Capital Regional District Page 1

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1 Capital Regional District 625 Fisgard St., Victoria, BC V8W 1R7 Notice of Meeting and Meeting Agenda Finance Committee Wednesday, June 7, :30 AM 6th Floor Boardroom 625 Fisgard St. Victoria, BC V8W 1R7 D. Howe (Chair), K. Williams (Vice Chair), M. Alto, S. Brice, B. Desjardins, A. Finall, C. Hamilton, L. Helps, M. Hicks, C. Plant, S. Price, J. Ranns, D. Screech 1. Approval of Agenda 2. Adoption of Minutes Minutes of the May 3, 2017 Finance Committee Meeting Recommendation: Attachments: That the minutes of the May 3, 2017 Finance Committee meeting be adopted as circulated. Minutes 3. Chair s Remarks 4. Presentations/Delegations 5. Committee Business KPMG LLP Audit Findings Verbal Presentation Capital Regional District 2016 Audit Findings Report and Statement of Financial Information Recommendation: Attachments: That the Finance Committee recommend to the Capital Regional District Board: That the Capital Regional District 2016 Statement of Financial Information be approved. Staff Report: 2016 Audit Findings Report & Statement of Financial Info Appendix 1: 2016 Statement of Financial Information (SOFI) Appendix 2: 2016 Unaudited Financial Statements Appendix 3: DBRS - Rating Canadian Municipal Governments Appendix 4: Additional Financial Analysis Appendix 5: Audit Findings Report Presentation: Overview of CRD 2016 Statement of Financial Information Climate Action Revenue Incentive Program (CARIP) 2016 Reporting Recommendation: That the Finance Committee recommend to the Capital Regional District Board: That the 2016 Climate Action Revenue Incentive Program (CARIP) Report be received for information. Capital Regional District Page 1 Printed on 6/1/2017

2 Finance Committee Notice of Meeting and Meeting Agenda June 7, 2017 Attachments: Staff Report: Climate Action Revenue Incentive Program (CARIP) Appendix A: Climate Action Revenue Incentive (CARIP) Public Report Appendix B: 2016 Corporate GHG Emissions Inventory Appendix C: Corporate Climate Action Strategy Appendix D: Climate Action Program Annual Report Bylaw 4185: Temporary Borrowing for Capital Financing of Vancouver Island Regional Library Recommendation: Attachments: That the Finance Committee recommend to the Capital Regional District Board: That Bylaw No. 4185, "Temporary Loan (Vancouver Island Regional Library District) Bylaw No. 1, 2017" be introduced and read a first and second time, read a third time, and adopted. Staff Report: Bylaw 4185 Temporary Borrowing VIRL Appendix A: Bylaw CRD Grants Update Recommendation: Attachments: That the Finance Committee recommend to the Capital Regional District Board: That this report be received for information. Staff Report: CRD Grants Update Appendix A: CRD Grants Dashboard Federal Budget Impact on Tax Exemption Recommendation: Attachments: That the Finance Committee recommend to the Capital Regional District Board: 1. That this report be received for information; 2. That the current CRD Board Remuneration policy continue to apply; and 3. That the CRD undertake a comprehensive Board remuneration review in 2018, with implementation in 2019, as scheduled. Staff Report: Federal Budget Impact on Tax Exemption 6. Correspondence Roy Brooke via Director Howe, May 8, 2017, re: Municipal Natural Assets Initiative (MNAI) Request for Expressions of Interest Recommendation: Attachments: That the Finance Committee recommend to the Capital Regional District Board: That the correspondence be received for information. Correspondence: Roy Brooke Municipal Natural Assets Initiative Attachment: MNAI Request for Expressions of Interest 7. New Business 8. Adjournment Next Meeting: July 5, 2017 Capital Regional District Page 2 Printed on 6/1/2017

3 Capital Regional District 625 Fisgard St., Victoria, BC V8W 1R7 Meeting Minutes Finance Committee Wednesday, May 3, :30 AM 6th Floor Boardroom 625 Fisgard St. Victoria, BC V8W 1R7 PRESENT: Directors: D. Howe (Chair), K. Williams (Vice Chair), S. Brice, A. Finall, C. Hamilton, L. Helps (9:46), L. Hundleby (for B. Desjardins) M. Hicks, C. Plant, S. Price, J. Ranns, D. Screech Staff: R. Lapham, Chief Administrative Officer; N. Chan, Chief Financial Officer; A. Donaldson, Acting Senior Manager, Financial Services; N. Moore, Manager, Risk and Insurance; B. Reems, Corporate Officer; K. Morley, Manager, Bylaw and Contract Administration; E. Gorman, Deputy Corporate Officer; P. Perna, Committee Clerk (Recorder) ABSENT: Directors M. Alto The meeting was called to order at 9:31 am. 1. Approval of Agenda 2. Adoption of Minutes MOVED by Director Finall, SECONDED by Director Hamilton, That the agenda for the May 3, 2017 Finance Committee meeting be approved as circulated. CARRIED Minutes of the April 5, 2017 Finance Committee Meeting 3. Chair s Remarks 4. Presentations/Delegations - None. 5. Committee Business MOVED by Director Price, SECONDED by Director Williams, That the minutes of the April 5, 2017 Finance Committee meeting be adopted as circulated. CARRIED The Chair remarked on the Finance Department's work towards measuring social and environmental impacts, aligning investment policies with that concept, and research that resulted in finding the Responsible Investment Association of Canada Capital Regional District Grants Update N. Chan provided an overview of the report. Capital Regional District Page 1 Printed on 6/1/2017

4 Finance Committee Meeting Minutes May 3, 2017 Discussion ensued on the following: - status of the Bike BC grant application - emergency preparedness in regards to flood risk and structural mitigation - identifying risks MOVED by Director Plant, SECONDED by Director Brice, That the Finance Committee recommend to the Capital Regional District Board: That this report be received for information. CARRIED Insurance Renewal (Excluding Property) for 2017 N. Chan provided an overview of the report. Discussion ensued on board coverage for group accidental death and dismemberment while in attendance at a meeting or travelling to and from a meeting. MOVED by Director Williams, SECONDED by Director Screech, That the Finance Committee receive this report for information CARRIED Investment Policy Update N. Chan provided an overview of the report and spoke on the various investment opportunities, rates, and yields. Director Helps arrived at 9:46 am. Discussion ensued on the following: - investments with Municipal Finance Authority - guidelines for socially responsible investments - how the list of approved investment dealers and financial institutions are determined - updated investment policies for principles or objectives and the order in which they are prioritized - areas of investment opportunities - performance data for responsible investment funds MOVED by Director Plant, SECONDED by Director Helps, That the Finance Committee recommend to the Capital Regional District Board: That the changes to the Investment Policy that incorporates Responsible Investing as a key objective, be approved. MOVED by Director Helps, SECONDED by Director Price, That the motion be amended to include "that the policy be reviewed by the Finance Committee in two (2) years." CARRIED MOVED by Director Finall, SECONDED by Alternate Director Hundleby, That the motion be amended under 3.4 Responsible Investing to change "within 5%" to "within 3%". DEFEATED Capital Regional District Page 2 Printed on 6/1/2017

5 Finance Committee Meeting Minutes OPPOSED: Directors: Price, Brice, Hicks, Williams, Hamilton, Helps, Plant, Screech May 3, 2017 MOVED by Director Plant, SECONDED by Director Helps, That the Finance Committee recommend to the Capital Regional District Board: That the changes to the Investment Policy that incorporates Responsible Investing as a key objective, as amended to add "that the policy be reviewed by the Finance Committee in two (2) years.", be approved. CARRIED OPPOSED: Directors: Hicks, Ranns Capital Regional District Investment Portfolio Annual Update A. Donaldson provided an overview of the report. MOVED by Director Plant, SECONDED by Director Screech, That the Finance Committee recommend to the Capital Regional District Board: That this report be received for information. CARRIED Delegation Bylaw and Procurement Policy R. Lapham provided an overview of the report, the bylaw, and the procurement policy and N. Chan spoke to the highlights of the report. Discussion ensued on the following: - how staff make decisions on procurement - comparative scans done to incorporate green and sustainable thresholds - developing individual criteria through product selection, supplier perspective, and meeting CRD baselines - the range of procurement guided by the financial plan and overall budget - current procurement process - individual limits for volunteers' purchasing authority - management limits as authorized by the General Manager - levels set by the annual audit planning document MOVED by Director Helps, SECONDED by Director Screech, That the Finance Committee recommend to the Capital Regional District Board: 1. That Bylaw No. 4186, Capital Regional District Delegation Bylaw No. 1, 2017, be introduced and read a first and second time; 2. That Bylaw No. 4186, Capital Regional District Delegation Bylaw No. 1, 2017, be read a third time; 3. That Bylaw No. 4186, Capital Regional District Delegation Bylaw No. 1, 2017, be adopted 4. That the Procurement Policy, attached as Appendix D, be adopted. 5. That the Consultants Policy, attached as Appendix B, be repealed. CARRIED Federal Budget Impact on Tax Exemptions N. Chan provided an overview of the report advising that this is in follow up to his verbal update at the April 5th Finance Committee meeting regarding the Federal and Provincial budget highlights. He advised that there is one additional implication in the Federal budget, which proposes to remove the tax exemption Capital Regional District Page 3 Printed on 6/1/2017

6 Finance Committee Meeting Minutes May 3, 2017 for non-accountable expense allowances paid to members of provincial and territorial legislative assemblies and to certain municipal office-holders. Discussion ensued on the following: - this change resulting in additional tax being subjected to income taxes and Canada Pension Plan contributions - possibly deterring those considering municipal office-holding positions - putting individuals into a higher tax bracket - providing a late resolution at FCM and UBCM - the lack of consultation by the Federal Government before putting this in place MOVED by Director Plant, SECONDED by Director Finall, That the Finance Committee recommend to the Capital Regional District Board: That staff be directed to provide a report to the Finance Committee on options to deal with the change in government policy on non-exemption of expenses. CARRIED MOVED by Director Brice, SECONDED by Director Plant, That the Finance Committee recommend to the Capital Regional District Board: That the Capital Regional District Board Chair submit, on behalf of the Capital Regional District Board, a late resolution to this year's Federation of Canadian Municipalities Annual General Meeting objecting to the change in government policy on non exemption of expenses. MOVED by Director Ranns, SECONDED by Director Plant, That the motion be amended to include sending a late resolution to the Union of British Columbia Municipalities Annual General Meeting. CARRIED MOVED by Director Brice, SECONDED by Director Plant, That the Finance Committee recommend to the Capital Regional District Board: That the Capital Regional District Board Chair submit, on behalf of the Capital Regional District Board, a late resolution to this year's Federation of Canadian Municipalities and Union of British Columbia Municipalities Annual General Meetings objecting to the change in government policy on non exemption of expenses. CARRIED 6. New Business - None. 7. Adjournment MOVED by Director Helps, SECONDED by Director Brice, That the Finance Committee recommend to the Capital Regional District Board: That this report be received for information. CARRIED MOVED by Director Ranns, SECONDED by Alternate Director Hundleby, That the May 3, 2017 Finance Committee meeting be adjourned at 11:36 am. CARRIED Capital Regional District Page 4 Printed on 6/1/2017

7 Finance Committee Meeting Minutes May 3, 2017 Chair Recorder Capital Regional District Page 5 Printed on 6/1/2017

8 REPORT TO THE FINANCE COMMITTEE MEETING OF WEDNESDAY, JUNE 7, 2017 SUBJECT Capital Regional District 2016 Audit Findings Report and Statement of Financial Information ISSUE To approve the Capital Regional District (CRD) 2016 Statements of Financial Information (SOFI). BACKGROUND Legislation requires that annual Audited Financial Statements be prepared for the CRD and presented at a public Board meeting. The 2016 Statements of Financial Information have been prepared by management in accordance with Canadian Public Sector Accounting Board (PSAB) Standards. These statements must be approved by the CRD Board and submitted to the Ministry of Community, Sport, and Cultural Development within six months of the fiscal year end (June 30, 2017). Under PSAB regulations, governments are required to present five statements with explanatory notes: 1. Statement of Financial Position 2. Statement of Operations 3. Statement of Change in Net Debt 4. Statement of Remeasurement Gains and Losses 5. Statement of Cash Flows. In addition to the required statements listed above, the 2016 Consolidated Statements of Financial Information (Appendix 1) include: 6. Schedules of Long Term Debt 7. Schedule of Guarantee and Indemnity Agreements 8. Schedule of Supplies of Goods and Services 9. Schedule of Remuneration and Expenses Directors 10. Schedule of Remuneration and Expenses Employees 11. Statement of Severance. Also included in the package are unaudited statements (Appendix 2) that present financial information by service, a DBRS whitepaper on rating Canadian Municipal Governments (Appendix 3) which describes DBRS s credit rating methodology, additional financial analysis (Appendix 4) that provides financial indicators on 2016 financial results, and the 2016 Audit Findings Report (Appendix 5). DISCUSSION KPMG LLP has audited the 2016 CRD financial statements and submitted an unqualified opinion on the financial statements, meaning that they are free from material misstatements. As per the audit planning scope presented to the Finance Committee on March 1, 2017, the 2016 Audit Findings Report provides information on the following items: FINT

9 Finance Committee June 7, 2017 CRD 2016 Audit Findings Report and Statement of Financial Information 2 Core Area Wastewater Treatment Program (CAWTP) o The CAWTP Project Board was established on May 25, 2016, and a new program business case was approved by the CRD Board on September 14, This resulted in a revision to the capital budget and reclassification of past project expenditures (where some costs could no longer be capitalized to the end-state asset). The CRD booked an impairment (write down) of $2.6 million in 2016 related to these expenses. The impairment includes rent charges for the project office while the program had been suspended, severance for former CAWTP employees, and design costs that are no longer applicable to the revised project. Closure and Post-Closure Liability for Hartland Landfill o The CRD is required to account for a liability for Closure and Post-Closure costs related to Hartland landfill. This liability is booked each year based on the estimated useful life of the landfill and costs associated with closure. In 2016, the CRD reassessed major assumptions around estimated useful life and closure costs, updating assessments last completed in The revised useful life of the landfill is now estimated at 33 years, while the liability recognized at December 31, 2016, is $8.8 million (2015 $8.3 million). PS3260 Liability for Contaminated Sites o This PSAB guideline came into effect during the 2015 reporting year. It requires organizations to book a future liability for any non-productive sites that exceed an environmental standard. The estimated liability at December 31, 2016, is $3.7 million, which includes the Millstream Septage and the McLoughlin Point sites. Deferred Revenue o In the past, monies were transferred from operating budgets and held in Deferred Revenue that related to future cyclical projects that the CRD intended to undertake every 3 to 5 years. This avoided cyclical jumps in requisition but these monies did not meet the criteria for deferral under PSAB guidelines. In 2016, the Board approved operating reserve bylaws to hold these monies for future cyclical projects. $9.5 million was transferred out of Deferred Revenue into newly created Operating Reserves. The auditors concur with this approach. PS3450 Financial Instruments and PS2601 Foreign Currency Translation o The CRD elected for early adoption of these two PSAB guidelines due to a change in MFA investment reporting. Investments are now carried at fair value and will result in remeasurement gains or losses in the Financial Statements annually. Additionally, the Consolidated Statement of Remeasurement Gains and Losses has been added as a required statement with explanatory notes. As the CRD has no Financial Instruments denominated in foreign currencies, it was unnecessary to make adjustments for exchange rates in effect at 2016 yearend. The Consolidated Statement of Financial Position and the Consolidated Statement of Operations form the basis of the audited financial statements and are similar to the Balance Sheet and Income Statement, respectively, in private organizations. As the CRD is in the public sector, the consolidated financial statements are prepared and presented in accordance with PSAB. The Capital Region Housing Corporation (CRHC) financials are consolidated in the CRD s financial statements, as required by PSAB. The CRHC audited financial statements were

10 Finance Committee June 7, 2017 CRD 2016 Audit Findings Report and Statement of Financial Information 3 presented and approved by the CRHC Board on March 28, 2017, and will be uploaded onto the CRD website. HIGHLIGHTS 1. Consolidated Statement of Financial Position The Statement of Financial Position highlights the following four key figures that together describe the financial position of the organization: a. The cash resources. b. The net debt position calculated as the difference between financial assets and financial liabilities. c. The non-financial assets that are normally held for service provision such as tangible capital assets. d. The accumulated surplus that can be thought of as equity instead of surplus and represents the net recognized economic resources of a government organization remaining after subtraction of liabilities from assets. Assets are items that provide future economic benefits. Under PSAB, assets are divided between Financial assets (which have value based on a contractual claim) and Non-Financial assets (which have physical value, such as tangible capital assets). Financial Assets Cash, Cash Equivalents, and Investments Include both cash and liquid investments (short and long term). They reflect an organization s ability to meet payment requirements. There was a net increase of $34.4 million to $209.6 million in cash and investments in 2016, due to a decrease in acquisition of tangible capital assets, and the timing of accounts payable payments. In addition, as bank interest rates were higher than short-term investment rates, there was a redistribution between cash and investments, resulting in higher cash amounts. Accounts Receivable Amounts due through the normal course of CRD business and are net of doubtful account allowances. The balance at December 31, 2016, comprises of tipping fees due from commercial solid waste haulers, development cost charge (DCC) income, and payments due from our member municipalities for bulk water sales. The $0.6 million increase to $12.6 million in accounts receivable over the 2015 balance is predominantly attributed to the timing of receipts. Debt recoverable from member municipalities and Municipal Finance Authority (MFA) debt reserve fund The objective of the MFA is to provide capital financing for regional districts and their member municipalities at the request of the regional district. Financing flows through the CRD to municipalities, who are required to borrow MFA funds through the CRD. On the CRD s financial statements, debt recoverable from member municipalities is a receivable related to MFA debt service obligations for our member municipalities. As this receivable is fully used to repay the MFA, it has no direct impact on the CRD s financial position. Debt recoverable from member municipalities has increased by $8.8 million in 2016, for a total of $153.4 million at December 31, 2016.

11 Finance Committee June 7, 2017 CRD 2016 Audit Findings Report and Statement of Financial Information 4 The MFA debt reserve fund represents the amount required, under agreement with the MFA, as security for debt service obligations related to MFA debentures issued to the District and its member municipalities. These amounts reside with MFA and are refundable, with interest, upon debenture maturity. Cash deposits of $3.6 million for the District (excluding member municipalities) are presented as a receivable on the financial statements. This balance fluctuates upward with new debt issues and downward as issues mature. Liabilities Liabilities are obligations or debt that will be settled by using assets like cash. Liabilities are used to finance operations and large capital construction or acquisitions. Accounts payable and other liabilities Accounts payable and other liabilities decreased by $0.7 million to $46.4 million in They are comprised mainly of: Amounts owing to suppliers for goods received and services rendered Deferred revenue, system development cost charges as an example Landfill closure and post-closure liability Contaminated sites liability Long term Debt The long term debt related to member municipalities increased $8.8 million to $153.4 million in 2016 while the CRD s long term debt decreased by $17.7 million to $215.0 million in 2016 predominantly due to retirement of long term debt related to the Regional Water Supply s Leech land acquisition, upgrades to various water works facilities and the Capital Region Housing Corporation s Parry and Brock Place. Non-Financial Assets Non-financial assets are resources that are normally held for service provision over one or more future periods. They include tangible capital assets, inventories of supplies that will be used in operations, the prepaid portion of land leases on housing properties, and prepaid expenses for items such as insurance. Due to the primarily service nature of non-financial assets, they are essential in achieving CRD objectives. Non-financial assets increased by $5.9 million to 1.01 billion in 2016, due mainly to an increase in tangible capital assets. Accumulated Surplus The accumulated surplus (equity) for the CRD is $977.2 million, which indicates that the organization has assets (Financial and Non-Financial) of greater value than what it owes (Liabilities). The $977.2 million can be broken down into the following distinguishable categories: Accumulated Surplus Categories: $ in Millions CRD operating surplus Add l CRD operating surplus related to reserves CRD capital equity, net of depreciation expense CRD capital and operating reserve equity Capital Region Housing Corporation consolidation 11.6 All other PSAB entries (e.g. Hartland closure/post-closure) (8.5) 2016 Accumulated Surplus 977.2

12 Finance Committee June 7, 2017 CRD 2016 Audit Findings Report and Statement of Financial Information 5 The 2016 CRD operating surplus of $4.1 million represents 0.4% of total accumulated surplus. The remaining accumulated surplus is predominantly tied to capital assets and the associated funding through restricted capital reserves. 2. Consolidated Statement of Operations The Statement of Operations identifies the results of the organization s financial activities for the year by presenting revenues less expenses, resulting in the organization s annual surplus/deficit on an accrual basis. Under accrual accounting and the matching principle, the CRD records economic events regardless of when cash is actually received or used, with a view to matching the revenues for the period with the costs incurred to generate them. Relevant explanations pertaining to the Consolidated Statement of Operations are as follows: Revenues Revenue in 2016 increased by $11.7 million to $220.8 million predominantly due to increased sale of services at Hartland, Regional Water Supply and Juan de Fuca Water Distribution. In addition, Regional Parks transacted the Jordan River land sale to BC Hydro, and there was an increase in requisitions including user fees. Expenses Expenses in 2016 decreased by $0.8 million to $160.9 million due primarily to a one-time higher amortization for CRHC in 2015 due to the Provincial Rental Housing Corporation land purchase. Please note that under PSAB, consolidated reporting of expenses excludes principal payments on long term debt Annual Surplus The 2016 annual surplus is $59.8 million, which identifies the change in accumulated surplus in the current year. The $59.8 million can be categorized into increases in operating, capital and reserves: Change in Accumulated Surplus: $ in Millions CRD operating surplus as identified in the final budget Add l CRD operating surplus related to reserves Less: CRD operating surplus, beginning of year (3.4) Increase in CRD capital equity, net of depreciation expense 39.7 Increase in CRD capital and operating reserve equity 19.0 All other PSAB entries (including CRHC) Annual Surplus 59.8 Financial surpluses generated from operations are generally carried forward and used to reduce the appropriate service requisitions or funding requirements. In 2016, the operating surplus is $4.1 million and represents 6.8% of the change in accumulated surplus. The remaining capital and reserve annual surpluses are better thought of as equity as opposed to surplus. The $39.7 million and $19 million above are revenues and transfers to equity, restricted to funding current and future asset construction and acquisitions. As such, they are unavailable to moderate future requisitions.

13 Finance Committee June 7, 2017 CRD 2016 Audit Findings Report and Statement of Financial Information 6 3. Consolidated Statement of Change in Net Debt Net debt shows the CRD s overall financial situation and is calculated as the difference between a government s financial assets and its financial liabilities. It shows the CRD s ability to pay off all debts if they become due simultaneously, using only the CRD s available cash and highly liquid assets. Net debt is an indicator towards the financial flexibility of the CRD to acquire capital. The Statement of Change in Net Debt reports the annual surplus the extent to which spending in the accounting period is offset by revenue raised during the period. It also displays the reasons for the difference between annual surplus and net debt; for instance, the acquisition of capital assets or the re-measurement gains or losses in the year. The CRD has seen an improvement in net debt of $53.5 million in Consolidated Statement of Remeasurement Gains and Losses The CRD elected for early adoption due to a change in MFA investment reporting. Investments are now carried at fair value and will result in remeasurement gains or losses in the Financial Statements annually. Additionally, the Consolidated Statement of Remeasurement Gains and Losses has been added as a required statement with explanatory notes. In 2016, the CRD experienced an unrealized remeasurement loss of $435,855 due to a decrease in market value. This amount is not a true or realized remeasurement loss unless market conditions are similar at time of investment maturity. 5. Consolidated Statement of Cash Flows The Statement of Cash Flow reports the sources and uses of cash during the period. The positive cash flow is from operating activities, which means that core operations is generating enough cash to buy new assets and to cover future loan payments. The Statement of Cash Flow also provides information about capital, investing and financing activities during the period. The CRD s cash position increased in 2016 by $53.1 million, primarily due to the annual surplus. Financial Indicators DBRS is Canada s largest and the world s fourth largest credit rating agency, respected for its independent, third-party evaluation of credit quality. They publish research whitepapers describing their methodology of rating Canadian municipal governments (Appendix 3). Their methodology includes analyzing the economic environment within which the government operates, and assessing fiscal management by looking at revenue generation, program responsibilities and fiscal discipline, as well as at the coherence and appropriateness of the strategies, policies and processes governing the planning and allocation of public funds. Other critical rating factors include financial management in terms of debt and liquidity, and relations with senior governments. Although the final rating is a blend of both operating risk and financial risk considerations in their entirety, key ratios can provide a quick measure in assessing the government s financial strength its ability to make timely payments on outstanding obligations (whether principal, interest, or other expenditures) with respect to the terms of the obligation. A sample of these critical ratios (Appendix 4) include: 1. Net tax-supported debt per capita; 2. Net tax-supported debt as a percentage of taxable assessment; and 3. Interest costs as a percentage of total revenue.

14 Finance Committee June 7, 2017 CRD 2016 Audit Findings Report and Statement of Financial Information 7 The four ratings, from exceptional to adequate credit quality, are: AAA The capacity for the payment of financial obligations is exceptionally high and unlikely to be adversely affected by future events. AA The capacity for the payment of financial obligations is considered high. Differs from AAA only to a small degree. Unlikely to be significantly vulnerable to future events. A The capacity for the payment of financial obligations is substantial. May be vulnerable to future events, but considered manageable. BBB Adequate credit quality. The capacity for the payment of financial obligations is considered acceptable. May be vulnerable to future events. For illustrative purposes, applying the 2016 financial results through the DBRS rating methodology with regard to the three critical ratios identified above, the CRD would result in a AA rating for net tax-supported debt per capita and interest costs as a percentage of total revenues, while achieving a AAA rating for net tax-supported debt as % of assessment. Appendix 4 discusses additional financial indicators of trends and performance: 4. Debt service costs as a percentage of total revenue; 5. Principal and interest as proportion of debt service costs. 6. Current ratio 7. Contributions to reserves as a percentage of total reserve; 8. Total assessment value; 9. Total debt; 10. Tangible capital assets; 11. Capital investment versus amortization; ALTERNATIVES Alternative 1 That the Finance Committee recommend to the Capital Regional District Board: That the Capital Regional District 2016 Statement of Financial Information be approved. Alternative 2 That the Finance Committee refer this report back to staff for additional information. FINANCIAL IMPLICATIONS The 2016 financial statements are a statutory requirement prepared in accordance to specific accounting principles. The statements have been audited by KPMG and no misrepresentations and no control deficiencies were identified. Overall the 2016 statements reflect an increase in the CRD accumulated surplus of $59.8 million. The CRD continues to invest in its infrastructure through a net increase in tangible capital assets of $6.2 million. The financial performance of the organization is illustrated in the financial indicators (Appendix 4). These indicators demonstrate a consistent, healthy financial position based on current operational needs, existing market conditions and debt servicing costs. The CRD debt levels continue to decrease as long term debt is retired, thereby creating capacity for future capital investments. The overall 2016 revenue has increased by $11.7 million demonstrating an expanded scope of CRD service delivery.

