2020 Annual Financial Report
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FOR THE YEAR ENDED DECEMBER 31, 20192020 20192020 ANNUALANNUAL FINANCIAL REPORT BRITISH COLUMBIA, CANADA SURREY.CA TABLE OF CONTENTS INTRODUCTION Surrey at a Glance v Message from the Mayor vi City Council & Surrey Officers vii Organizational Chart viii Canadian Award for Financial Reporting ix City of Surrey Overviews 1 Awards 3 Strategic Framework 5 City Manager’s Department 7 Corporate Services Department 9 Engineering Department 11 Finance Department 13 Fire Department 15 Investment & Intergovernmental Relations Department 17 Parks, Recreation & Culture Department 19 Planning & Development Department 21 Policing Transition Department 23 RCMP 25 Surrey Public Library 27 Performance Measures 28 City Manager 30 Corporate Services 30 Engineering 31 Finance 32 Fire 33 Investment Intergovernmental Relations 33 Parks, Recreation & Culture 34 Planning & Development 35 Policing Transition 35 RCMP 36 Surrey Public Library 37 FINANCIAL STATEMENTS 38 Audit Committee 40 Financial Management and Control 41 Report from the General Manager, Finance 42 City of Surrey Financial Statements 45 City of Surrey, Independent Auditor’s Report 46 Consolidated Statement of Financial Position 48 Consolidated Statement of Operations 49 Consolidated Statement of Changes in Net Financial Assets 50 Consolidated Statement of Cash Flows 51 Notes to the Consolidated Financial Statements 52 Supplementary Financial Information 81 Permissive Exemptions 89 STATISTICAL REVIEW 104 Population 105 Average Residential Tax and Utilities Bill 105 2020 Average Residential Tax and Utilities Bill 106 2020 Taxable Assessment and Taxation by Property Class 106 Taxable Assessment and Property Tax Notice Statistics 107 Assessment for Taxation 107 2020 Household Expenditures versus City Services 108 Building Permits 109 Construction Value of Building Permits Issued 109 Commercial and Industrial Development Approved in Surrey 109 Top 10 Employers in Surrey in 2020 110 Unemployment Rates 111 Full-time Equivalent Employees 111 Surrey's Business Distribution by Sector 112 Consolidated Debt per Capita 112 Gross Debt Supported by Property Tax Versus Total Debt 113 2020 Debt Servicing Costs Compared to General Taxation Revenue 113 Revenue Trend by Source of Revenue 114 Expenses Trend by Function 114 Net Tangible Capital Asset Acquisitions 115 Financial Statistics 115 Consolidated Revenues 116 Consolidated Expenses 117 Reserves, Committed Funds and Surplus 118-119 SURREY AT A GLANCE DEMOGRAPHIC AND ECONOMIC INFORMATION | Average home assessment 580,360* | Population $1,109,084* (detached single family home) | Average residential tax and utilities bill 8,750* | Annual population change (2020-2019) $5,297* (before Provincial Homeowner Grant) 38.4* | Median Age 4,019* | Housing starts $143.0 billion† | Metro Vancouver GDP 153,617* | Total households $80,300 | Metro Vancouver Median income 1,553* | Total residential permits issued 1,551 | Metro Vancouver Labour force (‘000) 1,417* | Total non-residential permits issued 1,441 | Metro Vancouver Employment (‘000) $1,073 million* | Residential permit values 7.3% | Metro Vancouver Unemployment rate $383 million* | Non-residential permit values * City of Surrey Statistics Canada, Dec 2020 Monthly Labour Force (Vancouver CMA) † Vancouver Economic Commission, October 2020 Report Statistics Canada, 2019 Income Statistics (Vancouver CMA) CONSOLIDATED FINANCIAL INFORMATION Consolidated Statement of Financial Position As of December 31, 2020, with comparative figures for 2019 (in thousands of dollars) 2020 2019 FINANCIAL ASSETS 1 $ 1,447,305 $ 1,163,280 LIABILITIES 1,315,616 1,124,523 NET FINANCIAL ASSETS 2 $ 131,689 $ 38,757 NON FINANCIAL ASSETS 3 9,480,648 9,301,094 ACCUMULATED SURPLUS 4 $ 9,612,337 $ 9,339,851 1 Financial assets: cash resources and liquid assets. 2 Net financial assets: the net financial position, calculated as the difference between financial assets and liabilities. 3 Non-financial assets: the non-financial assets that are owned which will be utilized for future services, including tangible capital assets, inventories and prepaid expenses. Non-financial assets can normally be used only for service provision to accomplish future objectives. 4 Accumulated surplus: This is an indicator of the City's overall financial health. It is the different between the combined financial assets and non-financial assets as compared to its liabilities and includes the investments in tangible capital assets (capital equity), total reserves (restricted funds), appropriated surplus (internally appropriated funds) and general or unrestricted funds. Consolidated Statement of Operations 1 As of December 31, 2020, with comparative figures for 2019 (in thousands of dollars) 2020 Budget2 2020 2019 REVENUES $ 1,166,500 $ 1,051,629 $ $1,136,566 EXPENSES 850,514 779,143 847,046 ANNUAL SURPLUS 3 $ 315,986 $ 272,486 $ 289,520 Accumulated Surplus, beginning of year 9,339,851 9,339,851 9,050,331 Accumulated Surplus, end of year $ 9,655,837 $ $9,612,337 $ $9,339,851 1 The statement of operations shows the sources of revenues and expenses, the annual surplus or deficit and the change in the accumulated surplus. 