Strathcona Regional District
Annual Report 2014
Strathcona Regional District | Annual Report 2014 | Page 2
Strathcona Regional District | Annual Report 2014
Strathcona Regional District | Annual Report 2014 | Page 3
Table of Contents Page
History and Purpose 5 Mission, Core Values, Vision Goals 6 Elected Officials and Appointed Officers 7 Message from the Chair 8 Message from the Chief Administrative Officer 9 Strategic Priorities and Key Work Projects 10 Functions and Participating Areas 11 2014 Highlights 13 Consolidated Financial Statements 17 Management's Responsibility for Financial Reporting 18 Independent Auditor's Report 19 A Consolidated Statement of Financial Position 20
B Consolidated Statement of Operations 21
C Consolidated Statement of Changes in Net Financial Assets 22
D Consolidated Statement of Cash Flows 23
Notes to Consolidated Financial Statements 24 1 Consolidated Schedule of Segment Disclosure by Service 2014 32 2 Consolidated Schedule of Segment Disclosure by Service 2013 33 3 Consolidated Schedule of Tangible Capital Assets 34 4 Consolidated Schedule of Long-term Debt 35 Supplementary Information & Information Pursuant to the Financial Information Act 36 Statement of Financial Information Approval 37 i. Consolidated Summary of Surpluses and Reserves 38 ii. Schedule of Changes in Reserve Fund Balances 40 iii. Schedule of Service Requisition Limits 41 iv. Schedule of Guarantee and Indemnity Agreements 43 v. Schedule of Remuneration and Expenses 44 vi. Statement of Severance Agreements 45 vii. Schedule of Payments to Suppliers 46
Strathcona Regional District | Annual Report 2014 | Page 4
Strathcona Regional District | Annual Report 2014
Strathcona Regional District | Annual Report 2014 | Page 5
History and Purpose The Strathcona Regional District (SRD) is a partnership of four electoral areas and five munici- palities providing approximately 43,000 residents with 55 services, including parks, land use planning, water, solid and liquid waste systems, and a full-service sports facility. The geography of the SRD ranges from forested hills and remote inlets to picturesque villages and vibrant urban landscapes. The borders extend from the Oyster River in the south to the southern part of Brooks Peninsula in the northwest, to the Sayward Valley and east to take in Cortes, Quadra and the Discovery Islands, and a portion of the mainland of British Columbia north of Powell River.
The SRD was established on February 15, 2008, when the Provincial government restructured the Comox Strathcona Regional District into the Strathcona Regional District and the Comox Valley Regional District. The Strathcona Regional District municipal members include the Villages of Gold River, Sayward, Tahsis, and Zeballos and the City of Campbell River. Its electoral areas, shown on the map below, include Area A (Kyuquot/Nootka-Sayward), Area B (Cortes Island), Area C (Discovery Islands-Mainland Inlets) and Area D (Oyster Bay-Buttle Lake).
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Mission
To provide citizens with a healthy environment and social well being that leads to a vibrant quality of life through responsible economic development and effective delivery of services.
Core Values
In fulfilling our Mission, we are guided at all levels by the Core Values of Teamwork, Respect, Integrity, Effectiveness, and Accountability as defined by these principles:
We work as a committed team in a spirit of collaboration and community. We are caring and respectful in all our interactions and relationships. We are open and honest. We adhere to the highest standards of ethical conduct. We deliver effective public service through professionalism and creativity. We are accountable to our constituents and to the region as a whole.
Vision Goals
People, fish and wildlife thrive in a healthy environment. Residents and businesses are supported by a diverse and resilient economy. High quality health and social care is available regionally. The region is a world-class tourism destination, leveraging our unique ecological, historical and cultural assets. Affordable quality services are delivered in a fiscally responsible way. The District is a leader in regional governance, with diverse jurisdictions including First Nations, working together cohesively and collaboratively.
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2014 Elected Officials and Appointed Officers
Board of Directors as of December 31, 2014
City of Campbell River A. Adams City of Campbell River M. Babchuk City of Campbell River C. Cornfield City of Campbell River R. Kerr City of Campbell River L. Samson Village of Gold River B. Unger Village of Sayward J. MacDonald (Vice-Chair) Village of Tahsis J. Schooner Village of Zeballos J. Colborne Electoral Area A – Kyuquot-Nootka/Sayward G. Whalley Electoral Area B – Cortes Island N. Anderson Electoral Area C – Discovery Islands–Mainland Inlets J. Abram (Chair) Electoral Area D – Oyster Bay–Buttle Lake B. Leigh
Officers
Chief Administrative Officer R. Hotsenpiller Officer responsible for Financial Administration D. Christenson Officer responsible for Corporate Administration T. Yates
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Message from the Chair On behalf of my colleagues at the Strathcona Regional District, it is my privilege as Chair of the Board to present the 2014 Annual Report. The report is the result of many months of Board and staff collaboration and it is a pleasure to now present it to you for your review. 2014 was a year of many changes, including the loss of one of our Board members, Ted Lewis. The former Mayor of Zeballos, and long standing Director of the SRD, passed away after a valiant struggle with cancer. This was a tremendous loss for those of us who knew and worked with Ted and of course for the community of Zeballos. In the past year we have accomplished many noteworthy goals. We took part in numerous Federal and Provincial initiatives that allow our voices to be heard at those levels on the issues that affect constituents every day concerning the environment, the economy and your social well being. We utilized our role on various Boards and committees, such as the Union of BC Municipalities and the Association of Vancouver Island and Coastal Communities, to help ensure sustainable and affordable transportation options exist for rural and island communities. We spent a lot of time working through the Quathiaski Cove sewage extension project and the Strathcona Gardens Facility Needs Assessment, as well as other issues in a number of areas. Ultimately, the year 2014 marked the beginning of a renewed Regional Board of Directors following the 2014 Local Government Elections in B.C. While most faces are familiar, there are a few new people at the Board table who bring with them a new perspective and contribute to the renewed energy in our discussions. I'm privileged and honoured to be able to serve the citizens of Electoral Area C once again for the next four years, as well as the entire region in my capacity as Chair for 2015, and I look forward to working with all of my colleagues as we continue to guide the regional district forward into the future. We will continue to work together to accomplish the job of governing this diverse area in the best way possible. Our goal is to ensure that no one is overlooked as we strive to provide good governance to our communities. We are, after all, one large community and our strength is in our constituents.
Jim Abram Chair
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Message from the Chief Administrative Officer The annual report provides an opportunity for the community and the organization to measure performance, celebrate success and learn from challenges. The 2014 Annual Report indicates that the Strathcona Regional District has a sound financial foundation and an increasing capacity to deliver services as we move forward. Of course 2014 was an election year, a period of change where the Regional Board transferred its goals and achievements to others to carry forward. There remain challenges: management of infrastructure, development of emergency capacity for the region and fiscal restraint, amongst others. Nevertheless, the 2011–2014 Regional Board has put its successor in a strong position for the future. The SRD delivers 55 separate services over a vast area, including engineering, planning, parks, waste management, recreation and transportation. In the beginning of the year we celebrated the installation of the Energy Recovery Loop at Strathcona Gardens, a system that repurposes energy waste from the arena to heat the pools and helps reduce the SRD's carbon footprint. Throughout the year, the SRD negotiated with Transport Canada until an agreement was reached and a divestiture ceremony held for the transfer of ownership and responsibility for three new wharf facilities on Read and Sonora Islands and in Port Neville on Johnstone Strait. The wharves acquisition was accompanied by a federal contribution of $2.89 million to help cover maintenance and operating costs as the Regional District ensures the continued availability of these access points for outer Discovery Islanders. Another significant event was the purchase of park land on Cortes Island known as Whaletown Commons. The Regional District had been engaged in ongoing talks with Island Timberlands to purchase the property for almost five years, and in August an offer of sale for $839,000 was finally accepted. Cortes Island residents spent more than 20 years working to protect this piece of land, and hosted a celebration with the Regional District to mark the occasion. Sadly, the year's successes were marred by the loss of one of our own. The passing of Director Edward (Ted) Lewis, former Mayor of Zeballos, was felt across the organization. Director Lewis' regional perspective was ever present at the Board table, as he saw the benefits of one community as a benefit to all. He was instrumental in helping the SRD build relationships with First Nations and contributed to the process that brought a representative of the Ka:'yu:'k't'h'/ Che:k'tles7et'h First Nation to sit as an associate member of the Board. The Strathcona Regional District provides this Annual Report for review and welcomes feedback on services, operations and financial performance. I wish to thank the staff for their work and their contributions to the region, and to acknowledge the many volunteers that contribute to our work and community vitality. As an organization, we look forward to advancing Regional Board priorities in 2015 and to providing the highest level of service to all citizens within the region.