15 Finance Committee June 7, 2017 CRD 2016 Audit Findings Report and Statement of Financial Information 8 The statements are now ready for the Board s approval. Board-approved financial statements are required by legislation and must be filed with the Ministry of Community, Sport and Cultural Development, the Municipal Finance Authority, the CRD s bankers, and various other institutions. Alternative 1 is recommended. CONCLUSION Board approval of the CRD 2016 Statement of Financial Information is required under the Local Government Act, Community Charter, and Financial Information Act. As noted in the Auditors Report, it is the Auditors opinion that these Financial Statements present fairly the consolidated financial position of the CRD as of December 31, 2016 and the results of financial activities for the year then ended in accordance with Canadian Public Sector Accounting Standards. RECOMMENDATION That the Finance Committee recommend to the Capital Regional District Board: That the Capital Regional District 2016 Statement of Financial Information be approved. Submitted by: Concurrence: Concurrence: Concurrence: Attachments: Pat Lee, BMus, CPA, CGA, Acting Manager, Accounting Services Amber Donaldson, MA, CPA, CMA, A/Senior Manager, Financial Services Nelson Chan, MBA, CPA, CMA, Chief Financial Officer Kevin Lorette, P.Eng., MBA, Acting Chief Administrative Officer Appendix Statements of Financial Information Appendix Unaudited Statements Appendix 3 DBRS Rating Methodology Appendix Additional Financial Analysis Appendix Audit Findings Report

16 Appendix 1 Capital Regional District STATEMENT OF FINANCIAL INFORMATION (SOFI) FOR THE YEAR ENDED DECEMBER 31, 2016

17 CAPITAL REGIONAL DISTRICT CAPITAL REGION HOUSING CORPORATION STATEMENT OF FINANCIAL INFORMATION APPROVAL The undersigned, as authorized by the Financial Information Regulation, Schedule 1, subsection 9(2), approves all the statements and schedules included in this Statement of Financial Information, produced under the Financial Information Act. Nelson Chan, MBA, CPA, CMA Chief Financial Officer

18 Statement of Financial Information (SOFI) prepared under the Financial Information Act for the Year Ended December 31, 2016 Index 2016 Consolidated Financial Statements 1 Page Schedules: Guarantee & Indemnity Agreement 48 Supplies of Goods& Services 49 Remuneration &Expenses--Directors 59 Remuneration & Expenses--Employees 63 Statement of Severance Payments 70

19 Capital Regional District 2016 CONSOLIDATED FINANCIAL STATEMENTS FISCAL YEAR ENDED DECEMBER 31,

20 Capital Regional District Statement 1 Consolidated Statement of Financial Position December 31, 2016, with comparative information for Financial Assets Cash and cash equivalents (Note 2) $ 90,116,820 $ 36,984,308 Investments (Note 2) 119,523, ,291,608 Accounts receivable 12,550,022 11,930,507 Debt recoverable from member municipalities (Note 3) 153,364, ,538,170 Restricted cash: MFA Debt Reserve Fund (Note 4) 3,636,392 3,561, ,190, ,305,735 Financial Liabilities Accounts payable and accrued liabilities 21,129,071 19,280,825 Deferred revenue (Note 5) 12,182,724 15,117,053 Long term debt (Note 3) 368,326, ,241,427 Landfill closure and post-closure liability (Note 6) 8,864,499 8,346,519 Other long term liabilities (Note 7) 4,234,172 4,383, ,736, ,369,067 Net Debt (35,546,002) (89,063,332) Non-financial Assets Tangible capital assets (Note 8) 1,011,465,405 1,005,239,091 Inventory of supplies 933, ,842 Prepaid expenses 319, ,727 1,012,718,503 1,006,842,660 Accumulated Surplus 977,172, ,779,328 Accumulated Surplus consists of: Accumulated operating surplus (Note 9) 977,608, ,779,328 Accumulated remeasurement gains (losses) (435,855) - Accumulated Surplus $ 977,172,501 $ 917,779,328 Contractual obligations (Note 10) Contingencies (Note 11) The accompanying notes are an integral part of the consolidated financial statements Nelson Chan, MBA, CPA, CMA Chief Financial Officer 2

21 Capital Regional District Statement 2 Consolidated Statement of Operations For the year ended December 31, 2016, with comparative information for 2015 Budget (Note 12) Revenue Conditional transfers from government (Note 13) $ 94,738,728 $ 107,113,022 $ 102,727,769 Sale of services 72,095,431 72,411,686 62,904,578 Other revenue 12,442,061 13,761,161 18,919,952 Interest earnings 231,977 3,455,112 3,102,862 Developer contributions - 3,624,416 1,406,968 Affordable housing - rental income 15,874,679 12,358,718 11,920,338 Grants in lieu of taxes 2,830,565 2,830,555 2,969,599 Actuarial adjustment of long-term debt - 5,207,402 5,117,586 Total Revenue 198,213, ,762, ,069,652 Expenses General government services 7,973,221 14,690,325 14,131,909 Grants in aid 1,471, , ,391 Protective services 9,401,267 9,829,308 9,379,864 Sewer, water, and garbage services 72,246,607 77,162,044 70,312,158 Planning and development services 2,851,868 2,812,067 2,766,851 Affordable housing - rental expense 9,428,560 14,456,963 19,950,928 Recreation and cultural services 24,768,304 25,626,716 26,187,885 Other 3,126,410 1,178,406 4,224,126 Transportation services 661, , ,625 Other fiscal services 14,062,256 14,499,056 14,091,070 Total Expenses 145,991, ,933, ,713,807 Annual Surplus 52,221,737 59,829,028 47,355,845 Accumulated Surplus, beginning of year 917,779, ,779, ,423,483 Accumulated Surplus, end of year (Note 9) $ 970,001,065 $ 977,608,356 $ 917,779,328 The accompanying notes are an integral part of the consolidated financial statements. 3

22 Capital Regional District Statement 3 Consolidated Statement of Change in Net Debt For the year ended December 31, 2016, with comparative information for 2015 Budget (Note 12) Annual surplus $ 52,221,737 $ 59,829,028 $ 47,355,845 Acquistion of tangible capital assets (108,806,620) (36,148,637) (51,466,494) Contributed tangible capital assets - (3,834,968) (1,406,968) Amortization of tangible capital assets - 29,905,289 34,688,464 Loss (gain) on sale of tangible capital assets - 543, ,986 Proceeds on sale of tangible capital assets - 3,308, ,096 (56,584,883) 53,602,712 30,473,929 Acquistion of inventory of supplies - (1,867,210) (1,445,416) Acquistion of prepaid expenses - (246,423) (718,240) Consumption of inventory of supplies - 1,792,747 1,578,731 Use of prepaid expenses - 671, , ,473 (281,573) Net measurement gains (losses) - (435,855) - Change in Net Debt (56,584,883) 53,517,330 30,192,356 Net Debt, beginning of year (89,063,332) (89,063,332) (119,255,688) Net Debt, end of year $ (145,648,215) $ (35,546,002) $ (89,063,332) The accompanying notes are an integral part of the consolidated financial statements. 4

23 Capital Regional District Statement 4 Consolidated Statement of Remeasurement Gains and Losses For the year ended December 31, 2016, with comparative figures for Accumulated remeasurement gains and losses, beginning of year $ - $ - Unrealized gain (loss) on portfolio investment (435,855) - Accumulated remeasurement gains and losses, end of year $ (435,855) $ - 5

24 Capital Regional District Statement 5 Consolidated Statement of Cash Flows For the year ended December 31, 2016, with comparative information for 2015 Cash provided by (used in): Operating activities: Annual surplus $ 59,829,028 $ 47,355,845 Items not involving cash: Amortization 29,905,289 34,688,464 Contributed tangible capital assets (3,834,968) (1,406,968) Loss (gain) on sale of tangible capital assets 543, ,986 Actuarial adjustment of long-term debt (5,207,402) (5,117,586) Decrease (increase) in non-cash assets: Accounts receivable (619,515) 1,458,412 Prepaid expenses 424,934 (414,888) Inventory of supplies (74,463) 133,311 Increase (decrease) in non-cash liabilities: Accounts payable and accrued liabilities 1,848,246 (13,126,527) Deferred revenue (2,934,329) 1,512,334 Landfill closure and post-closure provision 517, ,302 Other liabilities (149,071) 536,970 Net change in cash from operating activities 80,249,614 66,976,655 Capital activities: Proceeds on sale of tangible capital assets 3,308, ,096 Cash used to acquire tangible capital assets (36,148,637) (51,466,494) Net change in cash from capital activities (32,840,522) (50,855,398) Investing activities: Net change in investments 18,332,250 (20,741,750) Net change in cash from investing activities 18,332,250 (20,741,750) Financing activities: Restricted cash - MFA debt reserve fund (75,250) 131,122 Additions to long-term debt 5,495,000 12,413,000 Repayment of long-term debt (18,028,580) (20,248,916) Net change in cash from financing activities (12,608,830) (7,704,794) Net increase (decrease) in cash and cash equivalents 53,132,512 (12,325,287) Cash and cash equivalents, beginning of year 36,984,308 49,309,595 Cash and cash equivalents, end of year $ 90,116,820 $ 36,984,308 6

25 Capital Regional District Statement 5 Consolidated Statement of Cash Flows For the year ended December 31, 2016, with comparative information for Cash paid for interest $ 18,972,081 $ 20,421,841 Cash received for interest 3,448,628 3,156,537 The accompanying notes are an integral part of the consolidated financial statements. 7

26 Capital Regional District NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2016 The Capital Regional District was incorporated by Letters Patent under the provisions of the British Columbia Local Government Act. 1. SIGNIFICANT ACCOUNTING POLICIES a. BRITISH COLUMBIA REGIONAL DISTRICTS The consolidated financial statements of the Capital Regional District (the District) are prepared by management in accordance with Canadian public sector accounting standards for local governments and regional districts as recommended by the Public Sector Accounting Board of the Chartered Professional Accountants of Canada. The resources and operation of the District are segregated into various funds for accounting and financial reporting purposes, each being treated as a separate entity with responsibility for the stewardship of the assets allocated to it. Transactions between funds are recorded as interfund transfers and are eliminated upon consolidation into these consolidated financial statements. b. BASIS OF CONSOLIDATION The consolidated financial statements reflect the assets, liabilities, revenues, and expenses of the Capital Region Housing Corporation (CRHC). The CRHC is controlled by the District. All transactions and balances between these entities have been eliminated on consolidation. c. BASIS OF ACCOUNTING The District follows the accrual method of accounting for revenues and expenses. Revenues are normally recognized in the year in which they are earned and measurable. Expenses are recognized as they are incurred and measurable as a result of receipt of goods or services and/or the creation of a legal obligation to pay. d. TAXATION Each Municipality and Electoral Area within the District is requisitioned for their portion of each service in which they participate. These funds are then levied by the Municipalities and the Province (for Electoral Areas) to individual taxpayers and turned over to the District by August 1 of each year. e. INTEREST The District follows the practice of investing individually significant unspent funds within individual funds. Interest earned is allocated on the basis of actual earnings from the specific instruments. Excess funds or temporary borrowings of all functions are pooled and interest income or expense is allocated to the individual functions on a monthly basis. 8

27 Capital Regional District NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, SIGNIFICANT ACCOUNTING POLICIES continued f. GOVERNMENT TRANSFERS Government transfers without stipulations restricting their use are recognized in the financial statements as revenues in the period in which the transfers are authorized, any eligibility criteria are met, and reasonable estimates of the amounts can be made. Government transfers with stipulations restricting their use are recognized in the financial statements as revenues in the period in which the eligible expenditures are incurred, providing they are authorized and eligibility criteria are met. g. DEFERRED REVENUE Deferred revenues represent licenses, permits, and other restricted contributions and revenues which have been collected, but for which the related services or inspections have yet to be performed. These amounts will be recognized as revenues in the fiscal year the services are performed. h. CASH AND CASH EQUIVALENTS Cash and cash equivalents include short-term highly liquid investments with a term to maturity of less than 90 days at acquisition. i. INVESTMENTS Investments consist of bond and intermediate pooled investment funds with Municipal Finance Authority (MFA) and term deposits that have costs approximating market value. They are initially recognized at cost and subsequently carried at fair value. Unrealized gains and losses from changes in the fair value of the investments are recognized in the statement of remeasurement gains and losses. Upon settlement, the cumulative gain or loss is reclassified from the statement of remeasurement gains and losses and recognized in the statement of operations. Interest and dividends attributable to investments are reported in the statement of operations. During 2016, the District adopted Public Sector Accounting Board Standard PS 3450 Financial Instruments and Public Sector Accounting Board Standard PS 2600 Foreign Currency Translation in the preparation of these financial statements. The standards have been adopted prospectively. There is no material adjustment to the opening balances. j. LONG-TERM DEBT Long-term debt is recorded net of repayment deposits and actuarial adjustments. k. EMPLOYEE FUTURE BENEFITS i. The District and its employees make contributions to the Municipal Pension Plan. These contributions are expensed as incurred. 9

28 Capital Regional District NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, SIGNIFICANT ACCOUNTING POLICIES continued k. EMPLOYEE FUTURE BENEFITS continued ii. Sick leave and other benefits are also available to the District's employees. The costs of these benefits are actuarially determined based on service and best estimates of retirement ages and expected future salary and wage increases. The obligations under these benefit plans are accrued based on projected benefits as the employees render services necessary to earn the future benefits. l. LANDFILL LIABILITY The liability for closure of operational sites and post-closure care has been recognized based on estimated future expenses, estimated inflation and the usage of the site s capacity during the year. The change in this liability during the year is recorded as a charge to operations. These estimates are reviewed and adjusted annually. m. NON-FINANCIAL ASSETS Non-financial assets are not available to discharge existing liabilities and are held for use in the provision of services. They have useful lives extending beyond the current year and are not intended for sale in the ordinary course of operations. i. Tangible Capital Assets Tangible capital assets are recorded at cost which includes amounts that are directly attributable to acquisition, construction, development or betterment of the asset. The cost, less residual value, of the tangible capital assets, excluding land and the landfill site, are amortized on a straight line basis over their estimated useful lives as follows: Asset Engineering Structures Buildings Machinery and equipment Vehicles Other Assets Useful Life - Years 20 to 100 Years 20 to 50 Years 5 to 20 Years 8 to 15 Years 5 to 25 Years The landfill site is amortized using the units of production method based upon capacity used during the year. Amortization is charged annually, including in the year of acquisition and in the year of disposal. Assets under construction are not amortized until the asset is available for productive use. 10

29 Capital Regional District NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, SIGNIFICANT ACCOUNTING POLICIES continued m. NON-FINANCIAL ASSETS continued ii. Contributions of Tangible Capital Assets Tangible capital assets received as contributions are recorded at their fair value at the date of receipt and also are recorded as revenue. iii. Works of Art and Cultural and Historic Assets Works of art and cultural and historic assets are not recorded as assets in these financial statements. iv. Interest Capitalization The District does not capitalize interest costs associated with the acquisition or construction of a tangible capital asset. v. Leased Tangible Capital Assets Leases which transfer substantially all of the benefits and risks incidental to ownership of property are accounted for as leased tangible capital assets. All other leases are accounted for as operating leases and the related payments are charged to expenses as incurred. vi. Inventories of Supplies Inventories of supplies held for consumption are recorded at the lower of cost and replacement cost. n. USE OF ESTIMATES The preparation of financial statements in conforming with Canadian public sector accounting standards requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the period. Significant estimates include assumptions used in estimating provisions for accrued liabilities, landfill liability, useful lives of tangible capital assets and in performing actuarial valuations of employee future benefits. Actual results could differ from these estimates. o. SEGMENTED INFORMATION A segment is defined as a distinguishable activity or group of activities of a government for which it is appropriate to separately report financial information to achieve the objectives of the standard. The District has provided definitions of the District s segments as well as presented consolidated financial information in segmented format in Note

30 Capital Regional District NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, CASH AND CASH EQUIVALENTS AND INVESTMENTS a. CASH AND CASH EQUIVALENTS CRD $ 79,383,915 $ 28,142,598 CRHC 10,732,905 8,841,710 $ 90,116,820 $ 36,984,308 b. INVESTMENTS CRD MFA bond fund $ 39,343,487 $ 38,785,268 MFA money market fund 20,844,326 - MFA intermediate fund - 20,615,006 Term deposits - short term 57,020,060 75,574, ,207, ,974,474 Investments - CRHC 2,315,630 3,317,134 $ 119,523,503 $ 138,291, LONG-TERM DEBT a. DEBT Debt principal is reported net of repayments and actuarial adjustments, and interest expense is calculated and paid net of actuarial adjustments. In addition to debt incurred directly by the District, the District has also incurred long-term debt on behalf of its member municipalities through agreements with the Municipal Finance Authority of British Columbia (MFA). The loan agreements with the MFA provide that, if at any time the scheduled payments provided for in the agreements for the District and member municipalities are not sufficient to meet the obligation in respect to such borrowings; the resulting deficiency becomes a liability of the District and member municipalities to the MFA. The District reports the total principal and interest payments collected from member municipalities of $7,605,633 ( $8,135,902) and $6,495,861 ( $6,607,656) respectively as expenses in Other Fiscal Services and revenue in Conditional Transfers from Government. Debt incurred on behalf of member municipalities is also presented as a receivable from member municipalities on the statement of financial position in the amount of $153,364,220 ( $144,538,170). 12

31 Capital Regional District NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, LONG-TERM DEBT continued a. DEBT continued Debt is comprised of the following and includes varying maturities, with interest rates ranging from 1.55% to 5.15% and an average rate of 3.15%. The CRD debt consists of debenture debt held with the MFA and non debenture debt of $18,395,000 ( $17,700,000). The Capital Region Housing Corporation (CRHC) debt consists of mortgages with BC Housing and commercial banks. Outstanding December 31, 2015 Additions 2016 Total Debt Retirement Outstanding December 31, 2016 General Capital $ 26,525,383 $ 900,000 $ (2,714,168) $ 24,711,215 Sewer Capital 55,630,130 1,095,000 (4,358,158) 52,366,972 Water Capital 91,160,656 3,500,000 (11,365,547) 83,295, ,316,169 5,495,000 (18,437,873) 160,373,296 Accrued actuarial valuation - CRD Debt (1,945,754) - (267,939) (2,213,693) CRD direct debt 171,370,415 5,495,000 (18,705,812) 158,159,603 Member Municipalities 144,538,170 18,565,600 (9,739,550) 153,364,220 CRD total 315,908,585 24,060,600 (28,445,362) 311,523,823 CRHC 61,332,842 - (4,530,172) 56,802,670 $ 377,241,427 $ 24,060,600 $ (32,975,534) $ 368,326,493 b. DEMAND NOTES - CONTINGENT LIABILITY The MFA holds demand notes related to the District's debenture debt in the amount of $16,361,900 of which $6,280,543 is held by the District for the other authorities (see Note 4). The demand notes are not recorded in the financial statements. 13

32 Capital Regional District NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, LONG-TERM DEBT continued c. LONG-TERM DEBT PAYABLE/MATURING The following amounts included in long-term debt are payable/maturing over the next five years: CRD General $ 2,172,177 $ 2,033,150 $ 2,033,150 $ 2,033,150 $ 1,908,297 Water 8,249,366 6,743,293 6,417,784 6,387,785 6,207,487 Sewer 3,107,690 2,954,760 2,812,327 2,802,125 2,459,421 Total CRD 13,529,233 11,731,203 11,263,261 11,223,060 10,575,205 Member Municipalities 8,277,995 8,270,607 7,833,262 7,615,603 7,367,675 21,807,228 20,001,810 19,096,523 18,838,663 17,942,880 CRHC 4,704,322 4,799,212 4,704,492 4,367,084 3,552,797 $ 26,511,550 $ 24,801,022 $ 23,801,015 $ 23,205,747 $ 21,495, MFA DEBT RESERVE FUND The MFA provides capital financing for regional districts and their member municipalities. The MFA is required to establish a Debt Reserve Fund into which each regional district and member municipality, who shares in the proceeds of a debt issue through the District, is required to pay certain amounts set out in the debt agreements. Interest earned on these funds (less administrative expenses) becomes an obligation of the MFA to the regional district. If at any time insufficient funds are provided by the regional district or their member municipalities or any other MFA borrower, the MFA may then use these funds to meet payments on its obligations. Should this occur, the regional district and member municipalities may be called upon to restore the fund. The MFA has not required the debt reserve fund to meet obligations in its history. The cash deposits of the member municipalities are not recorded in these financial statements Cash Deposits Restricted cash: MFA Debt Reserve Fund $ 3,636,392 $ 3,561,142 Cash deposits - Member Municipalities 2,760,466 2,547,115 Demand Notes Demand notes - Capital Regional District 10,081,357 10,104,258 Demand notes - Member Municipalities 6,280,543 5,971,333 $ 22,758,758 $ 22,183,848 14

33 Capital Regional District NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, DEFERRED REVENUE Continuity of deferred revenue is as follows: Balance, beginning of year $ 15,117,053 $ 13,604,719 Externally restricted contributions received: Development cost charges 1,857,685 1,805,548 CIAC developer advances for construction 3,887,484 1,435,551 Total contributions received 5,745,169 3,241,099 Contributions used and recognized in revenue (5,094,030) (4,745,450) Net change in externally restricted contributions 651,139 (1,504,351) Change in deposits and other deferred revenues (3,585,468) 3,016,684 Balance, end of year $ 12,182,724 $ 15,117,053 The deferred revenue reported on the consolidated statement of financial position consists of the following: Deferred revenue - general $ 3,820,403 $ 6,147,196 Deferred revenue - sewer 1,250 1,497,243 Deferred revenue - water 1,115, ,356 Development cost charges 6,390,975 5,694,304 CIAC developer advances for construction 263, ,600 Deferred revenue - CRHC 591, ,354 Balance, end of year $ 12,182,724 $ 15,117,053 15

34 Capital Regional District NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, LANDFILL CLOSURE AND POST-CLOSURE LIABILITY The total liability recorded for the estimated landfill closure and post-closure costs of $34,000,000 is $8,864,499 ( $8,346,519). The estimated liability for these costs is recognized as the landfill site s capacity is used and the reported liability represents the portion of the estimated total costs recognized as at December 31, 2016, based on the cumulative capacity used to that date, compared to the total estimated landfill capacity. Estimated total cost represents the sum of the discounted future cash flows for closure and post closure care activities discounted at 2%. The estimated remaining capacity of the landfill site is 42% of its total capacity and its estimated remaining life is 33 years after which the period for post closure care is estimated to be 25 years. Landfill closure and post-closure care requirements have been defined in accordance with industry standards and include final covering and landscaping of the landfill, post-closure monitoring and management of leachate from the site. The reported liability is based on estimates and assumptions with respect to events over a 25 year period using the best information available to management. Future events may result in significant changes to the estimated remaining useful life, estimated total expenses, total or used capacity and the estimated liability. These would be recognized prospectively, as a change in estimate, when applicable. Management periodically performs an assessment of the underlying assumptions related to the reported liability. A full assessment was last performed in 1995 and management has updated these assumptions in

35 Capital Regional District NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, OTHER LIABILITIES Post employment benefits $ 500,600 $ 511,000 Contaminated sites 3,716,451 3,615,221 Other benefits payable 17, ,022 $ 4,234,172 $ 4,383,243 a. POST EMPLOYMENT BENEFITS The District provides sick leave and certain other benefits to its employees. The accrued benefit obligation is included in other liabilities on the consolidated statement of financial position and has been estimated by an actuarial valuation completed at December 31, The District's accrued benefit obligation is $500,600 ( $511,000). The significant actuarial assumptions adopted in measuring the District's accrued benefit obligation are as follows: Discount rates 3.30% 3.10% Expected future inflation rates 2.50% 2.50% Expected wage and salary increases 3.00% 3.00% b. CONTAMINATED SITES The District estimated a liability of $3,716,451 as at December 31, 2016 ( $3,615,221) for remediation of a total of 5 known contaminated sites, including the Millstream Meadows site identified in previous years. This estimate has been discounted to present value using current Municipal Finance Authority lending rates. 17

36 Capital Regional District NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, TANGIBLE CAPITAL ASSETS Cost Accumulated Amortization Balance at December 31, 2015 Additions Disposals Transfers Balance at December 31, 2016 Balance at December 31, 2015 Disposals Amortization Expense Balance at December 31, 2016 Net Book Value December 31, 2016 Work in Progress CRD $ 58,367,705 $ 18,261,089 $ - $ (26,639,512) $ 49,989,282 $ - $ - $ - $ - $ 49,989,282 Engineering Structures CRD 759,859,055 9,972,579 (168,508) 24,591, ,254, ,645,519 (6,918) 16,204, ,842, ,412,159 Building CRD 122,348,375 1,095,674 (42,635) 597, ,998,974 35,697,521 (16,919) 2,521,170 38,201,772 85,797,202 CRHC 104,778,872 1,147, ,925,910 65,129,619-3,366,035 68,495,654 37,430, ,127,247 2,242,712 (42,635) 597, ,924, ,827,140 (16,919) 5,887, ,697, ,227,458 Machinery & Equipment CRD 60,755,331 2,852,153 (1,543,353) 631,153 62,695,284 40,861,818 (1,543,353) 3,388,231 42,706,696 19,988,588 CRHC 28,035,648 1,950, ,986,513 19,798,427-2,030,645 21,829,072 8,157,441 88,790,979 4,803,018 (1,543,353) 631,153 92,681,797 60,660,245 (1,543,353) 5,418,876 64,535,768 28,146,029 Vehicles CRD 19,523,858 1,152,529 (472,587) - 20,203,800 10,863,676 (423,534) 1,559,772 11,999,914 8,203,886 Land (1) CRD 243,729,872 2,922,789 (3,615,641) 248, ,285, ,285,351 CRHC 9,496, ,496, ,496, ,225,925 2,922,789 (3,615,641) 248, ,781, ,781,404 Land Depletion CRD 648, , ,594-18, , ,184 Land Under Lease CRHC 12,601, ,601,318 10,358,048-70,769 10,428,817 2,172,501 Other Assets CRD 12,441, , ,692 13,640,652 6,882, ,002 7,628,150 6,012,502 $1,432,585,461 $ 39,983,603 $ (5,842,724) $ - $1,466,726,340 $ 427,346,370 $ (1,990,724) $ 29,905,289 $ 455,260,935 $ 1,011,465,405 Totals CRD 1,277,673,570 36,885,700 (5,842,724) - 1,308,716, ,060,276 (1,990,724) 24,437, ,507, ,209,154 CRHC 154,911,891 3,097, ,009,794 95,286,094-5,467, ,753,543 57,256,251 $1,432,585,461 $ 39,983,603 $ (5,842,724) $ - $1,466,726,340 $ 427,346,370 $ (1,990,724) $ 29,905,289 $ 455,260,935 $ 1,011,465,405 (1) On February 27, 2015 the District purchased 22 properties from the Provincial Rental Housing Corporation (PRHC) for $9,301,740. These lands have been leased to the CRHC for 60 year periods. This acquisition will enable the District to effectively own the majority of its assets and gain more control over the management, operation, and long-term sustainability of its social housing properties. 18

