we’re - kelowna · 2016-11-29 · th e theme of this year’s annual report tells the story of...

City of Kelowna2014 Annual ReportFor the year ended December 31, 2014 Kelowna, British Columbia, Canada

WE’RE

AWARDS & ACCOLADESMESSAGE FROM THE MAYOR

& THE CITY MANAGERSTRATEGIC PLAN OPEN FOR BUSINESS OPEN FOR SERVICE

122,000residents

1.6+ millionpassengers at Kelowna International Airport

325 kmof designated bike lanes

21,000 requests for service

5.4 millionkelowna.ca site page views

788 City of Kelowna employees

9,251business licences issued

1 general local election

1,632 kmof roadway maintained

330development permits issued

$351 millionin construction value

35,150hours of recreation programming

3wildfi re incidents,activating the regional Emergency Operations Centre

7.6% ($22.4 million)revenues from government transfers

BY THE NUMBERS

Annual Report 2014 A3

TABLE OF CONTENTS

WE’RE OPEN

Awards & recognition + 40th Annual Civic & Community Awards ................................................................. 1

Messages from the Mayor and City Manager .................................................................................................... 3

Strategic Plan: Moving opportunities forward .................................................................................................. 6

Open for business ................................................................................................................................................. 9

Open for service ..................................................................................................................................................13

Open for partnerships ........................................................................................................................................17

Open for excellence ............................................................................................................................................21

Open for opportunity .........................................................................................................................................25

FINANCIAL INFORMATION

Index to fi nancial statements ...........................................................................................................................32

Financial Services Director’s report .................................................................................................................42

Independent Auditors’ report ............................................................................................................................43

Consolidated fi nancial statements ...................................................................................................................44

Notes to the consolidated fi nancial statements .............................................................................................48

STATISTICAL REVIEW

Statistical review for the years 2010-2014 ......................................................................................................71

Th e Annual Report is produced by the Communications and Financial Services departments of the City of Kelowna,

in cooperation with all civic departments and agencies.



1 City of Kelowna

BC Small Business Roundtable’s Open for Business Award 2nd consecutive year

IABC Gold Quill Excellence Award for My DowntownBernard Avenue Revitalization Community Engagement

PIBC Gold Award in the category of Planning Practice City & Urban Areas for the Bernard Avenue Revitalization

International Downtown Association (IDA) Downtown Pinnacle Award Bernard Avenue Revitalization

Government Finance Offi cers Association (GFOA) Distinguished Budget Presentation Award for 2013the highest form of recognition in governmental budgeting and represents a signifi cant achievement for the organization – 13th consecutive year

GFOA’s Canadian Award for Financial ReportingDecember 31, 2012 Annual Financial Report – 12th consecutive year

BC Water & Wastewater Association’s (BCWWA) Best Tasting Drinking Water Award

Solid Waste Association of North America’s (SWANA) Most Improved Landfi ll Award

North American Occupational Safety and Health (NAOSH) Week Steering Committee BC Government Category Award

2013 FCM Sustainable Communities Award Community Action Plan and Corporate Energy Emissions Plan

AWARDS & RECOGNITION

Th e City of Kelowna and its staff were recipients of a number of awards and recognition in 2014 including:

Th e Building & Permitting Branch achieved building department accreditation with the International Accreditation Service, becoming the only accredited building department in Canada

Green Communities Committee Level 2 recognition – ‘Measurement’

WorkSafeBC and BC Municipal Safety Association Certifi cate of Recognition, which carries with it a fi nancial incentive of more than $125,000 annually so long as it is maintained, joining the ranks of 17 other BC municipalities for excellence in occupational health & safety



Annual Report 2014 2

OPEN FOR PARTNERSHIPS OPEN FOR EXCELLENCE OPEN FOR OPPORTUNITY FINANCIAL INFORMATION STATISTICAL REVIEW

Annual Report 2014 2Annual Report 2014 2

40TH ANNUAL CIVIC & COMMUNITY AWARDS

Kelowna’s Civic and Community Awards honour individuals and organizations for outstanding contributions and achievements in 2014 that directly benefi tted the Kelowna community.

Th e following recipients were recognized at the awards gala on April 30, 2015 at the Kelowna Community Th eatre.

ARTS AWARDS

Honour in the Arts Jennifer Schell

Teen Honour in the Arts Antony Knight

SPORTS AWARDS

Bob Giordano Memorial Award Volunteer Coach or Sport Administrator of the Year Tom Maxwell

Bryan Couling MemorialAthletic Team of the Year Okanagan Rockets, Major Midget Hockey Club

Male Athlete of the Year Robbie Yochim

Female Athlete of the Year Kelsey Serwa

Augie Ciancone Memorial - Male Jeff Tubbs

Augie Ciancone Memorial - Male Emma Johnson

CITIZENSHIP AWARDS

Young Male Volunteer of the Year Nikolai Lesack

Young Female Volunteer of the Year Th ish Rajapakshe

Champion for the Environment (individual and business) Casey Hamilton and 1800 Got Junk

Corporate Community of the Year(small/medium and large) Wentworth Music and Save on Foods

Fred Macklin Memorial - Man of the Year David Krysko

Sarah Donalda Treadgold Memorial - Woman of the Year Meryle Corbett

Central Okanagan Foundation, Volunteer Organization of the Year United Way of the Central & South Okanagan Similkameen

Anita Tozer Memorial Arion Th erapeutic Farms

New to the 2014 awards, the three successful fi nalists in the Young Male and Young Female Volunteer categories will receive a scholarship to help fund their post-secondary education.

MESSAGE FROM THE MAYORColin Basran

Although I was not Kelowna’s Mayor in 2014, I can refl ect on some of the foundations set by our previous Mayor and Council.

In 2012, Kelowna City Council created a framework to establish service and project initiatives. Th e fi rst phase set out areas of focus for Council’s term, through 2014. Much of the eff ort in this term focused on building on momentum from previous Councils, implementing progressive and well-considered plans for the future and beginning the process of establishing the foundation for major projects to be completed in the years to come.

Excellent progress was made in our goals during that three-year term, including launching a mobile version of the Service Request System, adopting the Pandosy Waterfront Plan, beginning work on

the Okanagan Centre for Innovation, opening the revitalized Bernard Avenue, beginning design of the John Hindle Drive connection to UBC Okanagan, completing Phase 1 of the Gordon Drive Frequent Transit Network and implementation of a City-wide Parking Management Strategy.

I hope you take some time to explore the City of Kelowna’s 2014 Annual Report for a greater understanding of our accomplishments and how we are always working to make Kelowna the best mid-sized city in North America. A city that is active, healthy, safe, optimistic and open for opportunity.

3 City of Kelowna



“A city that is active, healthy, safe, optimistic and open for opportunity.”

MESSAGE FROM THE CITY MANAGERRon Mattiussi

We made signifi cant progress in 2014 with the help of some great partnerships. By working closely with groups in our community and other levels of government, the City of Kelowna increased the impact of the resources available to us.

Th is approach resulted in partnerships to enhance the services we provide and the projects we undertake. By working together and being open to partnerships we: • Created a tentative agreement to obtain the CN Rail corridor • Established free public WiFi in City parks and facilities • Came to an agreement for the purchase of Rutland’s Centennial Park • Secured funding to complete John Hindle Drive at a reduced cost to the City • Worked with local sport organizations to enhance our sport delivery

Economic growth was a major focus in 2014. Proving that we truly were open for business we: • Completed the Bernard Avenue revitalization, breathing new life into Kelowna’s downtown

• Continued to expand services at Kelowna International Airport, which hit the 1.6 million passenger mark one year ahead of schedule • Saw the impact of an improvement in our general economic environment and had the highest value of new construction since 2010 • Provided nearly $600,000 in Arts, Culture & Heritage, Sports and Event & Festivals grants • Explored funding from Provincial and Federal sources to supplement our revenue sources, working to reduce the demand on reserves, debt and taxation • Won the B.C. Small Business Roundtable’s Open for Business Award for the second year in a row

Th e theme of this year’s Annual Report tells the story of how the City is open in so many ways. It shows how being open meets Council priorities and keeps us leading the development of a safe, vibrant and sustainable city. Together, we’re open – open for business, service, excellence, partnerships and opportunity.



5 City of Kelowna



VISIONTo be the best mid-sized city in North America

MISSIONLeading the development of a safe,

vibrant and sustainable city



STRATEGIC PLANNING: Moving Opportunities Forward

In 2014, City Council wrapped up its three-year term under the commitment to move opportunities forward and be open for business.

Council’s strategic priorities focused the City of Kelowna to meet fi ve goals:

Th e Corporate Plan builds the corporate capacity necessary to deliver on City Council’s directions and the goals of the community.

Th e City of Kelowna’s delivery of projects and core City services drive a corporate vision to be the best mid-sized city in North America.

1. 2. 3. 4. 5.GROW OUR ECONOMY

ENHANCE CITIZENS’

QUALITY OF LIFE

FOCUS ON RESULTS

DELIVER ON OUR PLAN

PROVIDE PROACTIVE & PRAGMATIC LEADERSHIP

7 City of Kelowna





A PERFECT PAIRING: Kelowna & TechA COMMUNITY STORY

Ed Henczel

Kelowna is the third-largest technology hub in B.C. and the City of Kelowna is working with partners to expand this clean, knowledge-based sector. Economic development research estimates 2014’s tech-sector revenues in the Okanagan at more than $850 million, a whopping 42 per cent jump from 2013.

Th e Okanagan has more than 300 technology companies, annual labour force growth of four per cent and more than 6,500 workers in the fi eld. Th e City supports this sector with access to our unlimited-bandwidth fi bre network for companies such as RackForce, Canada’s largest cloud-service provider.

Although not a multi-national player like RackForce, award-winning Kelowna start-up Soil Mate is benefi tting from the business environment and the natural environment.

Soil Mate is a fully mobile-optimized website that lets consumers see all the local agricultural suppliers within a 100-mile radius, from local produce, grains, and meats to some of the world’s best wines, beers and spirits. And it has maps for every province and state in North America. Th e concept was so revolutionary that Soil Mate won this year’s B.C. Small Business Award for Best Business Concept.

Like a lot of Kelowna residents, Soil Mate founder Matt Gomez is a transplant. He moved here from England in 2008 to work for Acro Media, one of Canada’s leading web development companies.

He fell in love with the weather and the local high-tech community (and a certain school teacher who later became his wife, but that’s another story). Drawing inspiration from the book Th e 100-Mile Diet and the young agrarian movement, Matt became interested in the local farmers’ market and thought there could be a high-tech way to connect local suppliers to consumers.

“Soil Mate launched with just farms, farmers’ markets and wineries in its database, but has now expanded to include craft breweries, cideries, distilleries, associations, and local sourcing restaurants and stores,” says the 31-year-old.

An avid bicycle commuter, Gomez makes use of Kelowna’s 340-kilometres of bike lanes with Soil Mate’s MyRoute app. MyRoute confi gures agri-tourism tours; there are plenty of areas to tour because nearly 70 per cent of the land in Kelowna is protected by the Agricultural Land Reserve or because it’s environmentally sensitive.

“Kelowna is the perfect place for a business like this. We have a great tech infrastructure and a solid agricultural community. It’s a perfect blend,” says Matt.

9 City of Kelowna



ATTRACTING VISITORSKelowna International Airport (YLW) passenger numbers surpassed the 1.6 million mark in 2014, a year ahead of schedule and up fi ve per cent over 2013. Service at YLW expanded to Fort McMurray (daily), Toronto, Trail and San Francisco (daily). Ten airlines now operate at the airport with approximately 20,000 seats available weekly, making it easier than ever to travel to and from Kelowna. For more details, check out YLW’s Annual Report.

ylw.kelowna.ca

Kelowna also hosted a number of high-profi le sports events attracting athletes, enthusiasts and fans to Kelowna. Events included Play On! Hockey Night in Canada, Cherry Blossom Triathlon, Canadian Championship Rugby Game tournament, Valley of Champions (youth baseball), Axel Merckx Cycling Foundation Camp, Basketball BCs 3-on-3

youth tournament, Roger’s Hometown Hockey Tour and Skate Canada International.

ARTS & CULTURE OPPORTUNITIESTh e City invests more than $2.5 million annually in cultural services to enliven public places and City facilities, in addition to investments that support more than 110 outdoor events every year.

In 2014, the City of Kelowna hosted the Business for the Arts’ artsVest program for the second year in a row. Th e goals of artsVest are to leverage public sector dollars to build partnerships with the arts community, stimulate new business investment in the arts, train arts and cultural organizations to approach the business sector with a partnership plan, activate municipal cultural plans and build local cultural assets and showcase what is possible when business invests in the arts.

MOVING OPPORTUNITIES FORWARD

Increased focus on economic development activities

Bernard Avenue revitalization

FOR BUSINESS



OUR RUTLAND PROJECTMichelle Kam

Sustainability Coordinator

“We’re providing capital investment and transforming a space right in the heart of the Rutland town centre.”

Watch Michelle talk more about Our Rutland and how engagement

with the community has helped shape this project.

11 City of Kelowna



Staff also submitted a successful bid to host the Creative City Network of Canada’s annual Creative City Summit, Oct. 27-29, 2015. Th e annual summit, which moves around the country, off ers content that is national in scope and designed to address local cultural development practice for a range of community types and sizes.

kelowna.ca/culture

TOWN CENTRE DEVELOPMENTA general improvement in development helped push the total value of construction projects in 2014 to $351 million – the best year since 2010 and the third consecutive year of increased construction value.

Major multi-year initiatives were completed, including the fi nal phase of the Bernard Avenue revitalization and the disposition of all nine Central Green development parcels. Th e $14-million investment in Bernard Avenue is one of the fi rst projects completed from the City of Kelowna’s Downtown Plan and will help rejuvenate downtown, setting the stage for more activity, attracting residents and visitors alike. Th e heart of the Central Green development will be a community park surrounded by environmentally sustainable multi-family homes, retail spaces and public amenities.

Th e City of Kelowna collaborated with the Rutland Community and panel represented by community organizations and individuals, to gather ideas

to build on Rutland’s already strong sense of community. In June 2015, Council endorsed the Our Rutland project for the development of an outdoor public market and improvements to Roxby Park.

