City of Surrey's Annual Financial Report 2020

REPORT FROMTHE GENERAL MANAGER, FINANCE

APRIL 27, 2021 To Mayor Doug McCallum and Members of City Council It is my pleasure to present the Annual Financial Report for the year ended December 31, 2020. The purpose of this report is to publish the Consolidated Financial Statements and the Independent Auditor’s Report for the City of Surrey, pursuant to Section 167 of the Community Charter. The following report provides a financial overview of the year ended along with a brief outlook to the future.  The City of Surrey’s management, along with City Council, are responsible for the preparation of the consolidated financial statements.  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 Chartered Professional Accountants of Canada (CPA Canada). Management is also responsible for ensuring that the City remains fiscally prudent and financially sustainable through the ongoing monitoring of all the City’s financial affairs. The City maintains a system of internal accounting controls designed to provide reasonable assurances for the safeguarding of assets and the reliability of financial records. In addition to the City of Surrey, the reporting entity comprises all organizations, boards, and enterprises financially accountable to the City of Surrey. This includes the Surrey Police Service, the Surrey Public Library, the Surrey Homelessness and Housing Society and the Surrey City Development Corporation. The public accounting firm of BDO Canada LLP, which was appointed by City Council as independent external auditor, has expressed 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, 2020, 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.  

FINANCIAL OVERVIEW

2020 - A Look Back  With the declaration of the pandemic, due to the COVID-19 outbreak, by the World Health Organization on March 11, 2020, governments worldwide enacted emergency measures to manage the spread of the virus. This included British Columbia, which enacted a Provincial State of Emergency to implement public health orders and restrictions to manage and reduce the transmission of COVID-19. The pandemic, along with these necessary emergency measures, has had a significant impact on the City’s financial results for 2020. This impact began in the first quarter due to closure of civic facilities, including libraries, community and recreation centres, cultural facilities, and a notable temporary decline in development and construction activity within the City. This translated into lower revenues associated with Parks, Recreation and Culture programming. In addition, there were other revenue reductions, including a significant loss in casino sharing revenue from the Province, due to casinos being closed.        In response to these financial impacts, in May 2020, City Council approved the Surrey Economic Action and Recovery Plan (Plan). The Plan aimed to bring economic resiliency by supporting residents and encouraging business investments in the Community.  • 50% reduction of several development fees related to new and in-stream projects with a construction value of greater than $25 million; • 90-day extension on late payment penalties for all property tax payments; • 90-day extension on annual flat water and sewer payments; • Deferral of business license late payment penalties; and • Process improvements to help the development and construction sectors citywide by expediting and streamlining permitting process. This recovery plan achieved the intended results to encourage and accelerate the implementation of larger-scale projects that could generate jobs and important investments in the City, benefiting Surrey’s residents and businesses. In addition to the Plan, measures were also taken to help reduce expenses to offset the significant revenue shortfalls relating to the pandemic.   Some key areas included in the Plan were:

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