning
SARM community planners continue to work with municipalities to create and update plans, provide assistance and advice and build
planning capacity within municipalities. Currently the department is working with approximately 20 municipalities to produce
new.planning bylaws.
Bylaw Enforcement Research, Program Development and Implementation
• Working with Ministry of Justice, RCMP and SUMA to develop Community Safety Officer Program (CSOP) for municipalities;
• Continue to identify gaps in rural enforcement of bylaws and provincial statutes
• Assist RMs in identifying enforcement need and help them determine best alternative enforcement model to meet those needs Enhanced RCMP Agreements, Special Constable appointments, Regional Bylaw Enforcement;
• Working with Saskatchewan Association of Municipal Enforcement Officers (SAMEO) (a.k.a SK Licensed Inspectors and Bylaw
Officers) on delivery of an additional Level 1 training session at the RCMP depot;
• Working with SAMEO on development of Level 2 training for bylaw enforcement officers; and
• Providing financial assistance to RMs wanting to train bylaw enforcement officers.
SARM Office Transition
SARM made some tenant improvements to our leased space including a small amount of electrical work and creating more effective
storage space.
SARM ADMINISTERED PROGRAMS
Municipal Capacity Development Program
16
The Municipal Capacity Development Program (MCDP) continued to facilitate relationships between municipalities and provide a clear
path for inter-municipal cooperation in 2014. Municipalities that engaged in inter-municipal cooperation were able to share knowledge,
enhance services and processes, strengthen their region and help to sustain community resources for future generations.
MCDP worked with municipal leaders to facilitate development of inter-municipal projects; educate on the potential for regional
cooperation; and research issues that matter to municipalities. In 2014, MCDP facilitated communication between municipalities which
resulted in the creation of 5 inter-municipal groups ranging in size from 2 to 12 municipalities and 17 inter-municipal projects were
initiated by groups established through MCDP. The benefits of regional cooperation was communicated to 200 municipalities across
Saskatchewan as MCDP had the opportunity to present at a variety of events.
MCDP partnered with the Ministry of Government Relations to co-host the Regional Planning Dialogue Session in Saskatoon. This session
brought regional planning groups together to share challenges, opportunities, and successes. MCDP also presented at the Regional
Waste Management, Transfer Stations & Landfill Information Sessions hosted by SEIMA and the Ministry of Environment. This session was
held in 6 locations across the province and aimed to improve waste management practises. MCDP staff were also able to focus on
program improvements. A communication plan was developed, policies and processes were reviewed, a new logo was designed, and
the website was updated and streamlined. MCDP’s website, www.municipalcapacity.ca continues to be a useful resource for
municipalities interested in inter-municipal cooperation.
Thank you to all appointed and elected officials who participated in the Municipal Capacity Development Program in 2014. Your work
is inspiring further regional cooperation and its benefits in Saskatchewan. This program belongs to the members from SARM and SUMA,
and it is encouraged that all municipal leaders consider taking advantage of our services in 2015.
Municipal Leadership Development Program
The Municipal Leadership Development Program held its 2014 winter workshops in Regina on February 1 and March 10. Delegates
attending the SUMA and SARM Annual Conventions were given an opportunity to participate in one of five workshops offered prior to
both conventions. Close to 222 municipal leaders from all areas of the province participated in the winter session.
Certificates of Completion were given to 33 elected officials and administrators in 2014. Of those, 26 were recognized for their initiative in
completing the program at the SARM Annual Convention in March.
New to the program in 2014 were facilitators Laurie-Anne Rusnak and Brian Schatz. Laurie-Anne and Brian were retained in October to
update the Human Resources in the Municipal Workplace module, especially as impacted by the new Saskatchewan Employment Act
17
and related Regulations. In addition, Jeff Mulligan joined the MLDP team of facilitators in 2014. Jeff facilitates the program’s Strategic
and Financial Planning for Municipalities module.
The Municipal Leaders’ Roles and Responsibilities workshop for SARM members was held in Saskatoon on November 12, ahead of the
SARM Midterm Convention. One hundred and sixty-two delegates attended the half-day workshop that featured an overview of SARM’s
structure and services, and presentations by Reeve Judy Harwood and Administrator, Adam Tittemore from the RM of Corman Park,
SARM’s Manager of Legal Services, Mike Morris and the Ministry of Government Relations.
The 2014 fall session consisted of six workshops scheduled throughout the last two weeks in November. The workshops were hosted in
various communities around the province. Total attendance for the fall session was 113.
Municipal Roads for the Economy Program
The following is a summary of the MREP – Heavy Haul High Volume Roads and Clearing the Path (CTP) Programs for the 2014-15 year.
Heavy Haul High Volume Roads
• 19 projects (increase of 6 from the 2013-2014 uptake)
• Total kilometers: 157.33 km from 84.1
• Total cost: $41,967,165.00 from $21,060,430
• Total grants: $9,680,947.50 from $6,920,500
CTP Construction Upgrades
•
•
•
•
24 projects (increase of 15 from the 2013-2014 uptake)
Total kilometers: 114.568 from 85.9
Total cost: $15,253,944.85 from $8,926,520
Total grants: $7,253,944.85 from $4,374,820
Clearing The Path Corridor Incremental Maintenance Funding
•
•
Total of 6515 from 6416 kms of designated corridor in the province
$7,166,610.00 from $ 7,057,600 in annual incremental maintenance payments at $1100 per kilometer
The application deadline for the Municipal Roads for the Economy Program construction projects for 2015-16 was November 28, 2014.
18
Heavy Haul High Volume Roads
•
•
•
58 applications, an increase from 54 applications in 2014-15
399 kilometers, an increase of 111 kilometers from 2014-15
Estimated construction costs: $ 83,671,001.40
Clearing the Path (CTP) Construction Upgrades
•
•
•
58 applications, an increase from 54 applications in 2014-15
399 kilometers, an increase of 111 kilometers from 2014-15
Estimated construction costs: $ 25,751,714.95
Municipal Bridge Program
•
•
•
•
65 applications, a decrease from 84 applications in 2014-15
Estimated construction costs: $56,925,196
220 applications in the program
73 applications from 2011 have been removed from the program at an estimated construction cost of $12,334,723
Municipal Bridge Services
The following is a summary of the MREP – Municipal Bridge Program for the 2014-15 year.
Bridge Construction
•
•
•
•
10 projects approved
8 projects proceeded
Total costs: $6,175,867
Total grants: $3,932,584 (63.7%)
Culvert Installation
•
•
•
•
17 projects approved
15 projects proceeded
Total costs: $2,322,261
Total grants: $1,679,489 (72.3%)
Bridge Repair
•
•
•
14 projects approved
10 projects proceeded
Total costs: $1,121,162
19
•
Total grants: $786,567 (70.2%)
Irrigation Structures Repair & Replacement Program
The funding for the Irrigation Structures Program is provided by the Ministry of Agriculture and is delivered through the Municipal Roads to
the Economy Program to fund the repair and replacement of irrigation bridges and structures in the Provence.
The following is a summary of the Irrigation Structures Program for the 2014-15 year.
•
•
•
2 approved projects
Total costs: $283,766.65
Total grants: $198,636.65 (70%)
Application deadline was July 15, 2014
Invasive Plant Control Program
New in 2013, the Invasive Plant Control Program assisted rural municipalities (RMs) and other stakeholders with chemical costs to control
persistent and problematic invasive plants. These plants include all weeds designated as Prohibited Weeds under The Weed Control Act
including Leafy Spurge, Russian Knapweed, Common Tansy, and Yellow Toadflax. The program in 2014, again provided financial
assistance for the cost of applied chemical of up to 100 per cent on public lands and 50 per cent on private lands.
Funding for the program is provided by the Saskatchewan Ministry of Agriculture and the Federal Government under Growing Forward 2,
in the amount of $800,000 with SARM administering the Invasive Plant Control Program on their behalf.
In 2014, the program was undersubscribed seeing only 42 applicants submitting funding requests of over $220,465. Of those requests for
approved herbicide rebates, $203,254 in total was paid out.
Moving forward, SARM is asking for continued funding for the Invasive Plant Control Program in an effort to encourage RMs and other
stakeholders to adopt an Early Detection and Rapid Response (EDRR) that recognizes that finding invasive weeds known to be
troublesome while they are in low numbers and treating these aggressively provides the greatest benefit to all municipalities in our
province.
Provincial Rat Eradication Program
SARM has been administering the Provincial Rat Eradication Program (PREP) on behalf of the Province of Saskatchewan since 2010. The
purpose of the program is to promote uniformity and consistency in rat control methods across the province through communication
and educational initiatives.
20
In 2014 the program received $1.4 million that was jointly funded through the provincial Agriculture Fieldworker Policy and the federal
Growing Forward 2 initiative. Along with the increased funds came a 2 year funding commitment. A total of 283 RMs applied for
funding as of December 31, 2014 and, to date, paid an average grant of approximately $3400.00.
The assurance of continued/future funding encourages the RMs to implement control programs knowing that their control efforts would
be cost-shared beyond one year. With increased program funding to 1.4 million in 2014, this results in the Province and RMs being close
to providing an equal share of the current RM rat control budget.
Beaver Control Program
The purpose of the Beaver Control Program is to provide financial assistance to rural municipalities (RMs) and First Nations Bands (FNBs),
south of the Northern Administrative District, to control the beaver population in their respective jurisdictions. The BCP began in 2011 with
SARM administering Provincial funds. Funding for the 2014/15 program in the amount of $500,000 is provided by the Ministry of
Agriculture and the Federal government under Growing Forward.
In 2014, the program provided cost shared payments to RMs and First Nations bands that apply, paying $15 per adult beaver removed
between March 1, 2014 and February 28, 2015. The program requires municipalities/bands to match this grant amount, at minimum,
making the compensation provided to the designated individual a minimum of $30 for the removal of each problem beaver.
In 2014/15, SARM received 147 applications from 143 RMs and 4 First Nation Bands, the highest intake since the program began in 2011.
Efforts have been made to target areas with high beaver populations by increasing the maximum claim eligibility in certain areas. At
the beginning of March 2015, claims of $356,380 have been paid out to 135 of the 147 applicants with a total 37,612 problem beavers
being removed.
SARM has asked that funding for the BCP be continued and provided for a multiple- year period to allow an opportunity to effectively
build on efforts to target those problem beaver areas and ensure that problem beaver populations are brought under control.
Feral Wild Boar Control Program
SARM continues to work with the Provincial Ministry of Agriculture with regard to the Feral Wild Boar Control Program. SARM only
received 3 wild boar siting reports in 2014. Challenges continue to hamper efforts in control of the feral wild boar including weather
conditions, hobby hunters and access to lands where the feral wild boar are known to nest. Focus remains on educating the public and
encouraging them to report any sighting of boar or damage.
21
POLICY DEPARTMENT
Provincial Budget Request 2014
SARM prepared our rural provincial funding priorities to be considered as the provincial ministries prepare for the new budget in April
2013. We asked that the Province consider three rural programs for continued and expanded provincial funding as allocations for the
2014 Provincial Budget are determined.
First, we asked the Province to provide MREP with a 2 year funding commitment of $40 million annually in 2014. We also requested
the Province to provide a separate pot of funding that would allow municipalities to pursue P3 or P4 models to fund rural road and
bridges that are required to support our rural based industries such as oil and gas and/or potash.
Second, we requested that the funding provided by the Ministry of Agriculture and Growing Forward II be increased to $1.48 million
dollars in 2014. This would mean that both the Province and the RMs would be providing an equal share of the rat control budget.
We also asked that the funding be provided for a 2 year period.
Lastly, we requested at least $500,000 dollars in provincial funding to continue to operate the Beaver Control Program (BCP) in
2014/15 and requests. We would also asked that the funding be provided for a 2 year period which would allow SARM an opportunity
to effectively build on our efforts to target funding to those problem beaver areas and ensure that problem beaver populations are
brought under control.
Update: SARM Provincial Pre-Budget Request 2015
SARM prepared a draft Provincial Pre-Budget submission for 2015. SARMs asks are for Public-Private Partnerships – Resource Roads
Program (P3 funding), Municipal Roads for the Economy Program (MREP), and the Beaver Control Program (BCP).
P3 Funding: SARM is requesting that the Province establish a P3 program with funding earmarked for rural based road infrastructure
projects and that the Province allocate 10% of the remaining 90% of the Provincial-Territorial Infrastructure Component funding to
22
develop the 4 year P3 program. We are also asking that roads related to natural resource development be eligible for funding under
the P3 program without consideration for average annual daily traffic volumes.
MREP: SARM is requesting that the province continue its $25.5 million investment in the MREP for 2015 and that the province provide
MREP with a 2 year funding commitment of the same level of funding allocated in 2013/2014.
BCP: SARM would like to operate a provincial Beaver Control Program (BCP) again in 2015/16 and therefore requests a continued
funding commitment of $500,000.00 by the Province in the 2015 Provincial Budget. SARM is also requesting that, similar to the Provincial
Rat Eradication Program, the funding be provided for a 2 year period which would allow us an opportunity to effectively build on our
efforts to target funding to those problem beaver areas and ensure that problem beaver populations are brought under control.
Municipalities are more likely to apply for funding and implement control programs if they know there will be funding available into the
future; otherwise the efforts of the previous year could be lost if funding is not made available in successive years.
Federal Pre-Budget Request 2014
Industries thriving in rural areas include natural resource industries, manufacturing companies and agriculture. These industries
depend on access to reliable and well-designed road infrastructure that will allow them to efficiently reach their suppliers and
markets. Targeted funding and regulatory changes by the federal government will help to improve this infrastructure and to create
jobs and economic growth in rural communities.
This year SARM highlighted 3 Specific areas in which federal funding will be most beneficial in the
Federal Budget:

Local road and bridge infrastructure that connects rural industries to the larger primary highway system;

Ensuring broadband access for rural based industries and residents; and,

Funding for rejuvenating the existing Rural Secretariat.
Update: SARM Federal Pre-Budget Request 2015
SARM has identified two overall priorities for the 2015 Federal Budget:
1. Federal Funding for Rural Municipal Infrastructure: New Building Canada Fund
23
In order to ensure that funding under the NBCF supports Canada’s economic drivers, SARM recommends that applications to the NIC
and PTIC-NRP for road and bridge infrastructure that supports our natural resource sector be considered both nationally and regionally
significant and weighted accordingly.
2. Natural Disaster Mitigation and Recovery: Better Utilizing Scarce Resources
To ensure that mitigation projects are strategically and effectively undertaken, SARM recommends that both structural and nonstructural mitigation projects should be funded under the National Disaster Mitigation Program (NDMP). Non-structural projects eligible for
funding under the NDMP include the development of flood mitigation strategies; these would likely include baseline data gathering (e.g.
hydro-mapping), engineering and planning support, and feasibility studies. Structural projects including dykes, costs associated with
raising properties, and channels dug for flood protection are eligible for NDMP funding.
SARM also recommends that the Federal Government undertakes a thorough review of the Disaster Financial Assistance Arrangements
(DFAA) Guidelines, with input from the provincial and territorial governments and that the Guidelines and/or applicable legislation and
regulations be updated to ensure compensation rates for use of public equipment for all hours of emergency operation to a level
comparable with the eligible rates for private contractors and that compensation for the regular wages of municipal employees
undertaking disaster related work in p lace of regular responsibilities be made eligible. Additionally, that municipal-owned gravel is a
recoverable expense for municipalities.
In addition to targeted funding, we raised some regulatory amendments that the federal government can make that will act as an
economic driver in regions across Canada, including in rural Saskatchewan.
This would include considering amendments to the Species at Risk Act to ensure it isn’t restricting our countries’ agriculture industry
from growing because of inadequate compensation for the efforts of agriculture producers to maintain critical habitat and the fear of
fines for undertaking normal agriculture activities that may inadvertently threaten species at risk.
Revenue Sharing
Over the course of the last two years, SARM has worked with the Ministry of Government Relations and officials from SUMA and the
New North to establish a fair allocation of funding within the Revenue Sharing pool.
24
Our initial position was to continue with the status quo going forward, as the pool was to see an increase of approximately $27 million
in 2013-2014 and we did not want to jeopardize the relationship we had been building with our sister association, SUMA. Unfortunately,
the associations were not able to come to an amicable agreement and so we later changed our position; asking for the revenue
sharing pool split percentages to be returned to what they were prior to the latest change in 2009-2010.
While RMs have a smaller total population than our urban neighbours, RMs provide services to virtually 99% of the land mass south of
the Northern Administrative District. Resource based industries, vital to the provincial economy and its growth, require roads and
bridges to get products to markets. Providing infrastructure for these industries falls on RMs and is not a low-cost venture.