Russ Hotsenpiller Chief Administrative Officer
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2014 Strategic Priorities i. Sub-Regional Tourism Strategy: to develop a sub-regional tourism strategy to promote tourism within the region. ii. Advocate Coordination between the SRD, Province and Federal Levels of Government Approval Processes: to advance on a political and administrative level, on a case-by-case basis and as a sustained effort, coordination on land approvals, licenses, tenures, authorization, rezoning and other regulatory matters in an effort to lessen conflict, provide transparency to the public and provide operational efficiency. iii. Campbell River Hospital & Home/Community Healthcare: to develop a strategy to ensure that service and capacity issues associated with the soon-to-be-constructed Campbell River Regional Hospital are resolved in a manner that is beneficial to the citizens of the Strathcona Regional District. iv. Advocate Internet and Cell Phone Coverage: to advocate, promote and encourage the extension of data and cellular services throughout the Regional District through direct political outreach, targeted analysis and business case development. v. First Nations – Education and Issue Development: to advance relations with First Nation communities through a graduated approach that includes education on First Nations issues, protocols and culture; outreach on a sustained basis; and specific understanding of First Nations issues that affect Regional District business and community interests. vi. Develop a Sustainability Plan: to undertake the development of an Integrated Community Sustainability Plan that is specific to the rural context of the Strathcona Regional District and that provides direction for the activities of the organization. vii. Develop a Communications Plan: to implement the recommendations from the 2012 Acumen Communications Plan Implementation Strategy in a graduated manner. viii. Homelessness Advocacy: to provide advocacy and support for the continuation of senior government programs designed to address the issue of homelessness in the region
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Functions and Participating Areas
Function Participating Area(s)
General Government Services Electoral Areas Administration and Election Services All electoral areas Feasibility Studies – Electoral Areas and Regional All member municipalities and electoral areas General Administration All member municipalities and electoral areas Grants in Aid All electoral areas Member Municipality Administration All member municipalities Protective Services 911 Emergency Answering All member municipalities and electoral areas Area D Animal Control Electoral Area D Building Inspection Electoral Area D Campbell River Area D Fire Protection Part of Electoral Area D Kyuquot/Nootka Emergency Program Part of Electoral Area A Noise Control Electoral Area D North Quadra Island Assistance Response Part of Electoral Area C Sayward Valley Fire Protection Part of Electoral Area A Soil Deposit and Removal Control Electoral Area D South Cortes Island Fire Protection Part of Electoral Area B Strathcona Emergency Program All electoral areas and municipalities Unsightly Premises Electoral Area D Transportation Services Area C Street Lighting Electoral Area C Area D Street Lighting Part of Electoral Area D Area D Transit Electoral Area D Oyster River Bank Protection Part of Electoral Area D Environmental Health Services Area D Water Part of Electoral Area D Cortes Island Refuse Collection Part of Electoral Area B Cortes Island Refuse Disposal Part of Electoral Area B Craig Road Water Part of Electoral Area D Kyuquot/Nootka Solid Waste Disposal Part of Electoral Area A Liquid Waste Management Plan Electoral Areas B and D Quathiaski Cove Sewer Part of Electoral Area C Quathiaski Cover Sewer Extension #1 Part of Electoral Area C Sayward Valley Refuse Collection Part of Electoral Area A Sayward Valley Refuse Disposal Village of Sayward and part of Electoral Area A
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Function Participating Area(s)
Walters Cove Water Part of Electoral Area A Development Services Area A Economic Development Part of Electoral Area A Area C Economic Development Electoral Area C House Numbering Electoral Areas B, C, D and part of Electoral Area A Planning All electoral areas Planning – Non-Part 26 All member municipalities and electoral areas Recreation and Cultural Services Area B Community Parks Electoral Area B Area C Community Parks Electoral Area C Area D Community Parks Electoral Area D Heritage Conservation Electoral Areas B and C Kyuquot Community Hall Part of Electoral Area A Quadra Island Community Hall Part of Electoral Area C Sayward Valley Recreation and Community Hall Part of Electoral Area A Strathcona Gardens Recreation Complex City of Campbell River and Electoral Area D Vancouver Island Regional Library All electoral areas
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2014 Highlights
Regional District acquisition of Whaletown Commons park land on Cortes Island was a project 25 years in the making Whaletown Commons is a 70-acre green space located on Cortes Island in the heart of the Whaletown Community. It was long identified as a park interest in the Cortes Island Official Community Plan, and for more than 20 years the SRD Board of Directors and Cortes Island residents worked to protect the piece of land and its many unique elements - including the high forest and riparian values, salmonoid-bearing creek that runs through it, and the natural Photo by John Preston, 2014 habitat it provides for wolves and other animals - in the hope to one day make it a park. 2
The Strathcona Regional District had been engaged in ongoing talks with Island Timberlands to purchase the property for almost five years, until they finally accepted the SRD's offer of $839,000. Ownership of the property was officially transferred to the regional district in October, and a community celebration was held to mark the occasion.
Ribbon Cutting Ceremony Whaletown Commons October 25, 2015 From left: Russ Hotsenpiller, Chief Administrative Officer;
Noba Anderson, Director, Cortes Island (Area B);
Asha Harvey, Cortes Island resident;
Hubert Havelaar, Photo by Kai Harvey, 2014 President, Whaletown Commons Society
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New Energy Recovery Loop at Strathcona Gardens saves energy, dollars and reduces carbon footprint The Strathcona Gardens is a multipurpose recreation centre which has two NHL size ice surfaces, a leisure/practice ice surface, a 37.5 meter swimming pool, a leisure pool with a waterslide and a fitness area. In March, the Regional District celebrated the completion of the Strathcona Gardens John Duncan, Member of Parliament for Vancouver Island North, does the Energy Recovery Loop, a project honours at the Energy Loop Ribbon Cutting Ceremony. Duncan is joined by members of the Strathcona Gardens Commission and designed to harvest waste energy created Strathcona Gardens' Operations Manager. from the operation of the arena compressors and used to heat the main and leisure pools through a system of heat exchangers. An Innovations Fund Gas Tax grant for $299,750 helped fund this $329,750 project.
Strathcona Gardens staff are always searching for cost savings measures and ways to reduce the facility's carbon footprint. The energy recovery loop reduces greenhouse gas emissions, electricity and natural gas consumption resulting in a positive change in the environmental impact of operating our facility. It is estimated that the energy loop saves the Regional District $50,000 to $60,000 in annual energy costs. The loop has been sized so that future expansions can be connected to the current infrastructure at a significantly lower cost.
Floor plan of Energy Recovery Loop
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Ownership and responsibility of three Transport Canada Wharves transferred to the Strathcona Regional District After two years of discussions and negotiations, the Regional District and Transport Canada officially signed an agreement that would transfer ownership and operation of three wharf facilities to the Regional District. The transfer of these wharves, located at Owen Bay on Sonora Dr. James Lunney, MP for Nanaimo-Alberni, shares a laugh with Regional Board Chair Jim Abram (Electoral Area C) at the official Island, Surge Narrows on Read Island, and Port signing ceremony of the Wharves Divestiture in November. Neville on Johnstone Strait, was part of the Federal Government's Port Divestiture Program. Taking over the wharves is an opportunity for the Regional District to provide continued availability and marine access points for coastal communities, along with recreational opportunties for local residents and the boating public. As part of the agreement, the Regional District received a $2.89 million contribution from the federal government to help with the management and operational costs of the wharf facilities.
Above left: The wharf at Owen Bay Above: The wharf at Port Neville Left: The wharf at Surge Narrows
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2014 Local Government Elections November 15, 2014 was General Election Day for local governments throughout British Columbia. Two elections by voting were held in the Strathcona Regional District electoral areas, while two electoral area incumbents were re-elected by acclamation. With recent changes to Provincial legislation the winning candidates will be the first to serve 4 year terms on the Regional Board. Elected by acclamation were: Gerald Whalley – Kyuquot/Nootka-Sayward (Electoral Area A) Jim Abram – Discovery Islands/Mainland Inlets (Electoral Area C) Elected by voting were: Noba Anderson – Cortes Island (Electoral Area B) Brenda Leigh – Oyster Bay-Buttle Lake (Electoral Area D)
The Strathcona Regional District was fortunate to have access to many skilled election workers in the region whose talents and dedication were key to the successful conduct of the 2014 elections. Thank you as well to the municipalities and school districts in the Strathcona Regional District who willingly partnered with us to maximize voting opportunities for electoral area voters.
