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Investments
The City’s investment policy, which complies with Community
Charter requirements, outlines how City funds are to be
invested to achieve reasonable returns and with investment
security while meeting the City’s cash flow requirements. The
average portfolio balance related to the City’s investments
during 2016 was $747.2 million ($643.7 million in 2015), which
earned $16.5 million in interest in 2016; plus an additional $1.2
million was earned specifically for deferred development
cost charges. The average rate of return during 2016 on the
City’s investment portfolio was 2.05%.
Reserve Funds
The City’s statutory reserve funds amount to $116.9 million at
the end of 2016 compared to a balance of $111.0 million at the
end of 2015. This increase is mainly due to the sale of lands
in Campbell Heights. The deferred development cost charge
balance at the end of 2016 was $267.0 million, which is an
increase over the balance of $239.6 million at the end of 2015.
This is a reflection of the City’s steady development activity.
These funds will be used to fund capital projects that are
listed in the City’s Five-Year (2017-2021) Financial Plan.
Financial Position
The financial position is calculated as Financial Assets less
Liabilities and results in either a Net Financial Asset or a Net
Financial Debt. A Net Financial Asset position is an indicator
of the funds available for future expenditures and a Net
Financial Debt position is an indicator of funds required to
pay for past expenditures.
In 2016, the City’s the financial position improved by $25.5
million resulting in a Net Financial Asset position of $58.7
million mainly due to the City’s annual consolidated surplus
(revenues exceeding expenses) of $215.9 million offset by net
capital acquisitions.
The City’s non-financial assets increased in 2016 by $190.4
million, bringing the total to $8.3 billion. The increase is the
net result of capital additions of physical assets in the year
offset by disposals and amortization expense.
The result of the increase in financial position and non-
financial assets was accumulated surplus increasing in 2016
to $8.4 billion (2015 - $8.2 billion). Overall, the City continues to
maintain a strong financial position.
THE FUTURE
The City’s future financial, social and environmental health holds promise and
opportunity. The significant growth and transformation we have experienced in the
last several years continues as over 1,000 new residents per month make Surrey
their home. With this level of growth expected to sustain for the next two decades,
the City needs to continue to expand its infrastructure and service levels to ensure
that both current and future residents and business needs are adequately met. 2016
marked the official opening of New Grandview Heights Pool and the City’s New
Works Yard facility. An additional gas boiler plant and distribution system to support
the City’s District Energy System was completed in 2016 and construction continued
on the public/private partnership of one of the largest Organics Biofuel Facilities in
Canada, allowing for the introduction of cost and environmentally effective energy
to more residential customers. Planning has also started on some significant
community projects to support our growing population, these include the relocation
of the North Surrey Arenas, the addition of a Multi-use facility in Clayton and
expansion of the Surrey Museum and additional ice surfaces in Cloverdale.
In light of the fiscal and operational pressures that come with such significant
expansion and growth, City staff will endeavor to ensure that property owners
continue to have competitive property tax rates relative to other cities of a similar
size both in the local region and across Canada. The continued effective use of City
resources will play a critical role in ensuring fiscal prudency, and effective and
efficient utilization of resources will certainly be driven by the use of technology
and the implementation of innovative solutions. The City continues to introduce
technology that improves customer service as well as enhancing and expanding
our online service delivery.
Staff is staying abreast with financial statement changes that are being considered
by the Public Sector Accounting Board (PSAB) with a view to ensuring that the
City implements changes in a timely and efficient manner. Staff are currently
studying the potential impact and developing policies to implement the upcoming
guidelines related to Inter-Equity Transactions; Related Party Disclosures;
Assets, Contingent Assets, and Contractual Rights. These new standards will be
required to be adopted by January 1, 2018. Effective January 1, 2019 and January
1, 2020 respectively, staff will also be required to adopt new standards related to
Restructuring and Financial Instruments. Other areas of potential change include
possible changes to asset retirement obligations, revenue recognition, public
private partnerships, employee future benefit obligations and the conceptual
framework for financial performance. Staff will monitor potential impacts of these
areas as they evolve.
Under the direction and guidance of City Council, the City of Surrey is well
positioned to continue to deliver a high quality of services for its current and future
residents and businesses in support of a continued high quality of life. The City’s tag
line, “The Future Lives Here”, aptly characterizes the growing, exciting, youthful
city that Surrey has become.
Respectfully submitted,
Vivienne Wilke, CPA, CGA
General Manager, Finance & Technology Department