The Minister of Government Relations eventually set the percentage splits between
sectors. While rural municipalities experienced a slight decrease in percentage, having revenue sharing funding overall tied to one
percentage point of the provincial sales tax has led to substantial increases in much needed funding.
In July 2014, the province made an announcement that an extra $8.3 million increase will be made in revenue sharing for
municipalities in 2015-2016. SARM was pleased with this announcement as it will bring the total fund to a record high of $265.3 million.
Update:
Acting President Ray Orb and Executive Director Jay Meyer met with Minister Reiter in Jan 2015 to discuss the future of revenue sharing
for municipalities. The low price of oil in late 2014 to early 2015 is having a negative effect on the provincial budget and revenues.
Overweight Permitting
SARM has begun work on two complimentary overweight permitting projects – 1) investigating the feasibility of an online overweight
permitting system for RMs and 2) working with the Ministry of Highways and Infrastructure and SGI to evaluate the effectiveness of
current legislation, regulations and policy related to overweight permitting.
The interagency working group that has been established consists of representation from the
25
Ministry of Highways and Infrastructure, Saskatchewan Government Insurance and SARM. Our goals for the working group are
to:
-
To clarify responsibilities for overweight permitting in Saskatchewan;
-
To review current overweight permitting practices being employed by municipalities and the Province; and,
-
To evaluate the effectiveness of current legislation, regulations and policy related to
overweight permitting.
SARM has been in numerous discussions with the Ministry of Highways and Infrastructure and SGI on the capabilities of the new system
and its potential to include municipal permitting. This year we had the opportunity to review and comment on a request for proposal
that was developed for the first phase of an overall permitting project.
The implementation of this software is anticipated to be just one of many phases that it will take to get to full multi-jurisdictional
permitting. As it stands, introducing mapping and interactive routing is estimated to be completed in mid-to-late 2015. Once the
automated routing and mapping are successfully implemented then municipal permitting may be incorporated into the system. Multijurisdictional permitting could be implemented before the end of 2017.
In the interim, SARM has initiated work on developing an online system for issuing overweight permits that will ease administration for
municipalities, but most importantly provide fast convenient access for truckers and industry. With respect to the online overweight
permitting system for RMs, we have been exploring the practicality of a stand-alone system housed at SARM.
Bylaw Enforcement and Special Constable Appointments
SARM has been undertaking a number of initiatives to assist municipalities in meeting local community safety needs. We engaged the
Ministry of Justice, Ministry of Corrections and Policing, the RCMP, and SUMA in discussions on how to expand and better current
enforcement options available to municipalities. Two models that have been explored and developed by this group are Enhanced
RCMP Agreements and Special Constable Appointments.
26
RMs are now adopting the Enhanced RCMP model to address local safety concerns related to speeding and overweight vehicles.
The role of the RCMP as an Enhanced Police Officer is to provide an enhanced level of provincial policing pursuant to the duties and
responsibilities under the Provincial Police Service Agreement (PPSA). Unfortunately, while municipalities entering into the Enhanced
RCMP arrangements are required to cover the total provincial cost of an additional RCMP officer in the local detachment, all of the
relatable fine revenues
collected go directly to the Province. We hope that a change in current fine revenue distribution will rectify this inequity.
Another model currently being refined by the group is the Special Constable Appointment. These appointments will provide a
solution to those municipalities with local policing concerns that are unable to be addressed by local bylaw enforcement practices.
In addition to these models, SARM has been working with the Saskatchewan Association of Licensing Officials and Bylaw Officers
(SALIBO) to develop training for municipal bylaw enforcement officers (BEO) to help address some concerns with current bylaw
enforcement practices raised by our Members. The training will be delivered in collaboration with the RCMP’s National Law
Enforcement Training unit at Depot in Regina this spring. To facilitate participation from our Members, we plan to cover the on-site
costs to RMs registering their local BEO for the upcoming session.
Update: Bylaw Officers
SALIBO offered training for municipal bylaw enforcement officers (BEO) April 23, 24 and 25, 2014. The training was delivered in
collaboration with the RCMP’s National Law Enforcement Training unit at Depot in Regina. There were 52 BEOs that went through the
training. Fourteen RM employees/contractor BEOs attended the training. SARM’s logo was passed on to SAMEO to add to
endorsement materials and certificates. Additional training is expected to be developed, focusing on best practices and licensing, for
2015.
Community Safety Officer Program (CSOP)
CSOP announced on Monday, December 1st and Ray spoke on behalf of SARM members. The following press release went out on the
1st to our Members:
“The Government of Saskatchewan announced the Community Safety Officer Program (CSOP) today which municipalities across the
Province will be able to access. “Rural Municipalities (RM) have long expressed the need for an alternative enforcement option that
would allow them to enforce both municipal bylaws and certain provincial statutes,” said Acting President, Ray Orb. The CSOP will give
27
municipalities another tool to meet low risk yet high priority policing needs. “We believe that the CSOP is a feasible alternative
enforcement option for RMs; especially for those in high-growth areas. A local Community Safety Officer (CSO) will empower RMs to
address traffic safety issues which will help us make Saskatchewan an even safer place to live and do business,” said Orb. The Ministry
of Justice may grant a CSO appointment upon submission of an acceptable business case by a municipality or group of municipalities.
CSO’s can be given the authority to perform enforcement duties in relation to a number of pieces of legislation and regulations
including but not limited to The Traffic Safety Act, The Litter Control Act, The Snowmobile Act and The Alcohol and Gaming Regulation
Act.”
Notes of interest – they will have standardized markings, they will be able to move between municipalities seamlessly, they will be
municipal employees, 6 week training will cost approximately $5000.00 and private companies will NOT be allowed to employ CSOs.
- SARM Staff are working with the Ministry of Justice on communication package to go out to RMs in the New Year; announcement was
actually made prematurely to allow RMs time to get it into budgets and for Minister Tell to announce it before she leaves.
- We’ve had a few questions regarding the status of applications already sent in to the Ministry of Justice for Community Safety Officer
(CSO) appointments. In speaking with the Ministry of Justice, some applications may have been misplaced during the transitioning of
employees onto this file.
- As such, if your municipality has submitted an application for a CSO appointment already, I’d suggest that you follow up with Hugh
McLaughlan – Ministry of Justice, Corrections and Policing – to make sure that he has personally received your request. Hugh can be
reached at [email protected] or 306-798-3383.
Traffic Safety
SARM has been lobbying for a number of legislative and policy changes meant to increase traffic safety in Saskatchewan. We have
asked that the following recommendations be considered by the Province in the development of its traffic safety action plan, which
addresses the recommendations made by the Special Committee on Traffic Safety in 2013.
28
Implementation of Speed Camera Programs – Motor vehicles exceeding posted speed limits is a common traffic safety concern for
municipalities. Unfortunately, the options currently available to RMs to enforce speed limits are often insufficient; thereby doing little to
limit related safety issues. We believe that the use of speed cameras in RMs will reduce the significant risk to the public that driving at
high speeds creates. We would, therefore, respectfully request that the Province undertake a review of the use of speed camera
programs in other jurisdictions and, if deemed beneficial, update applicable regulations and guidelines to allow for the most efficient
use of such technologies in Saskatchewan.
Improved Provincial Highway Ditch Mowing Program – Accidents on highways across the province increasingly lead to loss of life and
property damage. Uncontrolled vegetation growth on provincial highway road allowances causes visibility problems and is ideal
harborage for wildlife; both of which reduce the safety of travelling motorists. We believe that the Province should develop, with input
from affected municipalities, and implement a more robust ditch mowing program to improve traffic safety.
The Government will undertake ditch mowing pilot projects along highways 219 (Saskatoon) and 21 (maple creek) as recommended
by the SARM Board.
Legislation to Reduce Traffic Speeds - The Traffic Safety Act currently contains several safety provisions regarding passing highway
workers and highway equipment. Specifically Sections 203 and 219 (7) of the Act, which relate to speed limits when passing highway
workers or flag
persons and yielding the right of way to operators of road maintenance and construction equipment respectively. Unfortunately, the
provisions referenced do not address circumstances that are characteristic of municipal equipment operations. Municipal
equipment, including graders and mowers, do not have ministry issued warning lights and the work being undertaken is not normally
confined to a given stretch of road which would allow for the necessary signing. Therefore, we have requested that the Act be
amended to include provisions that require
vehicle operators to reduce their speed to 60kph when passing or approaching municipal equipment, without requiring signing.
ATV Registration & Snowmobile Trespassing
SARM unsuccessfully lobbied with SATVA and SUMA to get ATV’s registered. There was also a lobby on snowmobile trespassing
and this issue was raised to SGI. No further progress has been made thus far.
29
Road Maintenance Agreements
In response to our Members’ requests that road maintenance agreement (RMA) rates under The
Municipalities Regulations be increased to more accurately reflect related costs incurred by
municipalities, the Minister of Government Relations, Jim Reiter, announced a 37.1% increase
over two years (2013 and 2014). The increase, which has been based on the Saskatchewan Consumer Price Index (CPI) from
1998-2012, is meant as an interim solution to address RMs concerns that the regulated fees are too low and therefore limited the
ability of an RM to recover the actual costs of maintaining municipal roads. SARM is continuing to lobby for additional rate
increases.
Relevant information was collected from Board Members and a selection of RMs across. Information will be collected, compiled and
reviewed by the IC at its meeting in the spring 2015. A proposal for increased road maintenance agreement rates will be developed
and submitted to the Province for consideration afterwards.
Maintenance of Road Approaches
With respect to the maintenance of road approaches, MHI has agreed that it is responsible for maintaining approaches within its
right-of-ways. They did note that the Ministry’s main priority is maintaining the road and that, in some cases, because of the
remoteness of certain areas it’s difficult to get MHI equipment in.
The operational policy respecting the maintenance of these approaches has changed. Moving forward, we need to provide MHI
with a complete list of RMs that said they had concerns with the maintenance of approaches in their RM to see if there are areas
of concern that have been identified that the Ministry can deal with. Also, they will provide us the policy they developed to share
with our RMs along with a map of regional offices. Information will also be passed onto the DOMs in each region
Surface Rights Act
SARM’s Policy Department had undertaken a review of The Surface Rights Acquisition and Compensation Act. After consultations with
our Members, we asked that the Province consider the following recommendations when revising the Act.
30
Timeline for Review of Compensation - The current provisions of the Act regarding the eligibility for a review of compensation for
surface rights are insufficient and, as a result, we ask that the rate of compensation for a surface lease agreement be eligible for
review within 3 months
before or 3 months after the expiration of the 3 years after the date of the agreement and within
3 months before or 3 months after the expiration of each succeeding 3 year interval.
Notification for Review of Compensation – Similar to the practice in Alberta, we would request that operators be required to give
notice to the owner or occupant, as the case may be, of the opportunity to review the rate of compensation on or within 30 days
following the second anniversary of the date the surface lease agreement commenced.
Entry Fees – We would ask that owners or occupants, as the case may be, be eligible to collect an entry fee, similar to those outlined
in Alberta’s Surface Rights Act (SRA), for right of entry on land; this amount would be payable in addition to any compensation
payable in respect of the right of entry.
Compensation Factors – We would like to see the factors for compensation for well-sites, roadways, battery sites, power lines, flow lines
and service lines in Saskatchewan aligned with those under Alberta’s SRA. In addition to the compensation factors outlined in
Alberta’s SRA, we would like to see compensation paid to owners to cover property taxes for the land in use by the operator.
Security Deposit – The security deposit currently required of operators is no longer adequate, given that the most recent updates to the
related provisions were made in 1978. Therefore, we’d ask that the amount of the security deposit paid by the operator when
applying for immediate right of entry be increased to better reflect current costs and valuations and amount of land leased.
Termination of Right of Entry Order – The current basis to warrant a termination of right of entry order are too limited and so we would
ask that a general provision be added to the current Act
that will allow the Surface Rights Board to terminate an order under warranted circumstances, similar to the provision in Alberta’s
SRA.
Powers of the SRB – The powers of the SRB should be broadened to increase the level of compensation it can award for loss or
damages suffered by an owner and/or occupant, as the case may be, to an amount of at least $25,000.00, similar to the provision in
Alberta’s SRA.
31
Potential changes to The Surface Rights Act were released in November 2014. We have reviewed the changes and met with the
Ministers of the Economy and Government Relations to provide our comments.
SARM’s Infrastructure Committee
Late in December 2013, the SARM Board formed the new internal SARM Infrastructure Committee. The Infrastructure Committee’s
current focus will be on three key areas including gravel and depleting supplies, asset management development/implementation
and a jurisdiction review of innovative and proven best practices for road/bridge maintenance and construction.
An Infrastructure Survey was conducted in 2014 with the goal of corresponding with all Provincial RMs to capture their areas of
concerns and share their areas of expertise in gravel and depleting supplies. The survey includes a poll on the use of asset
management to determine if any RMs are using asset management and what type. Finally jurisdictional reviews of innovative and
proven practices to best manage a gravel road system. The jurisdictional review will be sent across Canada, Australia and the United
States.
The Infrastructure Committee will review and summarize the responses of the Infrastructure
Survey and jurisdiction review to develop recommendations to present to the SARM Board with a goal of developing tools to best
manage gravel roads and gravel depletion, asset management and best practices gravel information for Saskatchewan RMs.
Public- Industry Partnership Program (PIPP)
SARM developed a proposal for a Public-Industry Partnership Program (PIPP) that would see the Province, Federal Government,
municipalities and industry stakeholders contribute to the building of new or upgrading of existing road and bridge infrastructure that
will benefit natural resource development in rural Saskatchewan.
SARM has met with numerous stakeholders to-date to discuss the program. The Province has voiced an interest in pursuing this project
over the next six months. SARM has taken the lead.; the scope of project has been developed by SARM staff.
The goal is to have a thorough business proposal developed by mid-2015.
32
Asset Management
The asset management working group was formed and includes RM administrators. Research was completed in the early stages and
has led to pilot projects using Municipal Data Works and Lexcom. MDW is the favourite so far based on what it delivers and costs.
SARM learned that the Ministry of Government Relations uses asset management software for the northern municipalities however the
support has stopped as the company no longer exists; waiting to hear for new developments on that end. MDW is likely to be the
working group’s recommendation. However, SARM policy to prepare an RFP for asset management as that remains an option. The
annual convention will be used to host either a workshop or update. The need for more communication around the benefits of asset
management has been identified by the asset management working group.
The Long-term Infrastructure (LTI) Plan Sub-Committee met to discuss Municipal Financing and Asset Management (AM) On the AM
piece, which ties into Amanda Parkinson's request for comments on the MCDP strategic plan and budget, those around the table
including GR, SUMA, and New North, talked about current programming that might be about to be revamped to drive AM in the
province. Of course, MCDP came up as a potential vehicle to take over the SMAMS work (was group that drive training on PSAB and
developed Basic Guide to AM - website now only with some funding remaining) and to promote, build understanding of AM process,
and promote existing AM tools (such as the template etc. SARM develops through the Infrastructure Committee). We heard that
funding could likely be accessed for the MCDP after 2015 through the New Gas Tax Fund (GTF) if the Program is working to meet GTF
AM requirements plus municipalities could be encouraged to use GTFs for asset management projects living forward.
SARM’s Agriculture Committee
SARM has been working on a number of agricultural policy issues that are important to Saskatchewan producers. Some of the major
issues that the SARM Agriculture Committee has met to discuss in 2014 included: crop insurance, grain transportation, chronic wasting
disease, bison fencing, meetings with APAS, SCIC and the Ministry of Agriculture and Environment.
The CTA review concluded at the end of 2014 and SARM made a submission. Consultations were attended where information was
gathered that helped form the SARM submission. We will keep an eye on the review and wait for the next steps and any further
consultations.
33
A meeting with staff from the Ministry of Agriculture and the Ministry of Environment (including the Minister) was held to discuss the
creation of bison fencing guidelines. In SK there aren’t any and it is causing issues around wildlife (deaths, injuries). The Ag committee
brought a copy of Alberta’s bison fencing guidelines to the Government’s attention. The Gov’t is also looking at other jurisdictions such
as Montana and SARM will be involved in discussions moving forward. A letter was sent from the bison association saying that they
would also like to be involved in discussions moving forward.
The Ag committee met with Chuck Lees, ENV in the fall of 2014 to discuss chronic wasting disease. Possible strategies were discussed
from eradication, containment and to farm risk management practices. The Ag committee told Lees as well as officials in Ottawa
during the lobby trip that SARM does not support labelling Saskatchewan as endemic to CWD and essentially letting the disease
spread. On farm risk management practices were the preferred method presented by the Ag committee.