New Projects In addition to these successes, Regional District Board members directed staff to move forward on several new projects. Among them, the largest undertaking is the development of the Quathiaski Cove sewage extension project on Quadra Island (in Electoral Area C) which will provide service to 38 additional properties. A successful Request for Proposals (RFP) process was conducted, and a contract awarded to Koers & Associates Engineering Ltd. to design and supervise the construction of approximately 1.5 kilometres of sewer extension works.
Another RFP process was facilitated by staff for the purpose of conducting a facility needs assessment of the Strathcona Gardens Recreation Complex. The contract was awarded to GDH Solutions who will review current programs and services being offered at Strathcona Gardens and determine how they are meeting the needs and expectations of the community. Outcomes from the needs assessment will help the Regional District determine the most efficient and affordable plan to address identified facility and program needs, and help provide direction to the Regional District on the provision of future recreation programs and services at the facility.
Other successful RFPs included the awarding of contracts for the installation of adult outdoor fitness equipment in Hagel Park (in Electoral Area D); the construction of the Maple Park Community Garden (also in Area D); and the replacement of two old Zamboni ice resurfacers with one new machine for the Strathcona Gardens Recreation Facility. All of these projects are expected to be complete in 2015.
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Consolidated Financial Statements 2014 Strathcona Regional District | Annual Report 2014 | Page 18
Management’s Responsibility for Financial Reporting
The consolidated financial statements have been prepared by management in accordance with Canadian public sector accounting standards for British Columbia local governments and the integrity and objectivity of these statements are management’s responsibility. Management is also responsible for all the supple- mentary statements and schedules, and for ensuring that this information is consistent, where appropriate, with the information contained in the financial statements.
Management is also responsible for implementing and maintaining a system of internal controls to provide reasonable assurance that reliable financial information is produced.
The Board of Directors is responsible for reviewing and approving the financial statements and for ensuring that management fulfils its responsibilities for financial reporting and internal control.
The external auditors, MNP LLP, conduct an independent examination in accordance with generally accepted auditing standards and express their opinion on the financial statements. Their examination includes a review and evaluation of the Regional District’s system of internal controls and appropriate tests and procedures to provide reasonable assurance that the financial statements are presented fairly. The external auditors have full and free access to the Board of Directors and meet with it at least two times a year.
Dawn Christenson, BAccS, CPA, CGA Officer responsible for Financial Administration, pursuant to Section 199 of the Local Government Act
May 13, 2015
Prepared pursuant to Financial Information Regulation, Schedule 1, section 9 Strathcona Regional District | Annual Report 2014 | Page 19
Independent Auditors' Report
To the Board of Directors of the Strathcona Regional District:
We have audited the accompanying consolidated financial statements of the Strathcona Regional District, which comprise the consolidated statement of financial position as at December 31, 2014 and the consolidated statements of operations, changes in net financial assets, cash flows and related schedules 1 to 4 for the year then ended, and a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with Canadian public sector accounting standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Regional District as at December 31, 2014, and the results of its operations, changes in net financial assets and its cash flows for the year then ended in accordance with Canadian public sector accounting standards.
Other Matters The supplementary information, including schedules i through vii is presented for purposes of additional analysis. Such supplementary information has not been subjected to the auditing procedures applied in the audit of the consolidated financial statements. We have not audited, reviewed or otherwise attempted to verify the accuracy or completeness of such information. Readers are cautioned that these supplementary statements may not be appropriate for their purposes.
Campbell River, British Columbia
May 13, 2015 Chartered Accountants
201-990 Cedar Street, Campbell River, BC, V9W 7Z8 Phone: 250-287-2131
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Statement A Strathcona Regional District Consolidated Statement of Financial Position As at December 31, 2014
2014 2013
Financial assets Cash and cash equivalents (Note 3) $ 13,246,640 $ 10,191,429 Receivables (Note 4) 405,747 753,269 Inventory for resale 9,326 10,234 Investments (Note 5) 149,985 149,985 Municipal debt receivable (Note 6) 3,794,974 5,021,961 Total financial assets 17,606,672 16,126,878
Liabilities Accounts payable and accrued liabilities (Note 7) 537,503 913,003 Deferred revenue (Note 8) 2,988,765 3,248,896 Long-term debt Member municipalities (Note 6) 3,794,974 5,021,961 Regional District (Note 10) (Schedule 4) 784,136 833,535 Total liabilities 8,105,378 10,017,395
Net financial assets 9,501,294 6,109,483
Non-financial assets Prepaid expenses 38,142 87,449 Tangible capital assets (Schedule 3) 17,354,379 15,602,549 Total non-financial assets 17,392,521 15,689,998
Accumulated surplus (Note 11) $ 26,893,815 $ 21,799,481
Contingent liabilities (Note 13)
Dawn Christenson, BAccS, CPA, CGA Officer responsible for financial administration, pursuant to Section 199 of the Local Government Act
The accompanying notes and schedules are an integral part of these financial statements. Strathcona Regional District | Annual Report 2014 | Page 21
Statement B Strathcona Regional District Consolidated Statement of Operations Year ended December 31, 2014
2014 2014 2013 Actual Budget Actual (Note 20)
Revenue Frontage and parcel taxes $ 13,733 $ 13,733 $ 18,507 Grants in lieu of taxes 157,704 127,227 156,991 Property tax requisition 7,736,920 7,737,124 7,844,155 Government grants and transfers 3,822,939 685,635 722,559 Sales of services 2,050,822 2,110,377 1,889,847 Other revenue from own sources 171,868 110,218 146,001 Contributions from others 106,168 34,267 18,851 Contributed tangible capital assets 1,726,803 - - Interest earned 144,239 10,000 88,594 Actuarial adjustment of debenture debt 3,308 - 2,908 Total revenue 15,934,504 10,828,581 10,888,413
Expense General government services 2,103,961 2,725,195 2,084,768 Protective services 1,183,721 1,255,491 1,094,193 Transportation services 177,122 182,369 155,848 Environmental health services 1,045,549 1,169,088 868,699 Development services 417,085 662,894 535,635 Recreation and cultural services 5,912,732 5,274,211 5,319,983 Total expense 10,840,170 11,269,248 10,059,126
Annual surplus (deficit) 5,094,334 (440,667) 829,287
Accumulated surplus, beginning 21,799,481 21,799,481 20,970,194
Accumulated surplus, ending $ 26,893,815 $ 21,358,814 $ 21,799,481
The accompanying notes and schedules are an integral part of these financial statements. Strathcona Regional District | Annual Report 2014 | Page 22
Statement C
Strathcona Regional District Consolidated Statement of Changes in Net Financial Assets Year ended December 31, 2014
2014 2014 2013 Actual Budget Actual (Note 20)
Annual surplus (deficit) $ 5,094,334 $ (440,667) $ 829,287
Acquisition of tangible capital assets (948,837) (1,089,510) (1,605,874) Contributed tangible capital assets (1,726,803) - - Disposal of tangible capital assets 38,422 - - Amortization of tangible capital assets 885,388 - 795,847 Change in prepaid expenses 49,307 - (51,420)
Increase (decrease) in net financial assets 3,391,811 (1,530,177) (32,160)
Net financial assets, beginning 6,109,483 6,109,483 6,141,643
Net financial assets, ending$ 9,501,294 $ 4,579,306 $ 6,109,483
The accompanying notes and schedules are an integral part of these financial statements. Strathcona Regional District | Annual Report 2014 | Page 23
Statement D Strathcona Regional District Consolidated Statement of Cash Flows Year ended December 31, 2014
2014 2013
Operating activities Annual surplus $ 5,094,334 $ 829,287
Items not affecting operating activities: Actuarial adjustment of debenture debt (3,308) (2,908) Amortization of tangible capital assets 885,388 795,847 Change in prepaid expenses 49,307 (51,420) Loss on disposal of tangible capital asset 37,222 - Contributed tangible capital assets (1,726,803) - Decrease (increase) in non-cash financial assets: Receivables 347,522 (446,461) Inventory for resale 908 (551) Increase (decrease) in short-term liabilities: Accounts payable and accrued liabilties (375,500) 296,815 Deferred revenue (260,131) 404,741 Cash provided by operating activities 4,048,939 1,825,350
Capital activities Acquisition of tangible capital assets (948,837) (1,605,874) Proceeds on disposition of tangible capital asset 1,200 - Cash applied to capital activities (947,637) (1,605,874)
Financing activities Debt principal repaid (274,289) (197,267) Net debt issued for capital 228,198 540,114 Cash provided by (applied to) financing activities (46,091) 342,847
Net change in cash and cash equivalents 3,055,211 562,323
Cash and cash equivalents, beginning 10,191,429 9,629,106
Cash and cash equivalents, ending$ 13,246,640 $ 10,191,429
Supplemental information
Interest received $ 142,687 $ 125,780
Interest paid $ 21,701 $ 21,195
The accompanying notes and schedules are an integral part of these financial statements. Strathcona Regional District | Annual Report 2014 | Page 24 Strathcona Regional District Notes to Consolidated Financial Statements Year ended December 31, 2014
1. Purpose The Strathcona Regional District (Regional District) was incorporated on February 15, 2008 by letters patent issued by the Province of British Columbia. Its principal activities are the provision and coordi- nation of local government services to the residents of four unincorporated electoral areas and five municipalities within its boundaries. These services include general government administration, bylaw enforcement, planning and development services, building inspection, fire protection and emer- gency response planning, public transportation, parks and recreation, water distribution and sewer collection and disposal, solid waste collection and disposal and street lighting.