37 Capital Regional District NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, TANGIBLE CAPITAL ASSETS continued Cost Accumulated Amortization Balance at December 31, 2014 Additions Disposals Transfers Balance at December 31, 2015 Balance at December 31, 2014 Disposals Amortization Expense Balance at December 31, 2015 Net Book Value December 31, 2015 Work in Progress CRD $ 48,784,098 $ 21,212,293 $ - $ (11,628,686) $ 58,367,705 $ - $ - $ - $ - $ 58,367,705 Engineering Structures CRD 742,762,440 7,270,708 (140,340) 9,966, ,859, ,677,861-15,967, ,645, ,213,536 Building CRD 119,209,635 2,239,697 (33,319) 932, ,348,375 33,297,003 (30,264) 2,430,782 35,697,521 86,650,854 CRHC 104,559, , ,778,872 61,869,346-3,260,273 65,129,619 39,649, ,768,930 2,459,274 (33,319) 932, ,127,247 95,166,349 (30,264) 5,691, ,827, ,300,107 Machinery & Equipment CRD 58,245,310 3,067,191 (739,811) 182,641 60,755,331 38,094,765 (739,811) 3,506,864 40,861,818 19,893,513 CRHC 25,891,117 2,144, ,035,648 17,740,414-2,058,013 19,798,427 8,237,221 84,136,427 5,211,722 (739,811) 182,641 88,790,979 55,835,179 (739,811) 5,564,877 60,660,245 28,130,734 Vehicles CRD 18,744,511 1,857,871 (1,078,524) - 19,523,858 10,324,987 (918,737) 1,457,426 10,863,676 8,660,182 Land CRD 230,107,960 14,621,812 (999,900) - 243,729, ,729,872 CRHC 9,496, ,496, ,496, ,604,013 14,621,812 (999,900) - 253,225, ,225,925 Land Depletion CRD 648, ,301 91,071-18, , ,707 Land Under Lease CRHC 12,601, ,601,318 4,985,777-5,372,271 10,358,048 2,243,270 Other Assets CRD 11,653, , ,436 12,441,073 6,265, ,654 6,882,148 5,558,925 $1,382,703,892 $ 52,873,463 $ (2,991,894) $ - $1,432,585,461 $ 394,346,718 $ (1,688,812) $ 34,688,464 $ 427,346,370 $ 1,005,239,091 Totals CRD 1,230,156,109 50,509,355 (2,991,894) - 1,277,673, ,751,181 (1,688,812) 23,997, ,060, ,613,294 CRHC 152,547,783 2,364, ,911,891 84,595,537-10,690,557 95,286,094 59,625,797 $1,382,703,892 $ 52,873,463 $ (2,991,894) $ - $1,432,585,461 $ 394,346,718 $ (1,688,812) $ 34,688,464 $ 427,346,370 $ 1,005,239,091 19

38 Capital Regional District NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, ACCUMULATED SURPLUS Surplus: Invested in tangible capital assets $ 796,503,132 $ 779,511,906 Operating Funds: CRD 70,967,174 48,379,694 CRHC 2,320,920 1,046,687 Total surplus $ 869,791,226 $ 828,938,287 Reserve funds set aside for specific purposes (see Schedule E for complete list): Reserve Funds: Regional $ 64,767,890 $ 50,693,358 Sub-Regional 26,833,542 23,370,451 Local 7,375,226 6,510,385 CRHC 8,840,472 8,266,847 Total reserve funds $ 107,817,130 $ 88,841,041 Accumulated Surplus $ 977,608,356 $ 917,779,328 20

39 Capital Regional District NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, CONTRACTUAL OBLIGATIONS a. CAPITAL PROJECTS AND OPERATING CONTRACTS At December 31, 2016, the District has outstanding commitments to capital projects and operating contracts totaling $39,900,226. b. LONG TERM LEASES The District rents facilities and leases machinery and equipment under long-term leases. Future minimum lease payments are as follows: Long Term Leases 2017 $ 3,288, , , , ,526 Total future minimum lease payments $ 3,851,585 21

40 Capital Regional District NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, CONTINGENCIES a. LAWSUITS In the normal course of operations, the District is faced with lawsuits for damages of a diverse nature. At year-end, the District's estimated exposure to each such liability is either not determinable or is not considered to be significant. Claims paid by the District as a result of litigation are reported as expenses. Liabilities are recorded upon a determination that a loss is likely and a determination can be made of the estimated amounts. b. SUBLEASE OF KINGS PLACE HOUSING DEVELOPMENT - (CRHC) The Capital Region Housing Corporation (CRHC) entered into agreement with the Cridge Housing Society and the Provincial Rental Housing Corporation (PRHC) to sublease the land and improvements at 1070 Kings Road, Victoria for a term of 30 years commencing August 1, The Homes BC Program Operating Agreement was assigned to CRHC from the Cridge Housing Society with the approval of the BC Housing Management Commission (BCHMC). Current annual lease payments amount to $231,000 and are based on the annual mortgage payments. c. BUILDING ENVELOPE REMEDIATION (BER) - (CRHC) A number of low income housing buildings operated by the District through CRHC are operated under agreements with BCHMC, Homes BC and the Canadian Mortgage and Housing Corporation. Prior to the signing of the new Umbrella Agreement in 2012, BCHMC provided funding for building envelope failure remediation for BCMHC and Homes BC buildings. BCHMC may require repayment of certain BER subsidies. Repayment would be funded by second mortgages. Funding for future BER for all buildings except for buildings with no operating agreements is subject to future negotiations with BCHMC. d. HOMES BC PROGRAM REPAYABLE ASSISTANCE - (CRHC) Under the new Umbrella Agreement the Homes BC program repayable assistance no longer apply as of April 1, Any outstanding repayable assistance owed by CRHC to BCHMC will be forgiven at a rate of 1/5 each year commencing January 1, Estimated total repayable assistance at December 31, 2016 is $1,424,899 ( $1,899,866). 22

41 Capital Regional District NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, BUDGET DATA The budget data presented in these consolidated financial statements is based upon the 2016 budget approved by the Board on March 22, Amortization was not contemplated on development of the budget and, as such, has not been included. The chart below reconciles the approved budget to the budget figures reported in these consolidated financial statements. Revenues: Operating Budget $ 202,922,099 Less: Transfers from other funds (1,183,866) Opening surplus (3,524,792) Total Revenue 198,213,441 Expenses: Operating budget 202,008,004 Capital budget 108,806,620 Less: Transfers to other funds (38,040,889) Capital budget (108,806,620) Debt principal payments (17,975,411) Total Expenses 145,991,704 Annual Surplus $ 52,221,737 Total 13. CONDITIONAL TRANSFERS FROM GOVERNMENT The following government transfers have been included in revenues: Federal $ 95,290 $ 79,213 Provincial 16,943,711 15,546,729 Local 90,074,021 87,101,827 $ 107,113,022 $ 102,727,769 Local Government transfers include tax levies collected by the Province and municipalities on behalf of the District. 23

42 Capital Regional District NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, PENSION PLAN The District 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 Plan is a multi-employer contributory pension plan. Basic pension benefits provided are based on a formula. The Plan has about 189,000 active members and approximately 85,000 retired members. Active members include approximately 636 contributors from the District. The most recent actuarial valuation as at December 31, 2015 indicated a $2.2 billion funding surplus for basic pension benefits. The next valuation will be as at December 31, 2018 with results available in 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 District paid $3,854,460 ( $3,725,816) for employer contributions to the plan in fiscal 2016, while employees contributed $3,410,771 ( $3,312,240) to the plan in fiscal RELATED PARTY TRANSACTIONS The Capital Regional Hospital District (the Hospital District) is related to the Capital Regional District since the same individuals are members of the Board of Directors of both organizations. As legislated by the Hospital District Act, the officers and employees of the Capital Regional District are the corresponding officers and employees of the Hospital District. Each of the Regional District and the Hospital District are separate legal entities as defined by separate Letters Patent and authorized by separate legislation. During the year the Hospital District purchased, at cost, $632,511 ( $670,882) of administrative support services and project management costs from the Capital Regional District. 16. GVLRA - CUPE LONG-TERM DISABILITY TRUST The Trust was established January 1, 1987 as a result of negotiations between the Greater Victoria Labour Relations Association (GVLRA) representing a number of employers and the Canadian Union of Public Employees (CUPE) representing a number of CUPE locals. The Trust s sole purpose is to provide a long-term disability income benefit plan. The employers and employees each contribute equal amounts into the Trust. The District paid $392,674 ( $386,660) for employer contributions and District employees paid $392,674 ( $386,660) for employee contributions to the plan in fiscal At December 31, 2015, the total plan provision for approved and unreported claims was $19,101,700 with a net deficit of $1,519,

43 Capital Regional District NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, SEGMENTED REPORTING The District is a diversified regional government that provides a wide range of services to its stakeholders. For management reporting purposes, the District s operations and activities are organized and reported by Fund. Funds were created for the purpose of recording specific activities to attain certain objectives in accordance with special regulations, restrictions or limitations. District services are provided by departments and their activities are reported within these funds. Certain functions have been separately disclosed as segmented information, along with accounting for the services they provide as follows: Water Services: Water Services operations include responsibility for the supply of wholesale water to the core municipalities, distribution to the Saanich Peninsula, the Westshore Communities, and Sooke. This segment also includes accountability for a number of local water service areas in Port Renfrew, Saltspring Island, and the Southern Gulf Islands. Sewer Services: Sewer Services operations include responsibility for the design, build, and operation of sewage collection, treatment, and disposal systems in the district. This includes the accountability for liquid waste in the core area and a number of local sewer service areas in Port Renfrew, Saltspring Island, and the Southern Gulf Islands. Environmental Health Services: Environmental Health Services operations are responsible for solid waste management and related environmental assessment and regulatory programs. The department provides municipal solid waste disposal and recycling services. Recreation and Cultural Services: Recreation and Cultural Services operations provide a wide variety of facilities and programs to residents of the capital region. Regional Parks is responsible for establishing and protecting a network of regional parks. Three recreation centers are operated in Sooke, Sidney, and Ganges. There are a number of parks and recreation programs located throughout the Southern Gulf Islands. General Government Services: General Government Services operations are responsible for providing the functions of Corporate Services (Financial Services, GIS & Information Technology, Business Development, Risk Management, Payroll, Arts Development, and Facilities Management), Administration (Human Resources and Corporate Communications), and Planning and Protective Services. 25

44 Capital Regional District NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, SEGMENTED REPORTING continued Capital Region Housing Corporation: The CRHC is a wholly-owned subsidiary of the Capital Regional District. It was incorporated under the laws of British Columbia Company in 1982 and its principal activity is the provision of rental accommodation for citizens of the District. The CRHC operates properties with 1,286 housing units. The following page provides additional Segmented Information. 26

45 Capital Regional District NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, SEGMENTED REPORTING continued Year ended December 31, 2016 Water Services Sewer Services Environmental Health Services Recreation and cultural services General government services Capital Region Housing Corporation 2016 Revenue Conditional transfers from government $ 3,690,906 $ 33,654,400 $ 843,377 $ 28,223,793 $ 35,731,326 $ 4,969,220 $107,113,022 Sale of services 44,762,771 1,592,481 17,964,416 6,897,576 1,194,442-72,411,686 Other revenue 2,926,037 4,758,628 7,207, ,733 8,569,215-23,671,244 Affordable housing - revenues of subsidiary ,358,718 12,358,718 Actuarial adjustment of long-term debt 3,483,526 1,218,286 (325,651) (906,933) 1,738,174-5,207,402 54,863,240 41,223,795 25,689,773 34,424,169 47,233,157 17,327, ,762,072 Expenses Salaries, wages and benefits 12,506,461 29,741 2,200,356 12,099,874 27,479,794 1,814,827 56,131,053 Contract for services and consultants 1,444, ,288 7,455,494 1,175,888 3,232,685 2,218,419 16,438,304 Repairs and maintenance 77, ,635 1,278, ,166 1,057, ,598 3,727,135 Supplies 940, , , ,654 1,117,994 84,743 3,510,238 Utilities 981, ,270 80, , ,219 1,058,375 4,256,736 Amortization of tangible capital assets 12,240,156 4,184,004 1,863,219 3,152,658 2,997,803 5,467,449 29,905,289 Interest on debt 6,187,259 2,578, , ,017 6,966,768 1,973,465 18,667,065 Other expenses 1,869,192 13,319,704 5,139,793 6,458, ,210 1,130,087 28,297,224 36,247,505 22,448,970 18,465,569 25,626,716 43,687,321 14,456, ,933,044 Annual Surplus $ 18,615,735 $ 18,774,825 $ 7,224,204 $ 8,797,453 $ 3,545,836 $ 2,870,975 $ 59,829,028 27

46 Capital Regional District NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, SEGMENTED REPORTING continued Year ended December 31, 2015 Water Services Sewer Services Environmental Health Services Recreation and cultural services General government services Capital Region Housing Corporation 2015 Revenue Conditional transfers from government $ 457,703 $ 33,122,903 $ 4,115,579 $ 25,329,253 $ 35,815,478 $ 3,886,853 $102,727,769 Sale of services 40,573,912 1,321,271 15,663,533 4,184,129 1,161,733-62,904,578 Other revenue 4,306,009 3,126,598 5,942,943 6,891,060 6,132,771-26,399,381 Affordable housing - revenues of subsidiary ,920,338 11,920,338 Actuarial adjustment of long-term debt 3,535,151 1,140,015 69, ,157 49,426-5,117,586 48,872,775 38,710,787 25,791,892 36,727,599 43,159,408 15,807, ,069,652 Expenses Salaries, wages and benefits 12,175, ,617 2,123,004 11,335,422 25,740,326 1,885,768 53,496,376 Contract for services and consultants 1,283, ,773 7,621,527 1,059,502 3,245,304 2,078,443 16,119,757 Repairs and maintenance 101, , , ,324 1,017, ,660 2,762,284 Supplies 735, , , ,722 1,261,333 49,370 3,564,628 Utilities 928, ,149 64, , , ,243 4,034,141 Amortization of tangible capital assets 11,952,119 4,149,873 1,840,522 3,027,115 3,028,280 10,690,557 34,688,466 Interest on debt 6,514,017 2,836, , ,034 6,941,133 2,150,224 19,582,823 Other expenses (1,336,840) 10,833,255 5,091,658 7,815,196 3,585,400 1,476,663 27,465,332 32,352,573 20,413,260 17,546,325 26,187,885 45,262,836 19,950, ,713,807 Annual Surplus $ 16,520,202 $ 18,297,527 $ 8,245,567 $ 10,539,714 $ (2,103,428) $ (4,143,737) $ 47,355,845 28

47 Capital Regional District NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, COMPARATIVE INFORMATION Certain 2015 comparative information has been reclassified to conform with the financial statement presentation adopted for the current year. 29

48 CAPITAL REGIONAL DISTRICT Schedule A CONSOLIDATED DEBT CHARGES (Unaudited) For the year ended December 31, 2016 Principal Principal Payments on Payments on Interest on Mortgages and Long-Term Mortgages and Interest on Accrued Debenture Non-Debenture Long-Term Temporary Debt Debt Debt Debt Borrowings Charges GENERAL REVENUE FUND Issued by Municipal Finance Authority Member municipalities $ 7,605,633 $ - $ 6,495,861 $ - $ - $ 14,101,494 $ 14,743,558 Capital Regional District 2,191,116-1,268,326 - (4,728) 3,454,714 2,686,148 Non-debenture-Capital Regional District - 55,000 5,354 88, ,920 2,951,136 SEWER REVENUE FUND 9,796,749 55,000 7,769,541 88,566 (4,728) 17,705,128 20,380,842 Issued by Municipal Finance Authority 3,150,669-2,578,657 - (39,212) 5,690,114 5,937,291 Non-debenture-Capital Regional District ,705 49, , ,828 WATER REVENUE FUND 3,150,669-2,824,362 49,398 (39,212) 5,985,217 6,238,120 Issued by Municipal Finance Authority 8,101,623-6,187,260-11,359 14,300,242 14,909,741 Non-debenture-Capital Regional District ,327-14,327 11,444 HOUSING GENERAL REVENUE FUND 8,101,623-6,187,260 14,327 11,359 14,314,570 14,921,184 Mortgages Payable 4,530,172-1,973,465-6,503,637 6,528,762 $ 25,579,213 $ 55,000 $ 18,754,628 $ 152,291 $ (32,581) $ 44,508,551 $ 48,068,909 30

49 CAPITAL REGIONAL DISTRICT Schedule B LONG-TERM DEBT General Capital Fund (Unaudited) MFA/ December 31, 2015 Debt Issue Issue CMHC Maturity Original Interest Previous Principal Actuarial Retirement December 31, 2016 Date Bylaw Bylaw Issue Date Debt Rate Outstanding Outstanding Port Renfrew Fire , % 26,748 1, ,526 24,222 Total Port Renfrew Fire 40,000 26,748 1, ,526 24,222 North Pender Fire - 2nd Service Debt , % 53,465 27,005 26,460 53,465 - Total North Pender Fire - 2nd Service Debt 582,720 53,465 27,005 26,460 53,465 - Peninsula Recreation - Swimming Pool ,200, % 3,148, ,694 82, ,739 2,807, ,600, % 968,881 79,906 25, , , ,198, % 1,469, ,770 29, ,894 1,331,000 Total Peninsula Recreation - Swimming Pool 8,998,000 5,587, , , ,784 5,001,853 Solid Waste - Refuse Disposal ,000, % 1,211,101 99,882 31, ,438 1,079, ,500, % 1,823, ,853 27, ,902 1,671, ,200, % 1,733, ,869 18, ,537 1,604,905 Total Solid Waste - Refuse Disposal 6,700,000 4,768, ,604 77, ,877 4,356,423 Saltspring Island - Library , % 165,019 17,479 7,399 24, , ,000, % 1,575,854 99,882 16, ,848 1,459, , % 89,812 4, ,402 84,410 Total Saltspring Island - Library 2,450,000 1,830, ,355 24, ,128 1,683,557 Royal Theatre ,000, % 537, , , , ,264 Total Royal Theatre 3,000, , , , , ,264 Saltspring Island - Indoor Pool ,500, % 1,001, ,853 59, , , , % 188,593 19,976 8,456 28, ,161 Total Saltspring Island - Indoor Pool 2,900,000 1,189, ,829 68, , ,353 Gossip Island - Electrification , % 603,535 35,708 4,459 40, ,368 Total Gossip Island - Electrification 715, ,535 35,708 4,459 40, ,368 31

50 CAPITAL REGIONAL DISTRICT Schedule B LONG-TERM DEBT General Capital Fund (Unaudited) MFA/ December 31, 2015 Debt Issue Issue CMHC Maturity Original Interest Previous Principal Actuarial Retirement December 31, 2016 Date Bylaw Bylaw Issue Date Debt Rate Outstanding Outstanding Galiano Island Public Building , % 278,417 15,482 1,263 16, ,672 Total Gossip Island - Electrification 310, ,417 15,482 1,263 16, ,672 Galiano Island Fire , % 260,455 14,483 1,182 15, ,790 Total Gossip Island - Electrification 290, ,455 14,483 1,182 15, ,790 North Galiano Fire , % 266,017 13, , ,474 Total Gossip Island - Electrification 280, ,017 13, , ,474 East Sook Fire ,800, % 1,710,106 89,894 3,596 93,490 1,616, , % ,000 Total Gossip Island - Electrification 1,950,000 1,710,106 89,894 3,596 93,490 1,766,616 Land Banking and Housing ,413, % 9,413, , ,377 8,610,623 Total Land Banking and Housing 9,413,000 9,413, , ,377 8,610,623 Total General - Debenture Debt 37,628,720 26,525,383 2,191, ,052 2,659,168 24,016,215 Non-Debenture Debt Seaparc 750, % - 55,000-55, ,000 Total General - Non-Debenture Debt 750,000-55,000-55, ,000 Total Debt - General $ 38,378,720 26,525,383 2,246, ,052 2,714,168 24,711,215 32

51 CAPITAL REGIONAL DISTRICT Schedule B LONG-TERM DEBT General Capital Fund (Unaudited) MFA/ December 31, 2015 Debt Issue Issue CMHC Maturity Original Interest Previous Principal Actuarial Retirement December 31, 2016 Date Bylaw Issue Date Debt Rate Outstanding Outstanding MUNICIPALITIES Victoria ,000, % 7,604, , , ,302 7,333, ,000, % 7,604, , , ,302 7,333, ,000, % 7,861, , , ,430 7,604, ,509, % 2,434, , , ,181 2,125, ,800, % 1,089,990 89, , , , ,800, % 1,203,734 89, , ,745 1,089, ,440, % 2,300, , , ,379 2,083, ,200, % 3,793, , , ,957 3,477, ,200,000 variable 8,731, , ,599 8,327, ,200, % 22,420, , , ,261 21,610, ,500, % ,500,000 Total Victoria 85,649,015 65,043,961 2,470, ,747 3,085,450 67,458,511 Central Saanich ,000, % 729,503 49,941 10,820 60, , ,333, % 1,050,569 66,588 11,311 77, , ,085, % 885, ,420 8, , , ,523, % 8,523, , ,834 8,304,706 Total Central Saanich 11,942,413 11,188, ,783 30, ,931 10,622,801 Esquimalt ,000, % 1,857, , , ,107 1,629, ,800, % 1,452,151 84,679 67, ,072 1,300, ,256, % 716,358 37,985 26,982 64, , ,012, % 1,200,790 73,965 28, ,357 1,098, ,129, % 727,765 37,914 16,049 53, , ,353, % 1,624,911 79,018 29, ,142 1,516, ,200, % 1,100,051 99,949 3, , ,104 Total Esquimalt 14,750,000 8,679, , , ,555 7,865,727 33

52 CAPITAL REGIONAL DISTRICT Schedule B LONG-TERM DEBT General Capital Fund (Unaudited) MFA/ December 31, 2015 Debt Issue Issue CMHC Maturity Original Interest Previous Principal Actuarial Retirement December 31, 2016 Date Bylaw Issue Date Debt Rate Outstanding Outstanding MUNICIPALITIES Saanich , % 73,404 37,074 36, , , % 71,655 18,537 16, ,954 36, , % 107,484 27,805 24, ,431 55, ,500, % 999,745 31,429 25, , , , % 273,300 37,074 26, , , ,341, % 1,337, ,853 80, ,983 1,090, ,320, % 928, ,542 48, , , ,505, % 2,124, ,985 95, ,224 1,803, ,306, % 1,245, ,179 42, ,631 1,087, ,797,000 variable 1,293, , ,031 1,182, ,150, % 838,930 57,432 12, , , ,400,000 variable 6,581, , ,916 6,084, , % 633,078 37,456 4, , , ,400, % 2,200, ,898 9, ,337 1,990, ,725, % 4,489, ,972 7, ,968 4,245, ,064, % ,064,600 Total Saanich 43,858,900 23,197,269 1,922, ,784 2,351,967 28,909,902 Oak Bay ,715, % 2,445, , , ,078 2,189,238 Total Oak Bay 4,715,000 2,445, , , ,078 2,189,238 North Saanich ,900, % 1,285, , , , , ,722, % 6,014, ,442 68, ,790 5,760, ,680, % 1,596,099 83,901 3,356 87,257 1,508,842 Total North Saanich 14,302,907 8,895, , , ,845 8,147,038 Sidney , % 363,042 38,455 16,278 54, , , % 43,187 3,995 1,473 5,468 37, ,448, % 1,259,678 34,769 7,533 42,302 1,217, ,073, % 963,591 25,765 4,376 30, ,450 34

53 CAPITAL REGIONAL DISTRICT Schedule B LONG-TERM DEBT General Capital Fund (Unaudited) MFA/ December 31, 2015 Debt Issue Issue CMHC Maturity Original Interest Previous Principal Actuarial Retirement December 31, 2016 Date Bylaw Issue Date Debt Rate Outstanding Outstanding MUNICIPALITIES , % 443,096 11,502 1,436 12, ,158 Total Sidney 3,850,000 3,072, ,486 31, ,582 2,927,012 View Royal ,445, % 1,926, ,106 20, ,847 1,783, ,490, % 5,305, ,364 7, ,738 5,113,898 Total View Royal 7,935,000 7,232, ,470 28, ,585 6,897,532 Langford , % 51,383 25,952 25,431 51,383 - Total Langford 560,000 51,383 25,952 25,431 51,383 - Highlands , % 325,682 17,269 12,267 29, , , % ,000 Total Highlands 1,071, ,682 17,269 12,267 29, ,146 Colwood ,200, % 110,105 55,611 54, , , % 118,596 22,072 5,856 27,928 90, , % 440,583 44,085 11,697 55, , , % 578,829 57,918 15,367 73, , , % 458,916 39,362 10,443 49, , ,396, % 2,271, ,600 44, ,597 2,056, ,710, % 3,448,946 83,732 10,455 94,187 3,354, ,662, % 880, ,672 31, , , ,501, % ,501,000 Total Colwood 17,151,023 8,307, , , ,661 11,900,560 Sooke ,800, % 5,672, , , ,616 5,251, , % 426,152 20,723 7,638 28, ,791 Total Sooke 9,417,101 6,098, , , ,977 5,649,753 35

54 CAPITAL REGIONAL DISTRICT Schedule B LONG-TERM DEBT General Capital Fund (Unaudited) MFA/ December 31, 2015 Debt Issue Issue CMHC Maturity Original Interest Previous Principal Actuarial Retirement December 31, 2016 Date Bylaw Issue Date Debt Rate Outstanding Outstanding MUNICIPALITIES Total Municipal 215,202, ,538,170 7,605,634 2,133,917 9,739, ,364,220 Total General Debenture 37,628,720 26,525,383 2,191, ,052 2,659,168 24,016, ,831, ,063,553 9,796,750 2,601,969 12,398, ,380,435 Total General Non-Debenture 750,000-55,000-55, ,000 Grand Total $ 253,581,100 $ 171,063,553 9,851,750 2,601,969 $ 12,453,718 $ 178,075,435 36

55 CAPITAL REGIONAL DISTRICT Schedule C LONG-TERM DEBT Sewer Capital Fund (Unaudited) MFA\ December 31, 2015 Debt Issue Issue CMHC Maturity Original Interest Previous Principal Actuarial Retirement December 31, 2016 Date Bylaw Bylaw Issue Date Debt Rate Outstanding Outstanding Millstream Site Remediation , % 210,268 14,395 3,119 17, , , % 168,821 9,988 1,247 11, , , % 538,872 29,965 2,445 32, , , % 549,439 30,552 2,493 33, ,394 Total Millstream Site Remediation 1,700,000 1,467,400 84,900 9,304 94,204 1,373,196 Septage/Composting - Saltspring Island , % 187,248 13,984 3,710 17, , , % 267,497 19,976 5,300 25, , , % 474,177 32,462 7,033 39, , , % 691,553 38,455 3,138 41, ,960 Total Septage/Composting - SSI 2,100,000 1,620, ,877 19, ,058 1,496,417 Debt - NWT - Vortex / Siphon Upgrade , % 44,610 8,302 2,203 10,505 34, , % 39,005 5, ,881 33,124 Total NWT - Vortex / Siphon Upgrade 160,030 83,615 13,329 3,057 16,386 67,229 Debt - NWT - Macaulay Point/Genset , % 106,233 9,828 3,622 13,450 92,783 Total NWT - Macaulay Point/Genset 196, ,233 9,828 3,622 13,450 92,783 Debt - LWMP Core - NET / ECI Sewer Upgrade ,000, % 1,201, ,823 71, , , ,000, % 1,201, ,046 62, , , ,000, % 942,967 99,882 42, , , ,000, % 1,885, ,764 84, ,327 1,601,607 Total LWMP Core - NET / ECI Sewer Upg 12,000,000 5,231, , , ,269 4,359,043 Debt - LWMP Core - NET / ECI Sewer Upgrade (Oak Bay invoice) ,000, % 3,778, , , ,435 3,300, ,000, % 1,619, ,823 55, ,043 1,414, ,000, % 605,551 49,941 15,778 65, , , % 423,885 34,959 11,045 46, ,881 Total LWMP Core-NET/ECI Sewer Upg 11,700,000 6,427, , , ,201 5,632,549 37

