2020 Annual Report

Message from the Corporate Controller

obligations. The difference between total assets, both financial and non-financial and total liabilities is Accumulated Surplus and provides an indication of the net economic resources available for service delivery. The majority of this number is comprised of the physical assets used in service delivery and does not represent a source of funding. The City has a Net Financial Asset Position of $124.2 million at the end of 2020, an increase of $11.1 million from 2019. The change in Net Financial Assets is discussed in more detail in the Consolidated Statement of Change in Net Financial Assets. Accumulated Surplus at the end of 2020 is $1.26 Billion. Financial Assets: • Financial assets decreased by $10.2 million from 2019. • Cash and investments decreased by $7 million over 2019. • Accounts receivable decreased by $2.6 million from 2019. Liabilities: Total liabilities decreased by approximately by $21.3 million over 2019. • The actuarially determined liability for future employee benefits is $3.35 million. This liability will be settled over the longer term and does not impose an immediate claim on cash flow. • Accounts payable and accrued liabilities decreased by $7.5 million. • Restricted revenues decreased by $5.8 million through a combination of decreased collections and similar capital investment levels in 2020 to those in 2019. • Debt decreased by $2.6 million as a result of planned pay down. Non-Financial Assets: Non-financial assets are comprised of the tangible capital assets held for use in service provision, undeveloped land bank properties, supplies inventories and prepaid expenses. These represent economic resources available to the City for service provision, rather than a funding source to support the day-to-day operations of the City. In 2020 non-financial assets increased by $43 million over 2019, due primarily to a net increase in tangible capital assets of $42.7 million.

2020 Consolidated Financial Statements Late in the first quarter of 2020 the World Health Organization declared COVID-19 to be a global pandemic. While City operations continued without change for the most part, evolving public health orders did impact both revenues and expenses, the effects of which are described in the section on the Consolidated Statement of Operations. Generally Accepted Accounting Principles require that the actual financial results be compared to the budget that is adopted annually before setting the tax rates. Council adopted that budget in May of 2020. During the 2020 fiscal year, work was undertaken to review and refine the data that drives financial statement numbers. As a result, data corrections were identified that resulted in a restatement of 2019 results as described in Note 24 to the financial statements. The adjustments resulted in an increase to previously reported net financial assets of $775 thousand, a reduction to contributed tangible capital assets revenues of $8 million, a reduction to tangible capital assets of $14.6 million and a corresponding reduction to 2019 accumulated surplus. The following sections provide an analysis of the 2020 Financial Statements and selected supplemental financial information. The dollars quoted are approximate and are intended to account only for the major part of variances being discussed. Some key highlights are: • Net Financial Assets increased by $11.1 million to $124.2 million. • Municipal debt decreased by $2.6 million to $20.67 million. • Unused annual debt servicing capacity, based on our current financial position, is $25.94 million. 1 Consolidated Statement of Financial Position – Page 40 This statement reports the City’s assets, both financial and non-financial and its liabilities. The difference between financial assets and total liabilities is Net Financial Assets if positive and Net Debt if negative. This figure provides the City with an indicator of financial flexibility and future revenue requirements to finance activities and meet existing financial

2 Consolidated Statement of Operations – Page 41 This statement reports the City’s changes in economic resources and accumulated surplus for 2020, compared with budget and with 2019 results. Since annual revenues exceeded expenses, the City increased its accumulated surplus during the year. Included in this statement is information about the gain or loss on the disposal of capital assets. If tangible capital assets are disposed of before the

32 City of Maple Ridge - 2020 Annual Report