AROUND DOWNTOWNContinued work to develop Kelowna’s downtown resulted in a number of simultaneous projects occurring now and continuing over the next year. A project team has been created to coordinate the management and communication of the impact of both private and City-led development and construction activity in our downtown core. Projects include but are not limited to the Okanagan Centre for Innovation, Library Parkade expansion, new parkade on Ellis Street, Community Health and Services Centre, Stuart Park Phase 2, Queensway Transit Exchange, downtown hotel, Police Services building and Ethel Street Active Transportation Corridor.

kelowna.ca/cityprojects

WATERFRONT ACCESSPhase 2 of Stuart Park saw signifi cant progress in 2014, with construction of the Waterfront Promenade and demolition of the old Kelowna Yacht Club, increasing public access and interest in Kelowna’s coveted waterfront and water-based activities.

Staff led consultations on numerous community projects, including the Pandosy Waterfront public



process to plan future use of 12 City-owned waterfront properties. A workable plan emerged after eight days of public input and a two-day planning exercise involving 30 participants from resident associations and Kelowna citizens.

THE FUTURE

Downtown development

Stuart Park fi nal phases

Fibre Optic Network

10 AIRLINES

20,000SEATS AVAILABLE WEEKLY

3rd CONSECUTIVE YEAR

OF INCREASED CONSTRUCTION VALUE

BERNARD AVENUEINVESTMENT

$14 million



FOR SERVICEA FOCUS ON SAFETYInnovative technology is advancing methods to enhance public safety, with new predictive modeling and mapping tools in place to identify crime patterns, or data that shows locations of medical fi rst-responses for more effi cient allocation of fi refi ghters. For instance, the Predictive Modelling and Dynamic Deployment System project allows the Kelowna Fire Department to look back at the frequency, distribution and response to historical incidents to help guide decision-making.

In addition to numerous other fi re prevention and education activities, the Kelowna Fire Department worked with three Kelowna communities as part of the 2014 FireSmart Program. Th e program works with residents living in areas susceptible to wildfi res, providing them with the tools to decrease the risk of property loss and improve

knowledge about how to protect themselves in the event of wildfi re.

Th e Fire Department’s Regional Emergency Program supported the Regional District of Central Okanagan and the District of West Kelowna during Emergency Operation Centre activations for a fl ooding event that compromised Gellatly Road, and wildfi res in the Smith Creek, Mount Boucherie and Drought Hill neighbourhoods, including the evacuation of more than 3,600 residents.

kelowna.ca/fi re

Kelowna RCMP’s Downtown Enforcement Unit increased police presence in the downtown with foot patrols and additional bicycle patrols in parks. Kelowna RCMP continues to focus eff orts to reduce drugs on the streets through arrests and seizures. In 2014, 1,656 drug-related fi les were created – up 4.15 per cent over the same period in the previous year.


Police Services Building Project

Expand cycling and pedestrian networks

13 City of Kelowna



FIRE PREVENTIONRick Euper

Fire Inspector

“We can educate people […] it’s rewarding to hear that

people are safe because of a program we do.”

Watch Rick talk about the importance of fi re prevention and education at the City of Kelowna.

15 City of Kelowna

Th ree short-listed companies began work on their design proposals as part of the competitive design-build process for the Police Services Building project. Design and construction of the building is planned for 2015-2017, with occupancy in late 2017.

Pedestrian and traffi c calming safety initiatives such as new or upgraded traffi c signals and street lights, pedestrian crossings and signals, additional sidewalks, bike lanes and multi-use corridor networks are a result of public input.

GREAT OUTDOOR SPACESTh e City of Kelowna takes full advantage of our natural environment and climate to enhance citizens’ quality of life with waterfront pathways, clean beaches and investments in parks and public spaces.

Restoration of the Apex Trail in Knox Mountain Park was completed in 2014 along with a Ponds Playground Partnership with the developer to build a neighbourhood playground in this new subdivision.

kelowna.ca/parks

COMMUNITY SUPPORT & ENHANCEMENTCommunity-building grants for arts, culture and heritage of nearly $515,000 were distributed in 2014, along with sport grants totaling more than $30,000 and event and festivals grants of more than $50,000.

Th e Strong Neighbourhoods Project was introduced in 2014, which included 24 neighbourhood engagement events, an online survey and input from community stakeholders. Th e City of Kelowna asked residents about their neighbourhoods and what they personally valued. Th e input received will be used in 2015 to create initiatives that inspire community connection and involvement, including a number of pilot projects and neighbourhood grant program.

ENCOURAGEMENT TO GET ACTIVETh e City of Kelowna worked with regional partners to increase sustainable transportationparticipation through community events and programs, such as Bike to Work/Bike to School Week, Bike Skills Rodeos at Elementary schools and the Class Rides Free program.

Free outdoor events provided opportunities for residents and visitors to enjoy Kelowna’s beautiful outdoors. 2014 saw the return of Park and Play, Dancing in the Park, New York New Year’s Eve, plus a variety of free music concerts, multi-sport races and community parades.





OPEN ONLINE 24/7Public engagement opportunities continued to expand with residents through online services, including the launch of social media during Emergency Operation Centre activations in 2014. Web page views on kelowna.ca went from 4.7 million views in 2013 to 5.4 million in 2014. More than 40 per cent of sessions were on mobile or tablet devices, compared to 31 per cent in 2013.

kelowna.ca

City staff worked with internal groups who deal with the public and partners, such as the Downtown Kelowna Association and Festivals Kelowna, to raise awareness about the online Service Request System and when and how to use it. Mobile and online requests represented 19 per cent of all requests for service. As the City continues to increase the functionality of mapping service requests as a resource, a better understanding of the history of problems and their location will result in saving time and resources in deploying work crews.

kelowna.ca/servicerequests

THE FUTURE

Strong neighbourhood project


Interior Health building downtown

Design for John Hindle Drive extension

Rutland Town Centre business analysis

Technology Centre

ON TRACK FOR THE FUTURETh e municipalities of Lake Country, Coldstream, Vernon and Kelowna, as well as the regional districts of Central Okanagan and North Okanagan, jointly identifi ed the value the discontinued Canadian National (CN) rail line could have as a continuous multi-modal transportation corridor connecting all the communities. In December 2014, the City of Kelowna, on behalf of this Inter-jurisdictional Acquisition team, signed a negotiated sales and purchase agreement with CN for approximately 47.5 km of discontinued rail line between Kelowna and Mile 88 in Coldstream. Th e team will continue to do their due diligence and work on securing funding to solidify the deal.

FOCUS ON HEALTHTh e City signed a Healthy City Partnership Statement of Cooperation with Interior Health Authority and University of British Columbia Okanagan. Together, three of the BC interior’s largest institutions will collaborate on how to maximize resources and address issues such as community, sustainability, and health and wellness to benefi t the city. Beginning in the fall, the focus for Phase 1 includes modeling various housing density scenarios, their associated greenhouse gas emissions and identifying future plans for building healthy urban centres in Kelowna.

A new collaboration with Interior Health Authority focused on supporting people’s ability to manage their own health. Th e initiative included the development and delivery of “Move for Your Health” programs and the launch of a service where Allied Health staff on site at the Parkinson

17 City of Kelowna



FOR PARTNERSHIPS



JOHN HINDLE DRIVETodd Cashin

Subdivision, Agriculture & Environment Services Manager

“What I love most about this project is how multilayered it

is and how many communities are impacted by a simple road.”

Watch Todd talk about the John Hindle Drive extension and

how partnerships will help connect communities.

19 City of Kelowna

Recreation Centre are available to direct people to the appropriate community program.

Together, the City and Interior Health also began work to move a number of community services and programs, along with nearly 800 jobs, to Kelowna’s downtown. Th e project will help meet Downtown Plan goals to invest in the economy and build on the vibrancy of our city. Changes in density and upgrades to parking will make our downtown a safer place for residents and visitors.

A new health district zone was approved by Council to create a transitional area around Kelowna General Hospital that allows for transitional health service uses and guides the development of the Health District area east of Pandosy Street.

BUILDING NEIGHBOURHOODS TOGETHERTh anks to a federal, provincial and municipal government funding partnership of $11.6 million, completion of the fi nal phase of the John Hindle Drive extension will be accelerated. Creating a new major east-west link between Glenmore Road and the University of British Columbia (UBC) Okanagan campus will provide another option for students, staff and visitors travelling between the campus and the city.

Research conducted in partnership with Uptown Rutland Business Association helped identify gaps in the retail services provided in the Rutland Business area. Th is information will help guide future development in this growing town centre.

Th e Rutland Park Society approved the land transfer of Centennial Park to the City of Kelowna. Th is transfer will see an immediate investment of $1.2 million and will bring improvements to the Centennial Hall and park, breathing new life into this important community-gathering place.

Adding to our park inventory, the City acquired a 55-acre open space park in the University Heights neighbourhood through a donation agreement with the area developer and worked with the Regional District of Central Okanagan as part of its Legacy Parks Fund to help acquire the City’s largest open space park at Black Mountain.

CALLING ALL TECHIESGround-breaking began for the Okanagan Centre for Innovation in Kelowna’s downtown with an announcement from the Province to commit $6 million to the project. Th e $35-million project is being funded largely by the Kelowna Sustainable Innovation Group, which will also own and operate the building. Th e City of Kelowna has agreed to a long-term lease of City-owned land valued at more than $2 million in the heart of downtown Kelowna to support the creation of innovative business and research in an aff ordable synergistic setting.

THE FUTURE

Okanagan Rail Corridor

Our Rutland project




Fibre Strategy

Business licence review

Infrastructure preservation program & review

Parking Management Strategy

Transportation & transit improvements

Th ree-year Transit Plan implementation

RapidBus Project

Gordon Drive Frequent Transit Network

E-FIRSTInformation technology is a part of nearly every service that the City off ers citizens. In 2014, an Infrastructure Review Project (part of a larger Digital Strategy) assessed the current state of the City’s Information Services department and its business relationships, created a future vision for the department and a plan on how to get there. In 2015, work on the Digital Strategy will help the City of Kelowna to be agile and adaptable as digital demands evolve and increase.

Th e City of Kelowna completed the installation of Harvey Backbone fi bre optic cable that connects City Hall to Parkinson Recreation Centre and provides a backup by creating a redundant fi bre ring for Kelowna’s downtown core. Further high-speed and secure digital communications connections, both civic and public, will be made in the years to come.

MAINTAIN & GROWInvestments in new and existing transportation routes enhanced the travelling experience throughout Kelowna.

A new bridge and upgrades for Lakeshore Road were substantially completed. A major tourism and recreation corridor, Lakeshore Road sees an average of 12,000 vehicles per day. As the South Mission area continues to grow, work on the road and its amenities will help meet future demand.

Major upgrades completed on Clifton Road include widening to four lanes, new sidewalk on both sides, street lighting, sanitary sewer, water main and shallow utilities, and installation of a new storm main and construction of the City’s fi rst cycle track.

After public engagement and support, Kelowna City Council supported an accelerated timeline for

21 City of Kelowna



FOR EXCELLENCE



RAILS WITH TRAILSPaula Gosse

Groundsperson

“Th is phase of Rails with Trails has connected commuters to

the downtown area […] and it’s brought people together.”

Watch Paula talk about Rails with Trails Phase 2 and how it’s created

a place for people to get active and social.

23 City of Kelowna



design and construction of the development of South Perimeter Road subject to area developers fulfi lling conditions. Th e alignment of the road will extend from Gordon Drive to Stewart Road West, creating connections between two future school sites, with potential for an enhanced commercial development in the Ponds neighbourhood, which is planned as a village centre to service the needs of the entire south slopes including expansion of transit services.

Meanwhile, City crews completed the $2.8 million road-resurfacing program, involving 13 streets,

maintained 1,632 lane kilometres of roadway, and inspected and repaired 423 kilometres of sidewalks and walkways. Additionally, neighbourhood traffi c calming safety features were installed in various neighbourhoods, including on Ambrosi Road, Gibson Road, Willow Crescent and Aldon Road.

A FRESH LOOK AT PARKINGIn an eff ort to improve the availability of short-term parking spaces and ensure parking continues to pay for itself so that general taxation is not impacted, a City-wide Parking

Management Strategy was introduced in 2014. Th e project involved broad stakeholder engagement throughout the planning and implementation processes.

Th e South Pandosy neighbourhood was identifi ed as an area where improvements could be made. A plan was developed with input from local area staff , businesses owners and residents. Th e addition of paid parking, off -street parking availability and changes to on-street regulations contributed to improving parking in this busy neighbourhood.

ALTERNATIVE TRANSPORTATIONTransit service was expanded with implementation of the new #5 Gordon Drive frequent transit network and rerouting of the #8 Okanagan College. Further service enhancements included Queensway transit exchange upgrades for RapidBus service and a new transit exchange at Okanagan College. Th ese improvements support both regional commuter travel connection needs and, in particular, the needs of a large and growing student base at the UBC Okanagan and Okanagan College campuses, as well as a large employee base serving major employers like Kelowna General Hospital and the Interior Health Authority.

Th e next phase of Rails with Trails multi-use pathway from Spall Road to Dilworth Drive was completed with funding contributions from the federal and provincial governments. Th is is a key part of the pathway as it connects to Kelowna’s



DAILY DRIVERS ON LAKESHORE ROAD

12,000

SIDEWALKS INSPECTED & REPAIRED

423 km

ROAD RESURFACING PROGRAM

$2.8 million

expansive network of recreational pathways and amenities, links employment areas to neighbourhoods and town centres, and was a big step toward the development of a continuous 19.5 kilometre loop of off -road pathways within Kelowna’s urban centre.

THE FUTUREContinued work on:

Service Request System enhancements

Digital Strategy

Business licence review

25 City of Kelowna




Finding new ways to generate revenue and reduce costs

Pay-as-you-go capital expenditure program

Build reserves

SAVING TIME AND DOLLARSA corporate emphasis on identifying effi ciencies and continuous improvement produced results and saved money in 2014.

Th e City’s fl eet services reduced fuel use in 2014 by 111,000 litres compared to the previous year, in part by including the use of alternative-fuel vehicles. Landfi ll operations reduced the release of greenhouse gas into the atmosphere while being remunerated for capturing and sending gas to the FortisBC Renewable Natural Gas cleansing plant.

Staff researched and pursued funding from other sources in 2014 resulting in successful grants of approximately $820,000.

Th e City received the WorkSafeBC and BC Municipal Safety Association Certifi cate of

Recognition, which reduces premiums by more than $125,000 annually, in addition to the discount already enjoyed by the City due to its safety performance.

