City of Surrey's Annual Financial Report 2021

The rise of the COVID-19 Omicron variant at the end of 2021 and the reintroduction of public health measures and restrictions highlighted the fact that we are still susceptible to considerable uncertainty. Circumstances remain dynamic and it is unknown what the ultimate duration and magnitude of the pandemic’s continued economic impact will be on the City’s financial position in future periods. One of the most significant endeavors the City has ever undertaken is the creation of our own City Police Force. The transition to the Surrey Police Service (“SPS”) is well underway with the operational deployment of the first cohort of SPS officers taking place at the end of 2021. 2021 saw a resurgence in development activity within Surrey from the pandemic related slowdown in 2020. Building permits with a construction value of $2.0 billion were issued during the year, a 38% increase over the prior year. The development community continues to see Surrey as an attractive place to invest. The number of residential units approved in 2021 increased 52% over 2020. The real estate market remains robust with Surrey continuing its appeal as an affordable destination for young families to settle and thrive.

In 2021, the City’s financial position increased by $146.3 million resulting in a net financial asset position of $278.0 million. The City’s non-financial assets increased in 2021 by $159.3 million, bringing the total to over $9.6 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 financial position and non-financial assets was accumulated surplus increasing by $305.6 million in 2021 to $9.9 billion (2020 - $9.6 billion). Overall, the City continues to maintain a strong financial position.

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

2021 Actual

2020 Actual

Change

$ 1,183.1

Revenues Expenses

$ 1,051.6 $ 131.50

(877.6)

(779.1)

(98.50)

$ 305.5

Annual Surplus

$

272.5 $ 33.00

Financial Position

The City’s revenues in 2021 totaled $1,183.1 million, which is an increase compared to revenues of $1,051.6 million in 2020. The year-over-year growth was attributable to increased Taxation Revenue ($55.3 million), Developer Contributions, including Community Amenity Contributions & Bonus Density payments ($51.4 million), Utility Rates and Fees ($13.9 million), Sales of Goods and Services ($7.5 million), Transfers from Other Governments and Other Revenues ($11.2 million), and Gain on Disposal of Assets ($4.0 million). This was offset by decreased recognition of deferred Development Cost Charge revenue ($10.4 million) and lower Investment Income ($1.4 million). In accordance with the 2021 – 2025 adopted financial plan, the additional revenue generated from increased property taxation was required to support budgeted increases in the City’s robust capital program and related operating programs including funding supported labour and inflationary cost increases and other various corporate requirements. The City’s expenses totaled $877.6 million in 2021, which was an increase in comparison to expenses of $779.1 million in 2020. This year-over-year change was primarily attributable to increases in General Government, Police and Fire services, Libraries, Parks, Recreation & Culture, Roads & Traffic safety and in the cost of Water, Sewer, Drainage and Solid Waste.

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

2021 Actual

2020 Actual

Change

$ 1,768.8

Financial Assets

$ 1,447.3 $

321.5

(1,490.8)

Liabilities

(1,315.6)

(175.2)

278.0

Net Financial Assets Tangible Capital Assets Inventories of Supplies

131.7

146.3 157.7

9,631.9

9,474.2

1.2 6.8

1.0 5.4

0.2 1.4

Prepaid Expenses

9,639.9

Non-Financial Assets Accumulated Surplus

9,480.6

159.3 305.6

$ 9,917.9

$ 9,612.3 $

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

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