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May 7, 2015
To Mayor Linda Hepner and Members of City Council
It is my pleasure to submit the Annual Financial Report for the year ended December 31, 2014. The purpose of this
report is to publish the consolidated Financial Statements and the Auditor’s Report for the City of Surrey pursuant to
Section 167 of the Community Charter.
The preparation of the consolidated financial statements is the responsibility of City Council and the management
of the City of Surrey. The financial statements and related information have been prepared in accordance with
Canadian Public Sector Accounting Standards as prescribed by the Public Sector Accounting Board (PSAB) of the
Canadian Institute of Chartered Accountants (CICA). In addition to the City of Surrey, the reporting entity comprises
all organizations, boards and enterprises financially accountable to the City of Surrey, including the Surrey Public
Library, the Surrey Homelessness and Housing Society and the Surrey City Development Corporation.
The public accounting firm KPMG LLP, which was appointed by City Council as the external auditor, has given the
City an unqualified audit opinion on the City’s Consolidated Financial Statements, stating that in their professional
opinion, the Consolidated Financial Statements present fairly, in all material respects, the consolidated financial
position of the City of Surrey as at December 31, 2014 including its consolidated results of operations, its changes
in net consolidated financial assets and its consolidated cash flows for the year then ended in accordance with
Canadian Public Sector Accounting Standards. KPMG LLP has also stated that the City maintains a system of internal
accounting controls designed to provide reasonable assurance for safeguarding the City’s assets and the reliability of
financial records and documents.
FINANCIAL OVERVIEW
2014 in Review
The construction of new facilities under the ‘Build Surrey’ Program continued to facilitate development activity
throughout the City during 2014. Of particular significance was the opening of New City Hall in the downtown core
which will certainly serve as an anchor for the City core for many years to come. In the residential development
community, there continues to be a shift toward the construction of multi-family dwellings in 2014, although the
City still continues to offer excellent value in the single family residential sector relative to the rest of the Greater
Vancouver area. Another healthy sign of development was the significant activity in the commercial sector; this was
particularly evident in the Campbell Heights area.
The City’s revenues in 2014 totaled $844.2 million, which is an increase in comparison to revenues of $790.6 million
collected in 2013. This increase was attributable primarily to additional property taxes, additional utility fees and
increased capital contributions from developers for infrastructure-related projects.
The City’s expenses totaled $655.4 million in 2014, which was an increase in comparison to expenses of $574.5
million in 2013. This increase was primarily attributable to employee contract settlements, in particular the Fire
Services contract which included retro payments for years 2012 and 2013, an increase in the amounts that were paid
under the RCMP contract for police services, an increase in fiscal services as a result of the external borrowing that
the City has undertaken in 2011, 2012 and 2013 and a one-time loss on the disposal of land in relation to the South
Fraser Perimeter road in the amount of $12.8 million dollars.
Investments
The City’s investment policy, which complies with Community Charter requirements, outlines how City funds are to
be invested to achieve reasonable returns with investment security, while meeting the City’s cash flow requirements.
The average portfolio balance related to the City’s investments during 2014 was $620.6 million ($670.6 million in
2013), which earned $20.7 million in interest in 2014, of which $2.3 million was allocated to deferred development
cost charges. The average rate of return during 2014 on the City’s investment portfolio was 2.61%.
Report
f rom the
General Manager,
Finance & Technology