City of Surrey's Annual Financial Report 2021

REPORT FROMTHE GENERAL MANAGER, FINANCE

APRIL 22, 2022 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, 2021. 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 are responsible for the preparation of the consolidated financial statements, which are approved by City Council. 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, 2021, 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 2021 In Review

The COVID-19 pandemic first impacted the City’s financial results in quarter one of 2020 through the closure of libraries, community/ recreation centres and cultural facilities. Development and construction activity within the City also experienced a steep, albeit temporary, decline. The Surrey Economic Action and Recovery Plan strengthened economic resiliency and encouraged business investment, providing the City with a strong financial position as we entered 2021. The year began with the pandemic continuing to inflict tremendous human and economic hardships; however, optimism was increased against the backdrop of emerging vaccination program rollouts in British Columbia (“BC”), Canada, and several countries around the world. The City supported the heavily impacted restaurant sector through the creation of temporary patios, expansion of the Façade Enhancement Grant and revisions to the Parking to Patio Program which waived fees and deposits for applicants. Nations across the globe raced to vaccinate their populations as quickly as possible in the hopes that, with increased immunizations, COVID-19 would become a manageable threat. As governments eased restrictions, people became more mobile, and economies began to recover. Forward progress was tempered by the emergence of the COVID-19 Delta variant which proved to be more transmissible than other strains of the virus. However, “circuit breaker” restrictions on gatherings and activities were eventually repealed and gave way to progression within the Province of BC’s Restart Plan. The City’s Emergency Operations Centre (“EOC”) prepared the Surrey Restart Plan which outlined the changes to be made to facilities and services and was aligned with each step of the BC Restart Plan. Surrey continued to offer financial incentives to the development community to encourage and accelerate the implementation of larger scale projects that could generate jobs and important investments, benefitting residents and businesses. These initiatives, along with the overall streamlined development and permitting process, helped to keep Surrey resilient through the pandemic. The negative financial impacts of the COVID-19 pandemic on the City’s finances continued into 2021 with the loss of revenues due to the reopening of City facilities at less than 100% capacity and reduced Provincial gaming revenues resulting from the closure of the Elements Casino, and its reopening at less than 100% capacity. Cost avoidance measures were once again taken to help reduce expenses to offset the revenue shortfalls relating to the pandemic. Overall, the City was able to maintain a strong financial position in 2021.

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