Annual Report 2021 79 78 City of Chilliwack CITY OF CHILLIWACK NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Year Ended December 31, 2021 City of Chilliwack Notes to Consolidated Financial Statements Year Ended December 31, 2021 11 Contingent liabilities: (a) The City, as a member of the Fraser Valley Regional District, is responsible for its proportion of any operating deficits or long term debt related to functions in which it participates. Any liability which may arise as a result will be accounted for in the period in which the required payment is made. (b) The City is currently engaged in certain legal actions. Of the claims the City is defending, certain claims are covered by the City's insurers and/or other parties. The City accrues for claims for which the amounts are known or can be reasonably estimated. The outcome of other claims is undeterminable at this time and, accordingly, no provision has been made for these actions. (c) The City and its employees contribute to the Municipal Pension Plan (a jointly trusteed pension plan). The board of trustees, representing plan members and employers, is responsible for administering the plan, including investment of assets and administration of benefits. The plan is a multi-employer defined benefit pension plan. Basic pension benefits are based on a formula. As at December 31, 2020, the plan has about 220,000 active members and approximately 112,000 retired members. Active members include approximately 42,000 contributors from local governments. Every three years, an actuarial valuation is performed to assess the financial position of the plan and adequacy of plan funding. The actuary determines an appropriate combined employer and member contribution rate to fund the plan. The actuary's calculated contribution rate is based on entry-age normal cost method, which produces the long-term rate of member and employer contributions sufficient to provide benefits for average future entrants to the plan. This rate may be adjusted for the amortization of any actuarial funding surplus and will be adjusted for the amortization of an unfunded actuarial liability. The most recent valuation for the Municipal Pension Plan as of December 31, 2018, indicated a $2,866 million funding surplus for basic pension benefits on a going concern basis. The City expensed $3,116,738 (2020 - $2,894,548) for employer contributions to the Plan in fiscal 2021. The next valuation will be as at December 31, 2021, with results available in 2022. Employers participating in the plan record their pension expense as the amount of employer contributions made during the fiscal year (defined contribution pension plan accounting). This is because the plan records accrued liabilities and accrued assets for the plan in aggregate, resulting in no consistent and reliable basis for allocating the obligation, assets and cost to individual employers participating in the plan. 12 Fair value of financial assets and financial liabilities: The fair value of the City's cash, accounts receivable, accounts payable, accrued liabilities and refundable deposits approximate their carrying amounts due to the immediate or short term maturity of these financial instruments. The fair value of portfolio investments at December 31, 2021 was $176,999,939 (2020 - $124,007,842). Included in the fair market estimate is accrued interest of $895,529 (2020 - $1,038,702), which is reported within accounts receivable. 13 Commitments: (a) The City is committed to the acquisition of 1 property with an estimated acquisition cost of $899,500. (b) 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 Chilliwack Coliseum. 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, 14 Contractual rights: The City has entered into contracts for various property rentals and leases, and is scheduled to receive the following amounts under those contracts: Year Amount 2022 1,184,078 2023 1,118,586 2024 1,012,592 2025 884,706 2026 579,706 Thereafter 286,042 5,065,710 $ CITY OF CHILLIWACK NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Year Ended December 31, 2021 City of Chilliwack Notes to Consolidated Financial Statements Year Ended December 31, 2021 15 Budget figures: The operating and capital budget figures, presented on a basis consistent with that used for actual results, were approved by Council as the 2021 Financial Plan Bylaw 2020, No. 5022. The chart below reconciles the approved budget to the budget figures reported in these financial statements. 2021 Budget Revenues Operating budget 176,352,400 $ Capital budget Development cost charges 41,263,000 Contributed tangible capital assets 4,450,000 Statutory reserve funds 26,675,000 Operating reserves 42,199,500 Current operations 6,737,000 Government grants and transfers 20,770,000 Total revenue per approved budget 318,446,900 Add: CEPCO 1,620,100 Tourism 1,234,720 Less: Transfers from other funds (100,030,500) Inter-entity eliminations (1,150,000) Total budgeted revenue as reported 220,121,220 Expenses Operating budget 159,052,400 Capital budget 142,094,500 301,146,900 Add: CEPCO 1,213,982 Tourism 1,398,674 Amortization 17,612,485 Less: Transfers to other funds (159,863,914) Inter-entity eliminations (1,150,000) Total budgeted expenses as reported 160,358,127 Budgeted surplus as reported 59,763,093 $
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