2017 Annual Report

58 City of Chilliwack 2017 Annual Report City of Chilliwack Notes to Consolidated Financial Statements Year Ended December 31, 2017 4 Accounts payable and accrued liabilities: 2017 2016 Trade payables 10,961,733 $ 11,242,008 $ Province of British Columbia 2,208,406 1,402,151 Government of Canada 5,770,664 5,652,925 Regional and local governments 689,528 452,174 Landfill closure and post-closure costs 2,883,000 2,746,000 22,513,331 $ 21,495,258 $ Landfill closure and post-closure costs: The City has responsibility for closure and post-closure care of the Bailey Landfill site. Potential costs related to closure activities at this site include drainage control, leachate monitoring, gas monitoring and recovery, and final ground cover. The landfill site is expected to require post- closure care for thirty years after its estimated closure in 2037. The liability amount of $2,883,000 has been recorded by multiplying the estimated net present value of total remaining costs related to closure and post-closure care ($8,491,000) by the cumulative capacity used (34%) and is reduced as landfill restoration costs are incurred. In addition, the City has appropriated a portion of financial equity as a landfill reserve. The balance of $6,576,004 (2016 - $5,771,598) is appropriated for other landfill related costs and unforeseen closure and post-closure costs. 5 Development cost charges: The development cost charge liability represents funds received from developers for capital infrastructure expenditures required as a result of their development projects. As these funds are expended, the liability will be reduced and the amount expended will be recorded as revenue. Developers are entitled to pay development cost charges (DCCs) in equal installments over two years if the total amount payable is equal to or greater than $50,000. Installments due for the next two years are recorded as accounts receivable and are guaranteed by the developer by providing an irrevocable letter of credit payable to the City of Chilliwack for the remaining amount of DCCs owing. As at December 31, 2017, the amount of the DCCs due over the next two years is $4,248,561 (2016 - $5,200,108). Assets are not physically segregated to meet the requirements of the restricted revenues. The liability is amortized to revenue as the related expenditures are incurred. 6 Capital partnership obligation: In 2004, the City of Chilliwack entered into a 25 year agreement with the Chilliwack Chiefs Development Group Ltd. (CDG) for the provision of community priority time in the Prospera Centre. As part of the agreement, the City pays $400,000 annually to CDG for the operation of the facility and $175,000 as a reimbursement for revenues collected directly by the City. In addition, the City is required to make annual capital payments of $1.2 million which is applied towards CDG's term loan associated with the facility, until CDG's loan is fully repaid. CDG's term debt is a fixed rate operating loan at the Financial Institution's Cost of Funds (COF) plus 0.45%. At the end of the term of the agreement, the City obtains legal ownership of the facility. The City's capital partnership obligations under this agreement are as follows: 2018 1,200,000 2019 1,200,000 2020 1,016,340 3,416,340 Less amounts representing interest at 2.0% (128,747) 3,287,593 $ City of Chilliwack Financial Statements