OUR MAYOR & COUNCILTh e City of Kelowna is led by an elected council, including a mayor and eight councillors, who are elected for four-year terms. Each member of Council represents the city at large.

In 2014, Council was led by former Mayor Walter Gray, Councillors Colin Basran (our current Mayor), Andre Blanleil, Maxine DeHart, Gail Given, Robert Hobson, Mohini Singh, Luke Stack and Gerry Zimmermann.

Th e Community Charter and the Local Government Act grants Council the authority to establish policies to guide the growth,

FOR OPPORTUNITY



LANDFILL GAS CAPTUREDarren Enevoldson

Environmental Technician

“Our partnership with Fortis Natural Gas has allowed us to improve our infrastructure at the landfi ll at no extra cost to

the taxpayer.”

Watch Darren talk about landfi ll gas capture and how innovation has

helped repurpose methane gas to generate revenue for the City.

27 City of Kelowna



development and operation of the city, set budgets and levy taxes to provide services.

Our Mayor and Council give administrative responsibility to the City Manager who oversees City operations.

kelowna.ca/council

CITY ADMINISTRATIONEight City Divisions and the RCMP Superintendent report to the City Manager. Divisions are comprised of teams that deliver community services or corporate services. Community-focused divisions work to deliver civic services based on a plan, build and operate model. Th e Corporate side of the City provides support for the organization.

City Manager Ron Mattiussi works closely with the City’s Senior Leadership Team:

Joe Creron, Civic Operations Divisional Director, Jim Gabriel, Active Living & Culture Divisional Director, Doug Gilchrist, Community Planning & Real Estate Divisional Director, Stu Leatherdale, Human Resources & Corporate Performance Divisional Director, Rob Mayne, Corporate & Protective Services Divisional Director, Paul Macklem, Deputy City Manager and Strategic Services Divisional Director, Alan Newcombe, Infrastructure Divisional Director, and Carla Weaden, Communications & Information Services Divisional Director.

kelowna.ca/cityhall

THE FUTURE

Strategic Financial Management Model

Set new Council strategies and priorities



City ManagerRon Mattiussi

COMMUNITY CORPORATE

PLAN BUILD OPERATE

Corporate & Protective Services

Rob Mayne Divisional Director

Communications & Information Services

Carla Weaden Divisional Director

Human Resources & Corporate Performance

Stu Leatherdale Divisional Director

Strategic ServicesPaul Macklem

Deputy City Manager

Civic OperationsJoe Creron

Divisional Director

Active Living & CultureJim Gabriel

Divisional Director

Community Planning & Real Estate

Doug Gilchrist Divisional Director

InfrastructureAlan NewcombeDivisional Director

Design & Construction DirectorVacant

Capital Assets & Investments ManagerJoel Shaw

Transportation & Mobility ManagerMoudud Hasan

Utility Planning ManagerAndrew Reeder

Development Services DirectorMo Bayat

Subdivison, Agriculture & Environment DirectorShelley Gambacort

Urban Planning ManagerRyan Smith

Community & Neighbourhood Services ManagerLouise Roberts

Cultural ServicesManagerSandra Kochan

Civic Operations Finance& Administration ManagerCindy McNeely

Building ServicesManagerMartin Johansen

Park ServicesManagerIan Wilson

Fleet Services ManagerAlf Soros

Public WorksManagerDarryl Astofooroff

Financial Services DirectorGenelle Davidson

City Clerk Stephen Fleming

Bylaw Services ManagerGreg Wise

Police ServicesManagerStacey Jackson

Information ServicesManagerRob Entwistle

Community Communications Supervisor Jodie Foster

Corporate Communications SupervisorTom Wilson

Corporate Strategy &Performance Department ManagerEric Carr

Compensation & Benefits Manager Pam Philippot

HR Manager Community Services Paul Sourisseau

HR ManagerCorporate Services Cornelia Bujara

Corporate Business Ventures DirectorJohn Vos

Regional Services DirectorRon Westlake

Business Development Executive DirectorVacant

Kelowna Fire ChiefJeff Carlisle

Police SuperintendentNick Romanchuk

Utility Services ManagerKevin Van Vliet

Purchasing ManagerMaureen Loft

Risk Manager Lance Kayfish

Learning & Development ManagerBrandon Cavezza

Kelowna International Airport DirectorSam Samaddar

Community Engagement ConsultantKari O’Rourke

Grants & PartnershipsManagerLorna Gunn

Recreation & BusinessServices ManagerLori Angus

Sport & Event Services ManagerDon Backmeyer

Real Estate Director Derek Edstrom

Parks & Building Planning ManagerTerry Barton

Policy & Planning Department ManagerDanielle Noble-Brandt

SUPPORT



29 City of Kelowna

SMALL-CITY FEEL, OLYMPIC-SIZED HEARTA COMMUNITY STORY

Ed Henczel

When Olympic athlete Malindi Elmore retired from professional competition, she could have hung up her cleats anywhere in the world. But she chose her hometown because it has everything her young family needs.

“Kelowna is the most ideal place in the world to live,” says Malindi, whose husband Graham Hood was also an Olympic middle-distance runner. “It’s the perfect size, it has all the amenities you could want, but it’s not too big. You get a real sense of community when you bump into a neighbour out walking along the Greenway.”

When Malindi started competing internationally, she says a lot of people didn’t know where Kelowna was. Over the years that changed and eventually people started to talk to her about Kelowna’s skiing and wineries.

Th e Okanagan lifestyle has caught on. In the City’s 2015 Citizen Survey, 95 per cent of residents rated the quality of life in Kelowna as good or very good. Topping their list of what makes it a great place to live was “good recreational facilities/opportunities,” something the City takes pride in providing.

For Malindi, those recreational facilities include her beloved Apple Bowl, the place she trained preparing for the Pan American Games, the Commonwealth Game and the Olympics.

“I grew up using the Apple Bowl. It’s been kept in great condition. Today I use it to coach members of the Okanagan Athletics Club. Th e Greenway is another amazing legacy. It’s fl at and well maintained. It’s pretty and it’s shaded, so that makes it nice to run on.”

Between training, coaching, and raising a young son, Malindi also promotes events like the Cherry Blossom Triathlon. “Th e City really has a proactive approach to helping events like ours grow. Th e people got our vision and wanted to help us be successful.”

Th e swim portion of the Cherry Blossom takes place inside the H2O Adventure + Fitness Centre, the largest municipally-owned water park in Canada, and Malindi says that’s where she plans on teaching her son, Charlie, to swim.

And when Charlie needs some downtime, Malindi says he likes spending time at the Mission branch of the Okanagan Regional Library. Eventually, she says, he’ll join one of their regular preschool storytime groups.

Where, perhaps, he’ll read about his parents’ exploits at the Olympic Games.

31 City of Kelowna





FINANCIAL INFORMATIONSTRONG FINANCIAL MANAGEMENT

Financial services..............................................................................................................................................33

Development cost charges ..............................................................................................................................35

Financial management strategies ..................................................................................................................37

Permissive tax exemptions .............................................................................................................................39

CONSOLIDATED FINANCIAL STATEMENTS

Financial Services Director’s Report ...............................................................................................................42

Independent Auditors’ Report .........................................................................................................................43

Consolidated Statement of Financial Position ..............................................................................................44

Consolidated Statement of Operations and Accumulated Surplus............................................................45

Consolidated Statement of Changes in Net Financial Assets .....................................................................46

Consolidated Statement of Cash Flows .........................................................................................................47

Notes to the Consolidated Financial Statements .........................................................................................48

Schedule 1 - Tangible Capital Assets ..............................................................................................................61

Schedule 2 - Segmented information ............................................................................................................63

Schedule 3 - Long Term Debt ..........................................................................................................................67 STATISTICAL REVIEW

Statistical review for the years 2010 to 2014 ................................................................................................71

33 City of Kelowna



STRONG FINANCIAL MANAGEMENT Financial Services

Th e City of Kelowna is committed to providing the services, infrastructure and amenities expected by citizens of Kelowna in a conscientious and cost-eff ective manner. Th is commitment to excellence was recognized again by the Government Finance Offi cers Association. In 2014 and for the thirteenth year in a row, the City was awarded the Distinguished Budget Presentation Award and, for the twelfth year, the Canadian Award for Financial Reporting.

CANADIAN AWARD FOR FINANCIAL REPORTING Th e Government Finance Offi cers Association of the United States and Canada (GFOA) awarded a Canadian Award for Financial Reporting to the City of Kelowna for its annual fi nancial report for the fi scal year ended December 31, 2013. Th e Canadian Award for Financial Reporting program was established to encourage municipal governments throughout Canada to publish high quality fi nancial reports and to provide peer recognition and technical guidance for offi cials preparing these reports.

In order to be awarded a Canadian Award for Financial Reporting, a government unit must publish an easily readable and effi ciently organized

annual fi nancial report, whose contents conform to program standards. Such reports should go beyond the minimum requirements of generally accepted accounting principles and demonstrate an eff ort to clearly communicate the municipal government’s fi nancial picture, enhance an understanding of fi nancial reporting by municipal governments, and address user needs.

A Canadian Award for Financial Reporting is valid for a period of one year only. We believe our current report continues to conform to the Canadian Award for Financial Reporting program requirements, and we are submitting it to the GFOA.

PROVISION OF SERVICES & SUPPORT FOR GROWTHTh e 2014 taxation increase averaged 2.49 per cent for all property classes, an increase to refl ect the economic conditions both locally and globally but still support the current level of services delivered to the citizens of Kelowna. Th e utilization of tax revenue and development cost charges generated from new growth assist in providing a balanced approach to the expansion of services and infrastructure required to accommodate growth within the municipality.

Government Finance Officers Association

Presented to

City of Kelowna

For its Annual

December 31, 2013

Executive Director/CEO

Financial Reportfor the Year Ended

Financial Reportingfor

Canadian Award

British Columbia



Th e City budgeted to collect a total of $203 million in taxation revenues, 56 per cent of which was retained for municipal purposes. Th e remaining 44 per cent is levied by the provincial government to provide funding for schools, by the Regional District of Central Okanagan for shared services and by BC Assessment to cover the City’s share of the costs associated with providing assessment information.

Th e City has historically relied on pay-as-you-go rather than debt fi nancing for major infrastructure needs wherever possible in achieving strategic servicing goals. In 2014, 3.8 cents of each municipal tax dollar collected was budgeted for tax-supported debt servicing programs. Th is amount is expected to increase in the future due to anticipated debt required for

construction of a new Police Services building. Annual debt repayment costs are anticipated to increase above six cents over the next fi ve years based on the 10-Year Capital Plan.. Pay-as-you-go capital project funding represented 13 per cent of the 2014 taxation requirement.

CITY RESERVESMaintenance of adequate levels of reserves and surplus continues to play a signifi cant role in achieving a level of fi nancial stability for Kelowna taxpayers and ratepayers. Reserves fall into two categories, the most signifi cant of which is a capital reserve to ensure that existing City equipment and infrastructure can be maintained, and an operating reserve to ensure that unusual and unforeseen operating conditions can be met without the need for extraordinary tax increases.

Long Term Debtmillions

$79

$76

$74

$91

$102

$40

$48

$40

$44

$56

$21

$23

$28

$29

$36

2010

2011

2012

2013

2014

2010

2011

2012

2013

2014

Reserve for future Statutory Surplus

General Waste water Airport Natural gas Water Library

0 $40 $80 $120 $160

Consolidated Reserves & Surplusmillions

Breakdown of Municipal Tax

2014

Grants 3%

3% Utilities

6% Planning & Development

7% Civic & Real Estate

10% Waste & Recycling

12% Fire Services

Debt 2%

Police Services 24%

Parks, Recreation, & Cultural Services 15%

Transportation & Transit 18%

35 City of Kelowna



STRONG FINANCIAL MANAGEMENT Development Cost Charges

Development cost charges (DCCs) are monies that are collected from land developers and builders by a municipality to off set some of the infrastructure expenditures to service the needs of growth-related development. Imposed by bylaw pursuant to the Local Government Act, the charges are intended to facilitate development by providing a method to fi nance capital projects related to roads, drainage, sewers, water and parkland.

Th e City’s DCC program supports community development and integrates with longer-term plans. Infrastructure requirements are based on the Offi cial Community Plan that estimates a resulting population of 161,701 by the end of 2030. Th e 20-Year Servicing Plan and Financing Strategy provides the infrastructure requirements to 2030 along with the cost sharing for various projects. Cost sharing methodologies refl ect the level of benefi t to existing taxpayers and new growth. Charges are based on the demand placed on services by diff erent residential types, commercial, industrial and institutional growth.

Th e 2030 Offi cial Community Plan was prepared and approved in 2011. Th e latest update to the Offi cial Community Plan impacted DCC rates with the changes taking eff ect in June, 2011. With

this new plan the total cost of the program is $709 million. Approximately 56% or $400 million relates to the Arterial Roads program.

Local governments are permitted to temporarily lend available money from one DCC reserve fund to another. Th e money, along with appropriate interest, must be returned to the original reserve fund. For 2014, a defi cit in Water Sector D reserve fund was covered from Water Sector A, a defi cit in Sewer Sector A was covered from Sewer Sector B and a defi cit in the Wastewater Treatment reserve was covered by Roads Sector A reserve fund.

MUNICIPAL ASSIST FACTORTh e Local Government Act requires local governments to assist in the cost of new infrastructure. Th e municipal assist factor refl ects Council and the community’s support towards the fi nancing costs of new infrastructure. Th e level of the assist, determined by City Council, refl ects a benefi t to the existing population while encouraging development and housing aff ordability.

City of Kelowna Assist factorRoads 15%Parks 8%Water & Wastewater 1%

MAJOR PROJECT EXPENDITURES IN 2014 Parks $1.0 million Dewdney Road and Glenmore

Highlands Parkland Acquisition

Roads $7.8 million Mission Creek Bridge including

Lakeshore Road Improvements, Clifton Road Improvements, Gordon Drive Improvements and debt repayment.

Wastewater Treatment $5.4 million debt repayment and

Wastewater Treatment plant expansion

Wastewater Trunks $1.4 million Lakeshore Road Trunk and

debt repayment

Water $2.9 million Cedar Creek Pump station

and Royal View and Mountain Ave Watermain replacement.


