2020 Annual Report

City of Chilliwack 76 CITY OF CHILLIWACK NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Year Ended December 31, 2020 City of Chilliwack Notes to Consolidated Financial Statements Year Ended December 31, 2020 17 Financial risks The City is exposed to financial risks from its use of finaicial instruments. Management does not believe that the City's financial instruments are exposed to significant liquidity risk. Market risk is the risk where changes in market prices, such as interest rates, can affect the City's income. The City's cash and portfolio investments include amounts on deposits with financial institutions that earn interest at market rates. The City manages its cash by maximizing the interest income earned on excess funds while maintaining the liquidity necessary to conduct operations on a day-to-day basis. Fluctuations in market rates of interest would not have a significant effect on the City's income. Credit risk is the risk that one party to the financial instrument will cause a financial loss for the other party by failling to discharge an obligation. Management does not believe that the City is exposed to significant credit risk. The carrying value of cash, accounts receivable, and accounts payable and accrued liabilities approximate their fair value due to the relatively short periods of maturity of these items. There has been no change to the risk exposures outlined above from 2019 other than the pervasive impact of the ongoing COVID-19 pandemic, of which, may lead to adverse changes in cash flows and working capital levels, which may also have a direct impact on the City's operating results and financial position in the future. The situation is dynamic and the ultimate duration and magnitude of the impact on the economy and the financial effect on the operations is not known at this time. 18 Segmented information: The City is a diversified municipal government institution that provides a wide range of services to its citizens, including Protective Services; Transportation Services; Landfill Operations; Water and Sewer Services; Recreation and Cultural Services and Environmental Development Services. For management reporting purposes, the Government’s operations and activities are organized and reported by Service Areas. Service Areas were created for the purpose of recording specific activities to attain certain objectives in accordance with regulations, restrictions or limitations. General Government Services General government services include all activities associated with adopting bylaws, mayor and council support, financial management, municipal facilities and the cost effective delivery of services. Items included are Mayor and Council, administration, clerks, purchasing, management information systems, graphical information systems, corporate services, finance, municipal facilities, museum, and community grants. Protective Services Protective services includes all activities associated with protection including the enforcement of laws and the prevention of crime. Items included are fire protection, bylaw enforcement, emergency services, building inspection, and all costs associated with policing. Transportation Services Transportation services include all activities associated with transportation including roads and drainage networks. Items included are services of the engineering department, traffic services, street lighting, transit, winter, maintenance and enhancements to roads, shoulders, open drainage, storm sewers, and dykes. Landfill Operations Landfill operations include all activities associated with solid waste and environmental health. Items included are landfill operations, special waste programs, clean up campaigns, operation of the Green Depot, and the curbside collection and recycling program. Water and Sewer Services Water and sewer services include all activities associated with water and sanitary sewer operations. Items included are maintenance and enhancements of the water supply system, water pumps stations, water distribution system, water meters, hydrants, sanitary sewer collection system, sewer lift stations, and sewer treatment and disposal. Recreation and Cultural Services Recreation and cultural services include all activities associated with parks, recreation and cultural activities and operations. Items included are costs associated with Evergreen Hall, Landing Sports Centre, Rotary Pool, Cheam Centre, Leisure Centre, Prospera Centre, Heritage Park, Great Blue Heron Nature Reserve, Grandstands, Cultural Centre, community grants, parks and trails, urban trees and plantings, sports fields, and libraries. Environmental Development Services Environmental development services include all activities associated with community planning and economic development. Items included are costs associated with community planning, development, economic development and tourism. The following table outlines the City's revenues and expenses by operating segment: