Financial Statements December 31, 2011 May 14, 2012

Operating & Waterworks & Sewer Surpluses Contributions to Reserves Overall Surplus General Surplus (Working Reserves) $ 441,752 Waterworks Surplus (Waterworks Reserve) 113,151 Sewer Surplus (Sewer-Sewage Treatment Reserve) 252,874 $ 807,777 Other Transfer to Reserves: Building Services Reserve (revenue exceeded expenditures) $ 415,334 Winter Control Reserve (operational savings) $ 213,101 Supplementary Taxation Reserve (revenue exceeded budget) $ 216,817 Parking Reserve (revenue exceeded expenditures) $ 50,137 New Reserves (Social & Support Services): Employment Assistance Retained Surplus Reserve $ 767,189 Child Care ELCD Reserve $ 400,866 The City received Provincial funding for specific programs. At the conclusion of the programs, unused funds were released to the municipality to be used for similar purposes. Page

Consolidated Statement of Financial Activities In 2011, the City saw a decrease in Government Grants and an increase in Fees and Services compared to 2010. Page 3

Consolidated Statement of Financial Activities In 2011, the City’s expenditures were in line with budget when the non-cash amount for annual amortization is included in the comparison. The 2012 budget includes an estimate for annual amortization. Page 4

Major Infrastructure Projects Completed in 2011 Benson Centre Ribbon Cutting Ceremony June 29, 2011 EMS Head Quarters Ribbon Cutting Ceremony March 2, 2012 Page 5

Major Capital Projects Completed in 2011 Transportation Network Traffic Signals Upgrade – Pitt & Water Marleau Ave (Marlborough to Lochiel) Sidewalk Construction at various locations Benson Centre Access (Bicycle/Pedestrian) Transit Purchase of two Handi Transit Buses Transit Communication Upgrade Buildings Roof Replacement at the GSDL New EMS Headquarters Maintenance Management Program Roof Replacement Fire Hall #1 Parks & Recreation Benson Centre Aquatic Centre/Complex Parking Lot Light Upgrade Water & Sewer Storm & Combined Sewer Separation Raw Water Intake Brookdale Watermain Tollgate Watermain Page 6

Major Infrastructure Projects Continued in 2012 Secondary Wastewater Treatment Plant Project Cost $55.5 M Page 7

Major Infrastructure Projects Continued in 2012 Cornwall Business Park Infrastructure Development Project Cost $6.6 M Page 8 Page

Major Infrastructure Projects Continued in 2012 Brookdale Ave. North Channel Bridge Water St. to 7th St. Project Cost $6.3 M Page 9 Page

Major Capital Projects Continued in 2012 Transportation Network Snow Disposal Site LED Program - Streetlights Industrial Park Rd. to Tenth St. Parks & Recreation Kinsmen Park Redevelopment Complex Meeting Room Upgrades Complex VIP Suite Upgrade Playground Structure (Daprat Park) Bandshell Project Bob Turner/Joe St. Denis Field Redevelopment Waterfront Projects Buildings Upgrades at the GSDL Renovations at various Municipal Maintenance Management Program Solid Waste Gas Collection System Solid Waste Recycling Implementation Water & Sewer Secondary WWTP Brookdale – North Channel Bridge WWTP – Digester Cleanout Watermain Rehabilitation Improvements Sewer Network Analysis Page 10

Reserve Funds Progress Fund Opening Balance $ 25,000,000 Capital expenditures (10,271,480) Current Fund (4,361,226) Interest Income 16,054,897 Closing Balance $ 26,422,191 Other Reserve Funds $ 3,981,351 Downtown Investment 3,540,590 $ 7,521,941 In 2011, $2.4M was paid from the Progress Fund to the Cornwall Community Hospital in support of the Hospital’s Restructuring Capital Project. In 2012, the remaining committed amount of $1,410,255 will be paid from Progress Fund in monthly contributions of $200K. The total commitment of $8,410,255 will be transferred to the Hospital by July 2012. Page 11

Reserves & Reserve Funds 2011 2010 2009 2008 2007 Reserves $34,922,322 $32,975,851 $13,542,724 $12,632,909 $10,214,674 Reserve Funds $33,944,132 $35,487,484 $36,382,015 $38,298,757 $37,858,679 Total Reserves $68,866,454 $68,463,335 $49,924,739 $50,931,666 $48,073,353 The City received $18.5M of Provincial funding for the Secondary WWTP Facility in 2010. Most of these funds remain unspent at Dec 31, 2011 and are invested in financial instruments with maturity dates and values that match the construction budget forecast. The City also paid $2.4M to the Cornwall Community Hospital in 2011. The City’s financial position continues to be very strong. Page 12

Consolidated Schedule of Tangible Capital Assets (by service) The City’s Tangible Capital Assets (TCA) increased in 2011 for the most part due to two major projects: Benson Centre and the EMS Facility.   Please note that TCAs are required to be recorded at cost, not at replacement value. Page 13

Consolidated Schedule of Tangible Capital Assets (by category) Page 14

Annual Repayment Limit (ARL) (Under Ontario Regulation 403/02) Each year the City of Cornwall receives a notice from the Ministry of Municipal Affairs and Housing summarizing the City’s ‘Annual Repayment Limit’ (ARL). The City’s ARL effective January 1, 2012 is $22,446,695 This notice also lists the following examples of borrowing for illustration purposes only: 7.0% Interest Rate: Principal 20 years @ 7.0% $237,800,601 15 years @ 7.0% 204,442,563 10 years @ 7.0% 157,656,189 5 years @ 7.0% 92,035,879 Although the City has no intention to take on borrowing at these levels this also demonstrates the financial strength of the Corporation. Page 15

2011 Summary There was a surplus of $807,777 contributed to reserves. The Secondary WWTP major capital project continued as a result of $37M in funding from senior levels of government. The scheduled completion date for the project is March 2014. Reserves and Reserve Funds total $68.8M as a result of the Provincial contribution of $18.5M for the Secondary WWTP. The City’s financial position continues to be very strong and well positioned to finance the major infrastructure projects. Page 16