56 CAPITAL REGIONAL DISTRICT Schedule C LONG-TERM DEBT Sewer Capital Fund (Unaudited) MFA\ December 31, 2015 Debt Issue Issue CMHC Maturity Original Interest Previous Principal Actuarial Retirement December 31, 2016 Date Bylaw Bylaw Issue Date Debt Rate Outstanding Outstanding DEBT - NET Bowker ,153, % 564,966 99,792 79, , ,754 Total NET Bowker 2,153, ,966 99,792 79, , ,754 Debt - NWT Upgrade - Phase ,230, % 204, , , , ,800, % 322,452 83,416 73, , , ,500, % 268,710 69,513 61, , , , % 183,655 32,440 25,817 58, , , % 40,040 4,994 2,398 7,392 32,648 Total NWT Upgrade - Phase 1 6,330,000 1,019, , , , ,837 Debt- NWT - Groundwater Relief - MFA , % 12,846 6,488 6,358 12, , % 1, ,452 - Total NWT - Groundwater Relief - MFA 155,830 14,298 7,222 7,076 14,298 - Saanich Penninsula Waste Water System (S.P.W.W.S) , % 20,645 10,427 10,218 20,645 - Total S.P.W.W.S 225,000 20,645 10,427 10,218 20,645 - Debt - Craigflower PS Upgrade , % 200,201 26,841 10,493 37, , , % 188,593 19,976 8,456 28, , , % 48,444 3,995 1,263 5,258 43,186 Total Craigflower PS Upgrade 980, ,238 50,812 20,212 71, ,214 Debt - Saanich (Non Debt Assistance Grant) , % 57,754 10,201 8,119 18,320 39,434 Total Saanich (Non Debt Assistance Grant) 220,130 57,754 10,201 8,119 18,320 39,434 Debt- LWMP Core Treatment Facilities ,000, % 6,055, , , ,191 5,398,314 Total LWMP Core Treatment Facilities 10,000,000 6,055, , , ,191 5,398,314 38

57 CAPITAL REGIONAL DISTRICT Schedule C LONG-TERM DEBT Sewer Capital Fund (Unaudited) MFA\ December 31, 2015 Debt Issue Issue CMHC Maturity Original Interest Previous Principal Actuarial Retirement December 31, 2016 Date Bylaw Bylaw Issue Date Debt Rate Outstanding Outstanding Debt - Core Sewage Integrated Treatment Facilities ,000, % 8,754, , , ,132 8,024,903 Total Core Sewage Integrated Trtmnt. Facs. 12,000,000 8,754, , , ,132 8,024,903 Debt - Core Area WasteWater Treatment Program ,100, % 5,801, ,473 11, ,425 5,642,770 Total Core Area WasteWater Trtmnt Pgrm. 6,100,000 5,801, ,473 11, ,425 5,642,770 Debt - Oak Bay - Humber/Rutland , % 242,924 22,474 8,283 30, ,167 Total Oak Bay - Humber/Rutland 450, ,924 22,474 8,283 30, ,167 Debt - Ganges Sewer (S.S.I.) , % ,000 Total Debt - Ganges Sewer (S.S.I.) 350, ,000 Debt - Maliview Sewer (S.S.I.) , % 14,001 1,899 1,349 3,248 10, , % 11,315 1, ,706 9,609 Total Maliview Sewer (S.S.I.) 64,982 25,316 3,098 1,856 4,954 20,362 Debt - Magic Lake Estates (P.I.) , % ,000 Total Debt - Magic Lake Estates (P.I.) 745, ,000 Total Sewer - Debenture Debt 67,631,129 37,930,130 3,150,669 1,207,489 4,358,158 34,666,972 Non Debenture Debt ,700,000 variable 17,700, ,700,000 Total Sewer - Non Debenture Debt 17,700,000 17,700, ,700,000 Total Debt - Sewer $ 85,331,129 55,630,130 3,150,669 1,207,489 4,358,158 52,366,972 39

58 CAPITAL REGIONAL DISTRICT Schedule D LONG-TERM DEBT Water Capital Fund (Unaudited) MFA/ December 31, 2015 Debt Issue Issue CMHC Maturity Original Interest Previous Principal Actuarial Retirement December 31, 2016 Date Bylaw Bylaw Issue Date Debt Rate Outstanding Outstanding Highland Water , % 167,186 12,485 3,313 15, , , % 127,190 7, , ,725 Total Highland water 400, ,376 20,010 4,253 24, ,113 Highland & Fernwood Water(SSI) , % 393,963 24,971 4,241 29, ,751 Total Highland water 500, ,963 24,971 4,241 29, ,751 Cedars of Tuam Water , % 6,297 1, ,998 4,299 Total Cedars of Tuam Water 24,000 6,297 1, ,998 4,299 Beddis Water , % 130,330 17,473 6,831 24, , , % 249,026 24,987 2,039 27, , , % 58,106 5, ,306 51,800 Total Beddis Water 695, ,462 48,290 9,346 57, ,826 Fulford Water , % 229,431 30,760 12,025 42, , , % 122,394 7, , , , % 21,103 1, ,405 19,698 Total Fulford Water 743, ,928 39,250 13,085 52, ,593 Cedar Lane Water , % 36,335 2, ,943 32, , % 72,224 5,394 1,431 6,825 65,399 Total Cedar Lane Water 168, ,559 8,390 2,378 10,768 97,791 40

59 CAPITAL REGIONAL DISTRICT Schedule D LONG-TERM DEBT Water Capital Fund (Unaudited) MFA/ December 31, 2015 Debt Issue Issue CMHC Maturity Original Interest Previous Principal Actuarial Retirement December 31, 2016 Date Bylaw Bylaw Issue Date Debt Rate Outstanding Outstanding Magic Lakes Water , % 527,430 36,107 7,823 43, , , % 196,982 12,485 2,121 14, , , % 472,276 27,942 3,489 31, , ,002, % 900,365 50,066 4,085 54, , , % 22,454 1, ,351 21, , % 66,613 33,645 32,968 66, ,498, % 268,512 69,462 61, , ,531 Total Magic Lakes Water 4,784,900 2,454, , , ,063 2,111,569 Lyall Harbour/Boot Cove Water , % 167,186 12,485 3,313 15, , , % 131,311 8,989 1,948 10, ,374 Total Lyall Harbour/Boot Cove Water 430, ,497 21,474 5,261 26, ,762 Skana Water-Mayne Island , % 26,937 3,654 2,596 6,250 20, , % 13,494 1,831 1,300 3,131 10, , % 15,762 1, ,995 13,767 Total Skana Water-Mayne Island 147,550 56,193 6,943 4,433 11,376 44,817 Port Renfrew Snuggery Cove Water System , % 111,029 15,061 10,699 25,760 85,269 Total Port Renfrew Snuggery Cove Water Syst 325, ,029 15,061 10,699 25,760 85,269 Fernwood Water , % 66,874 4,994 1,325 6,319 60, , % 36,475 2, ,038 33, , % 37,985 2, ,528 35,457 41

60 CAPITAL REGIONAL DISTRICT Schedule D LONG-TERM DEBT Water Capital Fund (Unaudited) MFA/ December 31, 2015 Debt Issue Issue CMHC Maturity Original Interest Previous Principal Actuarial Retirement December 31, 2016 Date Bylaw Bylaw Issue Date Debt Rate Outstanding Outstanding Total Fernwood Water 195, ,334 9,738 2,147 11, ,449 Surfside Park Water , % 34,162 4,634 3,292 7,926 26, , % 35,530 4,820 3,424 8,244 27, , % 19,219 2,397 1,151 3,548 15, , % 8,009 1, ,494 6,515 Total Surfside Park Water 272,000 96,920 12,925 8,287 21,212 75,708 Wilderness Mountain , % 237,192 14,033 1,752 15, ,407 Total Port Renfrew Snuggery Cove Water Syst 281, ,192 14,033 1,752 15, ,407 Regional Water Supply ,000, % 4,836,776 1,251,242 1,108,161 2,359,403 2,477, ,000, % 1,311, , , , , ,000, % 524,729 92,685 73, , , ,000, % 4,238, , , ,034 3,778, ,000, % 4,844, , , ,753 4,318, ,000, % 36,333,029 2,996, ,679 3,943,145 32,389, ,000, % 6,018, , , ,723 5,449, ,000, % 668,742 49,941 13,250 63, , ,500, % 4,741, ,617 70, ,946 4,346, ,500, % 1,181,890 74,912 12,724 87,636 1,094, ,500, % 3,798, ,735 28, ,796 3,545, ,700, % 1,526,805 84,900 6,928 91,828 1,434, ,000, % 3,000, , ,475 2,844, ,500, % ,500,000 Total Regional Water Supply 136,200,000 73,025,960 6,685,271 2,800,228 9,485,499 65,040,461 42

61 CAPITAL REGIONAL DISTRICT Schedule D LONG-TERM DEBT Water Capital Fund (Unaudited) MFA/ December 31, 2015 Debt Issue Issue CMHC Maturity Original Interest Previous Principal Actuarial Retirement December 31, 2016 Date Bylaw Bylaw Issue Date Debt Rate Outstanding Outstanding Juan De Fuca Water Distribution ,000, % 716, , , , , ,500, % 2,110, ,853 15, ,443 1,969, ,500, % 4,041, ,735 18, ,073 3,798, ,000, % 4,750, ,706 9, ,694 4,490, ,000, % ,000,000 Total Juan De Fuca Water Distribution 16,000,000 11,618, , , ,751 12,625,903 Juan De Fuca Water Distribution - DCC ,500, % 600,602 74,912 35, , , ,000, % 400,402 53,682 20,986 74, , , % 235,741 24,971 10,570 35, , , % 269,915 24,971 9,202 34, ,742 Total Juan De Fuca Water Distribution-DCC 3,500,000 1,506, ,536 76, ,269 1,251,391 Total Water - Debenture Debt 164,666,630 91,160,656 8,101,623 3,263,924 11,365,547 83,295,109 Non Debenture Debt Total Water - Non Debenture Debt Total Debt - Water 164,666,630 91,160,656 8,101,623 3,263,924 11,365,547 83,295,109 43

62 CAPITAL REGIONAL DISTRICT SUMMARY OF LONG-TERM DEBT (Unaudited) 2016 Outstanding Total Debt Outstanding Dec 31/15 Additions Principal Actuarial Retirement Dec 31/16 General Capital - Debenture (Schedule B) $ 26,525, ,000 $ (2,191,116) $ (468,052) $ (2,659,168) $ 24,016,215 Non-Debenture (Schedule B) - 750,000 (55,000) - (55,000) 695,000 Sewer Capital - Debenture (Schedule C) 37,930,130 1,095,000 (3,150,669) (1,207,489) (4,358,158) 34,666,972 Non-Debenture (Schedule C) 17,700, ,700,000 Water Capital - Debenture (Schedule D) 91,160,656 3,500,000 (8,101,623) (3,263,924) (11,365,547) 83,295,109 Non-Debenture (Schedule D) ,316,169 5,495,000 (13,498,408) (4,939,465) (18,437,873) 160,373,296 Accrued actuarial valuation - CRD Debt (1,945,754) - - (267,939) (267,939) (2,213,693) 171,370,415 5,495,000 (13,498,408) (5,207,404) (18,705,812) 158,159,603 Member Municipalities (Schedule B) 144,538,170 18,565,600 (7,605,633) (2,133,917) (9,739,550) 153,364,220 CRD Total 315,908,585 24,060,600 (21,104,041) (7,341,321) (28,445,362) 311,523,823 CRHC Total 61,332,842 - (4,530,172) - (4,530,172) 56,802,670 Consolidated Total $ 377,241,427 $ 24,060,600 $ (25,634,213) $ (7,341,321) $ (32,975,534) $ 368,326,493 TOTAL OUTSTANDING DEBT General Capital (CRD and municipalities) $ 178,075,435 Sewer Capital 52,366,972 Water Capital 83,295,109 less accrued actuarial valuation 2,213,693 CRD 311,523,823 CRHC 56,802,670 Total $ 368,326,493 44

63 CAPITAL REGIONAL DISTRICT Schedule E RESERVE FUNDS For the year ended December 31, REGIONAL Equipment Replacement $ 20,522,344 $ 19,627,138 Feasibility Study 149, ,079 Office Facilities & Equipment 6,298,549 6,695,417 Regional Parks Capital 5,242,838 2,391,924 Solid Waste Capital 9,516,385 9,766,006 Solid Waste Disposal Services Capital - 12,063,794 Regional Parks Land Capital 1,000,000 - Regional Parks Legacy Operating 13,067 - Regional Parks Operating 86,009 - Regional Planning Services Operating 1,530,407 - Regional Growth Strategy Operating 694,527 - Climate Action & Adapt Operating 7,524 - Regional Source Control Operating 357,923 - Land Bank & Housing Operating 20,957 - HAZMAT Incident Response Operating 31,810 - Emergency Response 911 Operating 107,182 - Emergency Response 911 Communications Project Operating 165,021 - Solid Waste Operating 17,448,795 - GIS Data Maintenance Operating 27,432 - Labour Negotiations Operating 168,563 - Finance Operating 78,809 - Safety Audits Operating (5,507) - Real Estate Operating 11,499 - IW ES Ops Operating 328,769 - ES Water Quality Operating 81,299 - ES Partnership Operating 302,878 - ES HQ Admin Operating 40,529 - ES Engineering Operating 214,010 - ES Protection Operating 261,246 - IT Other Operating 65,565 - TOTAL REGIONAL 64,767,890 50,693,358 SUB-REGIONAL Royal Theatre Capital 876, ,588 S.P.W.W.S. Sewer Debt 3,641,178 3,346,466 Sooke Pool Capital - 597,701 Saanich Peninsula Ice Arena Facility Capital 1,182, ,375 Sooke and Electoral Area Recreation & Facilities Capital 1,104, ,342 Trunk Sewers and Sewage Disposal Facilities Capital 6,271,435 7,752,144 Northwest Trunk Sewer Capital 1,183 1,165 Northeast Trunk Sewer Capital 27,206 26,791 Central Saanich Treatment Plant Capital 743, ,089 Sidney Treatment Plant Capital 677, ,100 Saanich Peninsula Water Supply Capital 7,129,184 7,090,414 McPherson Theatre Capital 982, ,277 Panorama Rec Legacy Operating 5,319 - Seaparc Legacy Operating 2,501 - North West Trunk Sewer Operating 874,533 - North East Trunk Sewer Operating 1,069,532 - North East Trunk #2 Operating 181,796 - East Coast Interceptor Operating 114,606 - S.P.W.W.S. Sewer Operating 636,635 - Arts and Culture Grants Operating 162,079 - Sooke & EA Rec Facilities Operating

64 CAPITAL REGIONAL DISTRICT Schedule E RESERVE FUNDS For the year ended December 31, Panorama Recreation Operating 28,275 - JDF Community Planning Operating 38,575 - Stormwater Quality Sooke Operating 24,485 - Stormwater Quality Core Operating 97,863 - Stormwater Quality Sannich Pen Operating 1,585 - Saanich Peninsula Source Control Operating 47,912 - LWMP Onsite Operating 73,475 - LWMP Peninsula Operating 25,310 - LWMP Core & WS Operating 811,470 - TOTAL SUB-REGIONAL 26,833,542 23,370,451 LOCAL Shirley Fire Capital 29,882 27,498 Southern Gulf Islands Emergency Capital 180, ,256 Sooke Community Park Capital 366, ,105 Langford Community Park Capital - 24,951 Pender Island Park Land Capital 33,257 32,750 Salt Spring Island Park Land Acquisition 220,789 22,787 Salt Spring Island Parks & Recreation Capital 254, ,847 Southern Gulf Islands Small Craft Harbour Capital 1,169,985 1,535,905 Galiano Island Parks & Recreation Capital 42,174 51,152 Saturna Island Park Land 2,939 2,894 Mayne Island Park Land 103, ,372 North Pender Island Fire Capital 190, ,861 Pender Island Parks & Recreation Capital 110,473 71,447 Saturna Island Parks & Recreation Capital 56,448 48,602 Willis Point Fire & Recreation Capital 15,532 7,910 Port Renfrew Solid Waste Capital 33,807 10,091 Magic Lake Sewerage System Capital 61,241 83,829 Maliview Estates Sewer Capital 21,700 12,742 Ganges Sewer LSA Capital 347, ,668 Cedars of Tuam Water Capital 22,427 26,917 Port Renfrew Sewer System Capital 43,791 6,897 Magic Lake Estates Water System Capital 513, ,809 Port Renfrew Sewer & Water System Capital 187, ,884 Lyall Harbour/Boot Cove Water Service Area Capital 98, ,876 Surfside Park Estates Water Capital 45,368 21,513 Skana Water Service Capital 65,942 56,453 Sticks Allison Water Capital 18,228 11,120 Wilderness Mountain Water Capital 96, ,386 Cedar Lane Water Capital 87,406 88,066 Beddis Water Capital 36,825 72,524 Fulford Water Capital 79,433 69,828 Salt Spring Island Park Service Area Capital 27,164 26,749 Salt Spring Island Park Capital 286, ,061 Salt Spring Island Pool Facility Capital 295, ,835 Salt Spring Island Emergancy Capital 52,517 49,994 East Sooke Fire Capital Salt Spring Island Harbours Capital 213, ,382 Family Court Building Capital 169, ,304 Galiano Community Use Building Capital 25,415 6,592 SSI Library Building Capital 17,680 5,669 North Galiano Fire Capital 23,914 23,549 Salt Spring Island Transit Capital 712, ,205 Salt Spring Island Septage Capital 137, ,245 46

65 CAPITAL REGIONAL DISTRICT Schedule E RESERVE FUNDS For the year ended December 31, Highland/Fernwood Water SSI Capital 99,037 96,710 Port Renfrew Fire Capital 42,937 26,240 Animal Care Legacy Operating 93 - Highland/Fernwood Water Operating 2,516 - Beddis Water Operating 9,316 - Fulford Water Operating 5,032 - Cedar Lane Water Operating 1,117 - SSI Septage Composting Operating 29,032 - Ganges Sewer Operating 21,640 - Maliview Sewer Operating 17,996 - Magic Lake Estates Water Operating 15,106 - Lyall Harbour Boot Cove Operating 1,511 - Skana Water Operating 3,928 - Sticks Allison Water Operating 2,014 - Surfside Park Water Operating 1,153 - Magic Lake Sewer Operating 5,035 - Durrance Road Fire Operating 1,550 - SGI Emergency Program Operating 60,348 - SSI Emergency Program Operating 5,968 - Nuisance & Unsightly Premises Operating 25,952 - Electoral Area Fire Services Operating 74,479 - Electoral Area Soil Deposits & Removal Operating 59,053 - Noise Control Operating 2,337 - Animal Care Services Operating 3,021 - SSI Transit Operating 299,603 - Electoral Area Elections Operating 64,408 - Stormwater Quality SSI Operating 18,419 - Stormwater Quality SGI Operating 3,686 - TOTAL LOCAL 7,375,226 6,510,385 CRHC 8,840,472 8,266,847 TOTAL RESERVES $ 107,817,130 $ 88,841,041 47

66 Capital Regional District SCHEDULE OF GUARANTEE & INDEMNITY AGREEMENTS AS AT DECEMBER 31, 2016 NIL The Capital Regional District has not given any guarantees or indemnities under the Guarantees and Indemnities Regulation. 48

67 Capital Regional District SCHEDULE OF GOODS & SERVICES AS AT DECEMBER 31,

68 SCHEDULE OF PAYMENTS TO SUPPLIERS FOR GOODS AND SERVICES (including Grants) For the year ended December 31, 2016 Payments to Canadian Suppliers ($Cdn) Vendor Total B.C. Ltd 475,791 4-M Bobcat & Trucking Limited 42,706 Absolute Energy Inc. 43,935 Acklands 68,016 Acme Supplies Limited 181,640 Acumen Communications Group In 49,499 AECOM Canada Limited 115,860 AES Engineering Ltd. 48,363 Alan Dolan & Associates 33,356 Aleya Samji Studio Ltd. 25,735 Alpine Transmission & Auto Rep 129,399 Amazon 47,897 Andrew Sheret Limited 477,774 Aon Reed Stenhouse 667,554 Apex Steel & Gas Limited 129,685 Apple Online Store 64,663 Aqua Irrigation Systems Inc. 35,189 Aquatic Weed Harvestor Co 297,986 Aral Construction (2014) Ltd. 1,523,644 Arctic Painting and Decorating 115,474 Armtec Limited 30,875 Associated Engineering (BC) Ltd. 119,126 Aura Cabinet Works Limited 166,498 Aurora Innovations 62,863 Axys Analytical Services Limited 117,426 Basic Rock Products Limited 45,412 BC Housing Management Commission 1,126,626 BC Hydro 3,212,355 BC Transit 322,724 Beacon Community Services 280,205 Bee-Clean Building Maintenance 27,169 Ben Symons 35,053 Benini Consulting Ltd. 25,200 Bennett Jones LLP 253,468 Benton & Overbury (Victoria) 73,593 Bernhardt Contracting Ltd. 81,461 Best Buy 29,171 Black Press Ltd 121,217 Blue It Group 72,428 50

69 Vendor Total Bow Mel Chrysler Ltd. 80,468 Brenntag Canada Incorporated 209,012 Brigitte Prochaska 65,298 British Columbia Ferry Service 78,502 Brunnell Construction Ltd. 238,855 Bull, Housser and Tupper LLP 410,971 Bullet Security Cameras Inc. 158,649 BullfrogControl.com Inc 73,898 Canadian Linen & Uniform 43,407 Canadian Springs 51,585 Canadian Tire 32,777 Canadian Water Network 50,000 Canon Business Solutions Canada 152,950 Canpro Construction Ltd. 184,351 Cansel Survey Equipment 37,507 Cantex Okanagan Construction Limited 2,355,995 Canwest Tanks & Ecological 67,142 Capital City Paving Limited 603,655 Cascade Raider Holdings Limited 44,282 CBRE Limited 75,048 CDN Recreation Excellence SSI 631,849 Ceangal Professional Consulting 214,445 Centaur Products Incorporated 53,267 CH2M Hill Canada Ltd. 61,905 Charter 109,660 Chase Office Interiors (2007) 36,922 Chevron Canada Ltd. 181,251 Chew Excavating Limited 1,529,626 Cimco Refrigeration 123,329 Citizens Bank of Canada 216,944 City Engineering Inc 30,188 City Green Solutions 39,585 City of Colwood 53,745 City of Langford 597,376 City of Victoria 1,430,079 City Spaces Consulting Ltd 87,267 Citywide Concrete Company 38,010 CIVI - TV 25,502 Coast Environmental Ltd 611,512 Colliers ITF 336,636 Columbia Fire & Safety Limited 27,489 Columbia Fuels 26,201 Columbia Promotions 93,136 Commexus Inc. 31,185 Compass Electric Ltd. 156,860 Compost Education Centre 90,575 51

70 Vendor Total Convergent Information Systems 54,124 Cook Street Castle Building Center 25,146 Copcan Civil Ltd 239,141 Corix 740,541 Cowichan Valley Regional District 52,570 Crest Inc. 1,736,125 CUPE Local ,232 D B Birch Ltd. 101,119 Da Silva Garden & Landscaping 37,816 David Babbage 36,106 Davies Park & Associates 32,288 de Hoog & Kierulf Architects 1,078,454 Depend-A-Dor Repairs & Installations 51,389 District of Central Saanich 935,015 District of Metchosin 94,143 District of North Saanich 364,608 District of Saanich 1,164,434 DL Bins Ltd 830,297 Dogwood Tree Service Limited 85,365 Domcor Traffic Control International 184,057 Dominion GovLaw LLP 48,815 Downs Construction Limited 58,491 DPRA Canada Incorporated 98,733 Driftwood Properties Limited 28,107 E.H. Emery Electric Ltd. 233,860 Ecoasis Developments LLP 164,837 EcoPlan International 64,002 Elizabeth Zook 39,165 EMCO Corporation 664,463 Empire SCBA & Supplies Inc 27,420 Empress Painting 165,096 Emterra Environmental 5,699,028 Envirosystems 202,001 ERB Technical Contracting Ltd. 97,614 Esquimalt Nation 65,000 Esri Canada Limited 92,960 Evergreen Industries 164,856 Evoqua Water Technologies Ltd 144,833 Excel Contracting Limited 168,671 Finishing Touch Painting Limit 84,712 Finning (Canada) 737,486 First Capital (Millstream) Corp. 56,316 First National Financial LP 82,385 First Response Glass Limited 26,682 Fitness Town 77,959 Fletcher and Company Municipal Consulting Inc. 50,606 52

71 Vendor Total Flocor-Nanaimo 36,058 Flynn Canada Limited 191,332 Footprints Security Patrol Ltd 28,379 Fortis BC-Natural Gas 234,025 Four Star Waterworks Limited 48,768 Fred Surridge Limited 50,386 Friesens Corporation 25,397 Fuzzy Wuzzy Carpets 55,186 G & E Contracting L.P. 662,751 Galiano Island Recycling Resources 94,494 GeoAdvice Engineering Ltd 102,309 Geoffrey Bunting and Jane Dearie Bunting 977,335 Geosys Technology Solutions 92,827 Gescan - Division of Sonepar 46,187 Glenwood Garden Works 95,254 Golder Associates Ltd. 56,330 Goldstream Rock Products Ltd 50,376 Graham Kia Victoria 35,324 Grand & Toy Office Products 40,392 Granicus Inc. 45,567 Graphic Office Interiors Limited 194,296 Great West Life Assurance 172,206 Greater Victoria Labour Relations Assc. (CUPE) 840,721 Green Roots Play Equipment Inc 78,855 Griff's Lawn & Garden Care 34,662 Gulf Islands Septic Limited 62,978 Hach Sales & Services Canada Ltd. 25,014 Haste Worker's Cooperative 63,793 Heartwood Tree Service 31,033 HM Consulting Services Inc. 194,632 Home Depot 55,705 Home Hardware 48,895 Houle Electric Limited 27,683 IBI Group 62,221 Idexx Laboratories Canada 29,878 Ingrid Margareta Martin 1,179,450 Inland Kenworth 30,907 Insurance Corporation of BC 257,377 Integrity Exteriors Ltd 1,128,933 Interior Turf Equipment 63,683 Irwin Air Ltd 48,287 Island Floor Centre Ltd 306,016 Island Flow Control 27,266 Island Hose & Hydraulic (1994) 55,131 Island Key Computer Limited 696,821 Island Pest Control Ltd. 39,375 53