Members of the Agriculture Committee also met with various members of Parliament, government officials and staff in Ottawa, ON
to discuss our support of the Comprehensive Economic Trade Agreement (CETA) and our concerns with the Species at Risk Act
(SARA), the Country of Origin Labelling (COOL) and grain transportation in Saskatchewan. Our position on SARA was relayed to
both the Federal and Provincial Environment Ministers.
SARM partnered with the Ministry of Agriculture to co-host an agriculture summit on growth. The event is Feb. 4-5, 2015 and SARM
sits on the planning committee. SARM Board approved contributing up to $7,500.
Update: Bill C-30
SARM received a number of resolutions and has been dealing with a number of issues relating to rail level of service across the
province. Over the course of 2014, a number of letters have been sent to the Federal Minister of Agriculture and Federal Minister of
Transport. SARM requested that; the number of grain cars that railways are required to move be a minimum of 13,000 per week
without affecting other resource areas to fulfill the backlog; that regulations be put in place to ensure that railways deliver the same
level of service they have historically delivered for the last 3 years without affecting other resource areas; and that the mandatory
levels of rail service agreements be legislated with higher penalties imposed when levels of service are not met. More recently,
SARM attended an announcement made by Federal Agriculture Minister, Gerry Ritz, which marked the coming into force of the
34
regulations of Bill C-30 in which SARM supported. SARM will be providing a thorough review of the Canada Transportation Act
(CTA) once the formal consultation process begins.
SARM submitted comments to the CTA review and sought changes in the following areas: data reporting and transparency, car
allocation, winter movement of grain, the revenue entitlement CTA powers, corridor use, and minimum movement of grain and
short line level of service. SARM received copies of the Government of Saskatchewan’s submission and the joint submission by
producer groups. Many of the asks were similar however one difference is that the producer groups asked for a costing review
while SARM did not.
Rail Safety
The Federation of Canadian Municipalities (FCM) organized a National Working Group on Rail
Safety as a result of the recent rail disaster at Lac Megantic and other past incidents. Dave Marit,
Chair of FCM’s Rural Forum and SARM President, was asked to sit as a member of this working group. SARM wanted Dave to be a part
of this working group because we wanted to ensure the recommendations balance the need for safety with the need to allow
industry to still flourish in this province, as some of our most important commodities utilize rail. (ie. oil and gas, potash, agriculture
chemicals, etc.)
This working group will continue to work with Federal Minister Raitt and Transport Canada to identify the federal changes necessary
to ensure the safety of Canadian railways and the capacity of the services Canadians rely on in emergencies. Rail disasters such as
these have clearly raised questions about the safe transport of dangerous goods via railways through our municipalities across
Canada. Equip and support municipal first responders to rail emergencies:
a. Municipalities need to know what dangerous goods are being transported through their communities so local services can
plan and respond effectively to emergencies.
b. Railways and federal agencies cannot plan for emergencies alone. Local governments and authorities must be involved as
partners in emergency planning.
2. Ensure federal and industry policies and regulations address the rail safety concerns of municipalities:
a. At the local level, rail incidents can have significant impacts on public safety, the economy and the environment.
b. Municipal concerns must be included in federal government risk assessment and policy development on rail safety.
35
3. Prevent downloading of rail safety and emergency response costs to municipal taxpayers:
a. Third-party liability insurance systems must be strengthened to prevent the downloading of liability costs on municipal
taxpayers, even in the event of bankruptcies.
SARM met with the Working Group including Minister Raitt in Ottawa, ON and continues to participate to ensure that the Federal
Government continues to work with FCM to implement the recommendations of the FCM Rail Safety Working Group.
Update:
SARM continues to meet with the working group in Ottawa. Larry Miller, M.P. and Chair of the Transport, Infrastructure and
Communities Committee accompanied the SARM President and Division 3 Director on a two day tour of the some of the shortlines in
Saskatchewan. The intent of the tour was to showcase the vital importance of our shortlines in facilitating economic growth in our
province. SARM values the Saskatchewan shortlines and does not want to see them cease to operate in light of new safety regulations
being implemented at the federal level. We believe that provincially regulated shortlines are a lot different than the federally
regulated, high volume, high speed railways and would like any future safety regulations imposed on provincially regulated shortlines to
correlate with the level of risk associated with them.
Growing Forward 2 Update
In September 2012 the new program parameters for Growing Forward 2 Business Risk Management Program (BRM) were announced.
In 2013 SARM expressed its opinion on the new programs as it was pleased with the increased funding for strategic initiatives but was
disappointed with the changes to AgriInvest (reduced funding ) and AgriStability (margin coverage reduction with capped
payments).
Throughout 2013 SARM participated in consultations regarding the design of new Non-BRM Growing Forward 2 Programs. SARM’s
comments were as follows:
SARM feels strongly that all GF2 programs must take into consideration input from all arms of the agriculture industry. Not all producers
can be painted with the same brush – livestock producers have different needs than crop producers so programs should ensure
36
adequate support for these varied sectors. We also think that all GF2 policies and programs should consider how the parameters will
impact new farmers trying to enter the industry.
The programs SARM would like to see offered as part of Non-BRM GF2 are as follows:
1. Farm and Ranch Water Infrastructure Program: The Farm and Ranch Water Infrastructure Program was put in place to support
the development of secure water sources in Saskatchewan to expand the livestock industry, encourage rural economic
activity and mitigate the effects of future drought.
2. Research, Innovation and Market Access: In order for producers to stay competitive on
the world market, leading edge-research, innovation and market access are integral to the success of Canada’s agriculture
industry. GF2 funding must be earmarked for more crops, livestock and forage research. Beef and forage research are
especially lacking and must receive continued government support and investment.
3. Minimize Regulatory Costs: GF2 should also consider how Canadian implemented regulations compare with those supported
by our major world market competitors. Are there ways to work towards harmonizing such regulations?
4. Environmental Farm Plans (EFP) Best Management Practices (BMPs): Environmental Farm Plans (EFP) and Best Management
Practices (BMPs) are voluntary, confidential, self- assessment tools used by producers to raise awareness about environmental
risks and opportunities on their operations. There needs to be more courses offered so that farmers who haven’t taken a class
yet have an opportunity (i.e. beginning farmers).
5. Farm Safety/Education Programs: SARM would like to see funding dedicated for farm safety and farm safety education
programs. Farmers are self-employed and therefore do not have access to formal training regarding on-the-job safety.
Farmers work with large equipment in situations where
injury and death can result without proper operation and safety measures in place. SARM hopes this means continued funding
for programs like the Agricultural Health and Safety Network (AHSN).
6. Canadian Agricultural Skills Service (CASS): This program provided the funding to cover expenses (travel, tuition, books, etc.)
incurred for approved education or training taken by both farmers and their spouses. This program should be offered again
under GF2 because it is there assist producers in improving their business opportunities on the farm or in another sector and
improves productivity and competitiveness.
Non-BRM programming was officially announced in April 2013 and SARM was happy to see that much of what we asked for was
included with the addition of more funding for pest control, agriculture awareness and farm operator training.
37
Multi-Material Recycling Program
MMRP is a province-wide, industry and municipal cost-shared recycling program for household printed paper, newspaper,
cardboard, plastic, metal and glass packaging material.
As Saskatchewan communities continue to grow, reducing the waste going into landfills will help to extend the life of landfills and save
infrastructure dollars. Environment Minister Ken Cheveldayoff announced that a $500,000 grant will be provided to the Saskatchewan
Urban Municipalities Association (SUMA) to help eligible communities improve or implement recycling programs.
SARM is a member of the MMRP Advisory Committee which serves as a forum through which SK stakeholders will be kept informed of
MMSW’s program activities and provide feedback and advice on core program activities. SARM, including SUMA and ARWMAS have
identified some concerns with the program and is currently working with the Minister of Environment on addressing them.
In December 2014 the Ministry of Environment announced drastic changes to some of the policies in the MMRP that severely affect
the funding for the program. As a result MMSW terminated all funding agreements with all municipalities that had signed up. The
MMRP is essentially back to the beginning stages. SARM, SUMA, ARWMAS continue to ask for the creation of the advisory committee
and anxiously await some direction from the Government on next steps. Changes to the program included exemption to all businesses
that generate less than $2 million in revenues, a temporary 2 year transition period for businesses that generate between $2 and $5
million to only pay an annual fee of $500. These changes have drastically reduced the already lower than expected funding for the
program.
Saskatchewan Common Ground Alliance – Mandatory Call before you dig
The SCGA issued a white paper for a mandatory call before you in Saskatchewan. It calls for legislation to create one call centre
where anyone who will be doing digging can call and find out the locates of underground infrastructure. The goal is agreeable
however after reviewing the white paper there are concerns around the costs to municipalities as they would have to locate their
entire underground infrastructure – a costly endeavor.
Rural Healthcare
38
Health care continues to be a priority for SARM. SARM is a member of various provincial health related committees including the
Farm Health and Safety Council, Canadian Centre for Health and Safety in Agriculture and the New Horizon for Seniors. In 2013 SARM
became a member of
the Saskatchewan Seniors Mechanism.
Saskatchewan Environmental Code
SARM has been working with the Ministry of Environment to ensure that the proposed Environmental Code chapters appropriately
balance provincial and municipal interests. Most recently, we have been in consultations with the Ministry on the Landfill and
Domestic Liquid Waste Chapters of the code.
This year, the Minister of Environment agreed to a number of changes that we requested to the chapter on landfills/transfer stations.
The Ministry has agreed to extend and tier timelines for phasing-in changes, to have Ministry staff act as qualified persons on certain
activities, and to work with SARM to determine the costs of bringing landfills and transfer stations into compliance. We do, however,
have some outstanding concerns with the code that we’ve asked be addressed before we offer our support of the new legislation.
While we recognize the potential environmental benefits that the new code chapter on landfills/transfer stations is trying to achieve,
if we are to support it at this time we would be agreeing that at the end of the phase-in period all municipal landfills would agree to
comply
with the new code; regardless of currently unpredictable costs to upgrade or decommission and with no commitment of provincial
funding to assist with those costs.
SARM believes that ensuring this province has a functional, affordable and environmentally safe way to manage its solid waste is not
only a municipal interest but is also of great provincial interest and therefore should be equally funded by the Province. The Ministry
has noted that “a formal commitment regarding funding is not possible given our intention is to use the early part of the phase-in time
to assess the state of landfills and transfer stations and to gather sound, science based data."
In regards to the Liquid Domestic Waste Chapter and the land spreading of liquid domestic waste, SARM remains pleased that the
Ministry offered to maintain this practice as it currently exists and removed the proposed 5 year phase out. The industrial and
residential growth our province is experiencing is already requiring many municipalities to expand and build new lagoons to manage
increased effluent volumes. Continuing to allow land spreading will ensure that the financial burdens municipalities are facing are
manageable and aren’t in addition to increased growth pressure.
39
SARM has suggested, however, that the Ministry consider modifying the code chapter to allow winter spreading of septic effluent as
an “Acceptable Solution” under specific, controlled
conditions i.e. clearing snow from the land spreading site to minimize issues with run-off. This would provide an option for those
growing resort communities who currently have no opportunity to dispose of such waste during the winter months as existing
lagoons won’t accommodate their effluent.
Update: Environmental Code Committee
SARM received an inquiry from the Saskatchewan Code Secretariat requesting membership in the SK Environmental Code – Fire
Content Committee. SARM contacted our membership in the forest fringe and offered them an opportunity to nominate individuals
from Council or Administration that SARM could put forward and nominate for the Fire Content Committee. SARM received 3
submission, all of which we passed on to the Ministry of the Environment.
Drainage and Flooding Issues
The WSA is moving forward on its commitments to approach drainage and flooding issues. RMs are directly impacted by excessive
moisture and drought and will play an important role in ensuring any related strategies developed by the Province are deployed
successfully. As such, we asked our Members to provide us with some suggestions on how to improve current water management
practices and forwarded these to the Minister of Environment for consideration in the development of a comprehensive water
strategy.
Role of Watershed Associations and Conservation and Development (C&D) Authorities - SARM Members passed resolution 20-13A
which resolved that the Province encourage the formation of more watershed associations to assist neighbouring municipalities and
farmers to cooperate in maintaining the functionality of water runs and implement long-term flooding control strategies. RM
respondents to this survey reiterated the need for the expansion and development of not only new Watershed Associations but
Conservation and Development lands.
Need for Comprehensive Water Management Planning - There needs to be a clear understanding of the impact drainage has on a
drainage system. Without effective control of drainage, some property owners will see a benefit from drainage activity while property
owners on the outlet end may be negatively impacted by drainage. The drainage management system currently in place does not
40
bring about a needed balance that would benefit the province; it currently benefits the individual upstream who initiates the
drainage works.
The Province should be encouraging people to used responsible controlled drainage, which starts with a detailed drainage plan. With
regard to existing licensed/approved drainage works, as well as new ones coming on stream, there needs to be effort put into a
comprehensive management plan, which could include the following elements.
i.
On-sight yearly visits/inspections;
ii.
Education requirements for operators of the works etc.;
iii.
Use of existing highway and railway culverts for improving drainage for preventative measures; and
iv.
A holding strategy within each section or two of land so that we can slow the release of the fast melt and address problems
caused by severe weather events. This may be achieved through a system of appropriate sized culverts placed at different
heights within each storage structure to fast drain the top area and slow drain the lower portion of the retained water.
In order to ensure an effective drainage management system, cooperation between all levels of government needs to occur
Expedited Approval Process and Improved Monitoring Mechanisms - In order to reduce the likelihood of uncontrolled drainage
works, a clear set of rules for those wishing to pursue drainage works should be established and technical assistance should be
provided by the Province to assist proponents to obtain reasonable and responsible drainage goals.
Applications for controlled drainage works should also be simplified with an expedited approval
process; resources should allow for site visits by WSA personnel before giving permission to operate a drainage work.
In order to facilitate the effective management and control of drainage works, the WSA regions should be smaller than they are now
and elected/appointed officials should be trained to assist the regional offices with related decision-making.
With regard to flood control, more monitoring stations are required downstream of recurring and potential flood-damage sites; possibly
encouraging local monitoring of water levels and flows in the spring/peak runoff periods. Fees for reporting illegal drainage should also
be eliminated; possibly using a model similar to Crime Stoppers to report illegal drainage activities.
Increased Enforcement and Higher Fines - Respondents felt that taxpayer money would be better spent on enforcement of illegal
drainage and controls than on replacing destroyed infrastructure as a result of flooding. Specifically, they advocated for more
enforcement of related rules with the ability to apply significant fines, and the capability to ensure works are promptly ceased; it is of
utmost importance that the agency develops legislation that is not only enforceable but also enforced by the Province.
41
Compensation - The lands that hold water now or in the future to reduce the negative impacts of flooding, even temporarily, will likely
sustain periodic loss of production. This is why a new strategy is needed whereby producers are compensated for holding the
potential flood waters preventing damage downstream; somehow the related costs should be passed onto the people that profit
from dry land such as a developer that has transferred the cost for draining land downstream to the municipality, lake communities,
and landowners.
Water Related Issues
We have continued to reiterate our outstanding water related requests for the Province’s consideration in the development of future
legislative amendments, policy and programming.
Planning for industry needs –water is central to the expansion of economic development in the province. As such, water must be
made easily available to industry and agricultural
producers. Regulations on multi-user raw water pipelines must be reviewed because restricting the use of non-potable water for
producers, industry and individual users will limit economic growth and becomes an environmental concern when water is
unnecessarily treated i.e. irrigation and watering cattle.
Researching water treatment technologies - the Province must continue to research alternative water treatment technologies and
where feasible update applicable regulations and guidelines to allow for the most efficient use of those technologies; for example,
other jurisdictions in Canada currently allow for the use of point of entry (POE) and point of use (POU) treatment units for small water
systems. We appreciate the Minister’s recent commitment to undertake the creation of a working group with SARM to examine POE
and POU water systems further.
Funding for water infrastructure – further investments in programs like the Farm Ranch Water Infrastructure Program (FRWIP) should be
made by the Province. The FRWIP has allowed many producers and rural municipalities to implement long-term water infrastructure.
We believe a province wide FRWIP could reduce the cost of production for those requiring access to water for
irrigation or livestock purposes. We also see it contributing to the overall sustainability of the agriculture industry by lessening the
impacts of drought.
Education – more information on water related issues and means to address these issues should be communicated to municipalities,
landowners and other stakeholder groups; for example, impacts of unauthorized drainage.
