City of Surrey's 2023 Annual Financial Report

Surrey as a destination for commerce by investing in state-of-the-art facility upgrades, establishing Canadian subsidiaries of their foreign operations, relocating their out-of-province offces to Surrey, and expanding their operations to establish national headquarters within the City. In 2023, Council moved forward with reviving City's subsidiaries. Surrey City Development Corporation (“SCDC”) was re-operationalized through the approval of Directors on the Board of SCDC and the appointment of a President and Chief Operating Offcer. SCDC acts as a catalyst for positive development that will support and accelerate the City’s social, cultural, community, economic and environmental objectives. The Surrey Homelessness and Housing Society (“SHHS”) was revitalized through the reinstatement of community board members. SHHS is returning to a more robust organizational structure and undertaking a strategic review of its vision, mission and objectives so that it can once again make a difference in the lives of people who are homeless or at risk of homelessness in Surrey. On December 12, 2022, Council resolved to retain the RCMP as Surrey’s Police of Jurisdiction and forwarded a plan to the British Columbia (“BC”) Minister of Public Safety and Solicitor General (“Minister”) for endorsement. In July 2023, the Minister directed that the transition to the Surrey Police Service continue and appointed a strategic implementation advisor to aid all parties on the transition to the SPS. In October 2023, the City fled a petition with the Supreme Court of BC for a judicial review of the Minister’s order to continue the transition to the SPS.

In 2023, the City’s fnancial position increased by $309.5 million resulting in a net fnancial asset position of $762.3 million. The City’s non-fnancial assets increased in 2023 by $314.7 million, bringing the total to $10.3 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 these increases in fnancial position and non-fnancial assets was accumulated surplus increasing by $624.2 million in 2023 to $11.0 billion (2022 – $10.4 billion). Overall, the City continues to maintain a strong fnancial position.

CONSOLIDATED STATEMENT OF OPERATIONS For the year ended December 31 (amounts in $ millions)

(Restated) 2022 Actual

2023 Actual

Change

$ 1,650.6

Revenues Expenses

$ 1,430.8 $

219.8

(1,026.4)

(945.6)

(80.8)

$ 624.2

Annual Surplus

$

485.2 $

139.0

The City’s revenues in 2023 totaled $1.7 billion, which is an increase compared to revenues of $1.4 billion in 2022. The year-over-year growth was attributable to increased Transfers from other governments and Other revenues ($125.3 million), Taxation revenue ($67.1 million), Investment income ($45.2 million), Utility rates and fees ($27.1 million), Developer contributions, including community amenity contributions & bonus density payments ($22.0 million), and Sales of goods and services ($12.1 million). These increases were partially offset by a Loss on disposal of assets ($18.8 million) and decreased deferred Development cost charge (“DCC”) revenue ($60.1 million). The increase in Transfers from other governments and Other Revenue is primarily attributable to the receipt of provincial and federal grant funding in 2023, including the Growing Communities Fund (“GCF”) ($89.9 million) and Housing Accelerator Fund (“HAF”) ($23.9 million). Taxation revenue has also increased due to physical growth of taxable properties, commensurate with Surrey’s ongoing population growth. A property tax rate increase implemented in 2023 raised additional revenues to support increased Policing Services requirements, new resources for public safety and city-wide operations, labour and infationary cost increases, and other various corporate requirements. Utility rates and fees were increased in 2023 to account for greater regional district water and sewer utility charges along with required funding for the City’s infrastructure operating & maintenance costs. Additionally, the Growth in Developer contributions is a refection of strong development activity throughout the City with additional revenues and contributed assets received from developers during 2023. 43

Financial Position

CONSOLIDATED STATEMENT OF FINANCIAL POSITION For the year ended December 31 (amounts in $ millions)

(Restated) 2022 Actual $ 1,916.5

2023 Actual

Change

$ 2,271.8

Financial Assets

$

355.4

(1,509.5)

Liabilities

(1,463.7)

(45.8)

762.3

Net Financial Assets Tangible Capital Assets Inventories of Supplies

452.8

309.5 313.8

10,249.7

9,935.9

1.8 8.5

1.9 7.5

(0.1)

Prepaid Expenses

1.0

10,260.0

Non-Financial Assets Accumulated Surplus

9,945.3

314.7 624.2

$ 11,022.3

$ 10,398.1

$

Financial position is calculated as fnancial assets less liabilities and results in either a net fnancial asset or a net fnancial debt. A net fnancial asset position is an indicator of the funds available for future expenditures, and a net fnancial debt position is an indicator of funds required to pay for past expenditures.