2. Significant accounting policies a) Principles of consolidation The Regional District follows Canadian public sector accounting standards. The resources and operations of the Regional District are segregated into various funds for accounting and financial reporting purposes, each being treated as a separate entity with responsibility for the stewardship of the assets allocated to it. The consolidated financial statements are prepared in accordance with the recommendations of the Public Sector Accounting Board (PSAB). The consolidated financial statements include the activities related to all funds belonging to the one economic entity of the Regional District. Inter- fund transactions and fund balances have been eliminated on consolidation. b) Cash equivalents Cash equivalents are comprised primarily of Municipal Finance Authority (MFA) pooled investments including money market, intermediate and bond funds. Regional District funds invested with MFA are pooled with other local governments and managed independently by Phillips, Hager & North Investment Management. The investments are carried at market value which approximates cost. c) Inventory Inventory for resale is recorded at the lower of cost or net realizable value as a financial asset. d) Financial instruments Financial instruments consist of cash and cash equivalents, investments, receivables, municipal debt receivable, accounts payable and accrued liabilities, temporary borrowing and long-term debt. Unless otherwise noted, it is management’s opinion that the Regional District is not exposed to significant interest, currency or credit risk arising from these financial instruments. e) Non-financial assets Non-financial assets are not available to discharge existing liabilities and are held for use in the provision of services. They have useful lives extending beyond the current year and are not intended for sale in the ordinary course of business. f) Tangible capital assets Tangible capital assets are recorded at cost, net of tangible capital asset disposals, write-downs and amortization. The cost of the tangible capital assets, which includes all amounts that are directly attributable to acquisition, construction, development or betterment of the asset, is amor- tized on a straight line basis over their estimated useful lives as follows: Land improvements 20 to 50 years Buildings 40 to 50 years Building improvements 20 years Machinery, equipment, vehicles and fixtures 5 to 20 years Water systems 50 years Sewer system 15 to 50 years Strathcona Regional District | Annual Report 2014 | Page 25 Strathcona Regional District Notes to Consolidated Financial Statements Year ended December 31, 2014
One-half of the annual amortization is charged in the year of acquisition and in the year of dis- posal. Assets under construction are not amortized until the asset is put into use. Assets contributed to the Regional District are recorded at fair value at the time of contribution. g) Accrued employee benefits Based on obligations as determined by collective agreements and contractual arrangements, employee benefit accruals, which include an allowance for vacation entitlement, are recorded in the year in which they are earned. h) Post employment benefits The long-term, post employment benefit liability of the Regional District will be met by the Munici- pal Pension Plan into which both employees and the Regional District contribute. The Regional District is only liable for the interim retirement benefits for early retirees, from the date of retire- ment to the effective start date of the Municipal Pension Plan. Any liability for these benefits is accrued when the event occurs and the obligation arises. i) Government transfers In 2013, the Regional District adopted the provisions of the Public Sector Accounting standard as established by the revised section PS 3410 issued in March 2011. Section PS 3410 permits a recipient government to recognize government transfers as revenue when the transfer is authorized by the transferring government, unless the transfer creates a liability for the recipient. A liability is created as a result of the recipient government not yet meeting eligibility criteria or the existence of stipulations in the transfer agreement. When a government transfer results in recognition of a liability, revenue is recognized by a recipient government as the liability is settled. The adoption of the newly issued section did not have a material impact on the consolidated financial statements. j) Revenue recognition Revenue is recorded on an accrual basis and is recognized in the period in which it is earned. Property tax requisition revenue is recognized in the year the requisitions are levied. Grants in lieu of taxes are recorded on an accrual basis when it is possible to reasonably estimate the amounts receivable. User fees for water, sewer and solid waste services are recognized as revenue when services have been provided, amounts are known and collection is reasonably assured. Interest income is recognized in the period in which it is earned. k) Use of estimates The preparation of financial statements in conformity with Canadian public sector accounting standards requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Significant areas requiring management estimates are the determination of tangible capital assets, their useful life, amortization, actuarial adjustments and provisions for contingencies. Actual results may vary from the estimates and adjustments will be reported and reflected in operations as they become known. Changes to the underlying assumptions and estimates or legislative changes in the near term could have a material impact on the provisions recognized.
3. Cash and cash equivalents Included in cash and cash equivalents is $1,512,004 (2013 – $1,478,896) of short-term investments held with the Municipal Finance Authority in money market, intermediate and bond funds. These investments are carried at market value which approximates cost. Also included in cash and cash equivalents is $3,022,635 (2013 – $126,331) that is externally restricted by contribution agreements with Transport Canada (Note 12).
Strathcona Regional District | Annual Report 2014 | Page 26 Strathcona Regional District Notes to Consolidated Financial Statements Year ended December 31, 2014
4. Receivables 2014 2013 Government of Canada $ 57,803 $ 86,652 Province of British Columbia 76,440 38,557 Regional and local governments 62,978 52,408 Utility service customers 86,716 128,416 Other trade receivables 121,810 447,236 $405,747 $753,269
5. Investments Investments comprise a five-year 2.86% non-redeemable Guaranteed Investment Certificate at a cost of $149,985 (2013 – $149,985) which matures on July 5, 2016. This amount is externally restricted by an agreement between the Regional District, Tides Foundation, 0793406 BC Ltd., and TLC The Land Conservancy of British Columbia for the preservation of the land on Cortes Island known as Hank’s Beach as a forest conservation area and public park in perpetuity.
6. Municipal debt receivable Pursuant to the Local Government Act, the Regional District acts as the agency through which its member municipalities borrow funds from the Municipal Finance Authority (MFA). The annual cost of servicing this municipal debt is recovered entirely from the borrowing member municipality. However, in the event of default the Regional District is contingently liable to the MFA for this debt. 2014 2013 City of Campbell River $3,690,128 $4,909,640 Village of Sayward 104,846 112,321 $3,794,974 $5,021,961
7. Accounts payable and accrued liabilities 2014 2013 Province of British Columbia $ 63,185 $ 51,904 Regional and local governments 76,540 215,417 Accrued interest on long-term debenture debt 2,104 2,104 Payroll liabilities 268,069 228,919 Other trade payables 127,605 414,659 $537,503 $913,003
8. Deferred revenue 2014 2013 Community Works Fund (Note 9) $ - $3,151,440 Deferred grant contributions 33,894 39,942 Transport Canada deferred contribution (Note 12) 2,896,117 - Unearned revenue 58,754 57,514 $2,988,765 $3,248,896
Strathcona Regional District | Annual Report 2014 | Page 27 Strathcona Regional District Notes to Consolidated Financial Statements Year ended December 31, 2014
9. Community Works Fund Community Works Fund is a component of the Gas Tax Agreement funding provided by the Govern- ment of Canada and administered through the Union of British Columbia Municipalities (UBCM). Effective April 1, 2014, the Regional District signed a new agreement with UBCM that expands the use of funds to permit a much broader range of investments in infrastructure, and eliminates some of the restrictions contained in the previous agreement. This change has resulted in the Regional District revisiting the accounting treatment relating to the receipt and expenditure of these funds. As a result, beginning in 2014, Community Works Funds transfers will be recorded as revenue when received, then held as reserves until spent on eligible expenditures and no longer classified as deferred revenue. The following is a schedule of Gas Tax receipts and disbursements for 2014 with comparatives to 2013: 2014 2013 Community Works Fund, beginning balance $3,151,440 $2,719,335 Add: Amounts received during the year 460,566 490,764 Interest earned on funds 48,402 37,785 Less: Amounts allocated to projects during the year (7,631) (96,444) Community Works Fund, ending balance $3,652,777 $3,151,440
10. Long-term debt Long-term debt consists of interim borrowing from Municipal Finance Authority (MFA) for terms up to five years and debenture debt for longer terms. Under MFA’s interim borrowing program, loans are charged interest based on the daily 30-day Canadian Dollar Offered Rate (CDOR) plus 0.50%. On December 31, 2014 the CDOR rate was 1.3%. Regular principal payments are not required but any amount outstanding is due at the end of the five-year term. Details of long-term debt, including maturity dates, interest rates and outstanding amounts, are summarized in the Schedule 4 – Consolidated Schedule of Long-term Debt. Payments of principal on issued debt of the Regional District, not including municipal debt, for the next five years are: 2015 $ 52,267 2016 6,267 2017 5,080 2018 406,171 2019 233,278 Total $703,063
Interest on long-term debt recorded in the Consolidated Statement of Operations in 2014 is $21,701 (2013 – $19,919).
