City of Chilliwack
Notes to Consolidated Financial Statements
Year Ended December 31, 2013
12
Contingent liabilities:
(a)
The City, as a member of the Fraser Valley Regional District, is responsible for its proportion of any operating deficits or long term
debt related to functions in which it participates. Any liability which may arise as a result will be accounted for in the period in which the
required payment is made.
(b)
The City is currently engaged in certain legal actions. Of the claims the City is defending, certain claims are covered by the City's
insurers and/or other parties. The City 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 (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 Plan is a multi-employer contributory pension plan. Basic pension benefits provided are
defined. The plan has about 179,000 active members and approximately 71,000 retired members. Active members include approximately
32,000 contributors from local government.
The most recent actuarial valuation as at December 31, 2012 indicated a $1,370 million funding deficit for basic pension benefits. The 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 fiscal year (defined contribution pension plan accounting). This 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.
The City of Chilliwack paid $1,842,260 (2012 - $1,795,139) for employer contributions to the plan in fiscal 2013.
(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 $7,077,329 (2012 - $10,056,676), 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.
13
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, 2013 was $81,350,224 (2012 - $71,430,222). Included in the fair market estimate is accrued
interest of $736,457 (2012 - $780,600), which is recorded within accounts receivable.
The fair value of the loan receivable approximates the book value as the interest rate represents lending rates presently charged by
the City for similar investments.
The fair value of the capital partnership obligation approximates the book value as the interest rate represents
borrowing rates for loans under similar terms and maturities.
14
Commitment:
The City is committed to the acquisition of 5 properties with purchase prices totaling approximately $2,354,000.
City of Chilliwack Financial Statements
53
2013 Annual Report