FUTURE PLANSFor 2015, DCC projected expenditures include $4.1 million for Lakeshore Road (Dehart-McClure) Improvements and Active Transportation Corridor, $1.4 million for debt payments, and $1.4 million for John Hindle Drive Improvements. Th e Parks program includes $0.5 million for potential parkland acquisitions. Wastewater Utility projected expenditures include $5.4 million for debt payments and $0.9 million for Raymer Ave Lift Station Replacement. Th e Water DCC program includes $0.1 million for Royal View and Mountain Ave watermain replacement.

Development Cost Charges Reserve Fund Th ousands of dollars

Opening Transfers Closing Reductions/Balance Receipts Interest Out Balance Waivers*

Parks $ (1,188) $ 3,316 $ (24) $ 1,023 $ 1,081 $ 142Roads 15,364 6,287 412 8,235 13,828 107Water 11,806 444 306 2,960 9,596 8 Wastewater Treatment (1,964) 2,603 (98) 6,897 (6,356) 63

$ 24,018 $ 12,650 $ 596 $ 19,115 $ 18,149 $ 320*

*Waivers are for Aff ordable Rental Housing and are paid for through taxation.


37 City of Kelowna



STRONG FINANCIAL MANAGEMENT Financial Management Strategies

Th ere are various strategies adopted by Council that guide the City of Kelowna in managing a vibrant and sustainable community. Th ese strategies were updated in 2003 and are included in the City’s ten- year plans.

CAPITAL PAY-AS-YOU-GO STRATEGYHalf of new construction taxation revenue each year is to be allocated to capital, increasing the percentage of capital to municipal taxation to a maximum of 30 per cent.

CIVIC BUILDINGS STRATEGYBuildings will be planned and constructed as required, subject to funding availability, with a focus on public-private partnerships in the development of these future civic buildings.

DEBT MANAGEMENT STRATEGYTh e existing strategy of using alternative funding for discretionary expenditures, capitalizing on debt reduction opportunities and using short term borrowing and agreements for sale has been maintained. Maximum debt servicing should not exceed fi ve per cent of annual taxation demand.

GENERATION/DISPOSITION OF SURPLUS STRATEGYOne million dollars is to be allocated to reserves each year from annual surplus in order to mitigate the need for abnormal tax increases or incurring of new debt and to provide for capital expenditure opportunities which might otherwise require an alternative approval and/or referendum process.

INVESTMENT AND CASH STRATEGYTh e City will maintain suffi cient short term liquid assets to enable it to meet its annual operating budget as required. Due to the uncertain nature of future expenses, the portfolio will focus on high quality, liquid securities.

MAJOR RECREATIONAL FACILITIES STRATEGYMajor recreational/cultural facilities are budgeted with substantial emphasis on funding from private-public partnerships, public sector partnering and other contributions. Pay-as-you-go capital and reserve funding will be required to minimize long-term debt fi nancing.

PARK ACQUISITION STRATEGYTh is plan provides for the parkland acquisition standard of 2.2 hectares per thousand of population and the acquisition of natural space by means other than cash outlay.

PARKS DEVELOPMENT STRATEGYParks development costs will be a function of the capital allocation deemed reasonable annually and are to be shared by the community rather than through increased development cost charge fees.

PAVEMENT MANAGEMENT STRATEGYAnnual general revenue contributions are to increase from the baseline of $1.9 million over the ten year program.

STORM DRAINAGE RETROFIT STRATEGYAnnual general revenue contribution of $1.6 million is provided to fund storm drainage retrofi ts over the ten-year plan.

WATERFRONT AMENITIES STRATEGYAn annual allocation is provided for some waterfront land acquisitions but the emphasis is on private enterprise or community contributions to develop other amenities.


Top 10 Principal Taxpayers by Individual Property Type

2014Business (owner) Name 1. Orchard Park Shopping Centre2. Delta Hotels No 48 Holdings Ltd3. Inland Natural Gas Co Ltd4. FortisBC Inc5. McIntosh Properties Ltd

Type of Property Shopping MallHotel & Convention CentreGas Utility Electrical Utility Shopping Mall

6. 4231 Investments Ltd Shopping Mall7. Dilworth Shopping Centre Ltd Shopping Mall8. Wal-Mart Canada Corp Shopping Mall9. Victor Projects Ltd10. RG Properties Ltd

Shopping MallShopping Mall

2013Business (owner) Name 1. Orchard Park Shopping Centre2. Delta Hotels No 48 Holdings Ltd3. Inland Natural Gas Co Ltd4. FortisBC Inc5. McIntosh Properties Ltd

Type of Property Shopping Mall Hotel & Convention CentreGas Utility Electricity Utility Shopping Mall

6. 4231 Investments Ltd Shopping Mall7. Dilworth Shopping Centre Ltd Shopping Mall8. Wal-Mart Canada Corp Shopping Mall9. Victor Projects Ltd10. Al Stober Construction Ltd

Shopping MallCommercial Building


39 City of Kelowna



STRONG FINANCIAL MANAGEMENT Permissive Tax Exemptions

ART GALLERY, MUSEUM, HERITAGE, CULTURAL PURPOSE Central Okanagan Heritage Society $9,003 Centre Culturel Francais De L’ Okanagan $2,519City of Kelowna Library Society $78,278Kelowna Art Gallery $58,236Kelowna Museum -Th e Okanagan Heritage Museum $4,755Kelowna Museums Society (Laurel Packing House) $23,649Kelowna Visual and Performing Arts Centre Society $66,685Okanagan Military Museum Society $3,351Okanagan Symphony Society $3,519Roman Catholic Bishop of Nelson Pandosy Mission $1,954Westbank First Nation $7

ATHLETIC OR SERVICE CLUB Central Okanagan Land Trust $11,239Central Okanagan Small Boat Association $26,110East Kelowna Community Hall Association $1,888H20 Centre $442,023Kelowna & District Fish & Game Club $4,748Kelowna Badminton Club $6,431Kelowna Cricket Club $385Kelowna Curling Club $27,435Kelowna Lawn Bowling Club $7,409Kelowna Major Men’s’ Fastball Association $16,885Kelowna Minor Fastball Society $5,594Kelowna Outrigger Racing Canoe Club Society $6,909Kelowna Riding Club $4,124Kelowna United Football Club $726

Kelowna Yoga House Society $5,298Nature Trust of BC $40,982Okanagan Boys & Girls Clubs $59,896Okanagan Gymnastic Centre $11,593Okanagan Mission Community Hall Association $4,430Rutland Park Society $17,386Scouts Canada $9,503

CHARITABLE OR PHILANTHROPIC Adult Integrated Mental Health Services Society $2,847Arion Th erapeutic Riding Association $5,997BC Society for Prevention of Cruelty to Animals $8,354BHF Building Healthy Families Society $1,494Big Brothers Big Sisters of the Okanagan Society $3,323Bridges to New Life Society $3,243Canadian Mental Health Association $5,449Central Okanagan Child Development Association $13,580Central Okanagan Emergency Shelter Society $3,231Columbus Holding Society $3,060Father DeLestre Columbus Society $3,583German - Canadian Harmonie Club $4,329Howard-Fry Housing Society $1,678Kalano Club of Kelowna $4,261Kelowna & District S.H.A.R.E. Society $9,694Kelowna & District Safety Council Society $2,194Kelowna Canadian Italian Club $2,553Kelowna Centre for Positive Living Society $1,579Kelowna Child Care Society $2,912


Kelowna Community Food Bank Society $9,590Kelowna Community Music Society $2,856Kelowna Community Resources & Crisis $3,827Kelowna Elks Lodge No 52 $1,684Kelowna Gospel Mission Society $13,783Kelowna Sr. Citizens Society of BC $4,660Kelowna(#26) Royal Canadian Legion $2,189KGH - Rutland Auxiliary Th rift Shop $7,133Ki-Low-Na Friendship Society $21,343MADAY Society for Seniors $2,601National Society of Hope $3,288New Opportunities for Women (NOW) Canada Society $2,046Okanagan Halfway House Society $1,613Okanagan Halfway House Society Inc $4,372Okanagan Mental Health Services Society $1,448Pathways Abilities Society (Formerly the Kelowna & District Society for Community Living) $7,851Reach Out Youth Counselling & Services Society $3,336Resurrection Recovery Resource Society Inc. $6,326Resurrection Recovery Resource Society Inc. d.b.a. Freedom’s Door $1,429Salvation Army Community Resource Centre $20,832Society of Vincent De Paul of Central Okanagan $3,023Th e Bridge Youth & Family Services Society $10,273Th e Society of Housing Opportunities and Progressive Employment $1,606

HOSPITAL LICENSED UNDER COMMUNITY CARE FACILITY ACTCanadian Cancer Society $11,537Interior Health Authority $32,248Kelowna General Hospital $70,443

PARTNERING Capital News Centre $148,069Prospera Place $194,239

PRIVATE SCHOOLS Aberdeen Hall Preparatory School Society $23,393Evangel Tabernacle Church $3,806First Lutheran Church of Kelowna $7,443Immaculata Regional High School $41,584Kelowna Christian Centre School $8,203Kelowna Christian School $3,806Kelowna Society for Christian Education $8,441Lutheran Church - Private School $7,443Okanagan Montessori Elementary $5,984Seventh Day Adventist Church (Private School) $40,388St. Joseph Elementary School $9,089Studio9 Independent School of the Arts (Private School) $3,391Waldorf School $9,960

PUBLIC WORSHIP Assumption Of Blessed Virgin Mary’s Parish $2,698BC Assn of Seventh Day Adventist $1,158Bethel United Pentecostal Church $829C3 Church $2,349Christ Evangelical Lutheran Church $3,180Christian Science Society of Kelowna $2,567Church of the Nazarene $2,541Evangelical Church $3,023Faith Lutheran Church $3,836First Baptist Church $3,728First Mennonite Church $2,755First United Church $4,335Garden Valley Community Church $5,296German Church of God Dominion of Canada $2,414Glenmore Congregation of Jehovah’s Witnesses $4,073Grace Baptist Church $6,545Guisachan Fellowship Baptist $1,958


41 City of Kelowna



Gurdwara Guru Amardas Darbar Sikh Society $2,108Holy Spirit Parish $5,664Immaculate Conception Parish $6,787Kelowna Bible Chapel $3,866Kelowna Buddhist Society $4,363Kelowna Christian Centre Church (School) $8,203Kelowna Christian Reformed Church $5,372Kelowna Congregation of Jehovah’s Witnesses $2,175Kelowna Free Methodist Church $2,039Kelowna Full Gospel Church $4,043Kelowna Gospel Fellowship Church $4,506Kelowna Tabernacle Congregation Church $722Kelowna Trinity Baptist Church $30,582KLO Baptist Church $7,562Mennonite Brethren Churches (Willow Park Church) $7,177Mission Creek Alliance Church $13,001New Apostolic Church $2,018New Life Vineyard Fellowship $22,926Okanagan Chinese Baptist Church $1,981Okanagan Jewish Community Association $2,242Okanagan Sikh Temple & Cultural Society $5,184Rutland Gospel Tabernacle $2,530Rutland United Church $4,223Salvation Army Community Church $7,384Serbian Orthodox Par-Holy Proph St Ilija (Parish) $725Seventh Day Adventist Church $12,917Spring Valley Congregation of Jehovah’s Witnesses $4,631St. Aidan’s Anglican Church $2,286St. Andrew’s Church $5,261St. Charles Garnier Parish $1,672St. David’s Presbyterian Church $5,571St. Mary’s Anglican Church $833St. Michaels Anglican Church $4,613

St. Paul’s United Church $10,607St. Peter & Paul Ukrainian Greek Orthodox Church $4,000St. Pius X Parish $3,077St. Th eresa’s Parish $3,449Th e BC Muslim Association $1,158Th e Church of Jesus Christ of Latter-Day Saints $5,886Th e Congregation of Bethel Church $3,632Th e Union of Slavic Churches of Evangelical Christians $728Unitarian Fellowship of Kelowna Society $1,067

Total Value of Municipal Taxes Exempted $2,094,943

43 City of Kelowna



To the members of Council of the City of Kelowna

We have audited the accompanying consolidated fi nancial statements of the City of Kelowna (the “City”), which comprise the consolidated statement of fi nancial position as at December 31, 2014, and the consolidated statement of operations and accumulated surplus, consolidated statement of changesin net fi nancial assets and consolidated statement of cash fl ows for the year then ended, and a summary of signifi cant accounting policies and other explanatory information.

Management’s responsibility for the consolidated fi nancial statementsManagement is responsible for the preparation and fair presentation of these consolidated fi nancial statements in accordance with Canadian public sector accounting standards, and for such internal control as management determines is necessary to enable the preparation of consolidated fi nancial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ responsibilityOur responsibility is to express an opinion on these consolidated fi nancial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Th ose standards require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether the consolidated fi nancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated fi nancial statements.

Th e procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated fi nancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City’s preparation and fair presentation of the consolidated fi nancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the eff ectiveness of the City’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated fi nancial statements.

We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the consolidated fi nancial statements present fairly, in all material respects, the fi nancial position of the City of Kelowna as at December 31, 2014, and the results of its operations and its cash fl ows for the year then ended in accordance with Canadian public sector accounting standards.

Kelowna, CanadaApril 28, 2015

Audit • Tax • AdvisoryGrant Th ornton LLP. A Canadian Member of Grant Th ornton International Ltd.

INDEPENDENT AUDITORS’ REPORTGrant Th ornton LLP200 - 1633 Ellis StreetKelowna, BC V1Y 2A8

T (250) 712-6800 (800) 661-4244 (Toll Free)F (250) 712-6850www.GrantTh ornton.ca

Chartered Accountants


CONSOLIDATED STATEMENT OF FINANCIAL POSITIONAs at December 31, 2014 (in thousands of dollars)

2014 2013

Financial Assets Cash and cash equivalents (Note 3) $ 85,369 $ 67,842 Accounts receivable (Note 3) 33,917 32,309 Accrued interest 591 952 Portfolio investments (Note 3) 222,335 217,538 Long term investments (Note 10) 6,000 6,000 Property held for resale 220 449

348,432 325,090

Liabilities Accounts payable 39,333 40,753 Performance deposits 8,422 7,798 Deferred revenue (Note 3) 37,017 35,906 Deferred development cost charges (Note 3) 18,149 24,018 Long term debt (Note 3) 105,611 120,241

208,532 228,716

Net Financial Assets $ 139,900 $ 96,374

2014 2013

Non-Financial Assets Prepaid expenses $ 2,465 $ 1,482 Inventory 1,147 999 Work in progress (Note 4) 60,060 59,477 Tangible capital assets (Note 4) 1,566,200 1,563,290

1,629,872 1,625,248

Accumulated Surplus (Note 5) $ 1,769,772 $ 1,721,622

Contingent liabilities and Commitments (Notes 8 and 9)

Genelle Davidson, CPA, CMA Colin BasranFinancial Services Director Mayor, City of Kelowna

See accompanying notes to the consolidated fi nancial statements.