11. Accumulated surplus 2014 2013 Equity in tangible capital assets $16,577,647 $14,777,157
Operating funds 2,010,511 1,722,645 Capital funds 122,712 122,712 Reserve funds 6,891,748 3,823,965 Appropriated surplus 1,291,197 1,353,002 Accumulated surplus $26,893,815 $21,799,481 Strathcona Regional District | Annual Report 2014 | Page 28 Strathcona Regional District Notes to Consolidated Financial Statements Year ended December 31, 2014
12. Transport Canada port divestiture contributions On March 22, 2010 Transport Canada divested the Evans Bay Port Facility to the Strathcona Regional District. On November 14, 2014 Transport Canada divested the Owen Bay, Port Neville and Surge Narrows Port Facilities to the Strathcona Regional District. Divestiture funds are used for eligible operations and maintenance expense, net of any input tax credits or rebates, up to the period ending March 22, 2020 for Evans Bay Port Facility, and to November 14, 2024 for the other three ports. The unused portions of the contributions have been deposited in separate Canadian interest- bearing bank accounts dedicated exclusively for the operation of the Ports. 2014 2013 Evans Bay Port Facility reserve, beginning balance $ 126,331 $133,673 Add: Interest earned on funds 1,616 1,726 Less: Amount applied to eligible expenses (2,347) (9,068) Evans Bay Port Facility reserve, ending balance 125,600 126,331
Owen Bay, Port Neville and Surge Narrows Port - - Facilities deferred revenue, beginning balance Add: Contribution received November 14, 2014 2,894,500 - Add: Interest earned on funds 3,397 - Add: Other revenue 103 - Less: Amount applied to eligible expenses (1,883) - Owen Bay, Port Neville and Surge Narrows Port Facilities deferred revenue, ending balance (Note 8) 2,896,117 - $3,021,717 $126,331
13. Contingent liabilities As at December 31, 2014, there existed outstanding claims against the Regional District. These claims have been referred to legal counsel and to the Regional District’s liability insurers. It is not possible to determine the Regional District’s potential liability, if any, with respect to these matters.
14. Pension liability The Regional District and its employees contribute to the Municipal Pension Plan (the Plan), a jointly trusteed pension plan. The board of trustees, representing plan members and employers, is responsible for overseeing the management of the Plan, including investment of the assets and administration of benefits. The Plan is a multi-employer contributory pension plan. Basic pension benefits provided are based on a formula. The Plan has about 182,000 active members and approximately 75,000 retired members. Active members include 36,000 contributors from local government. The most recent actuarial valuation as at December 31, 2012 indicated a $1.370 billion funding deficit for basic pension benefits. The next valuation will be as at December 31, 2015 with results available in 2016. Employers participating in the Plan record their pension expense as the amount of employer contributions made during the fiscal year (defined contribution pension plan accounting). This is because the Plan records accrued liabilities and accrued assets for the Plan in aggregate with the result that there is no consistent and reliable basis for allocating the obligation, assets and cost to the individual employers participating in the Plan. The Regional District paid $306,692 (2013 – $268,543) for employer contributions while employees contributed $272,501 (2013 – $241,985) to the Plan in fiscal 2014. Strathcona Regional District | Annual Report 2014 | Page 29 Strathcona Regional District Notes to Consolidated Financial Statements Year ended December 31, 2014
15. Municipal Finance Authority debt reserve funds The Regional District secures its long-term borrowing through the Municipal Finance Authority (MFA). As a condition of these borrowings, a portion of the debenture proceeds is retained by MFA as debt reserve funds. As at December 31, 2014 the Regional District had debt reserve funds of $3,064 (2013 – $2,978).
16. North Island 911 Corporation The 911 emergency answering and fire dispatch services are provided by the North Island 911 Corporation which is owned by the Regional Districts of Alberni-Clayoquot, Comox Valley, Mount Waddington, Nanaimo, Powell River and Strathcona. The shares in the corporation are owned as follows: Alberni-Clayoquot 3 shares Comox Valley 6 shares Mount Waddington 1 share Nanaimo 5 shares Powell River 2 shares Strathcona 4 shares The Strathcona Regional District’s investment in shares of the North Island 911 Corporation is recorded at cost.
17. Environmental regulations The Regional District makes every effort to comply with all environmental regulations that apply to its operations. These regulations may require future expenditures to meet applicable standards and subject the Regional District to possible penalties for violations. Amounts required to meet these obligations will be charged to operations when incurred or set aside as future reserves when they can be reasonably estimated.
18. Segmented information The Strathcona Regional District is a diversified local government providing a wide range of services to 43,000 residents, including parks, recreation centre, community halls, fire protection, water and sewer services. As a requirement of the Local Government Act, separate financial records must be kept for each service providing detailed allocations of assets and liabilities, revenues and expenses, information concerning reserve funds and other pertinent financial details. For each reported segment, revenues and expenses represent amounts that are directly attributable to the segment and also amounts that are allocated on a reasonable basis. Segmentation has been determined on a functional basis with consideration to service delivery and departmental accountabilities. The following is a description of the types of services included in each of the main service segments of the Regional District’s financial statements. A detailed summary of the 2014 revenues and expenses can be found in Schedule 1 of the accompanying financial state- ments. Schedule 2 contains 2013 comparative figures. General Government General government comprises member municipality and electoral area governance, general admin- istration, feasibility studies and grants in aid. Protective Services Protective services include volunteer fire departments, emergency programs, 911 answering service, building inspection and various bylaw compliance services. Transportation Transportation services include a rural transit service, street lighting and bank protection. Strathcona Regional District | Annual Report 2014 | Page 30 Strathcona Regional District Notes to Consolidated Financial Statements Year ended December 31, 2014
Environmental Health The environmental health segment includes solid waste collection and disposal, liquid waste manage- ment planning, water distribution, and wastewater collection and disposal for participating electoral areas. Development Development services consist of rural land use planning, economic development, heritage conserva- tion and house numbering. Recreation and Culture Recreation and cultural services include a full-service recreation facility offering fitness, ice and aquatic programs, community parks and trail networks and contributions towards community halls and the Vancouver Island Regional Library.
19. Comox-Strathcona Regional Hospital District The board members of the Strathcona Regional District sit on the board of the Comox-Strathcona Regional Hospital District (CSRHD) together with the board members of the Comox Valley Regional District. The Regional District and the CSRHD are separate legal entities as defined by separate letters patent and authorized by separate legislation.
20. Reconciliation of 2014 budget The budget amounts presented throughout these financial statements are audited and represent the five year financial plan bylaw approved by the Regional District Board on March 27, 2014. The financial plan anticipated use of surpluses accumulated in previous years to balance against cur- rent year expenditures in excess of current year revenues. Another significant variance is that the financial plan anticipated capital expenditures rather than amortization expense. The summary below reconciles the 2014 adopted financial plan to the Consolidated Statement of Operations. Consolidated deficit, per the 2014 to 2018 Financial Plan and Capital Expenditure Program Bylaw No. 191, as approved March 27, 2014 ($1,565,173) Add: Capital acquisitions 1,089,510 Debt principal payments 274,290 Transfers to reserves and appropriated surplus 375,548 Less: Proceeds from borrowing - Transfers from reserves (614,842) Budgeted deficit, as restated ($ 440,667)
21. Recent accounting pronouncements In June 2010, the Public Sector Accounting Board (PSAB) issued PS 3260 Liability for Contaminated Sites to establish recognition, measurement and disclosure standards for liabilities associated with the remediation of contaminated sites. The new section defines activities included in a liability for remediation, establishes when to recognize and how to measure a liability for remediation, and provides the related financial statement presentation and disclosure requirements. PS 3260 is effective for fiscal years beginning on or after April 1, 2014. The Regional District has not yet determined the effect of the new section on its consolidated financial statements. Strathcona Regional District | Annual Report 2014 | Page 31 Strathcona Regional District Notes to Consolidated Financial Statements Year ended December 31, 2014
22. Comparative figures Prior year’s comparative figures have been reclassified where applicable to conform to the current year’s presentation.
