Part 1: Leadership Elections, Audit Planning, and Financial Risk Discussion - 03/24/2025

The meeting opened as a virtual, live-streamed session, continuing the committee’s standard approach to accessibility and transparency. As with most formal municipal meetings, the first steps followed a structured process. The agenda was reviewed and approved without changes, and members were asked to declare any conflicts of interest. None were declared, allowing the committee to proceed without delays.

With procedural matters completed quickly, the committee moved directly into its core business. This particular meeting carried added importance, as it marked the beginning of a new term with updated leadership. One of the first priorities was establishing who would guide the committee’s work for the year ahead.

Photo: PEC Council/ YouTube

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Election of Chair and Vice Chair

A key early item on the agenda was the election of a new chair and vice chair. These roles are essential, as they guide discussions, maintain order, and ensure that meetings follow proper procedures.

Nominations were opened to the floor, but no competing nominations were brought forward. This meant the process moved efficiently, with nominations accepted and then formally closed. Motions to appoint both positions were passed smoothly and without debate, reflecting general agreement among committee members.

Once confirmed, the newly elected chair officially assumed responsibility for leading the meeting. From that point onward, they directed the discussion, recognized speakers, and guided the committee through the remainder of the agenda.

Approval of Previous Minutes

The committee then turned its attention to the minutes from the December 18, 2024 meeting. Reviewing past minutes is a routine but important step, as it ensures there is an accurate public record of prior decisions and discussions.

Members were given the opportunity to raise any corrections or concerns. However, no changes were requested. With consensus reached, the minutes were formally adopted as presented, confirming their accuracy.

2024 Audit Planning Report

The committee’s discussion then shifted to financial oversight with a review of the 2024 audit planning report prepared by the external auditor. Although the auditor was not present to speak directly to the report, county finance staff provided a detailed overview and answered questions on their behalf.

The conversation focused on how the upcoming audit will be conducted, including the scope of work, areas of attention, and potential risks. Several key audit risk areas were highlighted, including:

• Management override of controls

• Capital assets and their valuation

• Asset retirement obligations

• Government grants and funding recognition

• Payroll expenses

These areas are typically examined closely in municipal audits due to their complexity and potential financial impact.

Another important topic discussed was materiality, which determines the threshold at which an error or discrepancy becomes significant enough to affect financial reporting. Understanding this threshold helps clarify how auditors assess risk and prioritize their work.

Finance staff also confirmed that interim audit procedures had already been completed, meaning preliminary testing and reviews were underway. The full audit process is expected to conclude in June, at which point the final audited financial statements will be presented.

Reserves and Financial Risk

A substantial portion of the meeting was dedicated to discussing the county’s financial reserves. Reserves act as a financial safety net, allowing municipalities to respond to unexpected expenses, emergencies, or economic downturns.

During the discussion, it was acknowledged that the county’s reserves are currently low compared to commonly recommended municipal benchmarks. This raised concerns among committee members, who sought additional context to better understand the situation.

Specifically, the committee asked how Prince Edward County compares to similar municipalities in terms of reserve levels. Finance staff responded by noting that benchmarking tools and provincial ministry reports are available to provide these comparisons. However, some of this information requires approval before it can be publicly shared. Staff committed to providing this data in the future to support a more informed discussion.

Development Charge Prepayment Agreements

The committee then examined development charge prepayment agreements, a financing tool used to support major infrastructure projects such as water and wastewater systems. These agreements allow developers to contribute funds in advance, helping municipalities move projects forward sooner.

Legal and financial advisors explained that these agreements are widely used across Ontario. However, they also come with important risks and financial considerations.

Much of the discussion centered on:

• Timing of payments and project delivery

• Cash flow challenges for the municipality

• The risk of developer insolvency

• The need for the county to carry debt while waiting for payments

Committee members emphasized the importance of strong safeguards, including clearer project milestones and improved risk management strategies. There was also a clear push for better public communication, as these agreements can be complex and not easily understood by residents.

It was noted that a more comprehensive financial strategy report is expected to come before Council in June. This report is anticipated to address many of the concerns raised, including how development charges are managed and how infrastructure projects are financed over the long term.

Audit Committee Annual Report to Council

Next, the committee reviewed its 2024 annual report to Council. This report summarizes the committee’s work over the past year and provides accountability to Council and the public.

During the review, members identified a few minor issues, including duplicated text and a spelling error. These were noted for correction. The committee also confirmed which member would present the report to Council. With those small revisions acknowledged, the report was approved.

Work Plan Review

The committee then revisited its work plan, which outlines ongoing priorities, past motions, and areas requiring continued oversight. This included discussion of large projects and the committee’s role in monitoring their progress.

Staff explained that some items on the work plan have been delayed, largely due to staffing changes and the presence of interim roles in key positions. These transitions have affected timelines and the ability to move certain initiatives forward.

Committee members accepted this explanation and indicated a willingness to remain patient while senior leadership positions are stabilized. At the same time, the discussion highlighted the importance of maintaining momentum once those roles are filled.

Closed Session

As the meeting approached its conclusion, the committee voted to move into a closed session. This portion of the meeting was held privately to discuss a cybersecurity update, which is permitted under the Municipal Act due to the sensitive nature of the topic.

Following the vote, the public live stream was ended. The session did not resume publicly afterward, meaning no additional discussion was broadcast.

Key Takeaways

1. County reserves remain a financial concern. Finance staff confirmed that reserve levels are lower than typical municipal benchmarks, leaving Prince Edward County with less flexibility to respond to unexpected costs or financial pressures.

2. Infrastructure funding relies heavily on development charges. The committee reviewed development charge prepayment agreements used to fund water and wastewater infrastructure, while also acknowledging associated risks such as developer insolvency, delayed payments, and borrowing costs.

3. A broader financial strategy report is coming soon. Many of the issues discusse including reserves, development charges, and long-term infrastructure financing are expected to be addressed in a comprehensive financial strategy report scheduled for Council review in June.

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Disclaimer: This article is based on a meeting with an approximate duration of 4:12:027. Due to the length of the meeting, our team was not able to independently review the full recording in its entirety. As a result, we relied on software-generated transcription, automated summarization, and automated recognition of speakers and participants, which may not be entirely accurate. All transcriptions, summaries, and related content are prepared by our team in good faith and on a reasonable best-efforts basis. The content is provided for general informational purposes only and is intended to support public understanding of the topics discussed. While reasonable efforts have been made to present the information accurately, automated processes may result in errors, omissions, or unintended misinterpretations. This article does not constitute an official, certified, or verbatim record of the meeting, and it should not be relied upon as such. Readers are encouraged to consult original source materials, official minutes, or recordings where available for confirmation or clarification. Questions, requests for clarification, or suggested corrections may be submitted to hello@pecconnect.ca for review and consideration.