45 City of Kelowna



CONSOLIDATED STATEMENT OF OPERATIONS AND ACCUMULATED SURPLUSFor the year ended December 31, 2014 (in thousands of dollars)

Budget 2014 Actual 2014 Actual 2013

Revenue Taxation (Note 6) $ 119,062 $ 119,266 $ 114,844 Fees and charges 98,421 117,950 111,870 Interest earned 5,408 8,438 6,818 DCC contributions 11,419 18,000 11,520 Government transfers (Note 7) 32,592 22,387 20,243 Other capital contributions 325 4,082 3,759 Gain on disposal of tangible capital assets - 4,455 23,281

$ 267,227 $ 294,578 $ 292,335


Expenses General government services $ 22,777 $ 18,481 $ 15,107 Protective services 49,887 48,866 48,962 Transportation services 32,576 32,119 30,568 Recreational and cultural services 33,427 33,807 31,214 Other services 17,343 16,238 17,432 Airport operations 10,837 11,131 10,672 Electrical utility - - 8,030 Wastewater utility 10,465 9,494 9,483 Water utility 5,769 5,134 4,769 Amortization of tangible capital assets - 61,411 60,092 Debt charges 10,326 9,747 9,865

193,407 246,428 246,194

Annual Surplus 73,820 48,150 46,141

Accumulated Surplus, beginning of year 1,721,622 1,675,481

Accumulated Surplus, end of year $ 1,769,772 $ 1,721,622



CONSOLIDATED STATEMENT OF CHANGES IN NET FINANCIAL ASSETS

For the year ended December 31, 2014 (in thousands of dollars)


Annual Surplus $ 73,820 $ 48,150 $ 46,141Amortization of tangible capital assets - 61,411 60,092Proceeds from disposal of tangible capital assets - 8,274 61,009Gain on disposal of tangible capital assets - (4,455) (23,281)Acquisition of tangible capital assets (182,854) (68,723) (49,270)Change in inventory and prepaid expenses - (1,131) 292

Increase (decrease) in Net Financial Assets (109,034) 43,526 94,983

Net Financial Assets, beginning of year 96,374 96,374 1,391

Net Financial Assets (Debt), end of year $ (12,660) $ 139,900 $ 96,374



47 City of Kelowna



CONSOLIDATED STATEMENT OF CASH FLOWSFor the year ended December 31, 2014 ( in thousands of dollars)

Actual 2014 Actual 2013

Net infl ow (outfl ow) of cash and cash equivalents related to the following activities

Operating

Annual Surplus $ 48,150 $ 46,141

Adjustment for non-cash items Amortization of tangible capital assets 61,411 60,092 Gain on disposal of tangible capital assets (4,455) (23,281) Other capital contributions (4,082) (3,759) Developer contributions of tangible capital assets (8,344) (2,388)

Decrease (increase) in Accounts receivable (1,608) (2,321) Inventory and prepaid expenses (1,131) 292 Other assets 361 (465)

Increase (decrease) in Accounts payable (1,420) (1,448) Deferred development cost charges (5,869) (2,614) Other liabilities 1,735 685

$ 84,748 $ 70,934

Actual 2014 Actual 2013

Capital Acquisition of tangible capital assets (60,150) (46,742) Proceeds from disposal of tangible capital assets 8,274 61,009

(51,876) 14,267Investing Change in investments (4,797) (35,015)

Financing Proceeds from issuance of long term debt 345 - Repayment of long term debt (10,893) (10,913)

(10,548) (10,913)

Net increase in cash and cash equivalents 17,527 39,273

Cash and cash equivalents, beginning of year 67,842 28,569

Cash and cash equivalents, end of year $ 85,369 $ 67,842

Supplemental cash fl ow information Interest paid $ 9,747 $ 9,865

Non-cash capital activities Acquisition of tangible capital assets through developer contributions $ 8,344 $ 2,388

Property held for resale transferred (to) from tangible capital assets $ (81) $ 449



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended December 31, 2014 ( in thousands of dollars)

Th e notes to the consolidated fi nancial statements are an integral part of the statements. Th ey explain the signifi cant accounting and reporting policies and principles underlying these statements. Th ey also provide relevant supplementary information and explanations which cannot be conveniently expressed in the consolidated fi nancial statements.

Th e consolidated fi nancial statements are the responsibility of and prepared by management in accordance with Canadian public sector accounting standards (PSAS). Th e preparation of these consolidated fi nancial statements necessarily involves the use of estimates based on management’s judgment, particularly when transactions aff ecting the current accounting period cannot be fi nalized with certainty until future periods.

1. SIGNIFICANT ACCOUNTING POLICIESBasis of presentationTh e City of Kelowna’s resources and operations are segregated into General, Airport, Wastewater Utility, Water Utility, Natural Gas Legacy, Development Cost Charges and Statutory Reserve Funds for accounting and fi nancial reporting purposes. Th e consolidated fi nancial statements include all the accounts of these funds. All material interfund transactions and balances have been eliminated within the consolidated fi nancial statements.

Th e City of Kelowna Library Society is controlled by the City of Kelowna through its appointment of the members of the society. Accordingly, the consolidated fi nancial statements include all the accounts of the society.

Accrual accountingTh e accrual method for reporting revenues and expenses has been used.

InventoryInventory is valued at the lower of cost, determined principally on a weighted average and specifi c item basis, or replacement cost.

Work in progressWork in progress represents capital projects under construction but not yet completed and are valued at cost.

Tangible capital assets Th e City records tangible capital assets including assets held as work in progress or capital lease at cost, in the period they were acquired or when the asset is put into use.

All tangible capital assets are valued at cost which includes all costs directly attributable to acquisition, construction, development or betterment of the tangible capital asset.

Assets owned by the City but not paid for by the City including contributions, dedications, gifts and donations, are valued at fair value at the date of contribution, dedication, gift or donation, where fair value is reasonably determinable.


49 City of Kelowna



AmortizationTh e cost less residual value of the tangible capital assets is amortized on a straight-line basis over the useful lives of the asset as follows:

Asset Type Useful Life Years

Parks infrastructure Playground equipment 15 - 20 Artifi cial turf fi eld 10 - 12 Washrooms, concessions, picnic shelters 40 - 50 Outdoor pools, spray pools 50 - 60

Building structure 40 - 75

Building improvements Exterior envelope 30 - 40 HVAC systems 10 - 12 Roofs 15 - 20 Electrical/plumbing/fi re 15 - 20 Site works-asphalt, water & sewer lines, etc 10 - 100

Machinery & equipment General equipment 7 - 10 Grounds equipment & machinery 10 - 15 Heavy construction equipment 5 - 10

Asset Type Useful Life Years

Vehicles Cars and light trucks 5 - 10 Fire trucks 15 - 20

IT infrastructure Hardware 4 - 5 Software 5 - 10 Telephone system 7 - 10

Infrastructure (dependent upon component and material)

Electrical 20 - 25 Water 10 - 100 Wastewater 10 - 100 Drainage 10 - 100 Transportation 10 - 100

One half of the annual amortization is charged in the year of acquisition and in the year of disposal.

Land and Work in Progress are not amortized.

Contributions of Tangible Capital AssetsTangible capital assets received as contributions are recorded at their fair market value.

Intangible AssetsIntangible assets include works of art and historic assets located throughout the City. Th ey are not refl ected in these consolidated fi nancial statements.

Interest CapitalizationTh e City of Kelowna only capitalizes interest on projects being fi nanced internally which will require debenture borrowing upon completion. Interest is calculated on monthly expenditures at the bank prime rate less 2%.

Municipal Finance Authority cash deposits and demand notesTh e City issues the majority of its debt instruments through the Municipal Finance Authority. As a condition of these borrowings, a portion of the debenture proceeds is withheld by the Municipal Finance Authority as a debt reserve fund. Th e City also executes demand notes in connection with each debenture whereby the City may be required to loan certain amounts to the Municipal Finance Authority. Th ese demand notes are contingent in nature. Th e Debt Reserve and Demand Note balances are as follows: 2014 2013

Cash Deposits held by MFA $ 2,642 $ 2,714

Demand Notes held by MFA 7,576 7,922

$ 10,218 $ 10,636


Reserves for future expendituresReserves for future expenditures are non-statutory reserves which represent an appropriation of surplus for specifi c purposes. Transfers to reserves for future expenditures include funds to fi nance incomplete projects and accumulations for specifi c purposes.

Statutory reserve funds Th e use of these funds is restricted by the Community Charter and associated Municipal Bylaws. Statutory reserve funds are funded 100% by cash and portfolio investments.

Revenue recognitionTaxation revenueAnnual levies for non-optional municipal services and general administrative services are recorded as taxes for municipal purposes. Levies imposed by other taxing authorities are not included as taxes for municipal purposes. Taxes are recognized as revenue in the year they are levied.

Th rough the BC Assessment appeal process taxes may be adjusted by way of supplementary roll adjustments. Th e aff ects of these adjustments on taxes are recognized at the time they are awarded.

Fees and charges revenueCharges for transportation, environmental health, building permits, electrical, water, wastewater, natural gas and airport are included in this category. Th ese revenues are recorded on the accrual basis

and recognized as earned which is usually when services are provided or facilities are utilized.

DCC contributionsDCCs are recognized as revenue during the period in which the related costs are incurred.

Government transfersGovernment transfers are recognized as revenue in the period that the transfer is authorized, eligibility criteria, if any, have been met by the City, and a reasonable estimate of the amount to be received can be made.

Investment incomeTh e City’s investments are disclosed in Note 3.

Investment income is recorded on the accrual basis and recognized when earned.

A portion of the City’s investments are invested in pooled funds of the Municipal Finance Authority of British Columbia. Earnings on these funds are allocated to the members from time to time based on the market value of the pool. Th e City recognizes only its share of the realized earnings of the pool. Th is revenue is recorded as investment income and the amount is added to the cost of the units held.

To the extent that investments have no stated rate of return, investment income is recognized as it is received.

ExpensesExpenses are recorded in the period in which the goods or services are acquired and a liability is incurred.

Use of estimatesManagement has made estimates and assumptions that aff ect the amounts reported in preparing these fi nancial statements. Actual results could diff er from the estimates. Signifi cant areas requiring the use of management estimates relate to the determination of tangible capital assets estimated useful life and related amortization, landfi ll post closure costs and settlement costs associated with outstanding legal actions.

2. FUTURE ACCOUNTING CHANGESPS 3260 – Liability for contaminated sitesTh is section establishes the recognition, measurement and disclosure requirements for reporting liabilities associated with remediation of contaminated sites. Th e section does not deal with tangible capital asset retirement obligations, liabilities associated with the disposal or sale of a tangible capital asset and acquisition/betterment costs for tangible capital assets that are less than the future economic benefi ts. Th is section applies to fi scal years beginning on or after April 1, 2014, with early adoption permitted.


51 City of Kelowna



PS 2601 – Foreign currency translationTh is section revises and replaces the existing Section PS 2600 Foreign currency translation. Th is section applies to fi scal years beginning on or after April 1, 2016, with early adoption permitted.

PS 1201 – Financial statement presentationTh is section revises and replaces the existing Section PS 1200 Financial statement presentation. Th is section applies to fi scal years beginning on or after April 1, 2016, with early adoption permitted.

PS 3450 – Financial instrumentsTh is section establishes standards for recognizing and measuring fi nancial assets, fi nancial liabilities and non-fi nancial derivatives. Th is section applies to fi scal years beginning on or after April 1, 2016, with early adoption permitted.

PS 2200 – Related party transactionsTh is new Section defi nes a related party and establishes disclosures required for related party transactions. Disclosure of information about related party transactions and the relationship underlying them is required when they have occurred at a value diff erent from that which would have been arrived at if the parties were unrelated. Th is Section applies to fi scal years beginning on or after April 1, 2017, with early adoption permitted.

PS 3420 – Inter-entity transactionsTh is section establishes how to account for and report transactions between public sector entities that comprise a government’s reporting entity from both a provider and recipient perspective. Th is Section applies to fi scal years beginning on or after April 1, 2017, with early adoption permitted.

3.FINANCIAL ASSETS AND LIABILITIESCash and cash equivalentsCash and cash equivalents consist of cash and short-term investments with maturities of 90 days or less from the date of acquisition.

Accounts receivableAccounts receivable are recorded net of allowance and are comprised of the following:

Type of Receivable 2014 2013

Property Tax $ 5,894 $ 6,012Trade Receivables 8,224 12,873Due from Federal Gov’t 4,032 1,065Due from Provincial Gov’t 7,159 3,816Due from Regional Gov’t 219 56Utilities 4,346 5,146Deferred Development Cost Charges 4,043 3,341

$33,917 $32,309

Portfolio investments Portfolio investments are recorded at cost and are comprised of the following:

Type of Investment 2014 2013

Municipal Finance Authority Bond/ Intermediate Funds $ 33,654 $ 32,627

Provincial and Bank Issued Accrual Notes and Debentures 102,142 116,144

Publicly traded shares 56,297 55,535

Guaranteed Investment Certifi cates & Deposit Notes 30,242 13,232

Total Portfolio investments $ 222,335 $ 217,538 Th e quoted market value of the publicly traded shares at December 31, 2014 was $68,524 million (2013 - $52,897 million).

Operating line of creditTh e City has an operating line of credit with the Royal Bank of Canada for an authorized amount of $5.0 million, bearing interest at bank prime rate. At December 31, 2014 the balance outstanding was $nil (2013 - $nil).

Deferred revenueTh e City records deferred revenue for funds received in advance on services not yet rendered and is recognized into revenue during the period in which the service is provided. Th e City also


records deferred revenue when a contract specifi es how the resources are to be used and therefore funds received in advance are deferred until the period in which the requirements are met. Because these funds are restricted in nature they are shown as a liability.