Schedule 1 Strathcona Regional District Consolidated Schedule of Segment Disclosure by Service Year ended December 31, 2014
General Transporta- Environmental Recreation 2014 2014 Government Protective tion Health Development and Cultural Actual Budget (Note 20) Revenue Frontage and parcel taxes $ - $ - $ - $ 13,733 $ - $ - $ 13,733 $ 13,733 Grants in lieu of taxes 116,025 4,377 133 383 1,471 35,315 157,704 127,227 Property tax requisition 1,124,568 1,187,998 166,324 463,527 494,566 4,299,937 7,736,920 7,737,124 Government grants and transfers 3,767,256 15,456 - - 5,000 35,227 3,822,939 685,635 Sales of services 103 4,620 - 535,134 1,060 1,509,905 2,050,822 2,110,377 Other revenue from own sources 56,537 31,385 353 31,246 25,038 27,309 171,868 110,218 Contribution from others - - - 3,750 20,000 82,418 106,168 34,267 Contributed tangible capital assets 1,726,803 - - - - - 1,726,803 - Interest earned 98,302 3,477 765 4,558 94 37,043 144,239 10,000 Actuarial adjustment of debenture debt - - 1,533 1,775 - - 3,308 -
Total revenue 6,889,594 1,247,313 169,108 1,054,106 547,229 6,027,154 15,934,504 10,828,581 Strathcona
Expense Labour and benefits 1,253,705 151,390 4,228 87,114 313,365 3,314,632 5,124,434 5,206,956 Grants 107,110 899,755 118,260 - 27,588 454,056 1,606,769 1,872,540 Regional Goods and services 640,441 66,748 41,079 815,064 62,240 1,539,084 3,164,656 4,159,234 Interest - 2,916 2,832 7,012 - 8,941 21,701 30,518 District Amortization of tangible capital assets 102,705 62,912 10,723 103,337 13,892 591,819 885,388 - Loss on disposal of tangible capital asset - - - 33,022 - 4,200 37,222 - | Total expense 2,103,961 1,183,721 177,122 1,045,549 417,085 5,912,732 10,840,170 11,269,248 Annual
Surplus (deficit) $ 4,785,633 $ 63,592 $ (8,014) $ 8,557 $ 130,144 $ 114,422 $ 5,094,334 $ (440,667) Report 2014 | Page 32 Schedule 2 Strathcona Regional District Consolidated Schedule of Segment Disclosure by Service Year ended December 31, 2013
General Transporta- Environmental Recreation 2013 2013 Government Protective tion Health Development and Cultural Actual Budget (Note 20) Revenue Frontage and parcel taxes $ - $ - $ 4,774 $ 13,733 $ - $ - $ 18,507 $ 18,484 Grants in lieu of taxes 112,447 4,651 174 567 1,663 37,489 156,991 126,532 Property tax requisition 1,122,818 1,181,197 165,302 466,503 475,960 4,432,375 7,844,155 7,844,155 Government grants and transfers 311,325 14,425 - 40,000 12,500 344,309 722,559 755,605 Sales of services - 7,440 - 532,581 72 1,349,754 1,889,847 1,995,837 Other revenue from own sources 1,703 52,594 346 15,734 49,598 26,026 146,001 86,899 Contribution from others - - - - 1,500 17,351 18,851 14,267 Interest earned 45,029 2,584 657 3,685 297 36,342 88,594 10,000 Actuarial adjustment of debenture debt - - 1,404 1,504 - - 2,908 - Total revenue 1,593,322 1,262,891 172,657 1,074,307 541,590 6,243,646 10,888,413 10,851,779 Strathcona
Expense Labour and benefits 1,162,074 155,997 3,322 68,606 376,580 2,870,418 4,636,997 4,990,429 Grants 216,282 815,187 103,195 - 66,106 427,296 1,628,066 1,772,870 Regional Goods and services 636,574 66,032 35,776 688,977 84,137 1,466,801 2,978,297 3,934,791 Interest - 2,442 2,832 7,010 - 7,635 19,919 25,687 District Amortization of tangible capital assets 69,838 54,535 10,723 104,106 8,812 547,833 795,847 - Total expense 2,084,768 1,094,193 155,848 868,699 535,635 5,319,983 10,059,126 10,723,777 | Annual
Surplus (deficit) $ (491,446) $ 168,698 $ 16,809 $ 205,608 $ 5,955 $ 923,663 $ 829,287 $ 128,002 Report 2014 | Page 33 Schedule 3 Strathcona Regional District Consolidated Schedule of Tangible Capital Assets Year ended December 31, 2014
Machinery Land Buildings Equipment Capital and and Vehicles and Water Sewer Projects Improvements Improvements Fixtures Infrastructure Infrastructure in Progress 2014 2013 Cost Balance, beginning $ 4,475,390 $ 16,409,170 $ 2,189,880 $ 4,099,023 $ 1,096,201 $ 294,987 $ 28,564,651 $ 27,033,996 Add: Additions during year 2,569,994 39,898 33,336 - - 32,412 2,675,640 1,657,106 Less: Disposals or write downs (61,435) - (9,000) - - - (70,435) (75,219) Completed during year - 288,421 - - - (288,421) - (51,232) Balance, ending 6,983,949 16,737,489 2,214,216 4,099,023 1,096,201 38,978 $ 31,169,856 28,564,651
Accumulated amortization Balance, beginning 477,120 8,434,839 1,184,345 2,410,192 455,606 - 12,962,102 12,241,474 Strathcona Add: Amortization for the year 91,811 500,461 190,547 81,980 20,589 - 885,388 795,847 Less:
Accumulated amortization on disposals (28,413) - (3,600) - - - (32,013) (75,219) Regional Balance, ending 540,518 8,935,300 1,371,292 2,492,172 476,195 - 13,815,477 12,962,102
Net book value $ 6,443,431 $ 7,802,189 $ 842,924 $ 1,606,851 $ 620,006 $ 38,978 $ 17,354,379 $ 15,602,549 District | Annual Report 2014 | Page 34 Schedule 4 Strathcona Regional District Consolidated Schedule of Long-term Debt As at December 31, 2014
Beginning Net Debt Principal Actuarial Ending Interest Accrued Accrued Issue # Maturity Date Rate Balance Issued Payments Additions Balance Payments Interest Actuarial Capital Oyster River Bank Protection MFA64 09/2016 7.22% 8,573 - (1,186) (1,533) 5,854 2,832 753 444 Strathcona Gardens Recreation BL78 09/2015 Variable: 206,000 - (160,000) - 46,000 2,720 - - CDOR + 0.50% BL162 02/2018 Variable: 328,800 - (65,760) - 263,040 5,376 - - CDOR + 0.50% Cortes Island Fire Protection BL170 04/2018 Variable: 180,314 - (42,263) - 138,051 2,916 - - CDOR + 0.50% Electoral Area B Community Parks
BL211 04/2019 Variable: - 204,814 - - 204,814 845 - - Strathcona CDOR + 0.50% Craig Road Water MFA99 10/2026 4.43% 101,706 - (4,648) (1,469) 95,589 6,575 1,315 343 Regional
Quathiaski Cove Sewer Extension #1 Variable: BL217 12/2019 - 23,384 - - 23,384 2 - - District CDOR + 0.50% 825,393 228,198 (273,857) (3,002) 776,732 21,266 2,068 787 | Annual
Operating
Walters Cove Water Report MFA77 06/2022 3.05% 8,142 - (432) (306) 7,404 435 36 201
8,142 - (432) (306) 7,404 435 36 201 2014 |
Total long-term debt $ 833,535 $ 228,198 $ (274,289) $ (3,308) $ 784,136 21,701$ 2,104$ 988$ Page 35 Strathcona Regional District | Annual Report 2014 | Page 36
Supplementary Information & Information Pursuant to the Financial Information Act
Strathcona Regional District | Annual Report 2014 | Page 37
Statement of Financial Information Approval
The information that follows includes schedules that have been prepared under the Financial Information Act for the year ended December 31, 2014. This information was included with the 2014 Financial Statements presented to and approved by the Strathcona Regional District Board at a meeting held on May 13, 2015. Approved in accordance with the requirements of Financial Information Regulation 371/93, Schedule 1, Section 9,
Jim Abram Chair of the Board
Dawn Christenson, BAccS, CPA, CGA Chief Financial Officer
Strathcona Regional District | Annual Report 2014 | Page 38
Schedule i Strathcona Regional District Consolidated Summary of Surpluses and Reserves As at December 31, 2014 (Unaudited)