72 Vendor Total Island Temperature Controls Ltd 96,908 Island Window Coverings Limited 53,525 IslandEarth Landscape Services 110,987 IWA - FI Pension & Ltd Plans 233,226 J J Plumbing & Heating 67,776 Jeffrey Bobcat and Trucking 31,403 Jenner Chevrolet Buick GMC 123,567 JLB Services Limited 30,219 John McCrea 83,386 Justice Institute of BC 41,640 Kal Tire 31,829 Kaleidoscope Theatre 52,827 Kerr Wood Leidal Associates Ltd. 229,328 Kevan Brehart 46,596 King Bros Ltd 27,048 Kirk & Co. Consulting Ltd 38,417 Kone Inc 82,788 KPFF Inc 28,787 KPMG LLP 161,451 LADR Landscape Architects 31,578 Latitude Geographics Group Ltd 45,238 LB Air Systems & Controls 40,174 Lectranator Systems Inc. 32,265 Lordco Auto Parts Ltd 92,274 Madison Paving (1976) Limited 45,350 Madrone Environmental Services 34,876 Mainroad South Island 40,449 Maple Ridge Chrysler Jeep Dodge 143,630 Mark R Management Inc. 53,209 Marsh Canada Limited 411,627 Mar-Tech Underground Services 77,357 Maxxam Analytics Incorporated 464,064 Mayne Island Recycling Society 70,072 MCAP Financial Corporation 166,546 McElhanney Consulting Services 231,499 McRae's Environmental Services 379,433 Medical Services Plan of BC 665,599 Metalogix International 26,507 Metro Motors Ltd 224,055 Metsa Resource Management 26,785 MFR Resolutions Consulting 28,163 Microsoft Licensing, GP 76,401 Milner Electric & Mechanical 194,164 Milner Group Ventures Inc. 51,503 Minister of Finance 564,412 Mircom Canada 36,717 54

73 Vendor Total Moffatt & Nichol 49,966 Monk Office 154,676 Moore Wilson Architects Inc 62,253 Morrison Hershfield Limited 33,800 Municipal Finance Authority of BC 25,603,272 Municipal Pension Plan 7,265,231 Murdoch de Greeff Inc. 45,424 N & N Courier 47,400 North Salt Spring Waterworks 180,671 North West Environmental Group 125,570 Northwest Hydraulic Consultant 81,694 Ocean Edge Sustainable 232,906 On-Line Ventures Inc 242,999 Open Business Process Inc. 72,193 Optum Health Services (Canada) 43,752 Opus International Consultants 191,666 Orkin Canada 28,065 P & R Truck Centre Ltd. 26,172 Pacific Audio Works 93,118 Pacific Blue Cross 1,874,106 Pacific NorthWest Raptors Ltd 94,372 Paladin Security Group 234,872 Paradigm Software, L.L.C. 124,371 Parker Johnston Industries Ltd 162,223 Partnerships British Columbia 307,980 Peninsula Consumer Services Co-op 27,890 Peoples Trust Company 268,057 PerfectMind Inc. 61,402 Pinna Sustainability 70,621 Pinnacle Safety Management 26,145 Pinton Forrest & Madden Group 47,374 Pitney Works 193,933 Planet Clean Ltd. 36,863 Price Waterhouse Coopers 42,473 Price's Alarm Systems 61,406 Prices Lock & Safe 28,195 Prism Engineering Ltd. 31,878 Progressive Waste Solutions Canada 226,680 Propellor Communications Research 148,534 Quake Cottage LLC 26,190 R & D Janitorial Services Ltd 64,125 R. Scott Hanna 29,491 Radio Works 90,064 Ralmax Properties Ltd Inc 50,000 Ramsay Painting 99,405 Ramtech Environmental Products 64,017 55

74 Vendor Total Read Jones Christoffersen Ltd 98,804 Receiver General for Canada 321,599 Richard Bickel 47,223 Richlock Rentals Limited 59,683 Rocky Mountain Phoenix 380,120 Rogers Media Inc. 236,956 Rona Inc 27,448 Royal Bank 125,156 Royal Bay Community LP 80,243 Royal Roads University 59,649 Ryzuk Geotechnical 56,646 Saanichton Village Veterinary Hospital 51,263 SAP Canada Inc 84,005 Save-On-Septic Services Inc 89,197 School District #63 (Saanich) 29,003 Scho's Line Painting Limited 28,017 Shanahans Limited Partnership 26,565 Shaw Cablesystems 108,689 Shell Canada Products 160,016 Shred-It International ULC 27,091 SideLines Promotional Products 101,409 Simark Controls Limited 91,174 Skyline Engineering Ltd 202,424 Slegg Limited Partnership 99,625 Smith Cameron Pump Solutions 40,589 SNC Lavalin Inc. 175,244 Softchoice Corporation LP 118,665 Songhees First Nation 91,840 Sooke Region Museum 168,200 Sooke Slinger Service Ltd 149,071 Southern Railway of Vancouver 289,937 Sparker Construction 1,088,844 Spartan Controls Ltd 35,820 Stantec Consulting Limited 1,037,437 Stericycle Communications Solutions 28,267 Steve's Portable Sawmill & Tree Service 26,747 Stewart McDannold Stuart 537,687 Stewart McDannold Stuart In Trust 236,901 Stone Pacific Contracting Ltd. 431,526 Storyoga Inc 43,993 Strategic Moves 102,280 Suburban Motors 44,569 Summit Valve and Controls Inc 35,788 Suncor Energy Products 162,757 Super Save Disposal 36,715 Sustainability Solutions Group 34,142 56

75 Vendor Total Telus 729,873 Tervita Corporation 174,211 Tetra Tech 118,606 The Active Network Limited 27,115 The Appian Way Traffic Data Service 36,960 The Board of Education of School District No. 61 (Greater Victoria) 491,279 The District of Highlands 495,000 The Grounds Guys 32,270 The Salvation Army NRO Thrift 49,612 Thomson Power Systems 131,919 Thurber Engineering Ltd 359,051 ThyssenKrupp Elevator 48,304 Times - Colonist 99,408 TKT The Kitchen Technician Inc 32,131 Top Line Roofing Ltd 220,630 Tower Fence Products Limited 75,807 Town of View Royal 125,000 Township of Esquimalt 43,592 Trail Appliances Ltd. 78,739 Tran Sign (1999) Limited 45,901 Trane 147,141 Trew Slinger Service 33,279 Tritech Group Ltd (BC) 1,783,595 Tri-X Excavating 612,470 Troy David Vassos Inc 26,304 T'Sou-ke Nation 93,230 Unitech Construction Management 2,143,664 Universal Appraisal Co. Ltd 57,694 Universal Sheet Metal Ltd 182,830 University of Victoria 109,388 Urban Systems Limited 579,531 Van Isle Container Inc 49,157 Van Isle Water Services Limited 126,416 Vancouver Career College (Burnaby) Inc. 5,229,684 Vancouver Island Engineering Inc. 51,660 Verity Construction Ltd. 201,645 Versatech 33,446 VI Rentals Ltd. 43,281 Victoria Flying Club 40,408 Victoria Mobile Radio Limited 152,580 Victoria Window Cleaning 89,416 VWR International Co 30,089 Waste Management 53,170 Waterhouse Environmental Services 113,476 Wayne's Tractor Services 74,455 WAZUKU Advisory Group 63,000 57

76 Vendor Total Web express 89,337 Wesco Distribution - Canada 116,100 West Bay Mechanical Limited 111,641 West Coast Circuits Limited 31,420 West Coast Evergreen Gardening 143,277 West Coast Helicopters 25,284 West Shore Parks & Recreation 30,953 Western Grater Contracting Ltd 60,006 Western Watershed Designs Inc 958,440 Westerra Equipment 37,355 Wholesale Fire & Rescue Limited 59,338 Williams Engineering 78,883 Wisdom Enterprises 25,024 Wizardry 25,294 Woodward Evans 31,260 Workers Compensation Board 192,273 WorleyParsons Canada Services 33,329 WSP Canada Inc. 465,189 XCG Consulting Ltd 30,557 Zoho Corp 27,185 Total of aggregate payments exceeding $25, ,167,432 Consolidated total of payments of $25,000 or less 10,558,361 Consolidated total of grants exceeding $25,000 2,832,141 Consolidated total of contributions exceeding $25,000 13,570,425 Consolidated total of grants and contributions exceeding $25,000 16,402,566 Total Payments $ 146,128,358 58

77 Capital Regional District SCHEDULE OF REMUNERATION & EXPENSES DIRECTORS AS AT DECEMBER 31,

78 SCHEDULE OF REMUNERATION AND EXPENSES For the year ended December 31, 2016 Directors and Alternate Directors Name Salary Allowance Expenses Total Alto-Bond, Marianne 6,708 3,354-10,062 Atwell, Richard 14,547 7,274-21,821 Blackwell, Denise 14,681 7,340-22,021 Brice, Susan 16,458 8,229-24,686 Brownoff, Judith 14,681 7,340-22,021 Coleman, Christopher Derman, Victor 16,658 8,329-24,986 Desjardins, Barbara 27,831 13, ,797 Finall, Alice 16,324 8,162 1,013 25,499 Gramigna, Bob 1, ,100 Hamilton, Carol 14,675 7,337-22,012 Haynes, Frederick Helps, Lisa 13,031 6,515-19,546 Hicks, Mike 39,848 19,923 3,016 62,787 Howe, David 41,966 20,383 10,744 73,094 Hundleby, Lynda Isitt, Benjamin 14,947 7, ,466 Jensen, Nils 14,868 7,434-22,302 Kasper, Rick 10,447 5,223 1,044 16,714 LeBlond, Paul ,022 2,122 Loveday, Jeremy 1, ,700 Madoff, Pamela McIntyre, Wayne 35,693 17,846 5,083 58,623 Murdock, Dean Plant, Colin 16,858 8, ,493 Price, Steven 14,614 7,307-21,921 Ranns, John 16,191 8, ,070 Roessingh, Karel Sanders, Vicki Lynn ,400 Screech, David 14,614 7,307-21,921 Seaton, Lanny 14,681 7,340-22,021 Stock, Celia ,000 Tait, Maja 4,700 2, ,468 Thornton-Joe, Charlayne Wergeland, Leif ,200 Williams, Kenneth 14,681 7, ,665 Windsor, Ryan 14,681 7, ,406 Young, Geoffrey 14,947 7,473-22,421 Total Directors $ 446,394 $ 222,593 $ 25,555 $ 694,543 60

79 Committee and Commission Members Name Salary Allowance Expenses Total Baird, Gordon Day, Cynthia ,400 Dixon, Theodore ,328 Jensen, Carl Jensen, Stanley ,008 King, P. Zeb Kirby, Michelle Logan, Gordie Lougher-Goodey, Mervyn ,000 McIntyre, Roy ,705 Morrison, Timothy Ney, Tara Orr, Geoff Ramsay, Ronald Rogers, John ,000 Sifert, Winnie Sinclair, George (Sandy) ,000 Szpak, Lillian Wynans, Art ,275 Zhelka, Eric Total Committee and Commission $ 9,867 $ 4,933 $ 2,016 $ 16,816 Project Board Members Name Salary Allowance Expenses Total Bird, Jane 122,137-3, ,267 Burke, Jim 109,305-4, ,476 Cummings, Frederick 2, ,176 Eaton, Brenda 39,412-2,076 41,488 Fairbairn, Don 111,657-2, ,301 Howe, David 30,305-4,778 35,083 Ing, Ivan 5, ,143 Lapham, Robert - - 1,701 1,701 McConnell, Hew 5, ,143 Smith, Colin 38, ,188 Total Project Board $ 463,940 $ - $ 19,026 $ 482,965 61

80 Technical Oversight Panel Members Name Salary Allowance Expenses Total Arora, Susheel 15,250-3,570 18,820 Atkins, Robert 12, ,623 Bailey, Roger 15,250-3,076 18,326 Coady, Teresa 18,750-3,234 21,984 Jank, Bruce 15,250-3,468 18,718 Snyder, Jeffrey 12,250-2,207 14,457 Total Technical Oversight Panel $ 89,000 $ - $ 15,929 $ 104,929 62

81 Capital Regional District SCHEDULE OF REMUNERATION & EXPENSES EMPLOYEES AS AT DECEMBER 31,

82 SCHEDULE OF REMUNERATION AND EXPENSES For the year ended December 31, 2016 Employees Name Salary Expenses Total Acosta, Guillermo 76, ,724 Allan, Mark 75, ,246 Alsdorf, Melanie 89,975 3,140 93,115 Arnet, Jessica 79, ,057 Arsenault, Ron 79, ,209 Arthur, Derek 80, ,508 Aspinall, Anthony 91, ,505 Bagh, Signe 138, ,122 Bains, Angila 103, ,754 Bandringa, Natalie 79,302 1,525 80,827 Barber, Lyn 90,481-90,481 Barker, Lisa 85, ,548 Bell, James 111,413 1, ,615 Benjamin, Tom 88,898-88,898 Bennett, Scott 105, ,374 Bergner, Anke 84, ,583 Bewley, Graham 105, ,712 Biggs, Ryan 78,461 1,199 79,660 Binks, Rob 102, ,748 Bissenden, Leigh 93,666 1,559 95,225 Blackwell, Warren 89, ,772 Blaney, Jennifer 104, ,191 Blundell, Greg 101,910 1, ,145 Breen, Peter 105,661 1, ,135 Brewster, Lorraine 124,413 2, ,739 Bridges, Gordie 79,575 2,099 81,674 Bridgewood, David-John 82,641 1,186 83,827 Brown, Donald 116, ,020 Brown, Roger 95, ,975 Burrell, Michael 80, ,249 Cain, Cameron 92,578 1,174 93,752 Campbell, Garth 88,890 1,909 90,799 Campbell, Karla 123,257 3, ,373 Carby, Shawn 127,938 1, ,937 Carlson, Richard 85, ,097 Constabel, Annette 137,217 4, ,125 Costin, Donna G 105,509 5, ,350 Cowley, Malcolm 131, ,224 Cranwell, Mark 75,419 2,467 77,886 Culham, Christine 129,871 4, ,246 64

83 Name Salary Expenses Total Curnow, Steven 104,873 2, ,078 Dales, Jason 90,166 1,235 91,401 Dayton, Peggy 99,280 1, ,418 Deane, Victor 104, ,079 Desharnais, Danielle 94, ,089 Dillabaugh, Nadine 92, ,630 Doucette, Maria 77,002-77,002 Drew, Brad 79, ,104 Earle, Hayden 126,850 3, ,311 Edwards, Richard 101, ,500 Ensor, Peter 105,001 5, ,849 Evans, Kevin 78, ,530 Fafard, Drew 111,390 2, ,835 Fernandez, Carlos 91, ,108 Ferre, Roseline 78,920 2,570 81,490 Fowler, Laraine 81,415 3,068 84,483 Frank, Beatrice 79,606 2,811 82,417 Franklin, Phillip 80, ,703 Frederick, Joshua 136,650 2, ,689 Fritz, Ronn 90,910-90,910 Futcher, David 80, ,454 Gann, Mark A 84,984 1,896 86,880 Gardner, David 102, ,084 Genero, Amber 119,483 1, ,148 Gibson, Heidi 125,553 2, ,540 Gibson, James 95,319 3,743 99,063 Girardet, Jeffery 81, ,378 Goddard, David 109,864 2, ,123 Goodwin, John 92, ,617 Gorman, Rob 94,811-94,811 Govan, James 84,590 1,287 85,877 Grant, James 83, ,318 Green, Dale 90,730 2,563 93,293 Grelson, Chris 94,860-94,860 Grigg, Sharon Elaine 80,031 1,093 81,124 Gutierrez, Robert 117,593 3, ,213 Haas, Tim 95,826 1,061 96,887 Hall, Fraser 85, ,552 Hallatt, Susan 115,376 2, ,821 Hancock, Adam 102, ,812 Harris, David 80, ,174 Harris, Glenn 138,771 4, ,374 Harrison, Jeffrey 89, ,143 Hawthorne, Scott 86, ,797 Hayes, Philip 78,231-78,231 Hemus, Burn 76, ,053 65

84 Name Salary Expenses Total Henderson, Stephen 125,952 3, ,990 Hennigan, David 138,645 3, ,310 Herriott, Don 100,491 2, ,535 Hesjedal, Leonard 78, ,992 Hicks, John 94,721 4,590 99,310 Hliva, Adam 103,963 2, ,016 Hoglund, Colleen 88, ,929 Howard, Keith 88, ,292 Hozack, John 95,149 5, ,345 Hudson, Brett 88, ,578 Hutcheson, Larisa 197,960 6, ,787 Irg, Shayne 100, ,922 Janyk, Darryl 83, ,689 Jay, Gary 105, ,365 Jefferies, Andrew 93,494 1,129 94,623 Jobsis, Mark 83,051-83,051 Johansson, Kenneth 93,317 2,242 95,559 Johnston, Todd 82, ,431 Jones, Wayne 98,299-98,299 Klassen, June 95,414 1,671 97,085 Kline, Laura 80, ,606 Knoke, Stephen 117,897 4, ,037 Kohout, Milan 85, ,989 Kolic, Joe 84, ,162 Kozak, Craig 103, ,190 Kruger, Allan 117, ,676 Lachance, Rianna 113,479 2, ,238 Lam, James 94, ,648 Lapham, Robert 252,041 9, ,186 Lathigee, Jonathan 94,835 1,324 96,159 Lavigueur, Eric 87, ,760 Lawrence, Iain 91,723 3,642 95,365 Lee, Henry 84, ,034 Lee, Patricia 87,761 1,207 88,968 Leigh-Dorin, Val 94,007 1,101 95,108 Lemmen, Steven 95, ,100 Lesperance, Bruce 77, ,944 Leung, Brian 83,947 1,328 85,275 Littlejohn, Warren 96, ,039 Liu, Andy 126,116 2, ,473 Locke, Henry 75, ,624 Lokken, Diana 190,082 2, ,771 Lorette, Kevin 189, ,861 Loukes, Robyn 108,785 1, ,960 Lowe, Chris 90,441 2,344 92,785 Ludvigson, Edwin 79, ,922 66

85 Name Salary Expenses Total MacIntyre, Michael 107, ,391 Magi, John 120,917 1, ,097 Maloney, Jeffrey 100,717 2, ,861 Marquis, Wilfred 92, ,742 Marr, Joseph 99, ,076 Martin, Benjamin 101, ,155 Martin, Darren 124,282 7, ,767 Mason, Scott 126,113 1, ,998 Matlo, Michael 82,678 1,464 84,142 McCrank, Matthew 117,202 12, ,199 McKay, Greg 105,495 4, ,998 McLorg, Michael 78,957-78,957 McQuarrie, Christine 116, ,604 Menzies, Curtis 84, ,455 Metcalf, Donald 105,452 1, ,533 Milne, Bob 80, ,140 Moch, Christoph 114,476 2, ,719 Mooney, John 98, ,598 Moore, Allan 90,010 3,486 93,496 Moore, Nancy 109, ,213 Moreira, Daniel 115, ,749 Morley, Kristen 82,223 1,444 83,667 Mullett, David 90, ,205 Nakata, Tony 90,076 1,199 91,275 Navarrete, Mauricio 98,586 7, ,162 Neilson, Christopher 158, ,012 Nelson, Douglas 95,869-95,869 Orr, Andy 129, ,777 Osborne, Scot 82, ,344 Ovington, Dan 94,145 3,728 97,872 Pacheco, Joe 79,080-79,080 Parker, Robert 109, ,813 Parry, Hilary 78, ,333 Peach, Rick 126,869 1, ,992 Pennimpede, Joe 79,002-79,002 Perreault, Denis 96, ,164 Piotrowski, Agnes 94,167 3,082 97,250 Poncelet, Janice 103, ,319 Preece, Cameron 105, ,638 Puskas, Dale 104,528 1, ,190 Quan, Carson 90, ,405 Reems, Brent 119,610 2, ,381 Rees, Pat 96, ,486 Reilly, John 100,373 4, ,085 Reynolds, Patrick 90, ,031 Robbins, Ted 189,990 6, ,763 67

86 Name Salary Expenses Total Robertson, Marie 94, ,638 Robins, Chris 106,383 2, ,753 Robson, Dan 103, ,410 Roy, Stephen 89, ,697 Ruljancich, Shane 77,673-77,673 Ryan, Barry 79,860 2,439 82,299 Sander, Ian 125,395 1, ,463 Sandhar, Amrit 92, ,825 Santarossa, Sonia 99, ,993 Scaber, Todd 105,509 3, ,757 Scheuer, Darren 89, ,548 Scott, Sharon 96,079 1,672 97,751 Semmens, Benjamin 79,472 2,592 82,064 Shannon, Todd 102, ,040 Sharma, Rajat 158,742 2, ,645 Shaw, Ryan 84,206-84,206 Sheppard, Rodney 97,107 1,682 98,790 Sinclair, Emily 75,552 1,670 77,223 Sladen, Trevor 93, ,514 Smart, James 92, ,382 Smith, Russ 138,771 3, ,888 Smyth, Trevor 101, ,377 Sneek, Jeff 83, ,195 Solomon, Marc 95, ,512 Stewart, Carolyn 87,182 1,425 88,607 Stewart, Nathan 78,319 1,095 79,414 Stock, Mary 116, ,801 Storie, Rob 115,288 2, ,292 Stott, Brad 78, ,822 Sturdy, Luke 112, ,105 Sweetnam, Albert 224, ,121 Tates, Ron 89, ,161 Telford, Dan 146,288 3, ,846 Teschke, Kyle 81,721 3,524 85,245 Torney, Korene 84,695 4,618 89,313 Tradewell, Kelly 78,758 1,436 80,194 Ussery, Joel 117,623 2, ,795 Van Niekerk, Jan 132,193 1, ,255 Vandewater, Ronald 76,042-76,042 Venoit, Martin 107, ,967 Villa, Roy 116, ,961 Wahlstrom, Keith 116,827 3, ,650 Walker, Deborah 86,309 3,831 90,140 Walker, Robert 104,806 2, ,677 Walton, Michael 137,993 1, ,610 Watkins, Tom 105, ,158 68

87 Name Salary Expenses Total Watson, Christopher 80,461 4,817 85,278 Watson, Jody 83,435 2,297 85,732 Weaver, Mike 106, ,434 Weightman, Jeff 83,947 1,876 85,823 West, Kevin 97,665-97,665 Whipps, Steven 98, ,930 Wilkinson, David 162, ,032 Wilson, Lynn 90,417 1,072 91,490 Woodsend, Cameron 79, ,258 Wyatt, Trevor 92, ,498 Xu, Liaoxin 95,824 2,085 97,909 Zeer, Bradley 75, ,370 Total for Employees >$75,000 $ 23,815,696 $ 340,212 $ 24,155,908 Total of employees with remuneration of $75,000 or less $ 23,078,355 $ 371,923 $ 23,450,278 Total Employee Remuneration $ 46,894,051 $ 712,135 $ 47,606,186 69

88 Capital Regional District SEVERANCE AGREEMENTS AS AT DECEMBER 31, 2016 NIL There were no severance agreements paid out by the Capital Regional District in

89 Appendix 2 Capital Regional District UNAUDITED FINANCIAL STATEMENTS FISCAL YEAR ENDED DECEMBER 31, 2016

90 Capital Regional District Statement 6 Revenue Funds Statement of Financial Position (Unaudited) December 31, 2016, with comparative information for Financial Assets Cash and cash equivalents $ 74,177,487 $ 23,098,636 Term deposits - short term 64,531,567 82,818,863 Accounts receivable: AR - federal government 810, ,184 AR - provincial government 153,536 13,212 AR - local government 1,871,209 1,744,075 AR - trade/other 9,532,492 8,715,397 Due to/from own funds (120,349,932) (81,625,369) Due to/from CRHC 134,612 24,680 Other assets: Prepaid - CRD 83, ,793 Municipal Finance Authority Debt Reserve Fund: Capital Regional District 13,717,753 13,665,398 Member Municipalities 9,041,009 8,518,448 53,704,087 58,197,317 Financial Liabilities Accounts payable: AP and accrued liabilites - CRD 15,766,950 13,356,770 Due to/from CRHD 108,713 21,557 Other liabilities: Sick leave bank 1,691,922 1,641,035 Deferred revenue - CRD 6,560,316 14,697,682 Long-term debt: Municipal Finance Authority Debt Reserve Fund: Capital Regional District Cash deposits - Capital Regional District 3,636,396 3,561,133 Demand notes - Capital Regional District 10,081,357 10,104,258 Member municipalities: Cash deposits - Member Municipalities 2,760,466 2,547,116 Demand notes - Member Municipalities 6,280,543 5,971,333 Insurance reserves 2,757,548 2,582,624 49,644,211 54,483,508 Net Financial Assets 4,059,876 3,713,809 Remeasurement gains/losses 52,961 - Accumulated Surplus $ 4,112,837 $ 3,713,809 These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. Capital Regional District Statement 7 Revenue Funds Statement of Surplus/Deficit (Unaudited) For the Year Ended December 31, 2016 Stmt # General Revenue Legislative & General 8 $ 438,267 $ 196,429 Environmental Services EA Elections EA Health 8 (7,700) (18) EA UBCM 8 3,173 6,076 EA Admin 8 82,693 45,012 Southern Gulf Islands Grants in Aid 9 - (26) Salt Spring Island Grants in Aid 9 33,801 36,932 Juan de Fuca Grants in Aid 9 26,175 21,133 CRD Grants in Aid 9 1,320,091 1,284,984 Animal Care 10 - (1,759) Building Inspection ,842 13,952 Bylaw Enforcement Noise Control 10-23,709 Soil Deposits 10-3,507 Nuisances & Unsightly Premises 10-3,300 Traffic Safety 10 61,253 75,296 CREST 10 (3,683) (5,203) Souther Gulf Islands Emergency Program 11-19,610 Juan de Fuca Emergency Program 11-4,702 Salt Spring Island Emergency Program 11-6,314 EA Emergency Program Coordinator 11 12,570 29,190 Regional Emergency Support 11 17,220 16,270 Juan de Fuca Search and Rescue 11 20,146 - SSI Search and Rescue 11 4,418 4,468 Emergency Response Telephone Service 11 (73,084) (12,510) Hazardous Materials Family Court Committee Victim Assistance Program Family Court Building Salt Spring Island Street Lighting 12 1,475 4,434 Port Renfrew Street Lighting 12 2,800 1,682 Juan de Fuca House Numbering ,282 Salt Spring Island House Numbering (36) Southern Gulf Islands House Numbering ,171 North Galiano Island Fire Protection Otter Point Fire Protection These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 1