Deferred Revenue by Type 2014 2013

Tax prepayments $ 17,302 $ 16,159Construction 12,458 12,857Local Service Areas 3,978 3,971Other 2,516 2,662Grants 763 257

$ 37,017 $ 35,906

Deferred Development Cost Charges (DCC)Th e City collects development cost charges to pay for a proportionate share of infrastructure related to new growth. In accordance with the Local Government Act, these funds must be deposited into a separate reserve fund. Because these funds are externally restricted in nature they are shown as a liability.

2013 Receipts Interest Transfers Out 2014

Roads $ 15,364 $ 6,287 $ 412 $ 8,235 $ 13,828Parks (1,188) 3,316 (24) 1,023 1,081Water 11,806 444 306 2,960 9,596Wastewater (1,964) 2,603 (98) 6,897 (6,356)

Total Deferred DCC $ 24,018 $ 12,650 $ 596 $ 19,115 $ 18,149

Long term debtDebenture debt principal is reported net of sinking fund balances. Interest rates on long term debt ranged from 1.58% to 10.07%. Th e weighted average rate for 2014 was 5.08% (2013 – 5.29%). Principal repayments for the next fi ve years are as follows:

2015 2016 2017 2018 2019

General Fund $ 2,526 $ 2,526 $ 2,506 $ 2,504 $ 1,638Airport 1,333 1,333 1,333 1,333 -Wastewater Fund 4,157 4,157 4,157 4,157 4,150Water Fund 333 333 333 333 333Natural Gas Legacy 1,699 1,699 1,699 1,699 -Library Society 460 502 180 - -

$ 10,508 $ 10,550 $ 10,208 $ 10,026 $ 6,121

Schedule 3 provides a break down of long term debt.

Debt as a percentage of total expenditures:

2014 2013 2012 2011 2010

42.79% 48.84% 53.64% 59.50% 64.66%


53 City of Kelowna



4. TANGIBLE CAPITAL ASSETS AND WORK IN PROGRESS 2014 2013 2014 Tangible 2013 Tangible Work in Capital Work in Capital Progress Assets (NBV) Progress Assets (NBV)

Land $ 6,372 $ 191,587 $ 3,036 $ 182,146Land Improvements 1,746 35,194 5,452 31,525Buildings 5,758 165,580 13,792 163,552Infrastructure 30,693 1,099,268 26,393 1,112,180Machinery & Equipment 15,491 40,172 10,804 37,888Natural Gas System (Capital Lease) - 34,399 - 35,999

$ 60,060 $ 1,566,200 $ 59,477 $ 1,563,290

Contributions received in 2014 include:

Type of Contribution 2014 2013

Land - park $ 8,344 $ 2,387 transportation - 1

Total Contributed Tangible Capital Assets $ 8,344 $ 2,388

Schedule 1 provides a break down of tangible capital assets and work in progress.

5. ACCUMULATED SURPLUS

Reserves Investment for Future Equity in Statutory Fund in Tangible Total Total Expenditures FortisBC Inc. Reserves Surpluses Capital Assets 2014 2013

Accumulated surplus, beginning of year $ 90,811 $ 55,535 $ 43,892 $ 29,145 $ 1,502,239 $ 1,721,622 $ 1,675,481Annual surplus (defi cit) 766 2,410 1,315 70,419 (26,760) 48,150 46,141Transfers 10,635 (1,648) 10,483 (19,470) - - -Acquisition of tangible capital assets - - - (32,778) 32,778 - -Repayment of long term debt - - - (10,893) 10,893 - -

Accumulated surplus, end of year $ 102,212 $ 56,297 $ 55,690 $ 36,423 $ 1,519,150 $ 1,769,772 $ 1,721,622


Accumulated Surplus detail as follows:

Balances, Transfer Transfer Annual Balances, Beginning of Year from to Surplus End of Year Non-Statutory ReservesGeneral Fund Reserve $ 52,355 $ 9,600 $ 15,027 $ 437 $ 58,219Airport Fund Reserve 20,905 10,539 15,485 232 26,083Waste Water Fund Reserve 8,046 1,052 340 20 7,354Water Fund Reserve 9,505 1,234 2,208 77 10,556

90,811 22,425 33,060 766 102,212

Statutory ReservesParking Reserve 4,599 1,285 1,445 128 4,887Land Reserve 10,288 3,077 9,165 283 16,659Capital Works, Machinery & Equip Reserve 29,005 7,927 12,162 904 34,144

43,892 12,289 22,772 1,315 55,690

Surplus by FundGeneral Fund Surplus 2,000 47,285 5,525 41,876 2,116Airport Fund Surplus 596 15,734 1,333 14,401 596Waste Water Fund Surplus 17,115 14,953 8,749 10,390 21,301Water Fund Surplus 4,419 2,092 3,465 1,759 7,551Natural Gas Legacy Surplus 4,849 3,299 1,572 1,572 4,694Library Surplus 166 843 421 421 165

Accumulated Surplus 29,145 84,206 21,065 70,419 36,423

Equity InvestmentEquity in FortisBC Inc 55,535 1,648 - 2,410 56,297

Investment in Non Financial AssetsInvestment in Tangible Capital Assets 1,502,239 46,041 89,712 (26,760) 1,519,150

Accumulated Surplus $ 1,721,622 $ 166,609 $ 166,609 $ 48,150 $ 1,769,772


55 City of Kelowna



6. TAXATIONTaxation revenue comprises the following amounts raised less transfers to other governments: 2014 2013

Taxes collected Property taxes $ 199,000 $ 192,996 Local improvement levies 104 104 Frontage tax – water 1,406 1,390 Specifi ed sewer area recoveries 1,655 1,925 Grants in lieu of taxes 486 475 Levies 6,409 6,178

$ 209,060 $ 203,068

Less transfers to other governments Province of BC (school taxes) $ 65,932 $ 65,259 BC Assessment Authority 2,003 2,001 Regional Hospital District 10,896 10,834 Regional District of Central Okanagan 10,963 10,130

89,794 88,224

Net taxes available for municipal purposes $ 119,266 $ 114,844

7. GOVERNMENT TRANSFERSGovernment transfers are the major source of transfers to the City. Government transfers received are for completed projects that meet the required criteria as set out by the Government body providing the funding. Due to the completion of the projects in 2014 there is no deferred revenue balances related to these transfers. Government transfers do not includegrants in lieu of taxes received from the Federal and Provincial governments. In 2014 the City received and recorded as revenue the following transfers:

2014 2013

Operating transfers Federal $ 531 $ 419 Provincial 15,313 15,045

15,844 15,464

Capital transfers Federal 1,660 2,391 Provincial 4,882 2,388

6,543 4,779

Total transfers $ 22,387 $ 20,243

8. CONTINGENT LIABILITIESRegional District of Central OkanaganRegional District debt is, under the provisions of the Local Government Act, a direct, joint and several liability of the District and each member municipality within the District including the City of Kelowna.

Th e loan agreements with the Regional District of Central Okanagan and the Municipal Finance Authority provide that if at any time the scheduled payments provided for in the agreements are not suffi cient to meet the Authority’s obligation with respect to such borrowing, the resulting defi ciency becomes a liability of the member municipalities.


Pension liabilityTh e City and its employees contribute to the Municipal Pension Plan (the Plan), a jointly trusteed pension plan. Th e Board of Trustees, representing plan members and employers, is responsible for overseeing the management of the Plan, including investment of the assets and administration of benefi ts. Th e Plan is a multi-employer contributory pension plan. Basic pension benefi ts provided are based on a formula. Th e Plan has about 182,000 active members and approximately 75,000 retired members. Active members include approximately 36,000 contributors from local governments.

Th e most recent valuation as at December 31, 2012 indicated a $1,370 million funding defi cit for basic pension benefi ts. Th e next valuation will be as at December 31, 2015 with results available in 2016. Employers participating in the Plan record their pension expense as the amount of employer contributions made during the fi scal year (defi ned contribution pension plan accounting). Th is is because the Plan records accrued liabilities and accrued assets for the Plan in aggregate with the result that there is no consistent and reliable basis for allocating the obligation, assets and cost to the individual employers participating in the Plan.

Th e City of Kelowna paid $5.9 million (2013 - $5.7 million) for employer contributions while employee contributions were $4.8 million (2013 - $4.7 million) to the plan in fi scal 2014.

Post employment benefi tsTh e City of Kelowna does not accrue expenses for post employment benefi ts such as retirement allowances or compensated absences (sick leave). City employees retiring do not receive any retirement allowance that either vests or accrues over the period of employment. Sick benefi ts do not accrue and are not vested. Th e City recognizes the expense for sick time when the event obligates the City to pay.

Legal actionsTh e City of Kelowna is currently engaged in certain legal actions, the outcome of which is not determinable at this time. Accordingly, no provision has been made in the accounts for these actions.

Th e amount of loss, if any, arising from these contingent liabilities will be recorded in the accounts in the period in which the loss is realized. Th e City of Kelowna has insurance policies and fi nancial reserves to off set associated risks.

9. COMMITMENTSAgreements, contracts and purchase ordersTh e City has entered into various agreements and contracts for services and construction with periods ranging from one to fi ve years.

Th e City has purchase orders open as at December 31, 2014 which have not been recorded in the accounts. Due to the reporting capabilities in the Agresso fi nancial system the balance of these open

purchase orders are not determinable at this time. Th e funding for the majority of these obligations has been set aside in reserves for future expenditures. Th ese amounts will be recorded in the accounts in the period the goods and services, to which they relate, are received.

Landfi ll closure and post closure costsAs required by PSAS and regulated by the Ministry of Water, Land and Air Protection, the City has agreed to obligations regarding the operation of the landfi ll site. Th ese obligations include recognition of closure and post-closure liability. Th e City’s estimated liability for these expenditures is recognized as the landfi ll site’s capacity is used. Th e reported liability of $3.6 million (2013 - $3.6 million) represents the portion of the estimated total expenditure recognized as at December 31, 2014. Th e liability and annual expenditure is calculated based on the ratio of current usage to the total capacity of the site and the discounted estimated future cash fl ows associated with closure and post-closure activities.

Th e reported liability is based on estimates and assumptions with respect to events extending over the remaining life of the landfi ll. Th e remaining capacity of the landfi ll site is estimated at 15.0 million tonnes, which is 81.7% of the site’s total capacity. Th e future cash fl ows for closure and post-closure cost is estimated at $11.9 million as at December 31, 2014. Th e landfi ll site is expected to reach its capacity in 2092.


57 City of Kelowna



Kelowna Family Y Centre loan guarantee agreementTh e City has, under the terms of the partnering agreement between the City of Kelowna and YMCA-YWCA of Central Okanagan, guaranteed repayment in the event that the YMCA-YWCA of Central Okanagan defaults on a $1.8 million, 20 year loan. Under the agreement the City shall resume operation of the facility and assume responsibility for the repayment of the debt incurred by the YMCA-YWCA of Central Okanagan. During 2010 an amendment was made to the agreement for additional fi nancing of $700,000. As at December 31, 2014 the outstanding loan balance was $1,189,598 (2013 -$1,286,901).

Multi-Purpose Facility Public/Private PartnershipTh e City has, under the terms of the Preferred Share Agreement between the City of Kelowna and RG Properties Ltd., purchased $6.0 million of preferred shares in RG Arenas (Kelowna) Ltd. at a cost of $1 per share. Th e terms and conditions of the purchase are subject to the terms of a Tripartite Agreement between the City of Kelowna, Royal Bank of Canada and RG Arenas (Kelowna) Ltd., RG Properties Ltd., Prospero Canadian Land Investment Fund Ltd. group of companies.

Th e City has, under the terms of the above noted Tripartite Agreement, committed to the annual purchase of community use time at the Multi-Purpose facility, commencing with substantial completion, on November 10, 1999 under the following terms:

(i) $1.3 million per annum for Years 1 to 3 comprised of a payment of $1.1 million, which for Years 2 and 3 is subject to a minimum CPI increase of 1% per annum and a maximum average CPI increase of 5% per annum, plus an annual payment of $150,000 without any adjustment for CPI;

(ii) $1.2 million per annum for Years 4 to 7, subject to a minimum CPI increase of 1% per annum and a maximum average CPI increase of 5% per annum;

(iii) $1.2 million per annum for Years 8 to 10, subject to a minimum CPI increase of 1% per annum and a maximum average CPI increase of 5% per annum, minus $150,000 per annum;

(iv) $1.0 million per annum for Years 11 to 20, subject to a minimum CPI increase of 1% per annum and a maximum average CPI increase of 5% per annum; and

(v) $0.5 million per annum for Years 21 to 30, subject to a minimum CPI increase of 1% per annum and a maximum average CPI increase of 5% per annum.

Th e year 2014 represented year 15 of the agreement.

Should the City not exercise, in its sole discretion, its option to renew any future term for community use time in the Multi-Purpose facility, under the

above terms it shall be required to make a lump sum payment to RG Arenas (Kelowna) Ltd. on or before the 15th day of one of year 6, 11, 16, 21 or 26 commencing with the year of substantial completion in the following amounts:

2005 Year 6 $13.2 million2010 Year 11 $11.9 million2015 Year 16 $10.4 million2020 Year 21 $6.7 million2025 Year 26 $4.5 million

Upon such payment, no further amounts will be payable to RG Arenas (Kelowna) Ltd. and the City will have the right to the community use time for the period from the beginning of the year in which the payment was made until November 9, 2029 without any additional payment.

Th e City did exercise its option to renew the purchase of community use time under the above annual payments terms and accordingly did not make either of the lump sum payment of $13.2 or $11.9 million otherwise due to RG Arenas (Kelowna) Ltd. in years 6 or 11.

Royal Canadian Mounted Police ServicesTh e Province of British Columbia and the Federal Government have an agreement with the Royal Canadian Mounted Police to provide police services for various municipalities in the Province. Th is agreement has a 20 year term expiring on March 31, 2032.


Okanagan rail corridorTh e City, on behalf of the inter-jurisdictional acquisition team signed a negotiated sales and purchase agreement with CN Rail for the 47.5km of discontinued rail line between Kelowna and Mile 88 in Coldstream. Th e City’s estimated cost of the purchase is $7.6 million plus a 50% interest in the land within the District of Lake Country’s boundaries at an estimated cost of $2.6 million. Th is agreement is subject to certain conditions being satisfi ed and is expected to be completed in 2015.

10. LONG-TERM INVESTMENTSKelowna Developments Ltd.Th e investment in Kelowna Developments Ltd., a wholly owned subsidiary, is carried at its cost of $2. Th e company is inactive with no assets or liabilities and is being retained for potential future use.