42
Abandoned wells – the Province must continue to address the issue of abandoned wells; sound data, funds and assistance should be
available to those looking to decommission abandoned wells.
Fire Protection and The Wildfire Act
SARM arranged a broader meeting to bring together a group of stakeholders including representation from Aboriginal Affairs and
Northern Development Canada, Ministry of Government Relations – Emergency Management and Fire Safety, Ministry of Environment
– Wildfire Management Branch, and SARM to discuss current wildfire protection issues such as mutual aid agreements, protection
processes, and current protection costs. Some areas being discussed and working being undertaken to address include:
-
EMFS’s The Fire Prevention Act will be replaced by The Fire Safety Act; SARM will be
consulted on these changes.
-
Fire Suppression on First Nation Lands, the Province’s role in building the FN and municipalities and capacity to
respond.
-
Building and Fire Code Inspections on First Nation Lands and possible assistance from the
Province for municipalities without easy access to such resources.
-
All parties to work together to build and share common messaging across the province with respect to fire prevention.
SARM policy department reviewed changes to the Fire Safety Act, December 2014, and found that there weren’t any issues with the
changes.
Fire Suppression and Vehicle Extrication (FSVER)
Consultations concluded and SARM approved the proposal developed with input from SUMA, the Saskatchewan Volunteer Fire
Fighters’ Association (SVFFA), and the Saskatchewan Association of Fire Chief (SAFC). A joint SARM/SUMA letter was sent to SGI asking
for changes to the definition of productive and non-productive calls, increase in FSVER rates, coverage for assistance with STARS
landings, and compensation for consumable items used by fire departments when responding to a call.
Provincial Disaster Assistance Program
SARM reviewed the current Provincial Disaster Assistance Program (PDAP) Guidelines and offered suggestions on how the
program can be expanded to better meet the needs of municipalities.
43
This year we continued our lobby to have additional reimbursements to municipalities under PDAP for use of their own
equipment as a direct result of a disaster and for the associated labour costs of heavy equipment operators. We have also
asked that the Ministry of Public Safety Canada amend the Disaster Financial Assistance Arrangements (DFAA) to more
accurately reflect the current practices and costs associated with municipal response to and recovery from flood events.
We raised the issue with municipalities being required to pay a deductible to the Province each year in order to access PDAP funding.
We believe that it is unreasonable to require a municipality to pay another deductible to address the impacts of flooding that is
primarily the consequence of previous flood events for which they have already paid. As well, the current method of calculating a
municipality’s deductible along with the recent rise in property values will result in considerable increases to the deductibles for many
next year. In a time when municipalities are struggling to restore infrastructure damaged by recent flooding, it is difficult to justify an
increase to a deductible to access necessary government assistance. As such, we asked that the deductibles remain at current levels
for 2014.
In addition to these concerns, our Members identified a limitation with the current PDAP guidelines regarding eligible compensation
that we requested the Province address. Specifically, the current level of assistance provided by PDAP is meant to restore properties
to
pre-disaster condition. The existing guidelines are likely sufficient under circumstances where the recurrence of property damage is
unlikely; however, in those instances where improvements to damaged property are needed to reduce the likelihood of future
damages and duplicate program expenditures, it is prudent that a suitable level of funding be available to municipalities to cost-share
the extra costs to build properties to an appropriate state to mitigate future flood damage.
With regards to mitigation assistance, Public Safety Canada staff asked us to provide some structural and non-structural mitigation
projects that we thought should be funded under the DFAAs. After surveying some of our Members, we provided the following
suggestions which we also passed onto the Province.
With respect to non-structural projects, we suggested that funding be provided for the development of flood mitigation strategies;
these would likely include baseline data gathering (e.g. hydro-mapping), engineering and planning support, and feasibility studies.
Regarding structural projects, we asked that funding for dykes, costs associated with raising properties and channels dug for flood
protection be considered.
In addition to the points noted above, we asked that the Province consider the following when further developing its mitigation
program under PDAP.
44

Cost-shared funding for the difference between rebuilding infrastructure to its previous condition and to an improved state to
mitigate future damages;

Engineers should be required to sign-off on the mitigation plans to ensure that the measures being undertaken will reduce the
likelihood of future subsequent events and the engineering related costs should be cost-shared;

Funding eligibility for projects should be based on past history e.g. PDAP claims the last two out of four years or three out of
five years; and

Funding for mitigation under PDAP needs to be stand-alone, rather than reliant on funds from other programs.
Update:
At the 2014 SARM Annual Convention, the Minister of Government Relations had announced that the PDAP is currently under review.
SARM had compiled a list of concerns that RMs have with the current PDAP and related management practices. 5 immediate issues
were identified and related to: Gravel use, overages above estimates, averaging form; Road terminology – Differs between Engineer,
Muni; PDAP staff – have to retell claim to different staff; Not receiving PDAP spreadsheet of payments; and Communications – update
website, etc.
SARM will make a submission during Phase 2 of the review process.
Annexation
In 2013, The Ministry of Government Relations released an Annexation Compensation and User Guide. According to the Ministry, the
intent of government developing an annexation compensation guideline was to provide principles and comprehensive parameters
the SMB could use to objectively resolve disputes over annexation compensation.
SARM was actively involved with the Rurals Bordering Urbans to discuss some of the issues and compile a response to the Ministry on
the proposed Guideline. As a result of the review and through consultations with member municipalities, the document was not
supported.
In summary, SARM recommended the following:
45
•
Adopt annexation principles where a municipality that chooses to annex must demonstrate the need to do so. A clear
definition of need versus want should be required prior to determining compensation;
•
When annexation compensation agreements are brought forward for adjudication to the SMB, compensation for
infrastructure (for the municipality in which the annexation is taking place on) should be mandatory. This should continue to
be determined on a case by case basis as level of service varies from municipality to municipality; and
•
Consideration must be given for lost future growth opportunities, including tax loss
compensation. Tax loss compensation should not only include the current lost tax base but also future growth opportunities
that are no longer available to the Rural Municipality.
Update:
Throughout 2014, the Ministry of Government Relations had met with SARM and members from the Rurals Bordering Urbans (RBU)
committee to discuss the comments put forward by RMs and SARM. The Ministry’s goal is to bring urban and rural parties closer
together to identify common grounds for stakeholders. Since the meetings were held, SARM provided the Ministry with another
submission which updated the already existing “Guide for Municipal Boundary Alterations (Annexation)”.
Rather than creating a new and separate document, SARM believes that the existing guide can be tailored to include
considerations that the SMB should take when determining compensation. When annexation compensation agreements are
brought forward for adjudication to the SMB, SARM recommends that the methodology to resolve the dispute be divided into two
overall phases: Defining Need (Phase 1) and Determining Compensation (Phase 2).
SARM, SUMA and the Ministry of Government Relations will be meeting in 2015 to come to an agreement on principles to guide the
SMB in its determinations on annexation and related compensation.
Rural Broadband
In meetings with both the Provincial and Federal Governments, SARM stressed the need for improved access to adequate highspeed internet service in rural areas to foster economic development opportunities. We were encouraged by Minister Moore’s recent
release on Canada’s spectrum licensing framework; specifically, we were glad to see that the renewal of
2300 MHz and 3500MHz spectrum licenses are subject to ‘use it or lose it’ provisions.
46
We do, however, have some on-going concerns with the Federal Government’s auction of 700
MHz bandwidth in Saskatchewan and the implications it could have for residents and businesses located in rural areas. The 700 MHz
spectrum is able to cover larger geographical areas than the
2300 MHz and 3500MHz spectrum which makes it more cost effective to provide advanced wireless services, even in less populated
areas. Unfortunately, the rules of the auction will allow companies to buy the license to use the province-wide Saskatchewan 700
MHz band with no intention of ever deploying it in rural areas.
The existing rules allow this to occur because the auction has combined urban and rural coverage areas. When large national
bidders purchase the spectrum the rural allocation, defined as large geographical areas with sparse populations, goes along with
urban coverage and in many cases remains unused. SARM has requested that the Federal Government introduce rules to ensure
that adequate rural spectrum can be accessed by service providers who are indeed willing to bring service to rural Saskatchewan.
SARM submitted comments on proposed changes to the 3500 MHz spectrum by Industry Canada. SARM also spoke with MP’s and
policy officials in Ottawa, ON in November 2014. Discussions took place around both the 2500 MHz and 3500 MHz spectrums. Our
concerns were given in person and SARM delegates were assured that there will be licenses for rural ISPs.
Industry Canada made an announcement (December 2014) that “our government will not take spectrum licences away from
anyone who is providing Internet service to rural Canadians. Furthermore, the final decision does not reclassify rural licence areas,
and it will ensure that spectrum is available for rural Canadians in the future. This decision provides a path for mobile use in the 3500
MHz band while maintaining existing fixed wireless Internet services in all communities. This approach will ensure existing services using
this band continue to be available to Canadians while implementing a fast-track licensing process for spectrum that becomes
available to allow even further services to be provided. Please find public statements from Xplornet and a group representing the 10
largest rural Internet service providers attached to this letter.
Gas Tax Fund – Communications Committee
SARM policy sits on a GTF Oversight Committee as well as the GTF Communications Committee. The goal of the Communications
Committee is to increase the communications and awareness of the GTF. This will be done by highlighting exciting and important
47
infrastructure projects that were funded using GTF money. Media events, signage, social media and traditional media will be used to
accomplish this. Group is prepping for the construction season when these events will start to take place.
SaskPower Issues
SARM met with Minister Boyd to discuss grants in lieu, the cuts to the Rural Electrical Rebuilds Program, weed control on SaskPower
owned lands, sale of reclaimed lands and drainage. SARM will be meeting with Jan Craig, SaskPower, to follow-up on all of the issues
raised with the Minister on October 14, along with concerns raised by members on power line relocates.
Grants in Lieu
SaskPower makes annual grant in lieu payments to the thirteen cities. His grant is based on five per cent of the electricity bills of
customers in each city. No grants are paid to other municipalities. In 2007, the total amount paid to the thirteen cities was
$16,538,420. In response to inquiries and past SARM convention resolutions, the reasoning has been to compensate for revenues
urban municipalities would lose as a result of transferring their investments to SaskPower.
The reasoning for the payment does not make sense as many, if not most, small towns had a power system at one time and
transferred it to SaskPower. Humboldt did not receive a grant-in-lieu until it became a city. Saskatoon and Swift Current receive
grant-in-lieu payments despite the fact that they continue to operate electrical generation facilities. The RM of Corman Park No. 344
has a population of about 8,500, more than at least three of the cities but receives no payment.
We have therefore asked that the Province pay grant-in-lieu of property taxes to municipalities for provincially or crowned owned
property based on the equivalent of what taxes would be if privately owned.
SaskPower Line Relocates
48
SARM met with SaskPower to discuss line relocates. SaskPower shared its investment directive related to how RM charges are
calculated when alterations are required due to road construction for our review. They also provided a copy of the letter that is sent
to RMs when facilities are proposed for construction along a road allowance.
We have since asked that RMs pass on to us any concerns that you have regarding power line relocates and/or comments on
associated costs and consultation with the municipality.
Occupational Health and Safety – Snow Removal
OH&S suggested that SARM create a checklist for RMs to use for when municipal residents remove snow on municipal roads. The
checklist ensures that due diligence is done and the municipal resident is exempt from having to be a trained/competent operator
as set out in the Occupational Health and Safety Act and Regulations. The SARM Board approved this and the checklist was sent out.
FINANCIAL REPORTS
Are included in the following order:
1. 2014 SARM Financial Statements
2. 2014 Rural Municipal Specific Claims Tax Loss Compensation Trust Fund Statements
3. 2014 Rural Municipal Tax Loss Compensation Trust Fund Statements
49
Saskatchewan Association of Rural Municipalities
Consolidated Statement of Operations
For The Year Ended December 31, 2014
(with comparative figures for the year ended December 31, 2013)
2014
General Fund
General Revenue
Membership Fees
Investment Income
Administration Fees (Note 11)
Convention Income
Gain on Sale of Land & Building
Other Revenue
$
Member Services (Schedule 1)(Note 12)
General Expenses
Conventions & Division Meetings
Board and Other Meetings
Federal Lobbyist Expense
Staff Salaries & Other Staff Expense
Office Expense
General Service Expense
Property & Amortization
Other Expense
Member Services (Schedule 1)(Note 12)
General Fund Surplus
Insurance & Benefit Restricted Funds (Schedule 2)
Premiums & Other Revenue
Claims Expense, SARM Fee & Other Expense
Insurance & Benefit Funds Surplus (Deficit)
Other Restricted Funds (Schedule 3)
Contributions, Fees & Interest
Program Expense
Other Restricted Funds Net Change
Consolidated Surplus (Deficit) /
Change in Fund Balance
625,565
275,055
1,699,415
248,162
144,207
2,992,404
11,225,325
14,217,729
2013
$
625,475
148,330
1,567,484
232,347
1,243,217
91,168
3,908,021
11,686,939
15,594,960
286,158
456,300
91,800
1,941,845
69,421
91,917
404,432
72,359
3,414,232
10,506,981
13,921,213
296,516
286,217
466,154
92,745
1,643,032
78,938
108,075
315,101
40,265
3,030,527
10,965,196
13,995,723
1,599,237
4,613,268
4,089,037
524,231
4,259,752
7,150,833
(2,891,081)
22,724,722
24,929,658
(2,204,936)
27,898,957
28,064,460
(165,503)
$ (1,384,189)
$ (1,457,347)
The accompanying notes form an integral part of the financial statements.
-4-
Saskatchewan Association of Rural Municipalities
Consolidated Statement of Changes in Fund Balance
For The Year Ended December 31, 2014
Surplus
Fund Balance
Member
Transfers To (Deficit)/ Net Fund Balance
- Beginning of Contributions (From) Fund Change for
- End of the
the Year
the Year
(Withdrawals)
Balance
Year
General Fund
$
4,658,360 $
Insurance & Benefit Restricted Funds:
SARM Benefits
3,377,317
Liability Self-Insurance
12,897,869
Fidelity Bond Self-Insurance
304,609
Property Self-Insurance
2,081,885
18,661,680
Other Restricted Funds:
MREP Program
PREP Program
Invasive Plant Programs:
Plant Management
Plant Control
Strategic Initiatives Program
MCDP Program
Beaver Control Program
Beaver Management in Parks
Irrigation Structures Program
Wild Boar Control Program
MLDP Program
Crown Land Survey Fund
Wilkinson Foundation
Totals
-
$
53,338 $
296,516 $
5,008,214
11,904
11,904
-
(229,965)
421,954
22,604
309,638
524,231
3,147,352
13,331,727
327,213
2,391,523
19,197,815
7,207,974
484,870
-
-
(2,403,276)
(71,977)
4,804,698
412,893
9,153
175,873
1,098,565
75,220
171,617
238,860
20,753
19,958
15,878
4,460
9,523,181
$ 32,843,221 $
-
-
11,904 $
(15,878)
(4,460)
(20,338)
33,000
14,319
23,472
(36,824)
139,049
197,278
1,295,843
26,482
101,702
(23,588)
148,029
37,726
37,726
59,464
298,324
(2,704)
18,049
(1,836)
18,122
(2,204,936)
7,297,907
$ (1,384,189) $ 31,503,936
The accompanying notes form an integral part of the financial statements.
-5-
Saskatchewan Association of Rural Municipalities
Consolidated Statement of Cash Flows
For The Year Ended December 31, 2014
(with comparative figures for the year ended December 31, 2013)
2013
2014
Operating Activities
General Fund Surplus
Items Not Affecting Cash:
Loss on Disposal of Tangible Capital Assets
Amortization of Tangible Capital Assets
Amortization of Deferred Contribution to Purchase
Tangible Capital Assets
Gain On Sale of Tangible Capital Assets
Insurance & Benefit Restricted Funds Suplus (Deficit)
Other Restricted Funds Change in Fund Balance
$
$
1,599,237
6,379
22,767
Members' Contributions - Liability Self Insurance Plan
Members' Building Contributions
External Contribution to Purchase Tangible Capital Assets
Change in Non-Cash Current Assets
Change in Current Liabilities Other Than Deferred
Contributions
Cash (Used) Provided
Financing and Investing Activities
Investment in Tangible Capital Assets
Net Proceeds From Sale of Tangible Capital Assets
Change in Investments, Net
Cash Provided (Used)
(Decrease) Increase in Cash
Cash, Beginning of Year
Cash, End of Year
296,516
$
15,653
(11,523)
524,231
(2,204,936)
(1,366,566)
11,904
148,000
(6,070,753)
(8,642)
(1,243,217)
(2,891,081)
(165,503)
(2,693,553)
10,493
148,000
54,732
(340,268)
(3,603,615)
(10,881,030)
8,521,397
5,700,801
(31,053)
2,500
2,518,200
2,489,647
(70,378)
1,436,980
(3,140,046)
(1,773,444)
(8,391,383)
16,933,869
3,927,357
13,006,512
8,542,486
$ 16,933,869
The accompanying notes form an integral part of the financial statements.