91 Capital Regional District Statement 7 Revenue Funds Statement of Surplus/Deficit (Unaudited) For the Year Ended December 31, 2016 Stmt # Port Renfrew Fire Protection Shirley Fire Protection Willis Point Fire Protection 13 8,365 27,602 East Sooke Fire Protection Durrance Rd Fire Protection Malahat Fire Protection Pender Island Fire Protection 14 17,252 5,706 South Galiano Island Fire Protection 14-14,470 Saturna Island Fire Protection Electoral Area Fire Protection 14 30,000 - Port Renfrew Disposal 15-19,072 Refuse Disposal Storm Water Quality Management Core Storm Water Quality Management Juan de Fuca 15 7,947 - Storm Water Quality Management Southern Gulf Islands Storm Water Quality Management Sooke Storm Water Quality Management Salt Spring Island Storm Water Quality Management Saanich Peninsula Economic Development Commission Salt Spring Island 16 22,056 50,775 Economic Development Commission Juan de Fuca 16 42,004 41,410 Economic Development Commission SGI 16-11,661 Electoral Area Community Planning 16 81,759 70,390 Growth Management Strategy 16 25,580 20,240 Regional Planning Geo Spatial Referencing GIS Information System Climate Change Development Regional Parks Panorama Administration 18 4,715,802 4,616,902 Panorama Ice Arena 18 (1,450,361) (1,469,836) Panorama Swimming Pool 18 (1,352,615) (1,225,671) Panorama Community Recreation Programs 18 (1,031,554) (1,040,123) Panorama Second Pool Service 18 (881,272) (881,272) Juan de Fuca Pool Juan de Fuca Parks 19 2,683 3,060 Juan de Fuca Ice Arena Juan de Fuca Curling Rink Juan de Fuca Senior Citizen Center Juan de Fuca Community Recreation These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. Capital Regional District Statement 7 Revenue Funds Statement of Surplus/Deficit (Unaudited) For the Year Ended December 31, 2016 Stmt # SEAPARC Juan de Fuca Electoral Area Community Parks Juan de Fuca Electoral Area Community Recreation 21 9,260 22,760 Salt Spring Island Community Recreation 22 7,316 14,175 Salt Spring Island Community Parks 22-4,940 Salt Spring Island Community Pool 22 17,310 - Salt Spring Island Park Land and Community Recreation Galiano Island Community Parks 23 (1,150) 130 Galiano Island Community Recreation 23 (461) (30) Mayne Island Community Recreation 23 2, Mayne Island Community Parks 23 13,885 8,685 Pender Island Community Recreation 23-6,555 North & South Pender Island Parks 23 (1,040) 3,007 Saturna Island Community Parks 23 6,481 - Saturna Island Community Recreation ,693 Vancouver Island Regional Library 24 (8,871) 383 Royal Theatre McPherson Theatre Sooke Regional Museum Greater Victoria Library Salt Spring Island Library Southern Gulf Islands Library Galiano Island Library 24-6,393 Arts Development 24 33,663 36,354 Salt Spring Island Arts Local Debt Services Gossip Island Electricity ,036 Land Bank & Housing 26 1,239, ,542 Southern Gulf Islands Small Craft Harbours Salt Spring Island Small Craft Harbours 27-15,320 Salt Spring Island Transit and Transport Sewer Revenue Funds Septage Disposal Facilities , ,582 SSI Septage Disposal Trunk Sewers and Sewage Disposal Operations and Maintenance 28 20,263 (13,470) Trunk Sewers and Sewage Disposal Debt , ,225 Ganges Sewer System Malaview Estates Sewer System These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 2

92 Capital Regional District Statement 7 Revenue Funds Statement of Surplus/Deficit (Unaudited) For the Year Ended December 31, 2016 Stmt # Magic Lake Estates Sewer System 28-30,550 Port Renfrew Sewer System 28 7,660 12,339 Water Revenue Funds Fernwood Water Supply Magic Lake Estates Water Supply 29 38,013 13,107 Port Renfrew Water Supply 29-7,123 Saanich Peninsula Water Supply Highland Water Supply Port Renfrew Snuggery Cove Water Supply 29 (15) 45 Lyall Harbour/Boot Cove Water Supply 29 - (3,522) Sticks Allison Galiano Island Water Supply 29-5,132 Highland/Fernwood Water Supply 29 (32,694) (33,810) Skana Water Supply 30-8,100 Surfside Water Supply 30-2,890 Beddis Water Supply Fulford Water Supply Cedars of Tuam Supply Cedar Lane Water Supply Wilderness Mountain Water 30 (4,366) 21,000 Regional Water Supply Regional Water Distribution $ 4,112,837 $ 3,713,809 These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 3

93 Capital Regional District Statement 8 General Revenue Fund Statement of Operations (Unaudited) General Government Services For the Year Ended December 31, 2016 Capital Regional District Statement 8 General Revenue Fund Statement of Operations (Unaudited) General Government Services For the Year Ended December 31, 2016 Legislative & General Environmental Services EA Elections EA Health EA UBCM EA Admin 2016 Budget 2016 Actual 2015 Actual Revenue Conditional transfers from government $ 6,786,342 $ - $ 20,000 $ 78,730 Sale of services: Recreation revenue 64, Other sales Other revenue from own sources: Interest earnings 266, Other revenue 1,942, Grants in lieu of taxes 321, Total Revenue 9,381, ,202 78,858 Expenses General administration (3,982,238) 483, ,502 Decrease in inventory 6,481,671 (10,434,034) 19,955 85,000 Salaries and wages 11,328,335 11,015, Recoveries (5,845,925) (1,524,548) - - Total Expenses 7,981,843 (459,044) 20,185 86,502 Net Revenue (Expenses) 1,399, , (7,644) Transfers to own funds: Transfers to capital 259, , Transfers to reserve 652, Transfers to ERF 229, , Trans from reserve Debt charges: Interest on short term debt 17, Annual Surplus (Deficit) 241, (7,682) Accumulated surplus (deficit), beginning of year 196, (18) Accumulated Surplus, end of year $ 438,267 $ - $ - $ (7,700) $ 12,930 $ 647,370 $ 7,196,711 $ 7,545,372 $ 6,489, ,591 10, , , , ,915,479 1,942,973 1,910, , , , ,660 13, ,450 9,440,256 10,143,847 8,927, ,048 (3,439,761) (3,439,737) (3,308,276) 15,089 47,260 10,511,102 (3,785,059) (3,681,915) - 698,210 24,171,437 23,042,198 21,468,633 - (199,039) (22,900,763) (7,569,512) (7,013,362) 15, ,479 8,342,015 8,247,890 7,465,080 (2,882) 46,971 1,098,241 1,895,957 1,462, , , , , , ,015-6, , , , (25,030) ,300 8,650 19,424 15,393 (2,903) 37,681 (247,490) 268,934 49,542 6,076 45, , , ,956 $ 3,173 $ 82,693 $ - $ 516,432 $ 247,498 These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 4

94 Capital Regional District Statement 9 General Revenue Fund Statement of Operations (Unaudited) Grants-In-Aid For the Year Ended December 31, 2016 Capital Regional District Statement 9 General Revenue Fund Statement of Operations (Unaudited) Grants-In-Aid For the Year Ended December 31, 2016 Southern Gulf Islands Grants in Aid Salt Spring Island Grants in Aid Juan de Fuca Grants in Aid CRD Grants in Aid 2016 Budget 2016 Actual 2015 Actual Revenue Conditional transfers from government $ 77,040 $ 12,970 $ 29,700 Sale of services: Other revenue from own sources: Interest earnings Grants in lieu of taxes Total Revenue 77,932 13,461 30,060 Expenses General administration 1,434 1,592 1,093 Grants in aid 76,276 15,000 13,925 Decrease in inventory ,000 Total Expenses 77,710 16,592 25,018 Net Revenue (Expenses) 222 (3,131) 5,042 Debt charges: Interest on short term debt Annual Surplus (Deficit) 26 (3,131) 5,042 Accumulated surplus (deficit), beginning of year (26) 36,932 21,133 Accumulated Surplus (Deficit), end of year $ - $ 33,801 $ 26,175 $ - $ 109,710 $ 119,710 $ 416,980 20, ,031 18,546 17,437 18,316 18,319 17,939 37, , , ,465-4,110 4,119 4,020 2,500 1,466, , , ,000-2,500 1,470, , ,509 35,107 (1,342,745) 37, , ,107 (1,343,015) 37, ,533 1,284,984 1,343,015 1,343,023 1,013,490 $ 1,320,091 $ - $ 1,380,067 $ 1,343,023 These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 5

95 Capital Regional District Statement 10 General Revenue Fund Statement of Operations (Unaudited) Protective Services - General A For the Year Ended December 31, 2016 Capital Regional District Statement 10 General Revenue Fund Statement of Operations (Unaudited) Protective Services - General A For the Year Ended December 31, 2016 Animal Care Building Inspection Bylaw Enforcement Noise Control Soil Deposits Nuisances & Unsightly Premises Traffic Safety CREST 2016 Budget 2016 Actual 2015 Actual Revenue Conditional transfers from government $ 387,480 $ 390,570 $ - $ 28,030 Sale of services: Recreation revenue 54,929 31, Other sales 428, ,216 - Other revenue from own sources: Interest earnings 201 1, Other revenue 273, , Grants in lieu of taxes 12,545 1, Total Revenue 1,157,240 1,264,463 22,300 28,653 Expenses General administration 40,227 44,411 10, Decrease in inventory 410, ,161 (331,846) 51,472 Salaries and wages 702, , ,168 - Recoveries - (10,900) - - Total Expenses 1,153,376 1,082,379 (1,770) 52,362 Net Revenue (Expenses) 3, ,084 24,070 (23,709) Transfers to own funds: Transfers to capital - 20, Transfers to reserve - 23, Transfers to ERF 1,000 47,050 24,070 - Transfers from own funds: Debt charges: Interest on short term debt 1, Annual Surplus (Deficit) 1,759 90,890 - (23,709) Accumulated surplus (deficit), beginning of year (1,759) 13,952-23,709 Accumulated Surplus (Deficit), end of year $ - $ 104,842 $ - $ - $ 8,160 $ 44,820 $ 68,020 $ 1,681,920 $ 2,609,000 $ 2,609,000 $ 2,655, ,340 86,612 90, , , , ,807 1,490 5,960 2, ,900 1,113, , ,450 71,331 89,630 89,621 45,655 8,268 45,193 72,287 1,756,058 4,163,280 4,354,462 4,175, ,951 6, , , ,250 10,935 47,435 83,379 1,744,669 2,407,905 2,264,882 2,217, ,808,220 1,822,347 1,810, (106,320) (10,900) (31,940) 11,775 48,385 86,330 1,750,669 4,217,545 4,183,506 4,102,530 (3,507) (3,192) (14,043) 5,389 (54,265) 170,956 72, , ,300 23,300 23, ,690 72,120 5, ,869 2,550 5,926 6,626 (3,507) (3,300) (14,043) 1,520 (112,805) 49,610 36,998 3,507 3,300 75,296 (5,203) 112, ,802 75,804 $ - $ - $ 61,253 $ (3,683) $ - $ 162,412 $ 112,802 These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 6

96 Capital Regional District Statement 11 General Revenue Fund Statement of Operations (Unaudited) Protective Services - General B For the Year Ended December 31, 2016 Capital Regional District Statement 11 General Revenue Fund Statement of Operations (Unaudited) Protective Services - General B For the Year Ended December 31, 2016 Souther Gulf Islands Emergency Program Juan de Fuca Emergency Program Salt Spring Island Emergency Program EA Emergency Program Coordinator Regional Emergency Support Juan de Fuca Search and Rescue SSI Search and Rescue Emergency Response Telephone Service 2016 Budget 2016 Actual 2015 Actual Revenue Conditional transfers from government $ 206,020 $ 72,310 $ 91,240 $ 109,650 Sale of services: Recreation revenue Other sales Other revenue from own sources: Interest earnings Other revenue Grants in lieu of taxes 2, Total Revenue 208,890 73,195 91, ,806 Expenses General administration 3,454 1,548 1,673 19,457 Decrease in inventory 156,749 48,506 91,016 60,069 Salaries and wages 2,981 4,781 3, ,936 Recoveries (358,373) Total Expenses 163,184 54,835 95, ,089 Net Revenue (Expenses) 45,706 18,360 (4,076) (16,283) Transfers to own funds: Transfers to capital Transfers to reserve 64,974 11,880 1,991 - Transfers to ERF - 11, Transfers from own funds: Debt charges: Interest on short term debt Annual Surplus (Deficit) (19,610) (4,702) (6,314) (16,620) Accumulated surplus (deficit), beginning of year 19,610 4,702 6,314 29,190 Accumulated Surplus (Deficit), end of year $ - $ - $ - $ 12,570 $ 112,580 $ 82,000 $ 14,500 $ (179,460) $ 508,640 $ 508,840 $ 290, ,818-4,818 58, , , , , ,077 2,250 3,550 7,143 13,474 33,051-1,413,671 1,522,000 1,461,830 1,501,627 7, (25,521) (15,390) (15,406) 30, , ,363 14,598 1,382,702 2,216,420 2,130,749 2,008,962 4,661 1,540 1,004 42,287 73,470 75,624 71,998 49,321 84,274 13,644 2,432,510 3,077,080 2,936,089 2,907,486 78, , , , , (1,299,704) (1,779,440) (1,658,077) (1,815,919) 132,409 85,814 14,648 1,425,261 2,208,790 2,099,028 1,878,017 1,074 29,549 (50) (42,559) 7,630 31, , ,000-2, ,540 78,845 52,293-9,110-15,738 17,070 35,869 70, ,277 2,060 3,781 3, ,146 (50) (60,574) (68,040) (86,774) 2,290 16,270-4,468 (12,510) 68,040 68,044 65,753 $ 17,220 $ 20,146 $ 4,418 $ (73,084) $ - $ (18,730) $ 68,044 These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 7

97 Capital Regional District Statement 12 General Revenue Fund Statement of Operations (Unaudited) Protective Services - General C For the Year Ended December 31, 2016 Capital Regional District Statement 12 General Revenue Fund Statement of Operations (Unaudited) Protective Services - General C For the Year Ended December 31, 2016 Hazardous Materials Family Court Committee Victim Assistance Program Family Court Building Salt Spring Island Street Lighting Port Renfrew Street Lighting Juan de Fuca House Numbering Salt Spring Island House Numbering Southern Gulf Islands House Numbering 2016 Budget 2016 Actual 2015 Actual Revenue Conditional transfers from government $ 295,460 $ 15,000 $ 248,478 $ (36,763) $ 14,480 Sale of services: Other sales Other revenue from own sources: Interest earnings Other revenue ,808 - Grants in lieu of taxes 18,825 1,000 14,892 (5,583) 5,045 Total Revenue 314,626 16, , ,735 19,578 Expenses General administration 3, ,850 5,214 1,044 Decrease in inventory 271,830 15, , ,266 21,485 Salaries and wages 10, Total Expenses 285,844 16, , ,480 22,529 Net Revenue (Expenses) 28, ,255 (2,951) Transfers to own funds: Transfers to reserve ,255 - Transfers to ERF 28, Debt charges: Interest on short term debt Annual Surplus (Deficit) (2,959) Accumulated surplus (deficit), beginning of year ,434 Accumulated Surplus (Deficit), end of year $ - $ 32 $ 358 $ - $ 1,475 $ 3,535 $ 7,890 $ 12,890 $ 11,430 $ 572,400 $ 572,400 $ 562,984 3, ,535 3,574 3, ,373 1, , , , ,329 34,334 30,051 7,688 7,958 12,895 11, , , , , ,184 17,174 15,700 6,180 16,115 11,832 11, , , , ,420 10,084 13,461 6,570 17,151 12,632 12, , , ,831 1,118 (9,193) 263 (1,026) 60,232 93,474 89, ,967 76,255 70, ,770 28,198 7, , ,118 (9,251) 209 (1,038) (16,685) (11,695) 10,147 1,682 9,282 (36) 1,171 16,685 16,697 6,550 $ 2,800 $ 31 $ 173 $ 133 $ - $ 5,002 $ 16,697 These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 8

98 Capital Regional District Statement 13 General Revenue Fund Statement of Operations (Unaudited) Protective Services - Fire A For the Year Ended December 31, 2016 Capital Regional District Statement 13 General Revenue Fund Statement of Operations (Unaudited) Protective Services - Fire A For the Year Ended December 31, 2016 N. Galiano Island Fire Protection Otter Point Fire Protection Port Renfrew Fire Protection Shirley Fire Protection Willis Point Fire Protection East Sooke Fire Protection 2016 Budget 2016 Actual 2015 Actual Revenue Conditional transfers from government $ 212,680 $ 375,420 $ 73,960 $ 140,760 Sale of services: Recreation revenue Other sales ,400 - Other revenue from own sources: Interest earnings Other revenue 1,350 2, Grants in lieu of taxes ,291 1,976 Total Revenue 214, , , ,097 Expenses General administration 3,204 3,961 3,701 2,730 Decrease in inventory 49, ,771 49,431 57,666 Salaries and wages 36,509 4,459 21,619 5,240 MFA reserve Total Expenses 89, ,191 74,765 65,636 Net Revenue (Expenses) 125, ,556 50,272 77,461 Transfers to own funds: Transfers to capital - 5, Transfers to reserve - 50,000 16,290 24,520 Transfers to ERF 76,027 87,876 30,281 52,611 Transfers from own funds: Trans from revenue Debt charges: Interest on short term debt 602 1, Interest on long term debt 20,405-1,652 - Principal 28,466-1,998 - Annual Surplus (Deficit) Accumulated surplus (deficit), beginning of year Accumulated Surplus, end of year $ - $ - $ - $ - $ 117,210 $ 442,660 $ 1,362,690 $ 1,362,690 $ 1,262,200-40,724 43,900 40,724 41, ,400 48,400 40, ,056 1,750 2,851 2,963 15,101 21,469 32,870 40, , ,730 4,729 5, , ,909 1,494,340 1,500,298 1,453,721 3,473 3,832 20,270 20,901 19,850 91, , , , ,993 8,237 6,046 77,010 82,110 75,155-2, , , , , , ,626 29, , , , ,095 3,103 11,696 62,950 20, ,381 7,500-98,310 98,310 79,608 43, , , , ,419 (6,070) - (6,070) (6,070) (5,950) 166 1,864 2,450 4,049 3,329-54,000 76,061 76,057 76,057-89, , , ,358 (19,237) - (27,600) (19,237) (30,107) 27,602-27,600 27,602 57,709 $ 8,365 $ - $ - $ 8,365 $ 27,602 These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 9

99 Capital Regional District Statement 14 General Revenue Fund Statement of Operations (Unaudited) Protective Services - Fire B For the Year Ended December 31, 2016 Capital Regional District Statement 14 General Revenue Fund Statement of Operations (Unaudited) Protective Services - Fire B For the Year Ended December 31, 2016 Durrance Rd Fire Protection Malahat Fire Protection Pender Island Fire Protection South Galiano Island Fire Protection Saturna Island Fire Protection Electoral Area Fire Protection 2016 Budget 2016 Actual 2015 Actual Revenue Conditional transfers from government $ 2,480 $ 53,900 $ 878,411 $ 242,320 Sale of services: Other revenue from own sources: Interest earnings , Other revenue ,100 6,576 Grants in lieu of taxes - - 7, Total Revenue 2,480 53, , ,505 Expenses General administration 320 1,334 9,804 3,887 Decrease in inventory 2,203 52, ,636 87,117 Salaries and wages ,596 MFA reserve Total Expenses 2,523 53, , ,600 Net Revenue (Expenses) (43) (5) 197,917 75,905 Transfers to own funds: Transfers to capital ,898 Transfers to reserve ,830 - Transfers to ERF ,530 87,784 Transfers from own funds: Trans from reserve Debt charges: Interest on short term debt - 4 1, Interest on long term debt - - 8,886 - Principal ,005 - Annual Surplus (Deficit) (43) (9) 11,546 (14,470) Accumulated surplus (deficit), beginning of year ,706 14,470 Accumulated Surplus (Deficit), end of year $ - $ 3 $ 17,252 $ - $ 145,300 $ 141,320 $ 1,463,731 $ 1,463,731 $ 1,427, ,103 1,673-6,017 30,650 35,693 3,452 7,419-15,180 15,181 15, , ,559 1,509,961 1,531,708 1,447,455 2,777 1,680 19,800 19,802 19, , ,415 1,214,800 1,124,946 1,146, ,370 82,596 70, , ,095 1,302,260 1,227,475 1,237,242 (5) 30, , , , ,900 1, ,530 85,830 40, , , , (33,300) ,770 2,281 3, ,886 8,886 17, ,005 27,005 27,005 (5) 30,000 (20,290) 27,019 7, ,290 20,294 12,907 $ 58 $ 30,000 $ - $ 47,313 $ 20,294 These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 10

100 Capital Regional District Statement 15 General Revenue Fund Statement of Operations (Unaudited) Environmental Health For the Year Ended December 31, 2016 Capital Regional District Statement 15 General Revenue Fund Statement of Operations (Unaudited) Environmental Health For the Year Ended December 31, 2016 Port Renfrew Disposal Refuse Disposal Storm Water Quality Management Core Storm Water Quality Management Juan de Fuca Storm Water Quality Management Southern Gulf Islands Storm Water Quality Management Sooke Storm Water Quality Management Salt Spring Island Storm Water Quality Management Saanich Peninsula 2016 Budget 2016 Actual 2015 Actual Revenue Conditional transfers from government $ 31,200 $ - $ 572,399 $ 31,390 $ 41,000 Sale of services: Refuse revenue 4,815 18,676, Recreation revenue - 26, Other revenue from own sources: Interest earnings , Other revenue 32,669 5,940,034 31, Grants in lieu of taxes , Total Revenue 69,507 24,748, ,270 31,507 41,437 Expenses General administration 2, ,181 6, Decrease in inventory 76,242 16,952, ,258 22,538 40,344 Salaries and wages - 2,200, MFA reserve - 2, Recoveries (15,000) (4,326,427) Total Expenses 64,000 15,526, ,688 23,478 41,334 Net Revenue (Expenses) 5,507 9,222,078 1,582 8, Transfers to own funds: Transfers to revenue - 320, Transfers to capital - 2,329, Transfers to reserve 23,559 5,651, Transfers to ERF 1, , Transfers from own funds: Trans from reserve - (25,351) Debt charges: Interest on short term debt , Interest on long term debt - 307, Principal - 334, Annual Surplus (Deficit) (19,072) 48-7,947 - Accumulated surplus (deficit), beginning of year 19, Accumulated Surplus (Deficit), end of year $ - $ 48 $ - $ 7,947 $ - $ 38,943 $ 20,650 $ 107,795 $ 843,377 $ 843,377 $ 815, ,926,050 18,681,744 16,381, ,000 26,250 26, , ,882 27, ,428,438 6,004,288 5,179, ,096 65,856 65,855 63,624 39,121 20, ,992 22,316,001 25,728,396 22,493,731 1, , , , ,660 38,042 20, ,212 20,302,153 17,917,542 15,279, (17) 2,323,544 2,200,356 2,123, ,230 2,271 2, (4,805,062) (4,341,427) (2,522,013) 39,052 20, ,655 18,534,814 16,490,642 15,546, ,781,187 9,237,754 6,946, , , , ,500,982 2,329,723 2,002, ,966 5,675,214 3,666, , , , (448,736) (25,351) (32,213) ,120 2,856 3, , , , , , , (19,070) (11,077) 14, ,070 19,072 4,785 $ - $ - $ - $ - $ 7,995 $ 19,072 These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 11

101 Capital Regional District Statement 16 General Revenue Fund Statement of Operations (Unaudited) Planning and Development For the Year Ended December 31, 2016 Capital Regional District Statement 16 General Revenue Fund Statement of Operations (Unaudited) Planning and Development For the Year Ended December 31, 2016 Economic Development Commission Salt Spring Island Economic Development Commission Juan de Fuca Economic Development Commission SGI Electoral Area Community Planning Growth Management Strategy Regional Planning Geo Spatial Referencing GIS Information System Climate Change Development 2016 Budget 2016 Actual 2015 Actual Revenue Conditional transfers from government $ 20,000 $ - $ 231,160 $ 583,800 $ 351,390 Sale of services: Recreation revenue Other sales ,900 - Other revenue from own sources: Interest earnings ,343 1,174 Other revenue - - 9, Grants in lieu of taxes ,655 21,609 Total Revenue 20, , , ,173 Expenses General administration 4,944-1,376 18,464 8,263 Decrease in inventory 44, , , ,163 Salaries and wages , ,977 Recoveries (16,380) - Total Expenses 49, , , ,403 Net Revenue (Expenses) (28,719) 594 (11,594) 103,238 5,770 Transfers to own funds: Transfers to reserve ,770 - Transfers to ERF ,000 - Transfers from own funds: Debt charges: Interest on short term debt , Annual Surplus Deficit) (28,719) 594 (11,661) 11,369 5,340 Accumulated surplus (deficit), beginning of year 50,775 41,410 11,661 70,390 20,240 Accumulated Surplus (Deficit), end of year $ 22,056 $ 42,004 $ - $ 81,759 $ 25,580 $ 1,165,060 $ 161,029 $ 57,394 $ 299,708 $ 2,679,541 $ 2,869,541 $ 2,845,447-7, ,800 7, ,850 20,900 33,208 2, ,750 6,947 6, ,233 31,139 59,768 9,369 3,256 15, , , ,732 1,228, ,375 60, ,477 2,829,254 3,027,016 3,030,068 20,452 3,110 15,874 3,788 65,462 76,271 91, , , , ,803 1,795,379 1,954,563 1,947, , ,372-1,637,044 1,403,226 1,360,249 (123,972) - (422,299) - (652,328) (562,651) (561,779) 1,215, ,695 28, ,591 2,845,557 2,871,409 2,836,961 12,633 40,680 32, (16,303) 155, , ,770 70,770 70,770 10,000 40,191 32, , , ,046 2, ,311 5,704 6, (194,480) (23,077) 14, , , ,197 $ - $ - $ - $ - $ - $ 171,399 $ 194,476 These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 12

102 Capital Regional District Statement 17 General Revenue Fund Statement of Operations (Unaudited) Recreation and Cultural Services Regional Parks For the Year Ended December 31, 2016 Regional Parks 2016 Budget 2016 Actual 2015 Actual Revenue Conditional transfers from government $ 11,342,650 $ 11,342,650 $ 11,342,650 $ 10,748,490 Sale of services: Recreation revenue 78,164 66,500 78,164 70,450 Other sales Other revenue from own sources: Interest earnings 8,438 9,000 8,438 9,096 Other revenue 338, , , ,507 Grants in lieu of taxes 625, , , ,269 Total Revenue 12,393,611 12,326,531 12,393,611 11,705,254 Expenses General administration 254, , , ,330 Decrease in inventory 2,030,037 2,210,760 2,030,037 2,035,233 Salaries and wages 4,941,543 5,076,070 4,941,543 4,497,137 Recoveries (90,780) (90,780) (90,780) (85,120) Total Expenses 7,135,689 7,450,940 7,135,689 6,687,580 Net Revenue (Expenses) 5,257,922 4,875,591 5,257,922 5,017,674 Transfers to own funds: Transfers to capital 198, , , ,158 Transfers to reserve 5,043,089 4,757,591 5,043,089 1,694,845 Transfers to ERF ,000 Debt charges: Interest on short term debt 16,554 18,000 16,554 16,863 Interest on long term debt ,348 Principal ,824,460 Annual Surplus (Deficit) Accumulated surplus (deficit), beginning of year Accumulated Surplus (Deficit), end of year $ - $ - $ - $ - These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 13