2 The budget numbers represent the City's plan for revenue and expenses set at the beginning of the year. 3 Annual surplus is the net income/(loss) for the current year operations. v MESSAGE FROM THE MAYOR With the onset of COVID-19 last year, City Council took a proactive approach on how to manage the City’s finances while meeting the evolving health and safety requirements presented by the pandemic. Council’s measured approach is reflected in the Surrey Economic Action and Recovery Plan introduced in May 2020. The purpose of the plan was to ensure economic resiliency along with support for our residents and business community. To help ease the financial burden of taxpayers, the Plan called for a 90-day extension on late payment penalties. For the third year in a row, Council held the line on property tax increases to 2.9%, keeping Surrey in the bottom third for property taxes in Metro Vancouver. The Surrey Makes PPE program helped local companies pivot to produce much needed PPE, such as N95 equivalent masks, hand sanitizers and plastic barriers. A buy local campaign was created with the Surrey Store to Door online shopping hub. The Parking to Patio initiative supported local restaurateurs by waiving fees and streamlining the application process. Despite the challenges of 2020, our local economy remained robust as the City recorded $1.46 billion in building permit value, surpassing our 10-year average. As important as it is for us to deal with COVID, of equal and greater importance is planning for a post- COVID world where Surrey is not starting from a standstill. The new Surrey Invests program was launched earlier this year and will see 16 new capital projects that will benefit everyone who lives, works, or play in Surrey. The fully-funded projects include a new Community Centre in Newton and a new Sports Complex in City Centre. All 16 of the Surrey Invests projects will break ground or begin construction before the end of the year. The continued confidence in Surrey is a result of the joint efforts of our residents, businesses, community leaders, and administration. Each of us play an integral role in the growth and well-being of our City. Sincerely, Doug McCallum Mayor vi CITY COUNCIL & SURREY OFFICERS Surrey Officers City Manager .......................................................................................................V. Lalonde Chief Librarian .......................................................................................................S. Bhogal City Council Director, Strategic Initiatives & Corporate Reporting ..........................................J. Arason BACK Fire Chief .................................................................................................... Chief L. Thomas Allison Patton General Manager, Corporate Services Department ......................................... R. Costanzo Mandeep Nagra Laurie Guerra General Manager, Engineering Department ..................................................... S. Neuman Doug Elford General Manager, Finance Department .............................................................. K. Grewal FRONT General Manager, Investment & Intergovernmental Relations Department ........D. Jones Steven Pettigrew Brenda Locke General Manager, Parks, Recreation & Culture Department .................................L. Cavan Mayor Doug McCallum General Manager, Planning & Development Department .......................... J. Lamontagne Linda Annis General Manager, Policing Transition ..........................................................T. Waterhouse Jack Hundial Officer in Charge, Surrey RCMP Detachment ..................................A/Commr. B. Edwards Chief Constable, Surrey Police Service .....................................................Chief N. Lipinski Auditors – BDO LLP Bankers – Royal Bank of Canada vii viii ORGANIZATIONAL CHART CITIZENS | CUSTOMERS SURREY POLICE BOARD MAYOR & COUNCIL COMMISSIONS & LIBRARY BOARD EXECUTIVE DIRECTOR COUNCIL COMMITTEES OF THE BOARD CITY MANAGER CHIEF CONSTABLE CHIEF DIRECTOR STRATEGIC SURREY POLICE LIBRARIAN RCMP OIC A/COMMR. INITIATIVES & SERVICE CORPORATE REPORTING GENERAL MANAGER GENERAL MANAGER GENERAL MANAGER GENERAL MANAGER GENERAL MANAGER GENERAL MANAGER INVESTMENT & GENERAL MANAGER FIRE CHIEF PLANNING & PARKS, RECREATION ENGINEERING FINANCE CORPORATE SERVICES INTERGOVERNMENTAL POLICING TRANSITION DEVELOPMENT & CULTURE