-6-
Saskatchewan Association of Rural Municipalities
Schedule 1 - Operations Summary - Member Services
For The Year Ended December 31, 2014
(with comparative figures for the year ended December 31, 2013)
2014
Prairie Petroleum Buying Group
Fuel & Lubricant Sales
Purchases & Program Fees
Surplus
$
Trading Department
Sales & Rebates
Purchases & Other Expense
Surplus
4,468,994
4,457,985
11,009
2013
$
4,942,656
4,927,444
15,212
2,084,362
1,968,370
115,992
2,120,630
2,003,774
116,856
589,388
278,082
311,306
480,490
194,779
285,711
73,500
10,087
63,413
105,789
15,726
90,063
3,942,225
3,749,494
192,731
3,967,426
3,777,619
189,807
Rural Councillor
Advertising & Subscription Fees
Printing & Distribution Expense
Surplus
43,766
36,270
7,496
46,672
39,344
7,328
Other Member Services
Fees for Service
Expense
Surplus
23,090
6,693
16,397
23,276
6,510
16,766
11,225,325
10,506,981
$
718,344
11,686,939
10,965,196
$
721,743
Legal Services
Fees for Service
Legal Expense
Surplus
Community Planning Services
Fees for Service
Community Planning Expense
Surplus
Benefit Programs
Premium Revenue
Premium Expense
Surplus
Total Revenue
Total Expense
Surplus
The accompanying notes form an integral part of the financial statements.
-7-
Saskatchewan Association of Rural Municipalities
Schedule 2 - Operations Summary Insurance & Benefit Restricted Funds
For The Year Ended December 31, 2014
(with comparative figures for the year ended December 31, 2013)
2014
SARM Benefits Plan
Premiums
Investment Income
Total Revenue
Claims Expense
SARM Administration Fee (Note 10)
Other Expense
Total Expense
Surplus (Deficit)
$
1,661,597
180,245
1,841,842
1,656,407
415,400
2,071,807
(229,965)
2013
$
1,602,231
170,326
1,772,557
1,690,568
400,558
120
2,091,246
(318,689)
Liability Self-Insurance Plan
Premiums
Investment and Other Income
Total Revenue
Claims Expense (Note 9)
SARM Administration Fee (Note 10)
Other Expenses
Total Expense
Surplus (Deficit)
484,637
727,470
1,212,107
168,535
145,391
476,227
790,153
421,954
Fidelity Bond Self-Insurance Plan
Premiums
Investment Income
Total Revenue
Claims Expense (Note 9)
SARM Administration Fee (Note 10)
Other Expense
Total Expense
Surplus
36,135
14,638
50,773
16,890
10,840
439
28,169
22,604
Property Self-Insurance Program
Premiums
Investment Income
Recovery of Claims
Total Revenue
Claims Expense (Note 9)
SARM Administration Fee (Note 10)
Other Expense
Total Expense
Surplus (Deficit)
1,297,545
136,954
74,047
1,508,546
695,218
389,264
114,426
1,198,908
309,638
1,197,098
110,015
16,572
1,323,685
959,812
359,129
98,916
1,417,857
(94,172)
Total Revenue
Total Expense
Surplus (Deficit)
4,613,268
4,089,037
524,231
4,259,753
7,150,833
$ (2,891,080)
$
482,327
634,107
1,116,434
3,095,350
144,698
389,422
3,629,470
(2,513,036)
35,360
11,717
47,077
1,324
10,608
328
12,260
34,817
The accompanying notes form an integral part of the financial statements.
-8-
Saskatchewan Association of Rural Municipalities
Schedule 3 - Operations Summary Other Restricted Funds
For The Year Ended December 31, 2014
(with comparative figures for the year ended December 31, 2013)
2014
2013
$ 19,111,407
21,514,683
(2,403,276)
$ 25,082,825
25,496,321
(413,496)
Provincial Rat Eradication Program
Contributions & Interest
Program Expenses
Change in Fund Balance
1,405,819
1,477,796
(71,977)
1,003,804
1,050,643
(46,839)
Invasive Plant Management Program
Contributions
Program Expenses
Change in Fund Balance
126,569
112,250
14,319
Invasive Plant Control Program
Contributions
Program Expenses
Change in Fund Balance
252,731
289,555
(36,824)
400,000
224,127
175,873
Strategic Initiatives Funding
Contributions
Program Expenses
Change in Fund Balance
691,267
493,989
197,278
538,654
473,755
64,899
Municipal Capacity Development Program
Contributions, Fees & Interest
Program Expenses
Change in Fund Balance
201,387
174,905
26,482
195,770
199,956
(4,186)
Beaver Control Program
Contributions & Interest
Program Expenses
Change in Fund Balance
459,478
483,066
(23,588)
281,793
414,501
(132,708)
Municipal Roads for the Economy Program
Contributions & Interest
Program Expense
Change in Fund Balance
Beaver Management in Provincial Parks
Contributions & Interest
Program Expenses
Change in Fund Balance
79,463
84,442
(4,979)
60,226
22,500
37,726
The accompanying notes form an integral part of the financial statements.
-9-
-
Saskatchewan Association of Rural Municipalities
Schedule 3 Continued - Operations Summary Other Restricted Funds
For The Year Ended December 31, 2014
(with comparative figures for the year ended December 31, 2013)
2014
2013
Irrigation Structure Repair & Replacement Program
Contributions & Interest
$
345,636
Program Expenses
286,172
Change in Fund Balance
59,464
$
250,839
11,979
238,860
Wild Boar Control Program
Contributions & Interest
Program Expenses
Change in Fund Balance
25,224
27,928
(2,704)
539
45,100
(44,561)
Municipal Leadership Development Program
Program Fees & Interest
Program Expenses
Change in Fund Balance
44,978
46,814
(1,836)
64,112
63,057
1,055
Crown Land Survey Fund
Interest
Program Expenses
Change in Fund Balance
-
158
79
79
Wilkinson Foundation
Contributions
Program Expenses
Change in Fund Balance
-
1,000
500
500
Total Revenue
Total Expense
Net Change in Fund Balance for the Year
22,724,722
24,929,658
$ (2,204,936)
27,898,957
28,064,460
$
(165,503)
The accompanying notes form an integral part of the financial statements.
- 10 -
Saskatchewan Association of Rural Municipalities
Notes to the Consolidated Financial Statements
December 31, 2014
1. Purpose of the Organization
The Saskatchewan Association of Rural Municipalities (SARM) is a non-profit organization
incorporated under a special act of the Province.
By bylaw, SARM provides for the election and appointment of officers, with the officers
constituting the Board of Directors. The officers consist of a President, Vice-President, six
directors and one ex-officio director. The President and Vice-President are elected at large
at the Annual Convention. The six directors are elected by delegates, with one director from
each of the six divisions of SARM members.
The mission of SARM is to deliver timely, dependable programs and services to meet the
needs of its members while influencing government policy and facilitating municipalities to
work together to foster rural development and build strong, sustainable communities.
Programs and services delivered by SARM include:
•
Member services delivered by SARM include programs for the bulk purchase of
products for sale to rural municipalities and the provision of legal and planning
services.
•
The SARM Benefits Plan provides short-term disability, vision care and other
benefits to the employees and officials of SARM members. SARM also provides
other group benefit programs for long term disability, extended health and dental
care, and group and optional life insurance.
•
The Fidelity Bond Self-Insurance Plan provides fidelity bond coverage for municipal
employees, along with coverage for cash, securities and registered mail.
•
The Liability Self-Insurance Plan and Property Self-Insurance Program provide
comprehensive property and liability insurance coverage for participating SARM
members.
•
Pursuant to various agreements with Provincial Ministries, SARM delivers a number
of programs that provide assistance to rural municipalities and rural Saskatchewan.
Programs included the Municipal Roads for the Economy Program, Provincial Rat
Eradication Program, Invasive Plant Management Program, Invasive Plant Control
Program, Municipal Capacity Development Program, Beaver Control Program,
Beaver Management in Provincial Parks Program, Irrigation Structure Repair and
Replacement Program, and Wild Boar Control Program.
•
SARM, on behalf of several municipal organizations, is the administrator of the
Municipal Leadership Development Program (MLDP).
SARM is exempt from income tax.
- 11 -
Saskatchewan Association of Rural Municipalities
Notes to the Consolidated Financial Statements
December 31, 2014
2. Significant Accounting Policies
The financial statements have been prepared in accordance with Canadian accounting
standards for not-for-profit organizations and reflect the following significant policies:
(a) Fund Accounting
SARM follows the restricted fund method of accounting for contributions.
The general operations of SARM, along with member services, are accounted for
through the General Fund. This fund reports unrestricted resources and contributions.
Revenues and expenses related to the operation of the SARM Benefits Plan, the Liability
Self-Insurance Plan, the Fidelity Bond Self-Insurance Plan, and the Property SelfInsurance Program are accounted for through the Insurance and Benefit Restricted
Funds. The Agreements for the Liability Self-Insurance Plan and the Property SelfInsurance Program specify that the Fund Balances of these Funds are the beneficial
property of the individual participants. The agreements for the SARM Benefits Plan and
Fidelity Bond Self-Insurance Plan provide for the retention of a reserve as determined by
the SARM Board of Directors – the fund balance is deemed to be the required reserve.
Contributions, allocated interest, and expenses for programs or initiatives funded
through externally restricted contributions or revenues are accounted for through the
Other Restricted Funds. Program agreements for programs funded by the Province
require unexpended funds to be returned to the Province. Pursuant to the agreement for
SARM to administer the MLDP Program, the fund balance is attributable to the program
partners, with the surplus periodically distributed to the partners. Strategic Initiatives
funding is provided by the Province – allocation of funding to specific initiatives must be
approved by the Ministry of Government Relations.
An Investment Fund is used to account for an investment pool that includes the
investments of the General Fund, the benefit and insurance restricted funds and two
trust funds administered by SARM as trustee.
(b) Revenue Recognition
(i)
Revenues are recorded using the accrual basis of accounting whereby revenues are
recognized as they are earned and measurable.
Fees (trade show, membership, and registration), insurance and benefit premiums,
and other contributions received in the current or previous fiscal years which will be
earned or are due in the next or future fiscal year are deferred and recognized in the
period earned.
Contributions restricted for the purchase of tangible capital assets are deferred and
taken into revenue annually in an amount equal to the amortization for those assets.
(ii) Investment income includes bank interest and investment income allocated from the
investment pool (see Notes 4 and 5). The investment pool includes fixed income
investments, structured notes, and equity investments.
- 12 -
Saskatchewan Association of Rural Municipalities
Notes to the Consolidated Financial Statements
December 31, 2014
Investment income for fixed income investments includes accrued interest,
amortized premium and discount, and realized gains or losses on the sale or
redemption of investments. Purchase premiums and discounts are amortized on a
straight-line basis over the earlier of the term to maturity or the call date.
Investment income for structured notes includes interest received in the year,
realized gains or losses on the sale or redemption of investments, and unrealized
gains or losses resulting from the change in market value for the structured note
return investments.
Investment income for equity investments includes realized gains or losses on the
sale of investments, unrealized gains or losses resulting from the change in market
value of the equity investments, and dividends received, less the fees for investment
management fees of the equity investments.
(c) Expense Recognition
(i)
Expenses are accounted for in the period the goods and services are acquired and
a liability is incurred or transfers are due.
(ii) Insurance claims (property, fidelity bond and liability claims) are expensed when
liability is established and the amount of the loss can be reasonably determined
(see Notes 8 and 9). This practice is appropriate for the Liability Self-Insurance
Plan, Fidelity Bond Self-Insurance Plan and Property Self-Insurance Program as the
agreements permit the Board to assess a special levy upon Plan participants should
the Plan resources become depleted. The terms of the contracts oblige the
participants to pay any such levy regardless of whether they subsequently withdraw
from the Plan. Participants who withdraw are also liable for their pro-rata share of
claims or expenses which subsequently become payable but which were incurred
during the period of their participation, even if not recovered through a special levy.
The continued existence of the Plans due to any significant losses is not limited by
future premium renewals.
(iii) Claims from rural municipalities for reimbursement of expenditures eligible for
funding under the Municipal Roads for the Economy Program (MREP), the
Provincial Rat Eradication Program (PREP) and the Beaver Control Program are
recognized by SARM when a valid claim has been received by December 31, 2014.
Claims for the Invasive Plant Control Program are subject to review by a technical
committee – claims for this program were recognized based on claims received by
December 31, 2014 and an estimate of the claim payment based on program
guidelines.
(iv) SARM participates in a contributory defined benefit plan for its employees. The
defined benefit plan is a multi-employer plan, and as such, the contributions are
expensed when due and payable. The obligation for accrued vacation pay has
been accounted for at an undiscounted value at the current rate of pay.
- 13 -
Saskatchewan Association of Rural Municipalities
Notes to the Consolidated Financial Statements
December 31, 2014
(d) Inventory
Inventory is valued at the lower of cost or net realizable value, with cost being
determined on a moving average.
(e) Financial Instruments
SARM initially measures its financial assets and financial liabilities at fair value adjusted
by, in the case of a financial instrument that will be subsequently measured at fair value,
the amount of transaction costs directly attributable to the instrument.
Financial assets subsequently measured at fair value are cash, accounts receivable, and
structured note and equity investments. Financial liabilities subsequently measured at
fair value are accounts payable (including government remittances payable) and
accrued liabilities. The fair value of accounts receivable and accounts payable
approximate their carrying value due to their nature or capacity for prompt liquidation.
The fair value of structured notes and equity investments is market value, with the
market value as reported by CIBC Wood Gundy.
Investments that are fixed income investments are subsequently recorded at amortized
cost, with the premium or discount amortized on a straight-line basis over the term to
maturity or call date.
At the end of each reporting period, SARM assesses whether there are any indications
that a financial asset measured at amortized cost may be impaired. When there is an
indication of impairment that has a significant adverse change in the expected timing or
amount of future cash flow from a financial asset, the carrying amount of the asset is
reduced to the net realizable value. There are no financial assets that have been
recorded at net realizable value.
Investments are reported on the Statement of Financial Position as either current assets
or long-term assets.
Investments classed as current assets are fixed income
investments that mature within one year, along with structured note investments and
equity investments. Fixed income investments with a maturity greater than one year are
classified as long-term assets.
(f) Tangible Capital Assets
Purchased tangible capital assets are recorded at cost less accumulated amortization.
Contributed tangible capital assets are recorded at fair value at the date of contribution,
when fair value can reasonably be determined. Tangible capital assets are amortized
over their estimated useful lives. Amortization on vehicles is calculated on the declining
balance at a rate of 25%. Amortization on all other tangible capital assets is calculated
using the straight line method: office furniture and the Group Benefits custom software
(10 years), the SARM website and Policy Tracking software (5 years), computer
hardware, software and other equipment (3 years), and the Fidelity Bond custom
software (4 years). Leasehold improvements are amortized using the straight line
method over the term (5 years) of the lease. When a tangible capital asset no longer
contributes to SARM’s ability to provide services, its carrying amount is written down to
its residual value.
- 14 -
Saskatchewan Association of Rural Municipalities
Notes to the Consolidated Financial Statements
December 31, 2014
(g) Liability Self-Insurance Plan Reserves (Fund Balance)
The reserves (fund balance) of this Plan are the beneficial property of the individual
participants. Each participant’s share of the total reserve consists of:
(i)
Initial reserve contributions – Each participant, upon joining the Plan, is required to
make reserve contributions of three times their annual premium for each of the first
three years they participate in the Plan.
(ii) Investment income – The investment income for the Plan for the year is allocated to
the reserves based on the participant’s reserve balance at the start of year and
reserve contributions made during the year.
(iii) Claims expense for prior years – When a claim for a prior year is resolved and paid
in the current year, if the claim is in excess of $10,000, the expense is allocated
against the reserves of the participants of the Plan in the year that the claim was
initiated. The claims expense is allocated based on each participant’s premiums for
the prior year as a percent of the total premiums paid in the prior year.
