Financial Annual Report 2016

REPORT FROMTHE GENERAL MANAGER, FINANCE &TECHNOLOGY

MAY 8, 2017 To Mayor Linda Hepner and Members of City Council It is my pleasure to submit the Annual Financial Report for the year ended December 31, 2016. The purpose of this report is to publish the consolidated Financial Statements and the Auditors’ Report for the City of Surrey pursuant to Section 167 of the Community Charter. The preparation of the consolidated financial statements is the responsibility of City Council and the management of the City of Surrey. 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). In addition to the City of Surrey, the reporting entity comprises all organizations, boards and enterprises financially accountable to the City of Surrey, including the Surrey Public Library, the Surrey Homelessness and Housing Society and the Surrey City Development Corporation. The public accounting firm KPMG LLP, which was appointed by City Council as the external auditor, has given the City an unqualified audit opinion on the City’s Consolidated Financial Statements, stating 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, 2016 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

2016 in Review The construction of new facilities under the ‘Build Surrey’ Program continued to facilitate development activity throughout the City during 2016. Of particular significance was the opening of the Grandview Heights Indoor Pool, serving the growing community of South Surrey. Design work also began on the new Clayton Hub, which will incorporate integrated arts, library, recreation and outdoor space in a single facility to serve the communities of East and West Clayton. In the residential development community, the shift toward the construction of multi- family dwellings has continued into 2016, although the City still continues to offer excellent value in the single family residential sector relative to the rest of the Greater Vancouver area. Another healthy sign of development was the strong commercial and institutional sector activity; which has been particularly evident in the City Centre. In addition, industrial development in the Campbell Heights area remains steady. The City’s revenues in 2016 totaled $914.7 million, which is an increase in comparison to revenues of $853.4 million collected in 2015. This increase was attributable primarily to additional property taxes, utility fees, license, permits and one-time land sale proceeds. The additional revenue generated from the increased property related fees and taxes was required to support a $12.5 million budgeted increase in Public Safety along with a $8.8 million budgeted increase in support for new Civic Facilities opening in 2016 and necessary labour and inflationary cost increases. The City’s expenses totaled $698.8 million in 2016, which was an increase in comparison to expenses of $670.5 million in 2015. This increase was primarily attributable to increase in the RCMP contract, increases in Parks, Recreation and Culture programming and a reclassification of utility overhead cost recoveries.

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