103 Capital Regional District Statement 18 General Revenue Fund Statement of Operations (Unaudited) Recreation and Cultural Services Panorama Recreation Centre For the Year Ended December 31, 2016 Capital Regional District Statement 18 General Revenue Fund Statement of Operations (Unaudited) Recreation and Cultural Services Panorama Recreation Centre For the Year Ended December 31, 2016 Panorama Panorama Ice Administration Arena Panorama Swimming Pool Panorama Community Recreation Programs Panorama Second Pool Service 2016 Budget 2016 Actual 2015 Actual Revenue Conditional transfers from government $ 4,528,310 $ - $ - $ 5,855 $ - Sale of services: Recreation revenue 373, , ,276 1,502,173 - Other sales 11,635 2,323 1,611 30,765 - Other revenue from own sources: Interest earnings 9,465 20, ,205 Other revenue 39, , , ,667 - Grants in lieu of taxes 187, Total Revenue 5,149, ,024 1,003,137 1,741,460 3,205 Expenses General administration (326,565) 179, , ,429 - Decrease in inventory 1,260,611 1,082,389 1,116,192 1,488,013 - Salaries and wages 2,361, , , ,352 - MFA reserve ,205 Recoveries (2,868,327) Total Expenses 427,086 1,443,222 1,990,702 2,661,794 3,205 Net Revenue (Expenses) 4,722,880 (620,198) (987,565) (920,334) - Transfers to own funds: Transfers to capital Transfers to reserve - 773, ,050 65,220 - Transfers to ERF - 57,000 47,000 46,000 - Debt charges: Interest on short term debt 7, Interest on long term debt ,902 Principal ,370 Annual Surplus (Deficit) 4,715,802 (1,450,361) (1,352,615) (1,031,554) (881,272) Accumulated Surplus (Deficit), end of year $ 4,715,802 $ (1,450,361) $ (1,352,615) $ (1,031,554) $ (881,272) $ 4,528,310 $ 4,534,165 $ 4,445,795 2,636,940 2,742,279 2,757,378 78,240 46,334 98,720 11,140 33,154 10,439 1,146,190 1,177,368 1,023, , , ,383 8,588,312 8,720,792 8,513, , , ,971 5,496,985 4,947,205 5,010,582 4,273,600 4,232,183 4,074,003 3,140 3,205 2,862 (3,080,630) (2,868,327) (2,866,935) 6,904,835 6,526,009 6,423,483 1,683,477 2,194,783 2,090, , ,202 1,156, , , , ,001 11,005 7,078 9, , , , , , , $ - $ - $ - These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 14

104 Capital Regional District Statement 19 General Revenue Fund Statement of Operations (Unaudited) Recreation and Cultural Services Juan De Fuca Recreation Complex For the Year Ended December 31, 2016 Capital Regional District Statement 19 General Revenue Fund Statement of Operations (Unaudited) Recreation and Cultural Services Juan De Fuca Recreation Complex For the Year Ended December 31, 2016 Juan de Fuca Pool Juan de Fuca Parks Juan de Fuca Ice Arena Juan de Fuca Curling Rink Juan de Fuca Senior Citizen Center Juan de Fuca Community Recreation 2016 Budget 2016 Actual 2015 Actual Revenue Conditional transfers from government $ 3,887 $ 5,528 $ 5,532 $ 2,759 Sale of services: Other revenue from own sources: Interest earnings Grants in lieu of taxes Total Revenue 3,888 5,548 5,534 2,760 Expenses General administration Decrease in inventory 3,177 5,093 5,167 2,419 Total Expenses 3,886 5,918 5,515 2,750 Net Revenue (Expenses) 2 (370) Transfers to own funds: Transfers to revenue Debt charges: Interest on short term debt Annual Surplus (Deficit) (14) (377) (6) (2) Accumulated surplus (deficit), beginning of year 32 3, Accumulated Surplus (Deficit), end of year $ 18 $ 2,683 $ 18 $ 20 $ 1,745 $ 10,877 $ 30,328 $ 30,328 $ 32, ,746 11,050 30,471 30,526 32, ,325 3,321 5,625 1,420 4,130 24,046 21,406 23,023 1,738 4,920 27,371 24,727 28, ,130 3,100 5,799 4,034-6,070 6,070 6,070 5, (3,150) (364) (1,994) 14-3,150 3,152 5,146 $ 14 $ 35 $ - $ 2,788 $ 3,152 These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 15

105 Capital Regional District Statement 20 General Revenue Fund Statement of Operations (Unaudited) Recreation and Cultural Services Sooke Recreation Complex For the Year Ended December 31, 2016 SEAPARC 2016 Budget 2016 Actual 2015 Actual Revenue Conditional transfers from government $ 2,610,180 $ 2,608,580 $ 2,610,180 $ 2,557,290 Sale of services: Recreation revenue 672, , , ,650 Other sales 13,362 7,000 13,362 9,735 Other revenue from own sources: Interest earnings 2,796 4,500 2,796 34,087 Other revenue 350, , , ,016 Grants in lieu of taxes 7,132 7,132 7,132 7,750 Total Revenue 3,655,638 3,609,412 3,655,638 3,578,528 Expenses General administration 115, , ,787 (124,000) Grants in aid 1,272 2,000 1, Decrease in inventory 780, , ,524 1,017,469 Salaries and wages 2,133,087 2,083,650 2,133,087 1,985,398 MFA reserve Recoveries (2,520) (2,520) (2,520) (2,500) Total Expenses 3,028,150 3,082,550 3,028,150 2,877,078 Net Revenue (Expenses) 627, , , ,450 Transfers to own funds: Transfers to capital ,460 Transfers to reserve 470, , , ,110 Transfers to ERF 90,000 90,000 90,000 70,000 Debt charges: Interest on short term debt 6,687 8,640 6,687 5,323 Interest on long term debt 5,354 22,500 5,354 7,750 Principal 55,000 38,870 55,000 49,807 Capital Regional District Statement 21 General Revenue Fund Statement of Operations (Unaudited) Recreation and Cultural Services Juan De Fuca Electorial Area For the Year Ended December 31, 2016 Juan de Fuca Juan de Fuca Electoral Area Electoral Area Community Community Parks Recreation 2016 Budget 2016 Actual 2015 Actual Revenue Conditional transfers from government $ 202,520 $ 61,690 $ 231,210 $ 264,210 $ 272,800 Sale of services: Other sales ,238 Other revenue from own sources: Interest earnings Other revenue 2,409 19,189 14,100 21,598 48,026 Grants in lieu of taxes Total Revenue 205,475 81, , , ,880 Expenses General administration 5,313 1,629 6,950 6,942 5,550 Decrease in inventory 63,718 35, ,630 99, ,542 Salaries and wages 83,067 30, , , ,786 Total Expenses 152,098 68, , , ,878 Net Revenue (Expenses) 53,377 13,004 2,730 66, ,002 Transfers to own funds: Transfers to capital 33,000-2,730 33,000 41,500 Transfers to reserve 19, , ,188 Transfers to ERF - 26,477 22,290 26,477 11,394 Debt charges: Interest on short term debt Annual Surplus (Deficit) - (13,500) (22,760) (13,500) 2,369 Accumulated surplus (deficit), beginning of year - 22,760 22,760 22,760 20,391 Accumulated Surplus (Deficit), end of year $ - $ 9,260 $ - $ 9,260 $ 22,760 Accumulated Surplus (Deficit), end of year $ - $ - $ - $ - These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 16

106 Capital Regional District Statement 22 General Revenue Fund Statement of Operations (Unaudited) Recreation and Cultural Services Salt Spring Island Parks and Recreation For the Year Ended December 31, 2016 Capital Regional District Statement 22 General Revenue Fund Statement of Operations (Unaudited) Recreation and Cultural Services Salt Spring Island Parks and Recreation For the Year Ended December 31, 2016 Salt Spring Island Community Recreation Salt Spring Island Community Parks Salt Spring Island Community Pool Salt Spring Island Park Land and Community Recreation 2016 Budget 2016 Actual 2015 Actual Revenue Conditional transfers from government $ 42,490 $ 356,050 $ 803,080 $ 608,330 Sale of services: Refuse revenue Recreation revenue 81, ,341 - Other sales Other revenue from own sources: Interest earnings ,263 4,508 Other revenue - 119, ,442 Grants in lieu of taxes ,167 Total Revenue 124, ,438 1,021, ,448 Expenses General administration 21,727 71,108 9,392 42,482 Decrease in inventory 59,026 44, , ,366 Salaries and wages 50, , ,760 MFA reserve - - 1,176 - Recoveries Total Expenses 130, , , ,608 Net Revenue (Expenses) (6,859) 27, , ,840 Transfers to own funds: Transfers to reserve - 31,130 22, ,258 Transfers to ERF ,400 50,001 Debt charges: Interest on short term debt ,503 1,581 Interest on long term debt ,470 - Principal ,829 - Annual Surplus (Deficit) (6,859) (4,940) 17,310 - Accumulated surplus (deficit), beginning of year 14,175 4, Accumulated Surplus (Deficit), end of year $ 7,316 $ - $ 17,310 $ - $ 1,809,650 $ 1,809,950 $ 1,782, , , , ,050 6,595 4,007 94, , ,188 1,500 1,495 1,598 2,152,480 2,244,318 2,189, , , ,660 1,164,118 1,103,224 1,128, , , ,006 1,110 1,176 1, (107,250) 1,788,738 1,752,646 1,648, , , , , , ,124 42,400 67, ,158 4,680 4,993 (12,530) 56,470 56,470 93, , , ,829 (19,120) 5,511 (61,916) 19,120 19,115 81,031 $ - $ 24,626 $ 19,115 These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 17

107 Capital Regional District Statement 23 General Revenue Fund Statement of Operations (Unaudited) Recreation and Cultural Services Southern Gulf Islands For the Year Ended December 31, 2016 Capital Regional District Statement 23 General Revenue Fund Statement of Operations (Unaudited) Recreation and Cultural Services Southern Gulf Islands For the Year Ended December 31, 2016 Galiano Island Community Parks Galiano Island Community Recreation Mayne Island Community Recreation Mayne Island Community Parks Pender Island Community Recreation North & South Pender Island Parks Saturna Island Community Parks Saturna Island Community Recreation 2016 Budget 2016 Actual 2015 Actual Revenue Conditional transfers from government $ 52,780 $ 27,550 $ 31,850 $ 76,540 Sale of services: Recreation revenue Other sales Other revenue from own sources: Interest earnings Other revenue 1, ,514 Grants in lieu of taxes Total Revenue 54,218 27,595 31,933 92,859 Expenses General administration 1, ,050 1,553 Decrease in inventory 54,055 27,045 29,259 69,883 Salaries and wages ,054 Total Expenses 55,374 27,955 30,309 74,490 Net Revenue (Expenses) (1,156) (360) 1,624 18,369 Transfers to own funds: Transfers to capital Transfers to reserve ,981 Debt charges: Interest on short term debt Annual Surplus (Deficit) (1,280) (431) 1,621 5,200 Accumulated surplus (deficit), beginning of year 130 (30) 862 8,685 Accumulated Surplus (Deficit), end of year $ (1,150) $ (461) $ 2,483 $ 13,885 $ 105,320 $ 55,290 $ 23,070 $ 9,520 $ 381,920 $ 381,920 $ 411, ,718 2, , , ,550 16,804 61, , ,000 3,007 2, ,675 56,035 24,279 9, , , ,893 2,059 1,356 1, ,620 10,070 9,430 91,298 58,725 9,658 10, , , , ,530 3,054 3,111 93,357 60,081 10,678 11, , , ,539 15,318 (4,046) 13,601 (1,427) (4,400) 41, , , ,733-7,090-7,810 41, , (6,555) (4,047) 6,481 (1,443) (20,900) (454) (14,776) 6,555 3,007-1,693 20,900 20,902 35,678 $ - $ (1,040) $ 6,481 $ 250 $ - $ 20,448 $ 20,902 These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 18

108 Capital Regional District Statement 24 General Revenue Fund Statement of Operations (Unaudited) Recreation and Cultural Services For the Year Ended December 31, 2016 Capital Regional District Statement 24 General Revenue Fund Statement of Operations (Unaudited) Recreation and Cultural Services For the Year Ended December 31, 2016 Vancouver Island Regional Library Royal Theatre McPherson Theatre Sooke Regional Museum Greater Victoria Library Salt Spring Island Library Southern Gulf Islands Library Galiano Island Library Arts Development Salt Spring Island Arts 2016 Budget 2016 Actual 2015 Actual Revenue Conditional transfers from government $ 261,920 $ 580,000 $ 750,000 $ 170,640 $ 28,260 Sale of services: Other sales Other revenue from own sources: Interest earnings 235 2, Other revenue Grants in lieu of taxes , Total Revenue 262, , , ,097 28,392 Expenses General administration 3,602 5,148 8,140 3, Decrease in inventory 267,540 95, , ,209 27,451 Salaries and wages MFA reserve - 1, Total Expenses 271, , , ,631 28,393 Net Revenue (Expenses) (8,403) 480, ,747 (534) (1) Transfers to own funds: Transfers to capital - 94,000 79, Transfers to reserve - 183, , Transfers to ERF Transfers from own funds: Debt charges: Interest on short term debt Interest on long term debt - 63, Principal - 139, Annual Surplus (Deficit) (9,254) - - (551) (3) Accumulated surplus (deficit), beginning of year Accumulated Surplus (Deficit), end of year $ (8,871) $ - $ - $ 41 $ 30 $ 562,410 $ 150,030 $ 55,010 $ 2,427,344 $ 85,850 $ 5,071,464 $ 5,071,464 $ 4,941, , ,000-1, ,590 5,461 5,272 3, ,430 11, , , , , , , ,543 55,344 2,593,426 85,915 5,263,432 5,284,745 5,131,898 4,727 3,194 1,645 24,287 1,575 56,680 56,682 55, , ,469 13,821 2,395,733 84,050 3,904,378 3,888,112 3,754, , , , , ,140 2,303 2, , ,663 15,560 2,592,897 85,625 4,144,255 4,119,974 3,983, ,097 (120) 39, ,119,177 1,164,771 1,148, , , ,000 11,922-18, , , , ,330-1,330 1,330 1,330 (1,536) , ,080 1,869 4,493 84,355-11, , , , ,356-15, , , ,865 - (121) (6,393) (2,691) 73 (44,105) (18,940) (10,725) ,393 36, ,105 44,112 54,837 $ - $ 70 $ - $ 33,663 $ 239 $ - $ 25,172 $ 44,112 These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 19

109 Capital Regional District Statement 25 General Revenue Fund Statement of Operations (Unaudited) Fiscal Services For the Year Ended December 31, 2016 Capital Regional District Statement 26 General Revenue Fund Statement of Operations (Unaudited) Land Bank and Housing For the Year Ended December 31, 2016 Local Debt Services Gossip Island Electricity 2016 Budget 2016 Actual 2015 Actual Land Bank & Housing 2016 Budget 2016 Actual 2015 Actual Revenue Conditional transfers from government $ 14,101,495 $ 51,660 $ 13,993,606 $ 14,153,155 $ 14,797,156 Other revenue from own sources: Interest earnings 74, ,610 74,604 64,635 Total Revenue 14,175,732 52,027 14,056,216 14,227,759 14,861,791 Expenses General administration - 1,186 1,190 1,186 1,190 Decrease in inventory (2) MFA reserve 74, ,510 74,460 64,431 Total Expenses 74,235 1,505 63,840 75,740 65,710 Net Revenue (Expenses) 14,101,497 50,522 13,992,376 14,152,019 14,796,081 Debt charges: Interest on short term debt Interest on long term debt 6,495,862 20,735 6,357,047 6,516,597 6,628,390 Principal 7,605,635 35,708 7,641,342 7,641,343 8,171,609 Annual Surplus (Deficit) - (5,953) (6,040) (5,953) (3,925) Accumulated surplus (deficit), beginning of year - 6,036 6,040 6,036 9,961 Accumulated Surplus (Deficit), end of year $ - $ 83 $ - $ 83 $ 6,036 Revenue Conditional transfers from government $ 2,289,406 $ 2,190,070 $ 2,289,406 $ 1,507,446 Sale of services: Recreation revenue 28,524 31,600 28,524 32,980 Other revenue from own sources: Interest earnings 26,266 6,270 26,266 45,366 Other revenue 75,400-75,400 - Grants in lieu of taxes 134, , ,691 73,063 Total Revenue 2,554,287 2,362,628 2,554,287 1,658,855 Expenses General administration 33,585 27,515 33,585 19,320 Decrease in inventory 799,645 1,923, ,645 3,029,485 Salaries and wages 368, , , ,614 MFA reserve 2,682 1,880 2,682 95,952 Recoveries (199,530) (216,563) (199,530) - Total Expenses 1,004,902 2,116,127 1,004,902 3,336,371 Net Revenue (Expenses) 1,549, ,501 1,549,385 (1,677,516) Transfers to own funds: Transfers to revenue 41,780-41,780 - Transfers to capital 1,613-1,613 - Transfers to ERF 21,760 1,760 21,760 25,800 Debt charges: Interest on short term debt ,782 Interest on long term debt 207, , , ,543 Principal 802, , ,377 - Annual Surplus (Deficit) 474,099 (765,542) 474,099 (1,872,641) Accumulated surplus (deficit), beginning of year 765, , ,542 2,638,183 Accumulated Surplus (Deficit), end of year $ 1,239,641 $ - $ 1,239,641 $ 765,542 These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 20

110 Capital Regional District Statement 27 General Revenue Fund Statement of Operations (Unaudited) Small Craft Harbours, Transit and Transport For the Year Ended December 31, 2016 Southern Gulf Islands Small Craft Harbours Salt Spring Island Small Craft Harbours Salt Spring Island Transit and Transport 2016 Budget 2016 Actual 2015 Actual Revenue Conditional transfers from government $ 241,860 $ 30,000 $ 571,860 $ 843,720 $ 843,720 $ 839,870 Sale of services: Recreation revenue 75, ,400 75,122 75,554 Other sales , , , ,371 Other revenue from own sources: Interest earnings 1, , ,733 3,976 Other revenue 6, ,000 6,219 8,908 Grants in lieu of taxes 2, ,980 2,975 2,724 Total Revenue 326,818 30, ,903 1,127,300 1,128,056 1,131,403 Expenses General administration 4,730 1,801 89,511 99,041 96,042 90,160 Decrease in inventory 119,734 14, , , , ,193 Salaries and wages 1, ,160 1,437 3,091 Total Expenses 125,901 16, , , , ,444 Net Revenue (Expenses) 200,917 14, , , , ,959 Transfers to own funds: Transfers to reserve 200,808 29, , , , ,870 Transfers to ERF ,000-7,000 Debt charges: Interest on short term debt Annual Surplus (Deficit) - (15,320) - (15,320) (15,320) (2,717) Accumulated surplus (deficit), beginning of year - 15,320-15,320 15,320 18,037 Accumulated Surplus (Deficit), end of year $ - $ - $ - $ - $ - $ 15,320 These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 21

111 Capital Regional District Statement 28 Sewer Revenue Fund Statement of Operations (Unaudited) For the Year Ended December 31, 2016 Capital Regional District Statement 28 Sewer Revenue Fund Statement of Operations (Unaudited) For the Year Ended December 31, 2016 Septage Disposal Facilities SSI Septage Disposal Trunk Sewers and Sewage Disposal Operations and Maintenance Trunk Sewers and Sewage Disposal Debt Ganges Sewer System Malaview Estates Sewer System Magic Lake Estates Sewer System Port Renfrew Sewer System 2016 Budget 2016 Actual 2015 Actual Revenue Conditional transfers from government $ 218,293 $ 290,280 $ 11,896,246 $ 20,209,170 $ 54,131 Sale of services: Other sales 107, , ,960 Other revenue from own sources: Interest earnings 3, , ,384 1,494 Other revenue 2,000-69, Grants in lieu of taxes 14, , , Total Revenue 345, ,001 12,320,799 21,094, ,000 Expenses General administration 10,472 13, ,780 52,130 23,230 Decrease in inventory 289, ,940 10,426,240 3,187, ,849 Salaries and wages (162) - 29, MFA reserve ,348 3,526 Recoveries - - (178,470) - - Total Expenses 299, ,487 10,388,453 3,262, ,605 Net Revenue (Expenses) 45, ,514 1,932,346 17,831, ,395 Transfers to own funds: Transfers to capital ,414 12,934,236 - Transfers to reserve - 22, , ,824 Transfers to ERF , Transfers from own funds: Trans from revenue (320,000) - Debt charges: Interest on short term debt ,279 (31,702) 3,571 Interest on long term debt - 89,135-2,487,641 - Principal - 104,876-3,042,697 - Annual Surplus (Deficit) 45,024-33,733 (281,194) - Accumulated surplus (deficit), beginning of year 195,582 - (13,470) 522,225 - Accumulated Surplus (Deficit), end of year $ 240,606 $ - $ 20,263 $ 241,031 $ - $ - $ 334,920 $ 40,295 $ 33,043,332 $ 33,043,335 $ 32,892, , ,676 41,146 1,512,675 1,592,481 1,321, , , , ,750 74,048 76, ,030,924 1,030,927 1,323, , ,958 81,632 35,676,305 35,970,951 35,787,492 4,523 15,758 2, , , , , ,431 71,727 14,518,614 15,607,265 13,259, ,741 17, , ,000 35,092 22,396 - (5,000) - (586,169) (183,470) (181,246) 125, ,694 74,437 14,342,914 15,722,091 13,346,496 12,950 (11,736) 7,195 21,333,391 20,248,860 22,440, ,466,836 13,709,650 15,220,570 7,908 14,208 11, ,708 1,110,386 1,083, , , , (320,000) (320,000) (320,000) 61 4, ,256 10,185 9,096 1, ,715,956 2,578,659 2,800,776 3, ,150,820 3,150,671 3,177,423 - (30,550) (4,679) (409,164) (237,666) 224,840-30,550 12, , , ,385 $ - $ - $ 7,660 $ - $ 509,560 $ 747,225 These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 22

112 Capital Regional District Statement 29 Water Revenue Fund Statement of Operations (Unaudited) For the Year Ended December 31, 2016 Capital Regional District Statement 29 Water Revenue Fund Statement of Operations (Unaudited) For the Year Ended December 31, 2016 Fernwood Water Supply Magic Lake Estates Water Port Renfrew Supply Water Supply Saanich Peninsula Water Supply Highland Water Supply Port Renfrew Snuggery Cove Water Supply Lyall Harbour/Boot Cove Water Supply Sticks Allison Galiano Island Water Supply Highland/Fernwood Water Supply 2016 Budget 2016 Actual 2015 Actual Revenue Conditional transfers from government $ 19,227 $ 729,277 $ 62,740 $ - $ 37,114 Sale of services: Recreation revenue - 2, Other sales - 301,940 54,043 6,380,351 - Other revenue from own sources: Interest earnings 84 22, , Other revenue - 8, ,307 - Total Revenue 19,311 1,064, ,142 6,399,681 37,289 Expenses General administration 1,600 19,880 5,083 61,969 1,701 Decrease in inventory (1) 502,085 65,550 5,553,242 - Salaries and wages MFA reserve 65 1, Total Expenses 1, ,849 70,633 5,615,211 1,834 Net Revenue (Expenses) 17, ,860 46, ,470 35,455 Transfers to own funds: Transfers to capital , Transfers to reserve - 141,526 43, ,449 - Transfers to ERF ,000 - Transfers from own funds: Trans from reserve Debt charges: Interest on short term debt - (1,950) 23 10,021 - Interest on long term debt 7, , ,448 Principal 9, , ,010 Annual Surplus (Deficit) (2) 24,906 (7,123) - (3) Accumulated surplus (deficit), beginning of year 23 13,107 7, Accumulated Surplus (Deficit), end of year $ 21 $ 38,013 $ - $ - $ 44 $ 23,700 $ 108,150 $ 5,330 $ 55,000 $ 1,030,538 $ 1,040,538 $ 1,081, , ,518 39, ,055 6,462,662 7,146,573 6,697, ,690 37,757 4, ,524 14,200 17,886 24,761 23, ,147 45, ,741 7,509,090 8,245,045 7,808, ,620 2,380 14, , , , ,734 38, ,961 6,300,026 6,574,537 6,359, ,528 2, ,501 41, ,535 6,414,609 6,691,516 6,474,580 22,902 58,646 3,834 43,206 1,094,481 1,553,529 1,333, , ,844 8, , , , , , , (21,300) ,907 9,447 11,133 7,800 18,425-16, , , ,494 15,061 21,475-24, , , ,212 (60) 3,522 (5,132) 1,116 11,854 17,224 (83,760) 45 (3,522) 5,132 (33,810) (11,854) (11,855) 71,905 $ (15) $ - $ - $ (32,694) $ - $ 5,369 $ (11,855) These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 23

113 Capital Regional District Statement 30 Water Revenue Fund Statement of Operations (Unaudited) For the Year Ended December 31, 2016 Capital Regional District Statement 30 Water Revenue Fund Statement of Operations (Unaudited) For the Year Ended December 31, 2016 Skana Water Supply Surfside Beddis Water Fulford Water Water Supply Supply Supply Cedars of Tuam Supply Cedar Lane Water Supply Wilderness Mountain Water Regional Water Supply Regional Water Distribution 2016 Budget 2016 Actual 2015 Actual Revenue Conditional transfers from government $ 19,350 $ 33,150 $ 71,590 $ 74,790 $ - Sale of services: Other sales 37,607 67, , ,445 25,778 Other revenue from own sources: Interest earnings Other revenue ,144 Total Revenue 57, , , ,138 28,934 Expenses General administration 2,820 5,270 7,820 9,551 1,630 Grants in aid Decrease in inventory 40,018 73, , ,614 28,528 Salaries and wages MFA reserve Recoveries Total Expenses 42,899 78, , ,450 30,169 Net Revenue (Expenses) 14,293 22,805 73,089 88,688 (1,235) Transfers to own funds: Transfers to capital Transfers to reserve 11,315 7,078 6,550 33,325 - Transfers to ERF Transfers from own funds: Trans from reserve (2,882) Debt charges: Interest on short term debt Interest on long term debt 4,090 5,584 18,004 15, Principal 6,943 12,925 48,291 39,250 1,112 Annual Surplus (Deficit) (8,100) (2,890) Accumulated surplus (deficit), beginning of year 8,100 2, Accumulated Surplus (Deficit), end of year $ - $ - $ - $ - $ - $ 21,650 $ 45,530 $ - $ - $ 266,060 $ 266,060 $ 287,060 37,140 58,890 31,042,823 16,590,959 43,340,149 48,139,115 43,815, ,898 (11,385) 58,920 64, , , , , , ,474 59, ,717 31,132,454 16,828,564 43,850,249 48,738,378 44,858,102 3,406 4, , , , , , , ,557 4,663,062 10,434,352 31,075,410 15,626,992 13,816, ,386, ,322 13,519,696 12,729,532 12,170, ,992 27, ,140 95,207 90, (4,864,532) - (22,236,850) (4,864,532) (4,531,650) 43, ,419 12,967,714 11,003,747 23,442,294 24,537,172 22,483,362 15,711 (1,702) 18,164,740 5,824,817 20,407,955 24,201,206 22,374, ,866,522 4,259,355 6,219,632 10,125,877 8,253, ,300 58, , , , , , (261,855) (284,495) (264,737) (291,262) ,800 7,720 88,161 16,240 (31,582) 7,250 9,554 5,327, ,750 6,058,178 5,976,005 6,286,193 8,390 14,033 6,685, ,197 7,777,675 7,779,411 8,107,735 - (25,366) - - (31,990) (36,356) (69,165) - 21, ,990 31, ,155 $ - $ (4,366) $ - $ - $ - $ (4,366) $ 31,990 These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 24

