City of Surrey's Annual Financial Report 2020

NOTESTOTHE CONSOLIDATED CITY OF SURREY  FINANCIAL STATEMENTS

For the year ended December 31, 2020 [tabular amounts in thousands of dollars]

13. DUE TO TRANSLINK

In 2018, the Mayors’ Council on Regional Transportation (“Mayors’ Council”) directed TransLink to proceed immediately with planning and project development for a Surrey Langley SkyTrain (“SLS”) project. Further to this, the Mayors’ Council passed a resolution in June 2019 endorsing an estimated $39.0 million of unnecessarily expended costs on the cancelled Surrey Newton Guildford LRT project be compensated by the City of Surrey. On May 28, 2020, the Mayors’ Council approved a compensation agreement with the City of Surrey to compensate TransLink for the $39.0 million. This agreement describes the compensation to be valued as follows: property contributions valuing $16.9 million; parking contributions valuing $12.8 million; and a financial contribution of $9.3 million. These contributions are anticipated to occur over the duration of the SLS project, which is expected to commence in 2021/2022. As at December 31, 2020 the City of Surrey has recorded a liability due to TransLink in the amount of $39.0 million (2019 – $38.8 million) relating to this resolution. The June 2019 resolution also included a recommendation that a further compensation of $5.4 million by the City of Surrey be required if there is no decision to implement rapid transit along King George Blvd by December 31, 2021. As at December 31, 2020 discussions have not taken place relating to this recommendation, therefore this further payment has not been accrued. a) The City has significant future contractual commitments for incomplete capital acquisitions and capital construction projects in progress. The City records the capital costs incurred to the end of the year on these projects as work in progress under tangible capital assets. To provide for the completion of the projects, unexpended budget money for incomplete projects is appropriated as Committed Funds (see Note 12). The Financial Plan, updated annually, provides for the financing of these and future obligations within the estimated financial resources of the City. b) The City as a member of Metro Vancouver is directly, jointly and severally liable with the other member municipalities for the net capital liabilities of those authorities. Any liability which may arise as a result will be accounted for in the period in which the required payment is made, no liability was recorded during 2019 or 2020. c) The City is a shareholder and member of E-Comm Emergency Communications for British Columbia Incorporated (E-Comm), whose services include regional 9-1-1 call centre for the Greater Vancouver Regional District, Area Wide Radio emergency communications network, dispatch operations, and records management. The City holds 2 Class “A” shares and 1 Class “B” share (of a total of 35 Class “A” and 20 Class “B” shares issued and outstanding as at December 31, 2020). As a Class “A” shareholder, the City is committed to paying levies for services received under a cost sharing formula to fund operating and capital costs of the E-Comm operations. In addition, the City is contingently liable to cover its proportionate share of such costs should any member be unable to fulfill its funding obligations. Annual levy amounts fluctuate based on various factors under the cost sharing formula and amounted to $1.5 million during the year (2019 - $1.3 million). d) The City is, from time to time, engaged in or party to certain legal actions, assessment appeals and other existing conditions involving uncertainty which may result in material losses. The outcome and amounts that may be payable, if any, under some of these claims, cannot be determined and accordingly only those claims in which a payment is considered likely and the amounts can be reasonably estimated have been recorded in the financial statements as a liability. e) The City insures itself through a combination of insurance policies and self-insurance. The City has a funded self-insurance appropriation included in accumulated surplus (Note 12). Based on estimates, this appropriation reasonably provides for all outstanding claims where the outcome is not currently determinable.

14. COMMITMENTS AND CONTINGENCIES

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