City of Surrey's 2024-2028 Financial Plan

DEBT

The Province of BC limits municipalities, by legislation, on the amount of long-term borrowing they can maintain under section 174 of the Community Charter. This limit provides that a municipality’s cost to service their debt cannot exceed 25% of “annual revenues”, as defined by the legislation. As at December 31, 2023, the City’s total debt servicing cost is only $33.8M while “annual calculation revenue” is $1.1B, resulting in an overall debt servicing cost to revenue percentage of 3.03%. This has minimal impact to the City’s current operations and cash flow. Under Surrey’s principles for financial planning, the City continues to target total debt service costs to below five percent of annual expenditures and continues to use a “pay-as-you-go” approach to finance the majority of its capital works projects. Any debt required should only be for major capital works projects, such as recreational and cultural facilities, and not for on-going operations. The “pay-as-you-go” approach employed by Surrey has two significant benefits: 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. As at December 31, 2023, the City’s total debt is comprised of the following breakdown with the following repayment schedule:

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

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