Appropriated Accumulated Function Surplus Reserves Surplus 2014 Total 2013 Total Note a Note b Note c General Government Services Area A Grants in Aid -$ -$ $ 11,561 $ 11,561 $ 7,571 Area B Grants in Aid - - (69) (69) 42 Area C Grants in Aid - - 16,800 16,800 16,927 Area D Grants in Aid - - 98 98 159 Electoral Areas Administration and Elections 72 - 111,274 111,346 74,648 Feasibility Studies - Electoral Areas - - 87,689 87,689 69,071 Feasibility Studies - Regional - - 30,564 30,564 37,237 General Administration 384,381 4,089,568 425,665 4,899,614 1,280,687 Member Municipality Administration 41,290 - 70,643 111,933 74,552 425,743 4,089,568 754,225 5,269,536 1,560,894 Protective Services 911 Emergency Answering 22,180 - 18,672 40,852 33,008 Area D Animal Control 50,521 - 21,162 71,683 64,868 Building Inspection 61,699 46,547 29,417 137,663 129,587 Campbell River Area D Fire Protection 69,220 - 24,571 93,791 92,984 Emergency Rescue Supplies Grants in Aid - - - - - Kyuquot/Nootka Emergency Program 2,252 - 3,113 5,365 4,616 Noise Control - - 4,295 4,295 4,664 North Quadra Assistance Response - 1,420 241 1,661 1,640 Sayward Valley Fire Protection 29,888 122,139 27,895 179,922 161,186 Soil Deposit and Removal Control 135 - 3 138 137 South Cortes Island Fire Protection 7,745 158,550 8,856 175,151 184,631 Strathcona Emergency Program 27,044 - 21,942 48,986 50,037 Unsightly Premises - 3,853 502 4,355 4,297 270,684 332,509 160,669 763,862 731,655 Transportation Services Area C Street Lighting 485 - (165) 320 (749) Area D Street Lighting - - (1,220) (1,220) (234) Area D Transit 15,000 - 12,003 27,003 34,281 Oyster River Bank Protection - 52,351 7,168 59,519 59,254 15,485 52,351 17,786 85,622 92,552 Environmental Health Services Area D Water 14,497 322,560 231,115 568,172 507,115 Cortes Island Refuse Collection 37,090 - 13,949 51,039 39,096 Cortes Island Refuse Disposal 42,653 4,922 5,403 52,978 52,359 Craig Road Water - - 3,860 3,860 2,696 Kyuquot/Nootka Solid Waste Disposal 10,312 - 10,425 20,737 13,452 Liquid Waste Management Plan 29,844 - 12,241 42,085 45,296 Quathiaski Cove Sewer 981 18,334 16,669 35,984 52,773 Sayward Valley Refuse Collection 31,795 - 1,851 33,646 37,591 Sayward Valley Refuse Disposal - 11,907 6,690 18,597 17,261 Walters Cove Water 4,488 - (7,000) (2,512) (4,540) 171,660 357,723 295,203 824,586 763,099 Strathcona Regional District | Annual Report 2014 | Page 39
Appropriated Accumulated Function Surplus Reserves Surplus 2014 Total 2013 Total Note a Note b Note c Development Services Area A House Numbering - - 1 1 7 Area B House Numbering - - 1 1 1 Area C Economic Development 4,000 - 9,471 13,471 9,502 Area C House Numbering - - 2 2 5 Area D House Numbering - - - - 3 Kyuquot/Nootka Economic Development - - - - - Planning 77,051 15,572 213,914 306,537 234,282 Planning - Non-Part 26 - - 32,659 32,659 14,292 Sayward Valley Economic Development 21,263 - 206 21,469 18,391 102,314 15,572 256,254 374,140 276,483 Recreation and Cultural Services Area B Community Parks 5,250 246,178 40,036 291,464 818,271 Area B Heritage Conservation - - 1,696 1,696 1,960 Area C Community Parks - 446,097 51,152 497,249 468,415 Area C Heritage Conservation - - 2,091 2,091 2,357 Area D Community Parks 5,357 647,124 19,797 672,278 1,018,069 Kyuquot Community Hall - - 101 101 284 Quadra Island Community Hall - 83,704 620 84,324 76,375 Sayward Valley Recreation and Community Hall 19,650 125,030 7,156 151,836 146,978 Strathcona Gardens Recreation Complex 275,054 495,892 402,386 1,173,332 940,669 Vancouver Island Regional Library - - 1,339 1,339 1,551 305,311 2,044,025 526,374 2,875,710 3,474,929 $ 1,291,197 $ 6,891,748 $ 2,010,511 $ 10,193,456 $ 6,899,612 Notes: a) Appropriated surpluses are internally restricted funds accumulated through planned contributions identified in the financial plan, and may be used for emergencies, contingencies, requisition smoothing or any other designated purpose within the function. These amounts are not automatically carried forward to offset future operational expense or supplement revenue. b) Reserves are established by bylaw or Provincial statute for specific purposes such as unforeseen future expenditures, capital works, machinery and equipment, and parkland acquisition. Use of reserves is identified in the financial plan as "transfers from reserves". Reserves may include externally restricted funds, such as endowments. Schedule ii Schedule of Changes in Reserve Fund Balances provides details about reserve fund changes in the current year. c) Accumulated surpluses are the net result of operating activities and are automatically carried forward each year to offset operational expense or supplement revenue. A surplus occurs if projects are not completed by the end of the fiscal year, if revenue exceeds expectations, or when cost savings are realized. A deficit, indicated by a bracketed amount, occurs if expense exceeds expectations, or there is a revenue shortfall. Strathcona Regional District | Annual Report 2014 | Page 40
Schedule ii Strathcona Regional District Schedule of Changes in Reserve Fund Balances As at December 31, 2014 (Unaudited)
Transfers Transfers Beginning Interest from (to) from (to) Ending Reserve Type and Function Balance Earned Operating Capital Balance Capital works, machinery & equipment reserves Area B Community Parks $ 476,258 $ 5,628 $ 31,849 $ (483,107) $ 30,628 Area C Community Parks 160,200 2,046 21,756 - 184,002 Area C Community Parks - Evans Bay Port Facility 126,331 1,616 (2,347) - 125,600 Area D Community Parks 783,939 8,631 (350,000) - 442,570 Area D Water 128,301 1,594 10,000 - 139,895 Building Inspection 16,889 250 - - 17,139 Cortes Island Refuse Disposal 4,850 72 - - 4,922 General Administration 335,648 4,224 72,430 - 412,302 Oyster River Bank Protection 43,861 651 - - 44,512 Planning 6,261 31 5,000 - 11,292 Quadra Island Community Hall - - 15,077 - 15,077 Quathiaski Cove Sewer 18,286 48 - - 18,334 Sayward Valley Fire Protection 75,347 815 45,978 - 122,140 Sayward Valley Recreation and Community Hall 53,440 793 - - 54,233 Sayward Valley Refuse Disposal 11,733 174 - - 11,907 South Cortes Island Fire Protection 111,366 1,368 - - 112,734 Strathcona Gardens Recreation Complex 343,213 5,250 100,000 (27,923) 420,540 2,695,923 33,191 (50,257) (511,030) 2,167,827 Future expenditure reserves Area B Community Parks 62,846 932 - - 63,778 Area C Community Parks 27,509 408 - - 27,917 Area D Community Parks 191,634 2,719 10,000 - 204,353 Area D Water 179,996 2,670 - - 182,666 Building Inspection 23,065 342 6,000 - 29,407 General Administration 24,131 358 - - 24,489 North Quadra Assistance Response 1,399 21 - - 1,420 Oyster River Bank Protection 7,725 115 - - 7,840 Planning 4,217 63 - - 4,280 Quadra Island Community Hall 67,624 1,003 - - 68,627 Sayward Valley Recreation and Community Hall 69,763 1,035 - - 70,798 South Cortes Island Fire Protection 44,191 625 1,000 - 45,816 Strathcona Gardens Recreation Complex 74,251 1,101 - - 75,352 Unsightly Premises 3,797 56 - - 3,853 782,148 11,448 17,000 - 810,596 Community parkland acquisition reserves Area B Community Parks 88,420 - - (88,420) - Area C Community Parks 106,990 1,587 - - 108,577 Area D Community Parks 197 3 - - 200 195,607 1,590 - (88,420) 108,777 Endowments Area B Community Parks-Hank's Beach Forest 150,287 4,289 (2,805) - 151,771 Conservation Park 150,287 4,289 (2,805) - 151,771
Community Works Fund - 48,403 3,610,390 (6,016) 3,652,777 $ 3,823,965 $ 98,921 $ 3,574,328 $ (605,466) $ 6,891,748 Strathcona Regional District | Annual Report 2014 | Page 41
Schedule iii Strathcona Regional District Schedule of Service Requisition Limits As at December 31, 2014 (Unaudited)
Service Requisition Limits (per $1,000 net taxable assessment, unless otherwise stated) General Government Administration General Administration No stated limit Grants in Aid – Areas A, B, C and D $0.10 limit on financial assistance grants Electoral Areas Administration and Election Services No stated limit Feasibility Study – Electoral Areas and Regional No stated limit Member Municipalities Administration No stated limit Protective Services 911 Emergency Answering $0.35 Area D Animal Control $0.323 Building Inspection No stated limit Campbell River Area D Fire Protection No stated limit Kyuquot/Nootka Emergency Program $6,000 or $0.25 per $1,000 net taxable assessment, whichever is greater Noise Control $0.01 North Quadra Assistance Response $0.02 Sayward Valley Fire Protection $2.00 Soil Deposit and Removal Control $25,000 or an amount equal to the actual costs for the prior year, whichever is less South Cortes Island Fire Protection $94,500 or $1.00 per $1,000 net taxable assessment, whichever is greater Strathcona Emergency Program $0.03 per $1,000 net taxable assessment; minimum $1,000 per participating area Unsightly Premises $25,000 or $0.002 per $1,000 net taxable assessment, whichever is greater Transportation Services Area C Street Lighting $7,880 total maximum Area D Street Lighting $0.20 Area D Transit $0.20 Oyster River Bank Protection $18,000 total maximum Strathcona Regional District | Annual Report 2014 | Page 42
