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City of Chilliwack
Notes to Consolidated Financial Statements
Year Ended December 31, 2012
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Contingent liabilities:
(a)
The City, as a member of the Fraser Valley Regional District, is responsible for its proportion of any operating deficits or long term
debt related to functions in which it participates.
(b)
The City is currently engaged in certain legal actions. Of the claims the City is defending, certain claims are covered by the City's
insurers and/or other parties. The City has accrued for claims for which the amounts are known or can be reasonably estimated. The
outcome of other claims is undeterminable at this time, accordingly, no provision has been made in the accounts for these actions.
(c)
The City and its employees contribute to the Municipal Pension Plan (the Plan), a jointly trusteed pension plan. The 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 benefits. The pension plan is a multi-employer contributory pension plan. Basic pension benefits are provided
based on a formula. The plan has about 176,000 active members and approximately 67,000 retired members. Active members include
approximately 35,000 contributors from local governments.
The most recent valuation as at December 31, 2009 indicated a $1,024 million funding deficit for basic pension benefits. The next valuation will
be as at December 31, 2012 with results available in 2013. Defined contribution plan accounting is applied to the Plan as the Plan exposes the
participating entities to actuarial risks associated with the current and former employees of other entities, with the result that there is no consistent
and reliable basis for allocating the obligation, Plan assets and cost to individual entities participating in the Plan.
The City of Chilliwack paid $1,795,139 for employer contributions to the plan in fiscal 2012.
(d)
The City has received certain capital grants that are repayable in the event the capital project that the grant was used for is sold, leased,
encumbered or otherwise disposed of. Total contingently repayable grants are $10,056,676 (2011 - $7,322,573), however the City does not
anticipate selling, leasing, encumbering or otherwise disposing of the capital projects and accordingly does not anticipate repaying any
of these grants.
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Fair value of financial assets and financial liabilities:
The fair value of the City's cash, accounts receivable and accounts payable and accrued liabilities approximate their carrying amounts due
to the immediate or short term maturity of these financial instruments.
The fair value of portfolio investments at December 31, 2012 was $71,430,222 (2011 - $54,999,147). Included in the fair market estimate is accrued
interest of $780,600 (2011 - $600,890), which is recorded within accounts receivable.
The fair value of the loans receivable approximate their book values as the interest rates represent lending rates presently charged by
the City for similar investments.
The fair value of the demand loans and capital partnership obligation approximate their book values as the interest rates represent
borrowing rates for loans under similar terms and maturities.
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Commitments:
The City is committed to the acquisition of 6 properties with purchase prices totaling approximately $2,946,000.
city of chilliwack financial statements
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