(iv) Net surplus or deficit for the current year – The net surplus or deficit for the current
year (excluding investment income and claims expense for prior years) is allocated
to the reserves based on each participant’s premiums for the year as a percent of
the total premiums paid in the year.
(h) Property Self-Insurance Reserves
The reserves (fund balance) of this Program are the beneficial property of the individual
participants. Each participant’s share of the total reserve consists of:
(i)
Net surplus or deficit for the current year – The net surplus or deficit for the current
year (excluding investment income) is allocated based on each participant’s
premiums for the year as a percent of the total premiums paid in the year.
(ii) Investment income – The investment income for the Program for the year is
allocated to the reserves of the participants based on the participants reserve
balance, after the allocation of the net surplus or deficit for the current year.
(i) Use of Estimates
The preparation of financial statements requires management to make estimates and
use assumptions that affect the reported amounts of assets and liabilities and the
reported amount of revenues and expenditures during the year. Management reviews
all significant estimates affecting the financial statements. The significant estimates that
affect the financial statements are the market values used in the valuation of equity
investments and structured notes and estimates for accrued claims. These estimates
have implications on the valuation of certain investments, the determination of
investment income and the determination of the claims expense for the insurance plans.
- 15 -
Saskatchewan Association of Rural Municipalities
Notes to the Consolidated Financial Statements
December 31, 2014
3. Financial Risk Management
SARM has a comprehensive risk management framework to monitor, evaluate and manage
the principal risks assumed with financial instruments. The significant financial risks to
which SARM is exposed are:
(a) Credit Risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for
the other party by failing to discharge an obligation.
SARM is exposed to credit risk on the accounts receivable from its customers and
members, however it does not have a significant exposure to any individual customer.
Accounts receivable are monitored to ensure collection of accounts. SARM has incurred
insignificant bad debt expense during the past three years.
SARM is exposed to credit risk with respect to cash and investments. The investment
pool of approximately $53.2 million is primarily invested in the debt of financial
institutions (77.8% of the total), provincial governments (7.4% of the total), or structured
notes and equity investments (14.8% of the total). The credit risk for fixed income
investments is minimized by ensuring that these assets are invested in financial
obligations of governments or major financial institutions that have been accorded
investment grade ratings by a primary rating agency. The credit risk is further minimized
by establishing investment policies that set limits on the investments by sector, by
issuer, and the term of the investments. The credit risk for equity investments is
minimized through engaging external investment managers to actively manage these
investments.
(b) Liquidity Risk
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations
associated with financial liabilities. SARM meets its liquidity risk by monitoring cash
flows from operations along with the cash flow of the investment pool. SARM has an
authorized line of credit in the event there are short-term cash flow requirements – the
line of credit was not used in 2014.
(c) Price Risk
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. Exposure to price risk is mainly in
structured notes and equity investments. The price risk for SARM is limited as 14.8%
(2013 – 0.6%) of investments are valued at fair value. If prices of these investments had
decreased or increased by 10%, with all other variables held constant, the fund balance
of SARM and the restricted funds would have decreased or increased, respectively, by
approximately $435,500 (actual results will differ from this sensitivity analysis and the
difference could be material). While these investments are significant in terms of the
total investment pool, the entities that comprise the investment pool typically do not
require cash that would necessitate the sale of investments. Equity investments are
considered a prudent long term investment and given the limited potential to require
- 16 -
Saskatchewan Association of Rural Municipalities
Notes to the Consolidated Financial Statements
December 31, 2014
disposal of investments to meet cash obligations, the investment pool is well positioned
to weather market fluctuations that will inevitably occur. SARM does not use any
derivative financial instruments to alter the effects of this risk.
4. Investments
The investment pool includes investments of SARM (General Fund, SARM Benefits Plan,
Liability Self-Insurance Plan, Fidelity Bond Self-Insurance Plan, and Property Self-Insurance
Program), the Rural Municipal Tax Loss Compensation Trust Fund and the Rural Municipal
Specific Claims Tax Loss Compensation Trust Fund.
The assets and investment income attributed to each fund is apportioned based on the
investment of each fund in the pool. SARM’s share of the assets of the investment fund at
December 31, 2014 was 55.2% (2013 – 53.3%). SARM’s share of the bank balance and
accrued interest receivable as at December 31, 2014 are included in the bank and accrued
interest receivable balances in the Statement of Financial Position.
The following table provides a summary of the SARM’s share of the investments in the
investment pool at December 31, 2014.
Investment Categories
Measured At Amortized Cost
Fixed Income - Canadian Financial Institutions
Fixed Income - Canadian Provinces
Fixed Income - Canadian Municipal
2014
2013
$ 22,856,889
2,167,508
25,024,397
$ 22,934,869
2,267,090
491,180
25,693,139
922,164
2,702,659
730,346
4,355,169
156,906
156,906
$ 29,379,566
$ 25,850,045
$
$
Measured At Fair Value
Structured Notes - Canadian Financial Institutions
Equities - Canadian Corporations
Equities - US Corporations
Total Investments
Current Assets
Fixed Income - Canadian Financial Institutions
Fixed Income - Canadian Provinces
Fixed Income - Canadian Municipal
Structured Notes - Canadian Financial Institutions
Equities - Canadian Corporations
Equities - US Corporations
Long Term Assets
Fixed Income - Canadian Financial Institutions
Fixed Income - Canadian Provinces
Total Investments
- 17 -
4,511,265
276,024
922,165
2,702,659
730,346
9,142,459
2,186,326
260,326
491,180
156,906
3,094,737
18,345,626
1,891,482
20,237,108
20,748,544
2,006,764
22,755,308
$ 29,379,567
$ 25,850,045
Saskatchewan Association of Rural Municipalities
Notes to the Consolidated Financial Statements
December 31, 2014
For the investments measured at amortized cost, the market value of the investments as at
December 31, 2014 was $30,119,957 (2013 - $26,302,623). The investments have maturity
dates that range from 2015 to 2022 – the investments are staggered over time to provide for
annual cash flow to meet the requirements of the funds participating in the investment pool.
Some investments have a fixed rate of interest – rates vary from 2.99% to 6.00%. For some
investments that have a fixed rate of interest, the purchase price included a discount or
premium. The amortization of the premium or discount will change the effective interest rate
for the investments. For other fixed income investments, there is no interest paid – these
investments were purchased at a discount with the annual investment income attributed to
the amortized discount.
There are two structured note investments - a note with a face value of $700,000 (market
value of $686,630 at December 31, 2014), is protected as to principal, while the second note
with a face value of $1,000,000 (market value of $983,810 at December 31, 2014) is not
protected as to principal. The current structured notes were purchased in 2014, with
maturity dates in 2019, although the notes are subject to being called. Interest paid on
structured notes is specified in the investment documents and is linked to the change in the
value of certain shares or market indices.
Equity investments were added to the investment portfolio in 2014. Equity investments are
primarily in investments that pay dividends and include investments in both Canadian and
US companies, including both preferred and common shares. Equity investments are
valued at fair value (market value). The investment income for equity investments includes
realized and unrealized gains and dividends, less investment management fees.
- 18 -
Saskatchewan Association of Rural Municipalities
Notes to the Consolidated Financial Statements
December 31, 2014
5. Investment Income
2014 Investment Income
SARM
SARM
General Fund Benefits Plan
Liability Self- Property Self- Fidelity Bond
Insurance
Insurance
Self-Insurance
Plan
Program
Plan
Interest From Cash
Investment Bank Interest
$
1,296 $
830 $
3,443 $
69 $
635
General Bank & Other Interest
129,937
-
-
-
-
Interest Allocated to Programs
(123,117)
-
-
-
-
Investments Measured At Amortized Cost
Interest - Fixed Income
116,094
69,743
293,735
5,924
54,354
Amortization - Fixed Income
95,061
54,971
233,241
4,719
43,318
Gains (Losses) - Fixed Income
10,474
11,640
41,508
832
8,142
Investments Measured at Fair Value
Interest - Structured Notes
4,314
2,226
9,695
198
1,808
Gains (Losses) - Structured Notes
(4,332)
(1,939)
(8,997)
(186)
(1,650)
Gains (Losses) - Equity Investments
25,893
31,921
107,591
2,139
21,679
Dividends - Equities
26,757
14,699
62,529
1,273
11,773
Management Fees - Equities
(7,322)
(3,846)
(16,276)
275,055 $
180,245 $
$
(330)
726,469 $
(3,105)
14,638 $
136,954
2013 Investment Income
SARM
SARM
General Fund Benefits Plan
Liability Self- Property Self- Fidelity Bond
Insurance
Insurance
Self-Insurance
Plan
Program
Plan
$
$
Interest From Cash
76,470 $
-
General Bank & Other Interest
Investment Bank Interest
40,095
-
-
-
$
-
-
$
-
-
Interest Allocated to Programs
(91,210)
-
-
-
-
Investments Measured At Amortized Cost
Interest - Fixed Income
78,928
113,029
420,874
7,768
73,047
Amortization - Fixed Income
43,241
55,578
206,068
3,836
35,814
-
-
-
-
Interest - Structured Notes
538
770
2,869
53
498
Gains
Notes
Ga s (Losses)
( osses) - Structured
qu ty
est
e ts
268
949
3,297
60
656
Dividends - Equities
-
-
Gains (Losses) - Fixed Income
-
Investments Measured at Fair Value
Management Fees - Equities
$
-
-
-
-
148,330 $
170,326 $
633,108 $
- 19 -
11,717 $
110,015
Saskatchewan Association of Rural Municipalities
Notes to the Consolidated Financial Statements
December 31, 2014
6. Tangible Capital Assets
Description
Land
Leasehold Improvements
Equipment & Software
Custom Software
Office Furniture
Vehicle
Accumulated
Amortization
Cost
$
$
625,000
46,883
16,094
155,607
3,415
31,053
878,052
$
$
16,409
11,957
145,969
1,030
5,823
181,188
2014 Net
2013 Net
$ 625,000
30,474
4,137
9,638
2,385
25,230
$ 696,864
$ 625,000
39,851
7,542
12,991
2,727
9,346
$ 697,457
SARM received external funding through the Strategic Initiatives Program to pay for
acquisition of certain tangible capital assets required as a result of the move to new office
space. The tangible capital assets acquired included leasehold improvements, computer
equipment and furniture. The total cost of these tangible capital assets was $54,732. The
funding received is recognized as deferred revenue and taken into revenue annually in an
amount equal to the amortization of the assets acquired with the funding. The revenue and
amortization in 2014 was $11,524 resulting in deferred revenue of $34,566 at December 31,
2014.
7. Deferred Contributions and Revenue
2014
Deferred Contributions:
Membership Fees - New Building
Contribution to Purchase Tangible Capital Assets
$
Deferred Revenue:
Membership Fees
Tradeshow Fees
Sponsorship
Municipal Leadership Development Fees
Fidelity Bond Plan Premiums
SARM Benefits Plan Premiums
Liability Insurance Plan Premiums
115,000
34,566
149,566
2013
$
4,825
117,422
750
4,125
4,795
81,675
39,995
253,587
$
403,153
46,090
46,090
26,115
86,982
750
2,250
2,965
65,559
20,627
205,248
$
251,338
SARM membership fees were increased in 2010 by $500 per rural municipality ($148,000 in
total each year) on the basis that the increased fee would be used for the costs associated
with a new building. Of the amount collected to date ($740,000), $625,000 was transferred
- 20 -
Saskatchewan Association of Rural Municipalities
Notes to the Consolidated Financial Statements
December 31, 2014
to SARM’s General Fund Balance to fund the acquisition of property on Rose Street. The
balance of $115,000 remains as deferred contributions.
The deferred revenue for Contribution to Purchase Tangible Capital Assets is funding
provided through the Strategic Initiatives funding for leasehold improvements and the cost of
furniture and equipment acquired when SARM relocated to new offices. The total funding
related to the acquisition of tangible capital assets was $54,732. The funding is taken into
revenue annually in an amount equal to the amortization for those assets acquired with the
funding. The revenue and amortization in 2014 was $11,524 (2013 - $8,642), leaving
deferred revenue of $34,566 at December 31, 2014.
Some SARM fees applicable to the 2015 fiscal year were invoiced in 2014. To the extent
that the fees are paid in 2014, the amount received (excluding GST) is accounted for as
deferred revenue.
8. Board of Directors’ Remuneration
General Fund expenditures include remuneration and payments provided to the Board of
Directors (portions included in Conventions and Division Meetings and Board and Other
Meetings). The Board received the following remuneration and payments:
•
Per Diem payments of $295 per meeting day, in addition to one day per month for
meeting preparation time.
•
A meal allowance of $60 per day.
•
A phone/data allowance of $100 per month. The President is reimbursed for 90% of
their cell phone costs.
•
Remuneration for travel time of 25 cents per kilometer.
•
Honorariums of $10,000 for the President, and $6,000 for the Vice-President. The
2014 honorariums were pro-rated by number of days in the position.
•
Reimbursement for use of a personal vehicle at a rate of 55 cents per kilometer.
•
Reimbursement of other expenses (hotels, airfare, taxis and sundry expenditures)
based on actual expenditures incurred.
The next table is a summary of the number of days in 2014 and 2013 for which the Board
members received per diem payments.
- 21 -
Saskatchewan Association of Rural Municipalities
Notes to the Consolidated Financial Statements
December 31, 2014
2014
Acting President Orb
President Marit
Acting Vice-President Steele
Vice-President Orb
Director, Division 1 - Sterling
Director, Division 1 - Taylor
Director, Division 2 - Nordgulen
Director, Division 3 - Steele
Director, Division 4 - Malanowich
Director, Division 5 - Harwood
Director, Division 5 - Stevens
Director, Division 6 - Wiens
Director, Division 6 - Senecal
Director, Ex Officio - Leurer
From October 27, 2014
To October 25, 2014
From November 12, 2014
To October 26, 2014
From March 14, 2014
To March 13, 2014
From March 14, 2014
To March 13, 2014
2013
34.5
99.8
19.0
102.0
62.0
18.5
104.5
88.0
69.5
58.5
13.0
64.0
48.0
154.0
110.5
96.0
95.5
91.0
71.0
65.0
55.0
19.5
43.5
781.3
801.0
9. Claims Expense
Details of the claims expense for the Liability Self-Insurance Plan, Property Self-Insurance
Program and Fidelity Bond Self-Insurance Plan are shown in the following tables.
2014
Liability Self-Insurance Plan
Claims Expense
Claims for Prior Years
Claims Paid
Claims Paid From Accrued at Prior Year End
Adjustment to Prior Year Accrued Claims
Claims for Current Year
Claims Paid
Claims Accrued At Year End
Claims Expense For Year
LSIP Accrued Claims
Accrued Claims - Start of Year
Claims Paid from Accrued Claims
Adjustment to Accrued Claims for Prior Years
Accrued for Current Year Claims
Accrued Claims - End of Year
- 22 -
$
$
$
$
28,938
(28,938)
(25,500)
(25,500)
83,611
110,425
168,536
3,245,524
(28,938)
(25,500)
110,424
3,301,510
2013
$
$
$
$
47,260
(47,260)
24,712
24,712
61,002
3,009,636
3,095,350
258,436
(47,260)
24,712
3,009,636
3,245,524
Saskatchewan Association of Rural Municipalities
Notes to the Consolidated Financial Statements
December 31, 2014
2014
Property Self-Insurance Program
Claims Expense
Claims for Prior Years
Claims Paid
Claims Paid From Accrued at Prior Year End
Adjustment to Prior Year Accrued Claims
Claims for Current Year
Claims Paid
Claims Accrued At Year End
Claims Expense For Year
PSIP Accrued Claims
Accrued Claims - Start of Year
Claims Paid from Accrued Claims
Adjustment to Accrued Claims for Prior Years
Accrued for Current Year Claims
Accrued Claims - End of Year
Fidelity Bond Self-Insurance Plan
Claims Expense
Claims for Current Year
Claims Paid
Claims Accrued At Year End
Claims Expense For Year
Fidelity Bond Accrued Claims
Accrued Claims - Start of Year
Claims Paid from Accrued Claims
Accrued for Current Year Claims
Accrued Claims - End of Year
$
$
$
$
$
$
$
$
2013
237,798
(196,827)
(131,093)
(90,122)
314,740
470,600
695,218
$
$
333,420
(196,827)
(131,093)
470,600
476,100
$
16,700
191
16,891
$
191
191
$
$
$
$
110,271
(82,690)
(19,195)
8,386
681,336
270,090
959,812
165,215
(82,690)
(19,195)
270,090
333,420
1,324
1,324
-
10. Contingencies
The General Fund is contingently liable as a participant in all the Insurance Plans for its
proportionate share of any special levy that may be assessed in the event resources
become depleted and its share of claims expense paid in future years for claims initiated in
2014 and prior years.
