COS Financial Plan 2018 - 2022

CONTRIBUTION & EXPENDITURE OVERVIEW

The City uses several approaches to finance capital works: “pay as you go”, internal loans, and external debt. Surrey continues to use a “pay as you go” approach to finance a majority of its capital works projects. The “pay as you go” approach employed by Surrey has two significant benefits, namely it:  Preserves flexibility for the City by allowing it to avoid fixed debt costs and interest charges; and  Is particularly appropriate in a growing municipality where development can be funded through developer contributions and an increased tax base. The City has undertaken a significant capital program to meet the needs of our growing community. In order to fund the capital projects under this program, the City has borrowed both internally and externally.

MFABC cash principal/interest payments and budgeted actuarial earnings over the next five years (2018 - 2022) will be $63,898,609 and $7,772,528 respectively. Section 177 of the Community Charter allows municipalities to undertake short- term (up to five years) borrowing to pay for capital projects. Total short-term debt outstanding must not exceed $50 multiplied by the municipal population, as certified by the Minister of Municipal Affairs and Housing. The City’s short- term capital borrowing capacity for 2018 is $26.7 million. Section 177 of the Community Charter also allows municipalities to borrow money to pay for their current expenditures. Temporary borrowing must not exceed total unpaid taxes levied during the current year. Surrey’s temporary borrowing capacity for 2018 is approximately $694 million. The City’s authorized temporary borrowing limit for 2018 is $20 million.

CAPITAL EXPENDITURES The capital program includes statutory and asset maintenance as well as new projects.

Statutory and Asset Maintenance Statutory and asset maintenance constitute the largest part of the capital program. They are the ‘base’ expenditures required to preserve previous investments, replace old or worn-out assets, and service growth.

These expenditures are funded by ongoing capital sources such as:  Contributions from operating revenue;  DCCs; and  Sundry sources.

the future lives here.

2018-2022 Financial Plan

- 340 -