City to report financial liability for environmental remediation annually:
New public sector accounting standard prompts greater financial transparency
Guelph, ON, November 3, 2015 – The City is updating its accounting practices to reflect the financial liability associated with its properties that may require remediation, to meet a new requirement of the Public Sector Accounting Standards (PSAS).
“The new accounting standard ensures Guelph is identifying, assessing, and reporting on financial liabilities that exist when an area of land exceeds environmental quality standards and requires some degree of remediation,” said Janice Sheehy, the City’s general manager of finance.
The cost to maintain, mitigate, or remediate City-owned contaminated sites that meet the criteria defined in the PSAS is estimated to be $30 million.
“The extent of remediation needed is site-specific and this work is subject to the City’s annual budget process,” added Sheehy. “The estimated cost of the liability will not factor into Guelph’s tax rate until the remediation work is scheduled and approved by Council.”
The change in the City’s financial position from this newly reported liability is expected to be comparable to other municipalities with a similar industrial history.
“The sites that require remediation work include the City’s historical dumps, a portion of Surrey Street between Gordon and Wyndham streets, and brownfields on Beverley, Fountain, and Baker streets,” said Terry Gayman, the City’s manager of development and environmental engineering.
The City will report on this liability annually in its Statement of Financial Position and any Council-approved expense for monitoring, mitigating, or remediation will be paid out of the operating and capital budgets.
In addition to the new financial reporting of these sites, the City will continue to conduct its environmental site management activities according to the Ministry of the Environment and Climate Change’s requirements.
For more information, read today’s audit committee staff report.