Accrued claims reported in the consolidated financial statements represent management’s
best estimate of the Liability Self-Insurance Plan; Property Self-Insurance Program and
Fidelity Bond Self-Insurance Plan liabilities for claims in progress. This estimate is based on
information at year-end. Circumstances beyond the control of SARM or information not
available during the preliminary investigations could result in settlement significantly higher
or lower than the current estimate.
- 23 -
Saskatchewan Association of Rural Municipalities
Notes to the Consolidated Financial Statements
December 31, 2014
At year-end, the Liability Self-Insurance Plan and Property Self-Insurance Program were
conducting preliminary investigations on a number of potential claims. The result of these
claims is not determinable at this time and in some instances may result in a significant
claim to be accrued by the Plan in a future period.
11. Administration Fees
Administration fees are a major component of SARM’s general revenues. The following
table provides details on the sources of the administration fees.
2014
General Administration Fees:
TLE Trust Fund
$
Specific Claims Trust Fund
Municipal Potash Tax Sharing Administration Board
Municipal Habitat Conservation Fund
Provincial Sales Tax Commission
Administration Fees From Restricted Funds:
SARM Benefits Plan
Liability Self-Insurance Plan
Fidelity Bond Self-Insurance Plan
Property Self-Insurance Program
Invasive Plant Management Program
Invasive Plant Control Program
MREP Program
Irrigation Structures Program
PREP Program
MCDP Program
Beaver Control Program
Beaver Management in Provincial Parks
Strategic Initiatives - Planning Services
Strategic Initiatives - Other Initiatives
Wild Boar Control Program
Crown Land Survey Fund
MLDP Program
Total Administration Fees
67,649
3,246
13,000
11,763
1,166
96,824
415,400
145,391
10,841
389,264
10,000
72,000
154,690
5,140
86,238
10,849
45,943
6,750
103,782
136,378
2,665
7,260
1,602,591
$ 1,699,415
2013
$
63,294
3,245
10,000
10,000
1,180
87,719
400,558
144,698
10,608
359,129
7,500
54,000
152,022
3,625
71,287
12,647
38,713
116,874
92,665
5,000
79
10,360
1,479,765
$ 1,567,484
The administration fees from the TLE Trust Fund and Specific Claims Trust Funds are 5% of
the tax loss compensation for the year for properties transferred to reserve, with 95% of the
compensation paid to rural municipalities. The administration fees from the Potash Tax
Sharing Board and the Municipal Habitat Conservation Fund are pursuant to agreements for
fees to administer the distribution of funds to municipalities.
- 24 -
Saskatchewan Association of Rural Municipalities
Notes to the Consolidated Financial Statements
December 31, 2014
The administration fees from the Liability Self-Insurance Plan, Fidelity Bond Self-Insurance
Plan and Property Self-Insurance Program are 30% of the premiums. The fee from the
SARM Benefits Plan is 25% of premiums.
The administration fees for the Provincial Program Funds are in accordance with the
agreements for delivery of the programs. The administrative fees are either a specific fee
set in the agreement, or a recovery of allocated SARM costs pursuant to the provisions of
the agreement.
The fees for the restricted funds are accounted for as an expense in the restricted funds
(Schedules 2 and 3) and revenue in the General Fund.
12. Member Services
Schedule 1 summarizes the revenues and expenditures for member services undertaken by SARM
to support rural municipalities. Services include:
•
Prairie Petroleum Buying Group – Prairie Fuel Advisors (PFA) manages a fuel buying
program for several municipal organizations in Canada. The program enables participants
to benefit from the pricing received through volume contracts with fuel suppliers. SARM
coordinates the participation of rural municipalities in Saskatchewan. There are about 42
municipalities that purchase fuel and lubricants through the program. In addition to the price
of the fuel or lubricants, a fee of 1.325 cents per litre on fuel and 6 cents per litre on
lubricants is added to cover administrative costs of the program. The fee is split, with 75%
paid to PFA and 25% retained by SARM. While the total revenue and expense for fuel is
substantial, the return to SARM is limited to 25% of the commission. SARM’s share of the
commission in 2014 was $11,009 (2013 - $15,212).
•
Trading Department - SARM purchases goods and services for sale to members, including
office products, road signs, tires and rodent control products. Through negotiated
arrangements with suppliers, SARM can provide savings to participating municipalities, and
generate revenue for SARM. In 2014, the net revenue to SARM from the operations of the
Trading Department was $115,992 (2013 - $116,856).
•
Legal Services - SARM provides legal services on a fee for service basis to members and
the SARM benefit and insurance funds. In 2014, the fees charged to members by the
lawyers employed by SARM were $57,533 (2013 - $83,846). SARM has a contract lawyer
for which fees charged to member municipalities were $67,638 (2013 - $19,495). The fees
charged to the SARM benefit and insurance funds were $263,231 (2013 - $216,694). The
fees to the benefit and insurance funds are recorded as an expense to those funds.
•
Community Planning Services - SARM provides community planning services on a fee for
service basis to members. The cost of community planning services, including an allocation
of certain general expenses, exceeds the revenue generated through fees for service. The
net expense of community planning is funded through an administrative fee charged to the
Strategic Initiatives Program. The following table shows the calculation of the net expense.
- 25 -
Saskatchewan Association of Rural Municipalities
Notes to the Consolidated Financial Statements
December 31, 2014
2014
Fees for Service
Other Fees
$
Planning Expenses (Direct & Allocated)
Net Expense - Community Planning
$
67,443
6,057
73,500
177,282
103,782
2013
$
$
93,630
12,159
105,789
222,663
116,874
•
Benefit Programs - SARM coordinates benefit programs for participating member
municipalities. The programs are a long term disability (LTD) program, an extended health
and dental benefits (EHD) program, a group life insurance program and an optional life
insurance (OLI) program. The benefit programs are provided through external carriers.
SARM coordinates the participation in the program, collecting premiums from participating
municipalities and paying the plan carriers. SARM retains a program administration fee –
the fees retained by SARM in 2014 were $192,731 (2013 - $189,807).
•
Other Member Services - includes the publication and distribution of the Rural Councillor
magazine, printing and distribution of calendars (desk, wall and pocket calendars), the
printing and sale of grid road maps, and the distribution of notices and advertisements for
members and other parties. These services are funded through advertising fees,
subscription fees, service fees and the sale of the products. The net revenue from these
other services in 2014 was $23,831 (2013 - $24,094).
13. Other Restricted Funds
Schedule 3 summarizes the revenues and expenditures for programs undertaken by SARM to
support municipalities. Programs are the result of agreements between SARM and other entities.
Many programs result from agreements with the Province, with the terms of the agreement setting
out the responsibilities of SARM, the funding available and the eligible expenditures for the program.
Each program is accounted for as a restricted fund with unexpended funds reported as restricted
fund balance.
•
Municipal Roads for the Economy Program (MREP) – SARM entered into an agreement
with the Province (Ministry of Highways) in 2009 for delivery of the MREP Program. The
current agreement is for the term April 1, 2014 to March 31, 2019. The amount of funding is
determined on an annual basis by the Province – the funding for 2014-15 is $25,500,000
(2013-14 - $25,500,000). The agreement establishes a Program Management Board to
manage the delivery of the program and sets out the responsibilities of SARM. Pursuant to
the agreement, SARM can charge actual and reasonable incremental salaries and
administrative costs to the program, and allocated costs subject to the allocated costs being
approved by the Program Management Board. The following table provides summary
information on program revenue and expenditures.
- 26 -
Saskatchewan Association of Rural Municipalities
Notes to the Consolidated Financial Statements
December 31, 2014
•
2014
2013
Provincial Contributions
Interest
Total Revenue
$ 19,000,000
111,407
19,111,407
$ 25,000,000
82,825
25,082,825
Administrative Costs
Traffic Counts
Bridge Inspections
Corridor Project Grants
Heavy Haul Road Project Grants
Corridor Maintenance Grants
Corridor Sign Grants
Bridge & Culvert Project Grants
Total Expense
518,607
274,560
702,675
2,307,973
5,515,185
7,188,470
5,007,213
$ 21,514,683
438,896
215,600
1,002,658
3,716,112
6,436,995
8,514,780
10,268
5,161,012
$ 25,496,321
Provincial Rat Eradication Program (PREP) – SARM has entered into agreements since
2011 with the Province (Ministry of Agriculture) for the delivery of the PREP program. The
current agreement is for delivery of the program from April 1, 2014 to March 31, 2015. The
agreement provides funding of $1,400,000 ($1,000,000 in 2013-14). Funding includes
$1,175,000 to be distributed to rural municipalities ($800,000 in 2013-14) and $225,000
($200,000 in 2013-14) for the delivery of the program, including SARM administrative costs.
The following table provides summary information on program revenue and expenditures.
2014
Provincial Contributions
Interest
Total Revenue
$ 1,400,000
5,819
1,405,819
Administration Expenses
Board & Regional PCO Supervisors
Workshop Expenses
Payments to Rural Municipalities
Total Expense
102,693
33,784
8,356
1,332,963
$ 1,477,796
2013
$
$
1,000,000
3,804
1,003,804
89,530
38,810
922,303
1,050,643
•
Invasive Plant Management Program – SARM has entered into agreements with the
Province (Ministry of Agriculture) for the delivery of the Invasive Plant Management
Program. The current agreement is for a term March 15, 2013 to March 31, 2018. Funding
of up to $150,000 per year is provided. The funding is used for a contracted resource to
deliver the program throughout the province. Eligible program expenditures in 2014 were
$112,250 (2013 - $84,442), including SARM administration costs of $10,000 (2013 $7,500).
•
Invasive Plant Control Program – In 2013 SARM entered into an agreement with the
Province (Ministry of Agriculture) for the delivery of the Invasive Plant Control Program. The
current agreement is for the 2014-15 fiscal year. This program provides funding to cover
- 27 -
Saskatchewan Association of Rural Municipalities
Notes to the Consolidated Financial Statements
December 31, 2014
some or all of the costs for control of certain invasive plant species. Rural municipalities,
First Nations Bands and other landowners or lessors are eligible for funding under the
program. The total approved funding for 2014-15 is $800,000 ($800,000 in 2013-14) of
which a maximum of $80,000 can be spent on administration. Funding of $400,000 was
received in 2014 ($400,000 in 2013). Expenditures, including accrued claims at the end of
the year are $289,555 (2013 - $224,127). The expenditures include $75,320 (2013 $54,000) for SARM’s administration of the program.
•
Strategic Initiatives – Since 2010 the Province (Ministry of Government Relations) has
provided funding to SARM for Strategic Initiatives that benefit rural municipalities. The
initiatives undertaken and the funding allocated to those initiatives are subject to the
approval of the Ministry. Total funding provided to date has been $2,808,284. Funding
provided in 2014 was $691,267 (2013 - $538,654). Program expenditures in 2014 were
$493,989 (2013 - $473,755). Strategic initiatives funded through the program include:










Municipal administrators intern program (MAIP)
Resource and Economic Development Committee
Community planning
Alternative bridge design project
Election reporting website
Bylaw enforcement initiatives
Asset management initiatives
Infrastructure Committee
Outside worker education
Assistance to SARM for the office relocation.
•
Municipal Capacity Development Program (MCDP) – SARM entered into an agreement
with the Province (Ministry of Government Relations) in December 2009, for delivery of the
Municipal Capacity Development Program (MCDP) to Saskatchewan municipalities. The
program is a joint effort of the Province, SARM, SUMA and the New North. The program is
to assist municipal associations in developing municipal capacity and promoting intermunicipal co-operation. The agreement has been extended to the end of 2015. The total
approved funding for the program is $1,000,000. Funding received in 2014 was $200,000
(2013 - $175,000). Interest allocated to the program in 2014 was $892 (2013 - $907).
Eligible program expenditures in 2014 were $174,905 (2013 - $199,956). SARM’s fees to
cover administration and the audit in 2014 were $13,983 (2013 - $15,996). SARM’s
administrative fee combined with the cost of the audit is limited to 8% of total expenditures.
•
Beaver Control Program - SARM entered into an agreement with the Province (Ministry of
Agriculture) in 2011. The current agreement is for delivery of the program from April 1, 2014
to March 31, 2015. Funding of up to $500,000 is to be provided in 2014-15 ($500,000 in
2013-14). Funding is to be provided to rural municipalities and First Nation Bands for the
control of problem beavers and beaver structures. Costs for administration of the program
are limited to 10% of the total funding. The following table provides summary information on
program revenue and expenditures.
- 28 -
Saskatchewan Association of Rural Municipalities
Notes to the Consolidated Financial Statements
December 31, 2014
2014
Provincial Contributions
Interest
Total Revenue
$
SARM Administration Fee
Payments to RM's & First Nation Bands
Total Expense
$
457,947
1,531
459,478
45,943
437,123
483,066
2013
$
$
279,955
1,838
281,793
38,713
375,788
414,501
•
Beaver Management in Provincial Parks Program - SARM entered into an agreement
with the Province (Ministry of Agriculture) in 2014. The current agreement is for delivery of
the program from March 1, 2014 to March 31, 2015. Funding for the program is jointly
provided by the Ministry of Agriculture and the Ministry of Parks, Culture and Sport, up to a
combined maximum of $100,000. Funding is provided to rural municipalities for the control
of problem beavers and beaver structures in six designated provincial parks. Costs for
administration of the program are limited to the lesser of $10,000 or 10% of the total
program costs. Funding of $60,000 was received in 2014 and interest of $226 was allocated
to the program. Eligible program expenditures were $22,500, including the SARM
administration fee of $6,750.
•
Irrigation Structure Repair and Replacement Program – SARM entered into an
agreement with the Province (Ministry of Agriculture) in 2013 for delivery of the Irrigation
Structure Repair and Replacement Program. The term of the current agreement is April 1,
2014 to March 31, 2015. The agreement provides for funding of $1,000,000, with up to
$150,000 of that amount for administration of the program. Funding of $342,908 was
received in 2014 ($250,000 in 2013) and interest of $2,728 (2013 - $839) was allocated to
the program. Eligible program expenditures were $286,172 (2013 - $11,979).
•
Wild Boar Control Program – SARM entered into an agreement with the Province (Ministry
of Agriculture) in 2009 for delivery of the Wild Boar Control Program. The most recent
agreement is for the fiscal year 2013-14. An agreement is under negotiation for 2014-15.
Funding of $50,000 was provided in 2010 and 2011 and $25,000 in 2014. Eligible program
expenditures in 2014 were $27,928 (2013 - $45,100). Eligible expenditures include the
SARM administration fee of $2,665 (2013 - $5,000). Interest allocated to the program in
2014 was $223 (2013 - $539).
•
Municipal Leadership Development Program (MLDP) - The program is a partnership
between the Rural Municipal Administrators Association (RMAA), Urban Municipal
Administrators Association (UMAAS), Saskatchewan Urban Municipalities Association
(SUMA), the New North and SARM. The program delivers education and training programs
to municipal clerks, administrators and elected officials. SARM is the program administrator
and receives an administration fee for each registration. The administration fees for
registrations in 2014 were $7,260 (2013 - $10,360). SARM and the other partners share in
the surplus generated by the program – the surplus is distributed based on the number of
registrations each semester (fall and winter) from each partner group. SARM’s share of the
surplus is accounted for as a transfer of fund balance. There was no surplus transferred to
SARM in 2014 or 2013. At December 31, 2014, the fund balance of the MLDP program held
- 29 -
Saskatchewan Association of Rural Municipalities
Notes to the Consolidated Financial Statements
December 31, 2014
in trust by SARM are $18,122 (2013 - $19,958). The funds include unexpended funds
initially provided by the Province and surplus funds available for distribution to the partners.
•
The Crown Land Survey Fund and the Wilkinson Foundation were discontinued in 2014.
The remaining fund balance for the two funds was transferred to the SARM General Fund.
14. Commitments
SARM has entered into a lease for office space at 2221 Cornwall Street. The lease is for 5 years
and 2 months from February 1, 2013 to March 31, 2018 and includes office space and 24 parking
stalls. The monthly cost of the base rent is $16,499 until January 31, 2015 and $17,530 from April 1,
2015 to March 31, 2018. Occupancy costs are estimated to be $14,490 per month in 2015 – the
occupancy costs are subject to change based on SARM’s proportionate share of property taxes and
operating expense. The cost for parking stalls is $3,615 per month in 2015 with the costs subject to
change each year based on changes in market rates for parking. The total lease commitments
based on current rates are $426,596 in 2015, $427,627 in each of 2016 and 2017, and $106,907 in
2018. SARM has an option to renew the lease for two additional five year periods.
SARM retains Hill & Knowlton Canada to provide ongoing government relations services in Ottawa.