Service Requisition Limits (per $1,000 net taxable assessment, unless otherwise stated) Environmental Health Services Area D Water $23,000 or $1.00 per $1,000 net taxable assessment, whichever is greater Cortes Island Refuse Collection No stated limit Cortes Island Refuse Disposal $0.50 Craig Road Water $36,000 total maximum Kyuquot/Nootka Solid Waste Disposal $18,750 total maximum Liquid Waste Management Plan $0.05 Quathiaski Cove Sewer $30,000 total maximum Quathiaski Cove Sewer Extension #1 $30,080 total maximum Sayward Valley Refuse Collection $0.286 Sayward Valley Refuse Disposal $0.344 Walters Cove Water $2,750 total maximum
Development Services Area A Economic Development $0.05 Area C Economic Development $0.278 House Numbering $0.0277 Planning No stated limit Planning – Non-Part 26 No stated limit
Recreation and Cultural Services Areas B and C Heritage Conservation $0.25 Areas B, C and D Community Parks $0.50 Kyuquot Community Hall $0.50 Quadra Island Community Hall $0.50 Sayward Valley Recreation and Community Hall $1.75 Strathcona Gardens Recreation Complex $1.588 Vancouver Island Regional Library No stated limit Strathcona Regional District | Annual Report 2014 | Page 43
Schedule iv Strathcona Regional District Schedule of Guarantee and Indemnity Agreements As at December 31, 2014 (Unaudited)
The Strathcona Regional District has not given any guarantees or indemnities under the Guarantees and Indemnities Regulation.
Prepared pursuant to the Financial Information Regulation, Schedule 1, section 5 Strathcona Regional District | Annual Report 2014 | Page 44
Schedule v Strathcona Regional District Schedule of Remuneration and Expenses As at December 31, 2014 (Unaudited)
Name Position/Area Represented Remuneration Expenses Total
Elected and Appointed Officials Abram, J. Director, Electoral Area C, Board Chair$ 61,121 $ 18,443 $ 79,564 Adams, A. Director, City of Campbell River 15,556 - 15,556 Anderson, C. Director, Village of Gold River 14,178 3,379 17,557 Anderson, N. Director, Electoral Area B 39,251 9,575 48,826 Babchuk, M. Director, City of Campbell River 728 - 728 Begon, K. Alternate Director, Village of Gold River 175 95 270 Colborne, J. Director, Village of Zeballos 5,528 1,781 7,309 Cornfield, C. Director, City of Campbell River 728 - 728 Grunerud, C. Commissioner, Strathcona Gardens Commission 875 - 875 Jakeway, W. Director, City of Campbell River 375 20 395 Kerr, R. Director, City of Campbell River 15,809 - 15,809 Leigh, B. Director, Electoral Area D 38,387 6,991 45,378 Lewis, E. Director, Village of Zeballos 8,395 1,653 10,048 MacDonald, J. Director, Village of Sayward 14,106 1,750 15,856 MacKenzie, D. Alternate Director, Electoral Area C 660 93 753 Mason, D. Alternate Director, Village of Sayward 495 233 728 Mennie, R. Director, City of Campbell River 6,027 - 6,027 Moglove, C. Director, City of Campbell River 12,578 - 12,578 Overton, B. Director, Village of Tahsis 1,386 353 1,739 Peacey, V. Alternate Director, Electoral Area D 125 - 125 Samson, L. Director, City of Campbell River 8,113 274 8,387 Schooner, J. Director, Village of Tahsis 14,184 3,378 17,562 Storry, M. Director, City of Campbell River 12,828 - 12,828 Unger, N.B. Director, Village of Gold River 778 185 963 Whalley, G. Director, Electoral Area A 39,526 6,672 46,198 311,912 54,875 366,787 Employees Bienvenu, Y. Facility Manager, Strathcona Gardens 82,146 602 82,748 Bullock, S. Programs Manager, Strathcona Gardens 77,668 1,245 78,913 Christenson, D. Financial Services Manager 113,137 5,802 118,939 Hotsenpiller, R. Chief Administrative Officer 137,747 8,051 145,798 Parker, L. Operations Manager, Strathcona Gardens 80,545 1,330 81,875 Rohne, J. Facility Manager, Strathcona Gardens 92,066 124 92,190 Yates, T. Corporate Services Manager 109,263 729 109,992 Consolidated total of other employees with remuneration and expenses of $75,000 or less 3,241,302 48,427 3,289,729 3,933,874 66,310 4,000,184 Reconciliation Total remuneration and expenses for elected officials and employees 4,245,786 $ 121,185 $ 4,366,971 Reconciling items, including adjustments for accrual-based accounting, accruals for vacation, sick leave, post-employment benefits, and employer share of CPP and EI benefits 878,648 Total labour and benefits expense, per Financial Statements, Schedule 1 $ 5,124,434
Prepared pursuant to the Financial Information Regulation, Schedule 1, section 6(2), (3), (4), (5), and (6) Strathcona Regional District | Annual Report 2014 | Page 45
Schedule vi Strathcona Regional District Statement of Severance Agreements As at December 31, 2014 (Unaudited)
There was one severance agreement under which payment commenced between the Strathcona Regional District and its non-unionized employees during the year ended December 31, 2014.
This agreement represents 3.5 months of compensation.
Prepared pursuant to the Financial Information Regulation, Schedule 1, subsection 6(8) Strathcona Regional District | Annual Report 2014 | Page 46
Schedule vii Strathcona Regional District Schedule of Payments to Suppliers As at December 31, 2014 (Unaudited)
Supplier Name Amount Paid 990 Cedar Ltd $ 91,284 Accent Refrigeration Systems Ltd 318,137 Acklands-Grainger Inc 27,677 BC Hydro 249,980 Black Press Group Ltd 28,969 Brenntag Canada Inc 31,179 Canada Savings Bonds 27,520 Cimco Refrigeration 48,842 City of Campbell River 960,363 Comox Valley Regional District 66,560 D A Townley & Associates Ltd 270,651 FortisBC-Natural Gas 235,667 Mahon Jones & Associates 25,775 Minister of Finance 76,714 MNP LLP 33,075 Municipal Finance Authority of BC 1,513,132 Municipal Insurance Association of British Columbia 44,651 Municipal Pension Plan 579,193 Quadra Island Recreation Society 126,083 Receiver General For Canada 1,138,891 Telus 37,410 United Steel Workers - Local 1-1937 36,688 Vancouver Island Enterprises 26,719 Verschuur Margaret 42,693 VI Newspaper Group Limited Partnership 31,215 Waste Management of Canada Corporation 37,171 Willis Canada Vancouver 46,846 WorkSafeBC 61,985 6,215,070
Consolidated total of all grants and contributions exceeding $25,000 1,531,146 Consolidated total paid to suppliers who received aggregate payments of $25,000 or less 1,304,705 Total aggregate amount paid to suppliers 9,050,921 Reconciling items, including adjustments for accrual-based accounting, disbursements for items which are not considered expenses for financial statement purposes, including payments for employee payroll deductions, capital acquisitions, debt principal payments, and the non-rebatable portion of GST/HST (4,257,795)
Total expense for interest, grants, goods and services, per Financial Statements, Schedule 1 $ 4,793,126
Prepared pursuant to the Financial Information Regulation, Schedule 1, section 7 and the Financial Information Act, section 2 Strathcona Regional District | Annual Report 2014 | Page 47
Strathcona Regional District | Annual Report 2014
301— 990 Cedar Street Campbell River, BC V9W 7Z8 P 250.830.6700 | 1.877.830.2990 F 250.830.6710 www.strathconard.ca