RG Arenas (Kelowna) Ltd.Th e investment in preferred shares in RG Arenas (Kelowna) Ltd. is carried at its cost of $6.0 million. Th e shares were purchased under the terms of the Preferred Share Agreement between the City of Kelowna and RG Properties Ltd. and are to be retained until 2028 per the terms of that agreement described in Note 8.

11. LETTERS OF CREDITIn addition to the performance deposits refl ected in cash balances, the City is holding irrevocable Letters of Credit in the amount of $28.9 million (2013 - $27.1 million) which were received from depositors to ensure their performance of worksto be undertaken within the City. Th ese amounts are not refl ected in the fi nancial statements but are available to satisfy any liabilities arising from non-performance by the depositors. Included in the $28.9 million, the City is holding irrevocable Letters of Credit in the amount of $4.1 million (2013 - $3.4 million) which are received from developers to ensure payment of development cost charges in future years.

12. CAPITAL LEASE PAYABLETh e City has entered into an agreement with FortisBC Energy Inc. (“FortisBC”) that has resulted in the creation of the Natural Gas Legacy Fund.

Capital leaseUnder the terms of the agreement the City entered into a 35 year capital lease with FortisBC on November 1, 2001 for the natural gas distribution system within the City’s municipal boundary. Th e City has prepaid $47.5 million of the capital lease obligation and has fi nanced the prepayment through debenture debt. Th e remaining obligation of $2.3 million, which is included in long term debt, will be paid with annual lease payments of $260,870 including interest based on FortisBC approved pre-tax weighted average cost of capital of 10.072%.

Operating leaseTh e City also entered into a 17 year operating lease with FortisBC on November 1, 2001 whereby the City leases back to FortisBC the operations of the gas distribution system. Under the operating lease FortisBC is required to make annual lease payments to the City calculated by a formula specifi ed in the agreement which is based on the total annual revenue generated by the transaction. At the end of the 17 year term FortisBC has the option of making a termination payment to the City equal to the unamortized portion of the City’s $47.5 million prepayment under the capital lease, which is estimated to be $27.0 million, or negotiate a new 18 year operating lease with a continuation of the annual lease payments which existed under the previous 17 year operating lease.

Annual lease revenues for the past fi ve years are:

2010 $5.0 million2011 $4.8 million2012 $4.6 million2013 $4.4 million2014 $4.3 million


59 City of Kelowna



13. CITY OF KELOWNA LIBRARY SOCIETYIn March 1997, the City transferred the Library building and land located on Ellis Street in the City of Kelowna and the related mortgage loan to the City of Kelowna Library Society, a non-profi t society. Th e City has guaranteed the repayment of the mortgage. As at December 31, 2014 the mortgage balance was $1.1 million (2013 - $1.6 million). Th e City has taken back an option to purchase these assets at a nominal value. Th e Society’s fi nancial information is included in with the City of Kelowna consolidated fi nancial statements.

14. TRUST FUNDSIn accordance with PSAS, trust funds are not included in the City’s consolidated fi nancial statements. Th e City administers a Cemetery Maintenance Fund for the perpetual care and maintenance of the City owned and operated cemetery. As at December 31, 2014 the Trust Fund balance is $2.3 million (2013 - $2.2 million).

15. SEGMENTED INFORMATIONTh e City of Kelowna is connecting communities and providing a multitude of services to the citizens of Kelowna. Th e City’s operations and activities are organized and reported by funds and departments. Th e General Fund reports on operations, funded primarily by property taxes, which include services provided by the City such as general government, protective services, transportation services, recreation and

cultural services, as well as public health, and environmental and development services. Th e City also operates its own airport and City utilities comprised of the electrical, wastewater and water systems that are self-sustaining operations. Operating results reported by the following segments are included in Schedule 2.

General GovernmentGeneral Government operations are primarily funded by property taxation and business tax revenues. Th e expenses within the department are for executive and legislative costs, general administration, and other general government areas such as community service grants and rental property operating costs within the municipality. Th e general revenue reported under the department includes revenues associated with taxation, business tax revenues and senior government payments in lieu of taxes. Th ese revenues have not been apportioned to other departments supported by the General Fund.

Protective ServicesProtective services are comprised of police services provided by the Royal Canadian Mounted Police, fi re protection services, building inspection services and bylaw enforcement as well as the Provincial Emergency Program.

Police services include administration, crime investigation and prevention, traffi c, prisoner custody and court liaison expenses.

Th e fi re department is responsible for eff ective fi re protection and public safety services to the City. Th is includes fi re suppression and rescue, prevention and investigation, specialty rescue/fi rst medical responses and fi re safety inspections.

Costs for maintenance and repair of police and fi re buildings are included in this section.

Transportation ServicesTransportation services are responsible for the delivery of municipal public works services related to the planning, development and maintenance of streets and roads, bridges, drainage systems, street lights, traffi c lights and signals, parking lots and on-street parking, and public transit as well as maintenance of workshops, yards and other buildings. Th e mandate is to provide a safe, effi cient, environmentally-sensitive and cost-eff ective transportation network. Recreation & Cultural ServicesRecreation & cultural services provide services related to recreation, leisure and culture including administration and program costs as well as grounds and building maintenance. Facilities managed within this area include parks and playgrounds, arenas, swimming pools, beaches, boat launches, stadiums as well as community and seniors centers. Th e H2O Adventure & Fitness Centre, Parkinson Recreation Centre, Kelowna Community Th eatre, Kelowna Museum, Kelowna


Art Gallery and the Rotary Centre for the Arts are some of the larger facilities included.

Other Services (Public Health/Environmental/Development Services)Public health services are comprised of cemetery operations and maintenance, environmental and development services including community planning and zoning as well as landfi ll operations.

Airport ServicesTh e Airport, owned and operated by the City of Kelowna, provides quality airport services in a safe and cost eff ective manner in compliance with Federal regulations. Th e Airport is accounted for in its own fund.

Wastewater ServicesKelowna’s sanitary sewer system collects, conveys, treats and disposes of domestic wastewater (derived from the home) and industrial wastewater (resulting from business use, manufacturing and processing). Th e system currently services approximately 70% of Kelowna’s population and continues to be extended to unserviced areas. Kelowna’s wastewater system has a treatment capacity of 72 million liters per day. Wastewater Utility is accounted for in its own fund.

Water ServicesTh e Water Utility is responsible for planning, designing, building, operating and maintaining the City’s Water Utility and is one of fi ve water

suppliers operating within Kelowna’s boundaries. Th e Water Utility is accounted for in its own fund.

Natural Gas Legacy ServicesNatural Gas Legacy Fund was created from an agreement with FortisBC for a 35 year capital lease for the natural gas distribution system within the City’s municipal boundary and a 17 year operating lease whereby the City leases back to FortisBC the operations of the gas distribution system. Th e Natural Gas Legacy Fund is accounted for in its own fund.

Library ServicesTh e City of Kelowna Library Society is a non-profi t society instituted and controlled by the City of Kelowna. Th e Society was incorporated for the purpose of establishing, operating, and maintaining libraries and library services for the benefi t of the City of Kelowna and its citizens. Financial statements for the Society are prepared separately and are consolidated with the City of Kelowna. Statutory ReservesStatutory Reserves include funds for parking, land and capital works, machinery and equipment.

16.EXPENSES BY OBJECTTotal consolidated expenses by object are itemized in Schedule 2 – Segmented information.

17. BUDGET DATATh e budget fi gures are from the Annual Five-Year Financial Plan Bylaw adopted before May 15 of each year. Subsequent amendments have been made by Council to refl ect changes in the budget as required by law. Amortization of tangible capital assets was not included in the budget. Th e table below shows the reconciliation between the approved budget and the budget presented in these consolidated fi nancial statements. Budget Amount

Revenues: Operating budget $ 237,794 Capital budget 29,433

267,227Expenses: Operating budget 193,407 Capital budget 182,854

376,261

Annual defi cit per approved budget (109,034)

Add: tangible capital asset purchases 182,854

Annual surplus per statement of operations $ 73,820

18. COMPARATIVE FIGURESCertain comparative fi gures have been reclassifi ed to conform to the presentation format adopted in the current year.


61 City of Kelowna



SCHEDULE 1 - TANGIBLE CAPITAL ASSETSFor the year ended December 31, 2014 (in thousands of dollars)

Other SubtotalLand Machinery & Machinery &

Land Improvements Buildings Vehicles Equipment Computer Misc Equipment

CostBalance, beginning of year $ 182,146 $ 58,326 $ 274,367 $ 28,809 $ 44,341 $ 13,255 $ 3,804 $ 90,209 Add: additions during the year 13,174 5,978 11,023 1,296 4,265 934 1,778 8,273 Less: capital held for resale (220) - - - - - - - Less: disposals during the year (3,513) - (136) ( 586) (152) (4,305) - (5,043)

Balance, end of year 191,587 64,304 285,254 29,519 48,454 9,884 5,582 93,439

Accumulated AmortizationBalance, beginning of year - 26,801 110,815 12,993 28,222 9,895 1,211 52,321 Add: amortization - 2,309 8,981 2,177 2 ,669 836 235 5,917 Less: accumulated amortization

on disposals - - - (122) (514) (152) (4,305) - (4,971)

Balance, end of year - 29,110 119,674 14,656 30,739 6,426 1,446 53,267

Net Book Value of Tangible Capital Assets $ 191,587 $ 35,194 $ 165,580 $ 14,863 $ 17,715 $ 3,458 $ 4,136 $ 40,172

Work in Progress $ 6,372 $ 1,746 $ 5,758 $ - $ 3,862 $ 1,114 $ 10,515 $ 15,491

MACHINERY & EQUIPMENT

continued on next page...


INFRASTRUCTURE

Roads, Lanes Underground, Natural Gas Plant & Sidewalks & Bridges & Overhead & Airport Subtotal Capital Total Total

Facilities Bike Paths Overpasses Other Networks Infrastructure Infrastructure Lease 2014 2013

$ 164,850 $ 481,624 $ 29,606 $ 1,013,764 $ 39,960 $ 1,729,804 $ 55,609 $ 2,390,461 $ 2,356,08110,952 4,664 530 9,623 3,923 29,692 - 68,140 90,828

- - - - - - - (220) (449)- _ - - - - - (8,692) (55,999)

175,802 486,288 30,136 1,023,387 43,883 1,759,496 55,609 2,449,689 2,390,461

47,779 215,342 6,699 328,332 19,472 617,624 19,610 827,171 789,3125,900 18,776 462 15,492 1,974 42,604 1,600 61,411 60,092

- - - - - - - (5,093) (22,233)

53,679 234,118 7,161 343,824 21,446 660,228 21,210 883,489 827,171

$ 122,123 $ 252,170 $ 22,975 $ 679,563 $ 22,437 $ 1,099,268 $ 34,399 $ 1,566,200 $ 1,563,290

$ 1,094 $ 15,287 $ 3,211 $ 7,578 $ 3,523 $ 30,693 $ - 60,060 59,477

$ 1,626,260 $ 1,622,767


63 City of Kelowna



General Protective Transportation Recreation & Other Gov’t Services Services Cultural Services Services

RevenueTaxation $ 116,074 $ - $ 104 $ - $ - Fees and charges 34,864 434 8,384 4,039 12,562 Interest earned 6,157 - - - - DCC contributions - - 7,120 1,024 - Contribution from other governments 222 3,704 14,549 483 2,830 Other capital contributions 728 - - - - Gain on disposal of tangible capital assets 4,455 - - - -

162,500 4,138 30,157 5 ,546 15,392 Expenses

Salaries and benefi ts 14,419 23,139 8,386 10,480 4,633 Contract and professional services 3,303 1,481 21,935 9,464 7,404 RCMP contract - 23,891 - - - Materials and supplies 4,465 1 ,419 5,303 9,926 1,531 Equipment 201 305 2,306 1 ,453 1,469 Allocations (3,799) (65) (294) (128) (746) Cost recoveries (620) (1,631) (7,380) (413) (729) Grants and external transfers 350 104 - 1,046 2,225 Utilities 161 222 1,863 1,979 175 Amortization of tangible capital assets 1,740 945 26,436 8,776 1,655

Total before Debt 20,220 49,810 58,555 42,583 17,617

Debt interest and fi scal services 2,572 - - - -

Total operating expenses 22,792 49,810 58,555 42,583 17,617

Annual Surplus (Defi cit) $ 139,708 $ (45,672) $ (28,398) $ (37,037) $ (2,225)

SCHEDULE 2 - SEGMENTED INFORMATIONFor the year ended December 31, 2014 (in thousands of dollars)



Airport Wastewater Water Natural Gas Library Statutory Services Services Services Legacy Services Services Reserves 2014

$ - $ 1,655 $ 1,433 $ - $ - $ - $ 119,26626,180 14,849 11,296 4,481 795 66 117,950

251 579 202 - - 1,249 8,438- 6,897 2,959 - - - 18,000

1 16 463 20 - - - 22,387289 1,157 64 1,844 - - 4,082

- - - - - - 4,455

26,836 25,600 15,974 6,325 795 1,315 294,578

3,797 3,001 2,139 - 14 - 70,008847 838 690 - 134 - 46,096

- - - - - - 23,8915,139 1,119 779 - 27 - 29,708

14 634 396 - 2 - 6,7801,306 2,945 782 20 - - 21(638) ( 2) (543) - - - (11,956)

- ( 131) - - - - 3,594667 1,090 891 - 80 - 7,128

4,938 10,614 4,545 1,600 162 - 61,411

16,070 20,108 9,679 1,620 419 - 236,681

744 2,953 472 2,889 117 - 9,747

16,814 23,061 10,151 4,509 536 - 246,428

$ 10,022 $ 2,539 $ 5,823 $ 1,816 $ 259 $ 1,315 $ 48,150


65 City of Kelowna



General Protective Transportation Recreation & Other Gov’t Services Services Cultural Services Services

RevenueTaxation $ 111,402 $ - $ 104 $ - $ - Fees and charges 24,939 443 7,715 4,035 11,717 Interest earned 3,793 - - - - DCC contributions - - 584 37 4,610 Contribution from other governments 1,254 3,802 12,164 555 1,638 Other capital contributions 667 - - - - Gain on disposal of tangible capital assets 4,212 - - - -