The contract commenced May 9, 2009 and is ongoing, until terminated by either party upon not less
than 90 days written. The monthly cost for the services is $7,500 plus expenses. The commitment
upon termination would be $22,500 for three months of service.
SARM has a Services Agreement with Lexcom Systems Group Inc. for the provision of certain
hardware, software and technical services. The monthly fee for the service is $1,991 plus taxes.
The Agreement commenced August 1, 2012 and is ongoing, until cancellation by SARM upon 30
days written notice. The commitment upon termination would be $1,991 plus taxes.
SARM has leases for copiers/printers and mailing equipment. Future commitments for lease
payments are $7,867 in 2015, $6,160 in 2016 and 2017 and $3,093 in 2018.
SARM has entered into agreements with several rural municipalities to provide funding for the hiring
of interns under the Rural Municipal Administrator Internship Program (funded through Strategic
Initiatives). The intern program provides funding of up to $20,000. There are twelve intern
agreements that have remaining commitments - the total commitment is $179,722 ($160,000 in
2015, $14,167 in 2016, and $5,555 in 2017). Either party to each of the intern agreements may
terminate the agreement by providing one month’s written notice.
SARM has entered into agreements with SaskTel for the provision of telephone services (Centrex
phone lines and voice mail). The agreement is for a three year term from June 13, 2013 to June 13,
2016. The agreements have minimum commitments with respect to the number of lines and the
number of voice mailboxes. The commitment based on minimum requirements is $16,823 in 2015
and $7,710 in 2016.
SARM has signed a license agreement to use the facilities at Saskatoon Prairieland Park for the
SARM 2015 Annual Convention in March. A deposit of $16,000 was paid by SARM on January 9,
2015. License fees include the basic facility occupancy charge of $65,550 plus taxes. Cancellation
of the agreement by SARM results in the forfeiture of the deposit and license fees.
- 30 -
Saskatchewan Association of Rural Municipalities
Notes to the Consolidated Financial Statements
December 31, 2014
15. Subsequent Events
On October 23, 2014, SARM signed an Offer to Purchase and Agreement of Purchase and Sale of
Real Property to purchase the premises located at 2301 Windsor Park Road, Regina,
Saskatchewan, as the site for a future office building for SARM. The total purchase price for the
property is $1,450,000.00. A deposit of $25,000.00 was paid on October 24, 2014 and a further
deposit of $55,000 was paid on January 21, 2015 once the buyer’s conditions on the purchase were
removed. The balance of the purchase price was paid, in trust, at the closing date of January 30,
2015.
16. Employee Pension Benefits
SARM and its employees contribute to the Municipal Employees Pension Plan, a multi-employer
defined benefit plan. Employer contributions (8.15% of the employee’s salary) to the Municipal
Employees Pension Plan of $132,051 (2013 - $123,394) were expensed during the year.
Periodically an actuarial valuation is performed to assess the financial position of the plan and the
adequacy of plan funding. The most recent actuarial valuation for the plan at December 31, 2013
indicated that on a management valuation, there was a surplus of $108.1 million (funded ratio of
107.3%). On a solvency basis, the plan has a shortfall of solvency assets as compared to solvency
liabilities of $206.9 million (funded ration of 88.9%). The actuary does not attribute portions of the
surplus to individual employers. The plan covers approximately 14,100 active members, of which 25
are employees of SARM.
17. Bank Indebtedness
SARM has an authorized line of credit of $500,000 with the Canadian Imperial Bank of Commerce
that can be drawn on by SARM, for the purpose of its operations or those of the trust funds. The
amount drawn on the line of credit bears interest at the bank prime rate. At December 31, 2014
there is no bank indebtedness for SARM or the trust funds.
18. Comparative Figures
Certain comparative figures have been reclassified to conform to the current year’s financial
statement presentation.
- 31 -
Rural Municipal Specific Claims Tax Loss Compensation Trust Fund
Statement of Operations and Fund Balance
For The Year Ended December 31, 2014
(with comparative figures for the year ended December 31, 2013)
2014
Revenues
Municipal Contributions
Investment Income (Note 5)
Total Revenues
$
Expenses
Payments to Rural Municipalities
SARM Administration Fee
Audit Fees and Other Expenses
Total Expenses
Surplus
Fund Balance - Beginning of Year
Fund Balance - End of Year
$
212,508
212,508
2013
$
7,075
185,834
192,909
61,671
3,246
3,557
68,474
61,658
3,245
3,473
68,376
144,034
124,533
4,763,659
4,907,693
$
4,639,126
4,763,659
Rural Municipal Specific Claims Tax Loss Compensation Trust Fund
Statement of Cash Flows
For The Year Ended December 31, 2014
(with comparative figures for the year ended December 31, 2013)
2014
Operating Activities
Surplus
Change in Non-Cash Current Assets and
Liabilities
Cash Provided (Used)
Investing Activities
Change in Long-Term Investments
Increase In Cash Position
Cash, Beginning of Year
Cash, End of Year
$
$
144,034
2013
$
124,533
(919,612)
(775,578)
24,537
149,070
853,846
(149,070)
78,268
78,268
$
The accompanying notes form an integral part of the financial statements.
-4-
-
Rural Municipal Specific Claims Tax Loss Compensation Trust Fund
Notes to the Consolidated Financial Statements
December 31, 2014
1. Operations
The Rural Municipal Specific Claims Tax Loss Compensation Trust Fund was established
pursuant to Article 2 of the Rural Municipal Specific Claims Agreement entered into May 25,
2000 by Saskatchewan and the Saskatchewan Association of Rural Municipalities (SARM).
The purposes of the Trust Fund are:
(a) Receiving the payment to be made by Saskatchewan pursuant to section 3 of the
Agreement;
(b) Receiving from rural municipalities specific claims tax loss compensation paid by Bands
to rural municipalities; and
(c) Disbursing payments to rural municipalities that lose tax revenue as a result of lands
which had been situated within the municipality being set apart as reserves pursuant to
the settlement of specific claims.
The specific claims funding, administered through the Trust Fund, results from negotiations
by Canada with certain Indian Bands in Saskatchewan for the settlement of their specific
claims against Canada. The specific claims settlement agreements with the Bands may
provide that the Band is entitled to acquire by purchase a certain number of acres of land to
which Canada is prepared to grant reserve status.
The beneficiaries of the Trust Fund are the rural municipalities that lose tax revenue as a
result of lands being set apart as reserves pursuant to the settlement of specific claims. The
Agreement designates SARM as the trustee. The Agreement provides that SARM is
entitled to deduct 5% of the payments to rural municipalities pursuant to the Agreement for
the administrative expenses that it incurs in the operation of the Trust Fund.
The Trust Fund is exempt from income tax.
2. Significant Accounting Policies
The financial statements have been prepared in accordance with Canadian accounting
standards for not-for-profit organizations and reflect the following significant policies:
(a) Revenue Recognition
(i)
Contributions are received from rural municipalities. The contributions are the
amounts received by the rural municipality from the Indian Band for lands set apart
as reserves. The Rural Municipal Specific Claim Tax Loss Compensation Trust
Fund is a restricted fund, and contributions are recognized as revenue in the year
the funds are received from the Rural Municipality.
(ii) Investment income is income allocated from the investment pool (see Notes 4 and
5). The investment pool includes fixed income investments, structured notes, and
equity investments.
Investment income for fixed income investments includes accrued interest,
amortized premium and discount, and realized gains or losses on the sale or
-5-
Rural Municipal Specific Claims Tax Loss Compensation Trust Fund
Notes to the Consolidated Financial Statements
December 31, 2014
redemption of investments. Purchase premiums and discounts are amortized on a
straight-line basis over the earlier of the term to maturity or the call date.
Investment income for structured notes includes interest received in the year,
realized gains or losses on the sale or redemption of investments, and unrealized
gains or losses resulting from the change in market value for the structured note
investments.
Investment income for equity investments includes realized gains or losses on the
sale of investments, unrealized gains or losses resulting from the change in market
value of the equity investments, and dividends received, less the fees for investment
management of the equity investments.
(b) Financial Instruments
The Trust Fund initially measures its financial assets and financial liabilities at fair value
adjusted by, in the case of a financial instrument that will be subsequently measured at
fair value, the amount of transaction costs directly attributable to the instrument.
Financial assets subsequently measured at fair value are cash, contributions receivable,
and structured note and equity investments. Financial liabilities subsequently measured
at fair value are accounts payable and accrued liabilities. The fair value of contributions
receivable and accounts payable approximate their carrying value due to their nature or
capacity for prompt liquidation. The fair value of structured notes and equity investments
is market value, with the market value as reported by CIBC Wood Gundy.
Investments that are fixed income investments are subsequently recorded at amortized
cost, with the premium or discount amortized on a straight-line basis over the term to
maturity or call date.
At the end of each reporting period, SARM assesses whether there are any indications
that a financial asset measured at amortized cost may be impaired. When there is an
indication of impairment that has a significant adverse change in the expected timing or
amount of future cash flow from a financial asset, the carrying amount of the asset is
reduced to the net realizable value. There are no financial assets that have been
recorded at net realizable value.
Investments are reported on the Statement of Financial Position as either current assets
or long-term assets.
Investments classed as current assets are fixed income
investments that mature within one year, along with structured note investments and
equity investments. Fixed income investments with a maturity greater than one year are
classified as long-term assets.
(c) Use of Estimates
The preparation of financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets and the reported amount of
revenues and expenses during the reporting period. Management reviews all significant
estimates affecting the financial statements. The significant estimates that affect the
financial statements are the market values used in the valuation of equity investments
and structured notes and estimates for the assessed value of properties. These
-6-
Rural Municipal Specific Claims Tax Loss Compensation Trust Fund
Notes to the Consolidated Financial Statements
December 31, 2014
estimates have implications on the valuation of certain investments, the determination of
investment income and the calculation of the tax loss payments to rural municipalities.
3. Financial Risk Management
The Trust Fund has a comprehensive risk management framework to monitor, evaluate and
manage the principal risks assumed with financial instruments. The significant financial
risks to which the Trust Fund is exposed are:
(a) Credit Risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for
the other party by failing to discharge an obligation.
The Trust Fund is exposed to credit risk with respect to cash and investments. The
investment pool of approximately $53.2 million is primarily invested in the debt of
financial institutions (77.8% of the total), provincial governments (7.4% of the total), or
structured notes and equity investments (14.8% of the total). The credit risk for fixed
income investments is minimized by ensuring that these assets are invested in financial
obligations of governments or major financial institutions that have been accorded
investment grade ratings by a primary rating agency. The credit risk is further minimized
by establishing investment policies that set limits on the investments by sector, by
issuer, and the term of the investments. The credit risk for equity investments is
minimized through engaging external investment managers to actively manage these
investments.
(b) Liquidity Risk
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations
associated with financial liabilities. The Trust Fund meets its liquidity risk by monitoring
cash flows from operations along with the cash flow of the investment pool.
(c) Price Risk
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. Exposure to price risk is mainly in
structured notes and equity investments. The price risk for the Trust Fund is limited as
14.8% (2013 – 0.6%) of investments are valued at fair value. If prices of these
investments had decreased or increased by 10%, with all other variables held constant,
the fund balance of the Trust Fund would have decreased or increased, respectively, by
approximately $71,500 (actual results will differ from this sensitivity analysis and the
difference could be material). While the investments are significant in terms of the total
investment pool, the entities that comprise the investment pool typically do not require
cash that would necessitate the sale of investments. Equity investments are considered
a prudent long term investment and given the limited potential to require disposal of
investments to meet cash obligations, the investment pool is well positioned to weather
market fluctuations that will inevitably occur. SARM does not use any derivative
financial instruments to alter the effects of this risk.
-7-
Rural Municipal Specific Claims Tax Loss Compensation Trust Fund
Notes to the Consolidated Financial Statements
December 31, 2014
4. Investments
The investment pool includes investments of SARM (General Fund, SARM Benefits Plan,
Liability Self-Insurance Plan, Fidelity Bond Self-Insurance Plan, and Property Self-Insurance
Program), the Rural Municipal Tax Loss Compensation Trust Fund and the Rural Municipal
Specific Claims Tax Loss Compensation Trust Fund.
The assets and investment income attributed to each fund is apportioned based on the
investment of each fund in the pool. The Trust Fund’s share of the assets of the investment
fund at December 31, 2014 was 9.17% (2013 – 9.3%). The Trust Fund’s share of the bank
balance and accrued interest receivable as at December 31, 2014 are shown in the
Statement of Financial Position.
The following table provides a summary of the Trust Fund’s share of the investments in the
investment pool at December 31, 2014.
Investment Categories
2014
Measured At Amortized Cost
Fixed Income - Canadian Financial Institutions
Fixed Income - Canadian Provinces
Fixed Income - Canadian Municipal
$
Measured At Fair Value
Structured Notes - Canadian Financial Institutions
Equities - Canadian Corporations
Equities - US Corporations
Total Investments
Current Assets
Fixed Income - Canadian Financial Institutions
Fixed Income - Canadian Provinces
Fixed Income - Canadian Municipal
Structured Notes - Canadian Financial Institutions
Equities - Canadian Corporations
Equities - US Corporations
Long Term Assets
Fixed Income - Canadian Financial Institutions
Fixed Income - Canadian Provinces
Total Investments
$
-8-
3,750,708
355,677
4,106,385
2013
$
4,207,602
415,918
90,111
4,713,631
151,323
443,494
119,846
714,663
28,786
28,786
4,821,048
4,742,417
740,277
45,294
151,323
443,494
119,846
1,500,234
401,101
47,759
90,111
28,786
567,757
3,010,431
310,383
3,320,814
3,806,501
368,159
4,174,660
4,821,048
$
4,742,417
Rural Municipal Specific Claims Tax Loss Compensation Trust Fund
Notes to the Consolidated Financial Statements
December 31, 2014
For the investments measured at amortized cost, the market value of the Trust Fund’s share
of investments as at December 31, 2014 was $4,942,543 (2013 - $4,825,446). The
investments have maturity dates that range from 2015 to 2022 – the investments are
staggered over time to provide cash flow to meet the requirements of the funds participating
in the investment pool. Some investments have a fixed rate of interest, with rates varying
from 2.99% to 6.00%. For some investments that have a fixed rate of interest, the purchase
price included a discount or premium. The amortization of the premium or discount will
change the effective interest rate for the investments. For other fixed income investments,
there is no interest paid – these investments were purchased at a discount with the annual
investment income attributed to the amortized discount.
There are two structured note investments - a note with a face value of $700,000 (market
value of $686,630 at December 31, 2014), is protected as to principal, while the second note
with a face value of $1,000,000 (market value of $983,810 at December 31, 2014) is not
protected as to principal. The structured notes were purchased in 2014, with maturity dates
in 2019, although the notes are subject to being called. Interest paid on structured notes is
specified in the investment documents and is linked to the change in the value of certain
shares or market indices.
Equity investments were added to the investment portfolio in 2014. Equity investments are
primarily in investments that pay dividends and include investments in both Canadian and
US companies. Equity investments are valued at fair value (market value). The investment
income for equity investments includes realized and unrealized gains and dividends, less
investment management fees.
5. Investment Income
The following table provides details of the Trust Fund investment income for 2014 and 2013.
2014
Interest From Cash
Investment Bank Interest
$
1,010
Investments Measured At
Amortized Cost
Interest - Fixed Income
86,159
Amortization - Fixed Income
68,439
Gains (Losses) - Fixed Income
12,041
Investments Measured at Fair Value
Interest - Structured Notes
2,865
Gains (Losses) - Structured Notes
(2,686)
Gains (Losses) - Equity Investments
31,100
Dividends - Equities
18,341
Management Fees - Equities
(4,761)
$ 212,508
-9-
2013
$
-
123,575
60,456
842
961
$ 185,834
Rural Municipal Specific Claims Tax Loss Compensation Trust Fund
Notes to the Consolidated Financial Statements
December 31, 2014
6. Bank Indebtedness
SARM has an authorized line of credit of $500,000 with the Canadian Imperial Bank of Commerce
that can be drawn on by SARM for the purpose of its operations or those of the Trust Fund. The
amount drawn on the line of credit bears interest at the bank prime rate. At December 31, 2014
there is no bank indebtedness for the Trust Fund.
- 10 -