City of Surrey's 2024-2028 Financial Plan

ECONOMIC OVERVIEW

SURREY’S FINANCIAL PERFORMANCE In 2023, the City continued to invest in significant major capital and utility infrastructure related projects to provide citizens with access to safe, inviting, high-quality facilities, programs and services. Last year, construction continued for the Cloverdale Sport & Ice Complex, the Bear Creek Athletics Centre (completed in early 2024), the Strawberry Hill Community Hall (started in 2023), the City Centre Sports Complex- Phase 1, Newton Community Centre and the Nicomekl Riverfront Park. Investing in major capital projects spurs economic activity that can catalyze growth while supporting our vision of a thriving, green and inclusive community. Aggressive and swift interest rate increases by the Bank of Canada in 2022 and in early 2023 resulted in a central bank key interest rate of 5.00%, with the Prime Rate at Canadian financial institutions climbing to 7.20%; the highest level over the past 22 years. Persistent inflation resulted in increased costs to the City for goods and services, which was slightly offset by an increase in the City’s investment portfolio income. In undertaking its 2024 budget process, the City completed a budget engagement process in fall 2023 for the 2024 - 2028 Five-Year Financial Plan. This process followed a similar framework to the 2023 budget engagement process conducted earlier in 2023. Additionally, the City also provided its written submission to the Province during pre budget consultations for BC Budget 2024, which included recommendations related to school and health care related infrastructure and supportive and affordable housing in Surrey. Overall, the City's accumulated surplus increased by more than $624.2M, as compared to 2022. The fiscal performance of the City in relation to the adopted budget is indicative of a continued stable and strong financial position. All departments are continuing to proactively manage their respective budgets and helping to retain a strong financial position. City of Surrey’s Key Performance Indicators Despite a slowdown in regional real estate construction activity in 2023 due to macro economic factors, such as high mortgage interest rates and inflationary pressures on the cost of construction, planning activity for future development has remained strong. Building permits with a construction value of $1.9 billion were issued during 2023. In the residential development category, the City has seen a decrease in the construction of new single-family dwelling units, whereas multi-family development activity, especially low-rise apartments, has remained strong in 2023, as compared to 2022. In the non-residential development category, the City saw a decrease in the 2023 construction value of permits in the Industrial, Commercial & Institutional (“ICI”) development segment as compared to the year before.

City of Surrey | 2024—2028 Financial Plan | Financial Overview

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