146,267 4,245 20,567 4,627 17,965

ExpensesSalaries and benefi ts 14,356 24,528 8,253 10,378 4,915 Contract and professional services 3,164 1,750 21,178 7,522 7,595 RCMP contract - 22,305 - - - Materials and supplies 4,641 1,424 - 9,708 1,418 Equipment 198 290 2,262 1,358 1,728 Allocations ( 5,178) - (237) (123) (790) Cost recoveries ( 2,597) (1,650) ( 2,559) (500) (28) Grants and external transfers 361 94 22 1,018 2,176 Utilities 162 221 1,649 1,853 145 Amortization of tangible capital assets 1,769 932 26,355 8,607 1,426

Total before Debt 16,876 49,894 56,923 39,821 18,585

Debt interest and fi scal services 2,595 - - - -

Total operating expenses 19,471 49,894 56,923 39,821 18,585

Annual Surplus (Defi cit) $ 126,796 $ (45,649) $ (36,356) $ (35,194) $ (620)

SCHEDULE 2 - SEGMENTED INFORMATIONFor the year ended December 31, 2013 (in thousands of dollars)



Airport Electrical Wastewater Water Natural Gas Library Statutory Services Services Services Services Legacy Services Services Reserves 2013

$ - $ - $ 1,925 $ 1,413 $ - $ - $ - $ 114,84424,233 9,112 14,465 9,584 4,571 793 263 111,870

184 1,207 405 120 - - 1,109 6,818 - - 5,929 360 - - - 11,520

443 - 367 20 - - - 20,243226 - 1,183 49 1,634 - - 3,759

- 19,069 - - - - - 23,281

25,086 29,388 24,274 11,546 6,205 793 1,372 292,335

3,704 59 3,036 1,963 - 23 - 71,215801 862 573 629 - 132 - 44,206

91 - - - - - - 22,396 5,011 6,288 1,203 724 - 18 - 30,435

10 - 634 384 - 3 - 6,8671,165 1,369 3,068 729 20 - - 23 (667) (550) (7) (477) - - - (9,035)

- - (124) - - 77 - 3,624557 2 1,100 817 - - - 6,506

4,532 609 9,583 4,517 1,600 162 - 60,092

15,204 8,639 19,066 9,286 1,620 415 - 236,329

744 - 3,009 472 2,892 153 - 9,865

15,948 8,639 22,075 9,758 4,512 568 - 246,194

$ 9,138 $ 20,749 $ 2,199 $ 1,788 $ 1,693 $ 225 $ 1,372 $ 46,141


67 City of Kelowna



SCHEDULE 3 - LONG TERM DEBTAs at December 31, 2014 (in thousands of dollars)

LONG TERM DEBT - GENERAL FUNDDebenture Debt

Debt Balance Sinking Fund Amount Current InterestYear of Maturity Purpose Dec. 31/14 Balance Dec. 31/14 of Issue % Rate

Public Works 2019 South Pandosy Spec Area 1 $ 81 $ 153 $ 234 2.102019 South Pandosy Spec Area 2 141 269 410 2.102019 Automated Curb Side Carts 2,640 2,170 4,810 4.132021 Downtown Parkade 903 1,297 2,200 4.432022 Chapman Parkade 2,110 1,961 4,071 5.372028 DCC Roads 4,654 5,746 10,400 5.15

Local Improvements2016 Local Improvements 59 334 393 4.002016 Local Improvements 40 229 269 4.432017 Local Improvements 12 42 54 4.822019 Local Improvements 24 45 69 3.152035 Lawrence Ave LAS 345 - 345 3.00

Recreation and Cultural2021 Kokanee Gym Facility 232 268 500 5.692027 H2O Centre 20,206 7,294 27,500 4.822027 Kokanee Gymnastic 588 212 800 4.822028 H2O Centre 1,555 445 2,000 5.15

Total Debt - General Fund $ 33,590 $ 20,465 $ 54,055


SCHEDULE 3 - LONG TERM DEBT CONT’DAs at December 31, 2014 (in thousands of dollars)

LONG TERM DEBT - WASTEWATER FUNDDebenture Debt


Specifi ed Area Programs 2018 Spec. Area 18 - Caramillo $ 39 $ 96 $ 135 4.652018 Spec. Area 19 - Poplar Point 22 55 77 4.652022 Spec. Area 22A - Gerstmar 20 19 39 6.062024 Spec. Area 21A - McKenzie Bench 836 514 1,350 2.002024 Spec. Area 22B - Vista Rd 49 30 79 2.002024 Spec. Area 22C - Hein Rd 165 101 266 2.002024 Spec. Area 22D - Elwyn Rd 92 57 149 2.002024 Spec. Area 22E - Dease Rd 59 37 96 2.002024 Spec. Area 22F - Mills Rd 212 130 342 2.002024 Spec. Area 29 - Campion Cambro 542 332 874 2.002024 Spec. Area 30 - Acland 226 138 364 2.002025 Spec. Area 20 - North Rutland 4,397 2,425 6,822 4.172025 Spec. Area 28A - Okaview 412 226 638 4.172028 Spec Area 26 - Fisher Rd 1,571 450 2,021 5.152028 Spec Area 34 - Country Rhodes 338 97 435 5.152028 Spec Area 36 - Clifton 208 59 267 5.15

Sewer Improvement Programs2014 Glenwood Sewer Main Replacement - 90 90 3.152014 Long St. Sewer Main Replacement - 64 64 3.152019 Byrns Baron Main 1,612 2,254 3,866 2.00


LONG TERM DEBT - WASTEWATER FUND CONT’DDebenture Debt


Sewage Treatment Plant2014 Sewer Treatment Plant Phase III $ - $ 8,000 $ 8,000 5.992019 Waste Water Treatment Expansion 10,977 9,023 20,000 4.902019 Waste Water Treatment Expansion 5,489 4,511 10,000 4.132020 Waste Water Treatment Expansion 6,463 3,537 10,000 4.002031 Brandt’s Creek Tradewaste Treatment 3,208 592 3,800 4.00

Total Debt - Wastewater Fund $ 36,937 $ 32,837 $ 69,774

LONG TERM DEBT - WATER FUNDDebenture Debt

Specifi ed Area Programs 2023 Spec Area 16 - Byrns $ 22 $ 17 $ 39 4.782024 Spec Area 18 - Lakeshore 15 9 24 2.002028 Spec Area 26 - Fisher Rd 231 66 2 97 5.15

Water Improvement Programs2028 Cedar Creek Pump Station 5,889 1,688 7,577 5.152031 Poplar Point Pump Station Upgrade 1,790 210 2,000 4.00

Total Debt - Water Fund $ 7,947 $ 1,990 $ 9,937

69 City of Kelowna




LONG TERM DEBT - AIRPORT FUNDDebenture Debt

Debt Balance Sinking Fund Amount Current Interest Year of Maturity Purpose Dec. 31/14 Balance Dec. 31/14 of Issue % Rate

2018 Airport Expansion $ 7,161 $ 8,839 $ 16,000 4.65

Total Debt - Airport Fund $ 7,161 $ 8,839 $ 16,000

LONG TERM DEBT - NATURAL GAS LEGACY FUNDDebenture Debt

2018 Leased Capital Assets $ 10,009 $ 19,791 $ 29,800 4.432018 Leased Capital Assets 6,549 12,951 19,500 4.43

$ 16,558 $ 32,742 $ 49,300

Capital Lease Payable 2,276 2,396 10.072

Total Debt - Natural Gas Legacy Fund $ 18,834 $ 51,696

LONG TERM DEBT - LIBRARYDebenture Debt

2017 Mortgage - Building $ 1,142 $ 5,100 8.94

Total Debt - Library Fund $ 1,142 $ 5 ,100

Total City Long Term Debt $ 105,611 $ 96,873 $ 206,562




71 City of Kelowna



STATISTICAL REVIEW2010-2014

Population

Age of Population

15-19

20-29

30-49

50-64

>65

23,340

13,580

28,720

20,335

20,725

2010

2011

2012

2013

2014

118,500

117,312

119,000

120,000

122,000

EducationPopulation aged 25-64

OccupationLabour force 15 years and over

College/non-university certifi cate

High school certifi cate or equivalent

Trades certifi cate, apprentice

University certifi cate below the bachelor level

Art, culture, recreation and sport

Sales and service occupations

Business, fi nance, admin

Processing, manufacturing and utilities

Occupations unique to primary industry

Natural and applied sciences

Health occupations

Management occupations

Trades, transport

Social science, education, government service and religion

No certifi cate, diploma or degree

University certifi cate, diploma or degree



Net Financial Assets (Liabilities)millions

2010

2011

2012

2013

2014

($25.3)

($13.6)

$1.4

$96.4

$139.9

Accumulated Surplusbillions

2010

2011

2012

2013

2014

$1.58

$1.64

$1.68

$1.72

$1.77

Consolidated Expensesthousands

2010

2011

2012

2013

2014

$245.40

$251.3

$251.5

$246.2

$246.4

Annual Surplusmillions

2010

2011

2012

2013

2014

$286.41

$270.5

$285.1

$292.3

$294.6

Consolidated Revenuesthousands

2010

2011

2012

2013

2014

$41.0

$19

$34

$46

$48

Consolidated Revenues by Typemillions

2010 2011 2012 2013 2014

Fees & Charges $ 126.27 121.60 $ 129.69 $ 111.87 $ 117.95Taxation 103.85 107.66 110.49 114.84 119.27Contributions from other Governments 33.56 19.84 17.59 20.24 22.39DCC Contribution 15.42 10.92 17.88 11.52 18.00Interest earned 4.67 5.85 5.27 6.82 8.44Other 2.64 4.18 2.92 3.76 4.08Gain on Disposal of Tangible Capital Assets - 0.48 1.27 23.28 4.46

Total $ 286.41 $ 270.53 $ 285.11 $ 292.34 $ 294.58

73 City of Kelowna



Consolidated Expenses by Functionmillions

Consolidated Expenses by Objectmillions

2010 2011 2012 2013 2014

General Government Services $ 16,339 $ 19,882 $ 17,140 $ 15,107 $ 18,481Protective Services 39,579 43,296 43,077 48,962 48,866Transportation Services 34,414 30,738 30,297 30,568 32,119Recreational & Cultural Services 30,368 29,512 30,153 31,214 33,807Other Services 16,857 16,187 15,490 17,432 16,238Airport Operations 8,628 9,357 10,214 10,672 11,131Electrical Utility 21,431 22,234 24,403 8,030 -Wastewater Utility 8,689 8,557 8,450 9,483 9,494Water Utility 4,859 5,077 4,830 4,769 5,134Amortization on Tangible Capital Assets 53,236 56,348 57,329 60,092 61,411Debt Charges 9,899 10,125 10,155 9,865 9,747Loss on Tangible Capital Asset Disposal 1,104 - - - -

Total $ 245,403 $ 251,313 $ 251,538 $ 246,194 $ 246,428

2010 2011 2012 2013 2014

Salaries & Benefi ts $ 61.72 $ 64.94 $ 65.68 $ 71.22 $ 70.01Amortization of Tangible Capital Assets 53.24 56.35 57.33 60.09 61.41Materials & Supplies 47.69 43.28 45.27 30.44 29.71Contract & Professional Services 40.48 42.91 43.90 44.21 46.10RCMP Contract 17.24 20.42 20.09 22.40 23.89Debt interest & fi scal services 9.9 10.1 10.16 9.87 9.75Equipment 7.57 7.10 6.65 6.87 6.78Utilities 5.85 4.85 3.66 6.51 7.13Grants and External Transfers 4.10 3.37 3.25 3.62 3.59Allocations 0.02 0.04 0.04 0.02 0.02Loss on Disposal of Tangible Capital Assets 1.1 0.0 - - 0.00Cost Recoveries -3.50 -2.06 -4.51 -9.04 -11.96

Total $ 245,403 $ 251,313 $ 251,538 $ 246,194 $ 246,428



2010

2011

2012

2013

2014

General Debenture Debt Charges as a Percentage of Total General Expenditures

26.5%

24.8%

22.9%

20.0%

17.8%

2010

2011

2012

2013

2014

Consolidated Debt Charges as a Percentage of Taxation

9.81%

9.68%

9.46%

8.85%

8.39%

Assessment for General Taxationbillions

2010

2011

2012

2013

2014

$23.3

$23.9

$23.8

$23.7

$23.8

2010

2011

2012

2013

2014

64.7%

57.4%

53.64%

48.84%

42.79%

Consolidated Debt as a Percentage of Total General Expenditures

2010

2011

2012

2013

2014

$1,340

$1,275

$1,150

$1,025

$900

Consolidated Debt per Capita

2010

2011

2012

2013

2014

$93.3

$96.8

$99.5

$103.7

$107.7

Taxation Demandmillions

Source: City of Kelowna Financial Services

75 City of Kelowna



Source: City of Kelowna Financial Services

Total Property Tax Leviesmillions

2010 2011 2012 2013 2014

City of Kelowna $ 97,977,449 $ 101,678,382 $ 104,594,045 $ 108,974,094 $ 113,119,208School Tax 63,371,000 66,875,523 65,815,150 67,758,860 66,173,956Regional Hospital 9,019,084 9,627,872 10,305,508 10,868,739 10,900,888Regional District 8,886,636 9,248,749 9,454,286 9,866,411 10,685,452BC Assessment 2,075,653 2,016,783 1,976,024 2,000,803 2,003,333

Total Property Tax Levies $ 181,329,822 $ 189,447,309 $ 192,145,013 $ 199,468,907 $ 202,882,837



Housing Starts

2010

2011

2012

2013

2014

941

423

559

724

1,029

Value of New Developmentmillions

2010

2011

2012

2013

2014

$359

$265

$287

$339

$351

Business Licences

2010

2011

2012

2013

2014

9,119

9,101

9,144

9,197

9,251

2010

2011

2012

2013

2014

27%

24%

32%

29%

24%

73%

76%

68%

71%

76%

Regional Housing Starts

2010

2011

2012

2013

2014

Development Floor Spacesquare footage (thousands)

Source: City of Kelowna Development Services, City of Kelowna Business Licenses system, Regional District of Central Okanagan

City of Kelowna Region

Commercial Industrial Institutional

254

232

129

66

146

133

258 95 23

294 127 139

471 73 25

Note: the Regional District of the Central Okanagan includes District of West Kelowna, District of Peachland, District of Lake Country, and the Central Okanagan east and west electoral areas.

City Hall1435 Water StreetKelowna, BC V1Y 1J4T. [email protected]

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