114 Capital Regional District Statement 31 Capital Funds Statement of Financial Position (Unaudited) December 31, 2016, with comparative information for 2015 General Capital Water Capital Sewer Capital Financial Assets Receivables: Accounts receivable $ 13,603,263 $ 22,702,081 $ 28,078,084 $ 64,383,428 $ 44,547,990 Debt recoverable from other authorities Debentures: District of Sooke 5,649, ,649,753 6,098,730 City of Colwood 11,900, ,900,559 8,307,223 Town of Esquimalt 7,865, ,865,727 8,679,282 District of Highlands 796, , ,682 District of Langford ,383 District of North Saanich 8,147, ,147,037 8,895,883 District of Oak Bay 2,189, ,189,239 2,445,316 District of Saanich 28,909, ,909,902 23,197,268 Town of Sidney 2,927, ,927,012 3,072,593 City of Victoria 67,458, ,458,511 65,043,961 District of Central Saanich 10,622, ,622,801 11,188,732 Town of View Royal 6,897, ,897,533 7,232,118 $ 166,967,483 $ 22,702,081 $ 28,078,084 $ 217,747,648 $ 189,086,161 Capital Regional District Statement 31 Capital Funds Statement of Financial Position (Unaudited) December 31, 2016, with comparative information for 2015 General Capital Water Capital Sewer Capital Financial Liabilities Payables: Trade accounts and accrued liabilities $ 9,051 $ 5,014,603 $ 20,000 $ 5,043,654 $ 5,181,182 Contractors holdbacks 211, , , , ,482 CIAC developer advances for construction - 263, , , ,508 5,692, ,963 6,115,797 6,090,264 Debentures issued by Municipal Finance Authority 177,380,436 83,295,110 34,666, ,342, ,154,343 Non-debenture / bank loan 695,000-17,700,000 18,395,000 17,700, ,075,436 83,295,110 52,366, ,737, ,854, ,295,944 88,987,436 52,569, ,853, ,944,607 Net Financial Assets (Liabilities) (11,328,461) (66,285,355) (24,491,850) (102,105,666) (134,858,446) Non-Financial Assets Tangible capital assets: Engineering structures 103,328, ,955, ,847, ,131, ,859,055 Buildings 109,687,140 7,440, , ,283, ,632,646 Equipment 31,362,498 25,954,942 5,377,844 62,695,284 60,755,331 Vehicles 14,213,523 5,960,956 29,322 20,203,801 19,523,858 Land 120,086,137 84,037,357 39,810, ,933, ,187,922 Other assets 2,116,703 8,348,161 3,175,790 13,640,654 12,441,074 Assets WIP 13,237,525 12,440,697 39,399,085 65,077,307 78,184, ,032, ,138, ,794,937 1,304,965,320 1,273,584,279 Inventory of supplies - 933, , ,437 Accumulated Surplus Capital funds $ 382,703,561 $ 561,786,312 $ 259,303,087 $ 1,203,792,960 $ 1,139,578,270 These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 25

115 Capital Regional District Statement 32 Capital Funds Statement of Financial Activities (Unaudited) For the Year Ended December 31, 2016 General Capital Water Capital Sewer Capital Revenue Conditional transfers from government $ 2,904,146 $ 180,433 $ 140,161 $ 3,224,740 $ 4,116,851 Developer contributions - 3,624,416-3,624,416 1,406,968 Interest earnings 85, , , , ,456 Other revenue 205, , , ,661 6,073,022 Capitalization of debt 2,714,168 11,365,548 4,358,158 18,437,874 20,761,181 Net Revenue 5,909,678 15,593,434 4,966,966 26,470,078 32,854,478 Transfers to own funds: Transfers to revenue Transfers to capital - (100,000) (1,575,000) (1,675,000) - Transfers to reserve (417,950) (33,249) (172,163) (623,362) (1,862,438) Transfers to ERF (273) - - (273) - Transfers from own funds: Trans from revenue 3,146,840 10,135,876 13,709,650 26,992,366 26,655,792 Trans from capital 1,675, ,675,000 - Trans from reserve 9,689,252 2,251,350 2,805,126 14,745,728 8,592,210 Trans from ERF 2,156, ,397 4,260 2,383,017 3,195,525 Decrease in inventory - 89,860-89,860 (49,671) Disposal of assets (5,200,516) (597,677) (44,531) (5,842,724) (2,991,895) Annual Surplus 16,958,391 27,561,991 19,694,308 64,214,690 66,394,001 Accumulated surplus, beginning of year 365,745, ,224, ,608,779 1,139,578,270 1,073,184,269 Accumulated Surplus, end of year $ 382,703,561 $ 561,786,312 $ 259,303,087 $ 1,203,792,960 $ 1,139,578,270 Capital Regional District Statement 33 Capital Funds Statement of Capital Financing (Unaudited) For the Year Ended December 31, 2016 General Capital Water Capital Sewer Capital Finances acquired: Unexpended funds at beginning of year $ 10,611,033 $ 18,797,515 $ 15,139,442 $ 44,547,990 $ 35,116,926 Long-term debt incurred: Bank loan / MFA non-debenture loans 750, ,000 - Debentures: Own portion 150,000 3,500,000 1,095,000 4,745,000 12,413,000 Member municipalities' portion 18,565, ,565,600 8,523,540 Transfer from member municipalities for their portion of long-term debt 7,605, ,605,634 8,135,902 Transfer from post capitalization 205,552 5, ,552 4,616,907 Transfer from current liability to equity - Skirt & Silver Creek - 138, ,078 - Transfers from own funds: Sewer Revenue Fund ,709,650 13,709,650 15,220,571 General Revenue Fund 3,146, ,146,840 3,181,815 Water Revenue Fund - 10,225,736-10,225,736 8,203,735 Reserve Funds 11,845,612 2,473,747 2,805,125 17,124,484 11,847,412 Capital Funds 1,675, ,675, ,383 Conditional grant from government 2,904, , ,283 3,210,863 4,892,436 Contribution in aid - 3,624,417-3,624,417 - Juan de Fuca Rec Centre - Capitalization of Debt ,981 Interest earned 85, , , , ,475 Other , ,908 1,456,114 Temporary borrowings and payables at end of year 220,508 5,692, ,963 6,115,797 6,090,264 $ 57,765,738 $ 44,917,210 $ 33,560,989 $ 136,243,937 $ 120,826,461 Finances applied: Temporary borrowings and payables at beginning of year $ 345,590 $ 5,717,675 $ 27,000 $ 6,090,265 $ 7,591,906 Expenditure for fixed assets 17,227,427 16,364,203 3,713,002 37,304,632 50,105,007 Transfers to own funds: Reserve Funds 418,224 33, , ,378 1,922,116 Capital Funds - 100,000 1,575,000 1,675,000 - Transfer to member municipalities for their portion of debentures 18,565, ,565,600 8,523,540 Payment of long-term debt on behalf of member municipalities 7,605, ,605,634 8,135,902 Unexpended funds at end of year 13,603,263 22,702,081 28,078,084 64,383,428 44,547,990 $ 57,765,738 $ 44,917,210 $ 33,560,989 $ 136,243,937 $ 120,826,461 These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 26

116 Capital Regional District Statement 34 Reserve Funds General Government Capital Reserves Statement of Continuity (Unaudited) December 31, 2016 General Government Equipment Replacement Fund Feasibility Study Reserve Office Facilities & Equipment Replacement Fund Opening balance $ 5,023,884 $ 149,079 $ 6,695,417 Add Other revenue from own sources: Interest earnings 112,833 3, ,046 Other revenues 43, Transfers from own funds: Trans from revenue ,574 Trans from reserve ,480 Trans from ERF 710, Total Revenue 866,185 3, ,100 Deduct Debt charges ,429 Decrease in inventory (1) 3,210 2 Transfers to own funds: Transfers to capital 739,697-1,265,057 Transfers to reserve ,480 Total Expenses (739,696) (3,210) (1,330,968) Change in Fund Balance 126, (396,868) Capital Regional District Statement 35 Reserve Funds Fire Protection Capital Reserves Statement of Continuity (Unaudited) December 31, 2016 North Pender Island Fire Capital Reserve Willis Point Fire & Recreation Capital Reserve Shirley Fire Capital Reserve East Sooke Fire Capital Reserve Opening balance $ 173,861 $ 7,910 $ 27,498 $ 911 Add Other revenue from own sources: Interest earnings 2, Other revenues Transfers from own funds: Trans from revenue 85,830 7,500 24,520 - Trans from ERF Total Revenue 87,945 7,623 24, Deduct Transfers to own funds: Transfers to capital 71,400-22,288 - Total Expenses 71,400-22,288 - Change in Fund Balance 16,545 7,623 2, Accumulated Surplus, end of year $ 190,406 $ 15,533 $ 29,882 $ 925 Accumulated Surplus, end of year $ 5,150,373 $ 149,460 $ 6,298,549 These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 27

117 Capital Regional District Statement 35 Reserve Funds Fire Protection Capital Reserves Statement of Continuity (Unaudited) North Galiano Fire Capital Reserve Fire Protection Equipment Replacement Fund Port Renfrew Fire Capital Reserve Opening balance $ 23,549 $ 824,298 $ 26,240 Add Other revenue from own sources: Interest earnings , Other revenues - 12,381 - Transfers from own funds: Trans from revenue ,290 Trans from ERF - 611,241 - Total Revenue ,785 16,697 Deduct Transfers to own funds: Transfers to capital - 512,095 - Total Expenses - 512,095 - Change in Fund Balance ,690 16,697 Capital Regional District Statement 36 Reserve Funds Protective General Capital Reserves Statement of Continuity (Unaudited) December 31, 2016 Southern Gulf Islands Emergency Capital Reserve Salt Spring Island Emergency Capital Reserve Family Court Building Capital Reserve Protective General Equipment Replacement Fund Opening balance $ 122,256 $ 49,994 $ 351,304 $ 1,050,428 Add Other revenue from own sources: Interest earnings 1, ,253 14,089 Transfers from own funds: Trans from revenue 64,974 1,991 76,255 - Trans from ERF ,477 Total Revenue 66,827 2,762 80, ,566 Deduct Transfers to own funds: Transfers to capital 8, ,796 80,860 Total Expenses 8, ,796 80,860 Change in Fund Balance 57,862 2,523 (182,288) 59,706 Accumulated Surplus, end of year $ 180,118 $ 52,517 $ 169,016 $ 1,110,134 Accumulated Surplus, end of year $ 23,914 $ 947,988 $ 42,937 These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 28

118 Capital Regional District Statement 37 Reserve Funds Transportation Capital Reserves Statement of Continuity (Unaudited) December 31, 2016 Southern Gulf Islands Small Craft Harbour Capital Reserve Salt Spring Island Harbours Capital Reserve Salt Spring Island Transit Capital Reserve Transportation Services Equipment Replacement Fund Opening balance $ 1,535,905 $ 181,382 $ 616,205 $ 12,401 Add Other revenue from own sources: Interest earnings 21,871 2,820 5, Transfers from own funds: Trans from revenue 200,808 29, ,442 - Trans from capital ,703 - Trans from ERF ,750 Total Revenue 222,679 32, ,008 1,846 Deduct Transfers to own funds: Transfers to capital 588, ,990 - Total Expenses 588, ,990 - Change in Fund Balance (365,921) 32,319 32,319 1,846 Accumulated Surplus, end of year $ 1,169,984 $ 213,701 $ 712,223 $ 14,247 Capital Regional District Statement 38 Reserve Funds Recreational and Cultural Capital Reserves Statement of Continuity (Unaudited) December 31, 2016 Saturna Island Park Land Capital Reserve Pender Island Park Land Capital Reserve Saanich Peninsula Ice Arena Facility Capital Reserve Regional Parks Capital Reserve Opening balance $ 2,894 $ 32,750 $ 927,375 $ 2,391,924 Add Other revenue from own sources: Interest earnings ,625 54,573 Other revenues - - 1,319 - Sale of services - - (100,000) 2,130,000 Transfers from own funds: Trans from revenue - - 1,156,433 5,043,088 Trans from capital Trans from reserve Trans from ERF Total Revenue ,065,377 7,227,661 Deduct Debt charges Decrease in inventory Transfers to own funds: Transfers to capital ,700 4,375,764 Transfers to reserve Total Expenses ,700 4,376,747 Change in Fund Balance ,677 2,850,914 Accumulated Surplus, end of year $ 2,939 $ 33,258 $ 1,182,052 $ 5,242,838 These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 29

119 Capital Regional District Statement 38 Reserve Funds Recreational and Cultural Capital Reserves Statement of Continuity (Unaudited) Langford Community Park Capital Reserve Sooke Community Park Capital Reserve Salt Spring Island Park Land Acquisition Capital Reserve Saturna Island Parks & Recreation Capital Reserve Opening balance $ - $ 341,056 $ 22,787 $ 48,602 Add Other revenue from own sources: Interest earnings - 5,570 1, Other revenues ,500 - Sale of services Transfers from own funds: Trans from revenue - 19,933-7,090 Trans from capital Trans from reserve Trans from ERF Total Revenue - 25, ,002 7,846 Deduct Debt charges Decrease in inventory Transfers to own funds: Transfers to capital Transfers to reserve Total Expenses Change in Fund Balance - 25, ,002 7,846 Accumulated Surplus, end of year $ - $ 366,559 $ 220,789 $ 56,448 Capital Regional District Statement 38 Reserve Funds Recreational and Cultural Capital Reserves Statement of Continuity (Unaudited) Sooke Community Parks Capital Reserve Pender Island Parks & Recreation Capital Reserve Galiano Island Parks & Recreation Capital Reserve Royal Theatre Capital Reserve Opening balance $ 731,342 $ 71,447 $ 51,152 $ 824,588 Add Other revenue from own sources: Interest earnings 13,949 1, ,171 Other revenues Sale of services Transfers from own funds: Trans from revenue 470,445 21, ,973 Trans from capital - 20,328 5,272 - Trans from reserve 314, Trans from ERF Total Revenue 798,532 43,426 5, ,144 Deduct Debt charges Decrease in inventory Transfers to own funds: Transfers to capital 424,985 4,400 14, ,000 Transfers to reserve Total Expenses 424,985 4,400 14, ,000 Change in Fund Balance 373,547 39,026 (8,977) 52,144 Accumulated Surplus, end of year $ 1,104,889 $ 110,473 $ 42,175 $ 876,732 These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 30

120 Capital Regional District Statement 38 Reserve Funds Recreational and Cultural Capital Reserves Statement of Continuity (Unaudited) Capital Regional District Statement 38 Reserve Funds Recreational and Cultural Capital Reserves Statement of Continuity (Unaudited) Salt Spring Island Parks & Recreation Capital Reserve Mayne Island Park Land Capital Reserve Salt Spring Island Parks Capital Reserve Salt Spring Island Parks Service Area Capital Reserve Opening balance $ 332,847 $ 113,372 $ 158,061 $ 26,749 Add Other revenue from own sources: Interest earnings 4,067 1,524 2, Other revenues Sale of services Transfers from own funds: Trans from revenue 18,630 12, ,168 - Trans from capital Trans from reserve Trans from ERF Total Revenue 22,697 14, , Deduct Debt charges Decrease in inventory Transfers to own funds: Transfers to capital 101,188 24, Transfers to reserve Total Expenses 101,188 24, Change in Fund Balance (78,491) (10,235) 128, Accumulated Surplus, end of year $ 254,356 $ 103,137 $ 286,680 $ 27,164 McPherson Theatre Capital Reserve Sooke Pool Capital Reserve Salt Spring Island Pool Facility Capital Reserve Galiano Community Use Building Capital Reserve Opening balance $ 673,277 $ 597,701 $ 224,835 $ 6,592 Add Other revenue from own sources: Interest earnings 12,420 1,937 3, Other revenues Sale of services Transfers from own funds: Trans from revenue 356,745-67,670 18,717 Trans from capital Trans from reserve Trans from ERF Total Revenue 369,165 1,937 71,156 18,823 Deduct Debt charges Decrease in inventory (1) Transfers to own funds: Transfers to capital 60, , Transfers to reserve - 314, Total Expenses 60, ,638-1 Change in Fund Balance 309,165 (597,701) 71,156 18,822 Accumulated Surplus, end of year $ 982,442 $ - $ 295,991 $ 25,414 These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 31

121 Capital Regional District Statement 38 Reserve Funds Recreational and Cultural Capital Reserves Statement of Continuity (Unaudited) Cap Res Regional Parks Land S&A SSI Library Building Capital Reserve Recreation & Cultural Equipment Replacement Fund Opening balance $ - $ 5,669 $ 1,540,818 Add Other revenue from own sources: Interest earnings ,907 Other revenues - - 8,884 Sale of services 1,000, Transfers from own funds: Trans from revenue - 11,922 - Trans from capital Trans from reserve Trans from ERF ,209 Total Revenue 1,000,000 12, ,000 Deduct Debt charges Decrease in inventory Transfers to own funds: Transfers to capital ,325 Transfers to reserve Total Expenses ,325 Change in Fund Balance 1,000,000 12,011 (451,325) Accumulated Surplus, end of year $ 1,000,000 $ 17,680 $ 1,089,493 Capital Regional District Statement 39 Reserve Funds Sewer Capital Reserves Statement of Continuity (Unaudited) December 31, 2016 S.P.W.W.S. Sewer Debt Capital Reserve Sidney Treatment Plant Capital Reserve Maliview Estates Sewer Capital Reserve Magic Lake Estates Sewer System Capital Reserve Opening balance $ 3,346,466 $ 667,100 $ 12,742 $ 83,829 Add Conditional transfers from government 163, Other revenue from own sources: Interest earnings 60,803 10, Transfers from own funds: Trans from revenue 530,886-7,908 14,208 Trans from capital Trans from reserve ,242 Trans from ERF Total Revenue 755,545 10,342 8,958 92,413 Deduct Debt charges (2,166) Decrease in inventory Transfers to own funds: Transfers to capital 463, ,000 Total Expenses 460, ,001 Change in Fund Balance 294,711 10,342 8,958 (22,588) Accumulated Surplus, end of year $ 3,641,177 $ 677,442 $ 21,700 $ 61,241 These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 32

122 Capital Regional District Statement 39 Reserve Funds Sewer Capital Reserves Statement of Continuity (Unaudited) Capital Regional District Statement 39 Reserve Funds Sewer Capital Reserves Statement of Continuity (Unaudited) Central Saanich Treatment Plant Capital Reserve Port Renfrew Sewer System Capital Reserve Northwest Trunk Sewer Capital Reserve Trunk Sewers & Sewage Disposal Facilities Capital Reserve Northeast Trunk Sewer Capital Reserve Ganges Sewer LSA Capital Reserve Salt Spring Island Septage Capital Reserve Sewer Equipment Replacement Fund Opening balance $ 732,089 $ 6,897 $ 1,165 $ 7,752,144 Add Conditional transfers from government Other revenue from own sources: Interest earnings 11, ,610 Transfers from own funds: Trans from revenue - 11, ,061 Trans from capital - 5, ,746 Trans from reserve - 19, Trans from ERF Total Revenue 11,350 36, ,417 Deduct Debt charges Decrease in inventory Transfers to own funds: Transfers to capital ,062,126 Total Expenses ,062,126 Change in Fund Balance 11,350 36, (1,480,709) Accumulated Surplus, end of year $ 743,439 $ 43,791 $ 1,183 $ 6,271,435 Opening balance $ 26,791 $ 297,668 $ 113,245 $ 4,020,858 Add Conditional transfers from government Other revenue from own sources: Interest earnings 415 4,628 1,761 76,330 Transfers from own funds: Trans from revenue - 209,824 22,665 - Trans from capital Trans from reserve Trans from ERF ,975 Total Revenue ,452 24, ,305 Deduct Debt charges Decrease in inventory Transfers to own funds: Transfers to capital - 165, ,783 Total Expenses - 165, ,783 Change in Fund Balance ,452 24, ,522 Accumulated Surplus, end of year $ 27,206 $ 347,120 $ 137,671 $ 4,243,380 These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 33

123 Capital Regional District Statement 40 Reserve Funds Water Capital Reserves Statement of Continuity (Unaudited) December 31, 2016 Saanich Peninsula Water Supply Capital Reserve Salt Spring Island Highland Water System Capital Reserve Magic Lake Estates Water System Capital Reserve Lyall Harbour/Boot Cove Water Service Capital Reserve Opening balance $ 7,090,414 $ - $ 613,809 $ 105,876 Add Conditional transfers from government 160, Other revenue from own sources: Interest earnings 143,070-7,619 1,447 Other revenues Transfers from own funds: Trans from revenue 674, ,526 14,844 Trans from capital - - 1,955 1,995 Trans from reserve Trans from ERF Total Revenue 978, ,100 18,286 Deduct Debt charges 24, Transfers to own funds: Transfers to revenue Transfers to capital 915, ,000 25,500 Total Expenses 939, ,000 25,500 Change in Fund Balance 38,770 - (99,900) (7,214) Accumulated Surplus, end of year $ 7,129,184 $ - $ 513,909 $ 98,662 Capital Regional District Statement 40 Reserve Funds Water Capital Reserves Statement of Continuity (Unaudited) Port Renfrew Sewer & Water Capital Reserve Cedars of Tuam Water Capital Reserve Surfside Park Estates Water Capital Reserve Skana Water Service Capital Reserve Opening balance $ 126,884 $ 26,917 $ 21,513 $ 56,453 Add Conditional transfers from government Other revenue from own sources: Interest earnings 2, Other revenues Transfers from own funds: Trans from revenue 43,609-7,078 11,315 Trans from capital ,416 7,385 Trans from reserve 14, Trans from ERF Total Revenue 60, ,855 19,488 Deduct Debt charges Transfers to own funds: Transfers to revenue - 2, Transfers to capital - 2,000 2,000 10,000 Total Expenses - 4,882 2,000 10,000 Change in Fund Balance 60,368 (4,490) 23,855 9,488 Accumulated Surplus, end of year $ 187,252 $ 22,427 $ 45,368 $ 65,941 These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 34

124 Capital Regional District Statement 40 Reserve Funds Water Capital Reserves Statement of Continuity (Unaudited) Capital Regional District Statement 40 Reserve Funds Water Capital Reserves Statement of Continuity (Unaudited) Sticks Allison Water Capital Reserve Beddis Water Capital Reserve Fulford Water Capital Reserve Wilderness Mountain Capital Reserve Cedar Lane Water Capital Reserve Water Equipment Replacement Fund Highland Fernwood Water Capital Reserve Opening balance $ 11,120 $ 72,524 $ 69,828 $ 140,386 Add Conditional transfers from government Other revenue from own sources: Interest earnings ,541 Other revenues Transfers from own funds: Trans from revenue 8,963 6,550 33,325 - Trans from capital ,500 Trans from reserve Trans from ERF Total Revenue 9,108 7,301 34,105 5,041 Deduct Debt charges Transfers to own funds: Transfers to revenue Transfers to capital 2,000 43,000 24,500 48,550 Total Expenses 2,000 43,000 24,500 48,550 Change in Fund Balance 7,108 (35,699) 9,605 (43,509) Accumulated Surplus, end of year $ 18,228 $ 36,825 $ 79,433 $ 96,877 Opening balance $ 88,066 $ 4,373,919 $ 96,710 Add Conditional transfers from government Other revenue from own sources: Interest earnings 1,340 71,095 4,326 Other revenues - 87,758 - Transfers from own funds: Trans from revenue Trans from capital Trans from reserve Trans from ERF - 646,498 - Total Revenue 1, ,351 4,326 Deduct Debt charges Transfers to own funds: Transfers to revenue Transfers to capital 2, ,150 2,000 Total Expenses 2, ,150 2,000 Change in Fund Balance (660) 518,201 2,326 Accumulated Surplus, end of year $ 87,406 $ 4,892,120 $ 99,036 These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 35

125 Capital Regional District Statement 41 Reserve Funds Environmental Health Capital Reserves Statement of Continuity (Unaudited) December 31, 2016 Solid Waste Capital Reserve Port Renfrew Solid Waste Capital Reserve Environmental Health Equipment Replacement Fund Opening balance $ 18,112,525 $ 10,091 $ 2,780,529 Add Other revenue from own sources: Interest earnings 318, ,676 Other revenues ,900 Transfers from own funds: Trans from revenue 453,686 23,559 - Trans from ERF ,884 Total Revenue 771,779 23, ,460 Deduct Debt charges (5,949) - - Transfers to own funds: Transfers to capital 484,018-90,387 Transfers to reserve 25, Capital Regional District Statement 42 Reserve Funds General Government Operating Reserves Statement of Continuity (Unaudited) December 31, 2016 Electoral Area Elections Operating Reserve Land Bank & Housing Operating Reserve Finance Operating Reserve IT Other Operating Reserve Opening balance $ - $ - $ 77,606 $ 15,340 Add Other revenue from own sources: Interest earnings 707-1, Other revenues 63,701 20,957-50,215 Transfers from own funds: Total revenue 64,408 20,957 1,203 50,225 Deduct Total expenses Change in fund balance 64,408 20,957 1,203 50,225 Accumulated surplus, end of year $ 64,408 $ 20,957 $ 78,809 $ 65,565 Total Expenses 503,420-90,387 Change in Fund Balance 268,359 23, ,073 Accumulated Surplus, end of year $ 18,380,884 $ 33,806 $ 3,074,602 These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 36

126 Capital Regional District Statement 42 Reserve Funds General Government Operating Reserves Statement of Continuity (Unaudited) Labour Negotiations Operating Reserve Real Estate Operating Reserve Safety Audits Operating Reserve ES HQ Admin Operating Reserve Opening balance $ 165,990 $ 26,903 $ 45,965 $ 40,111 Add Other revenue from own sources: Interest earnings 2, ,369 Other revenues - (15,821) (51,472) (1,951) Transfers from own funds: Total revenue 2,573 (15,404) (51,472) 418 Deduct Total expenses Change in fund balance 2,573 (15,404) (51,472) 418 Accumulated surplus, end of year $ 168,563 $ 11,499 $ (5,507) $ 40,529 Capital Regional District Statement 42 Reserve Funds General Government Operating Reserves Statement of Continuity (Unaudited) ES Protection Operating Reserve ES Engineering Operating Reserve ES Partnership Operating Reserve ES Water Quality Operating Reserve Opening balance $ 137,202 $ 233,267 $ 404,864 $ - Add Other revenue from own sources: Interest earnings 15,271 12,510 17, Other revenues 108,772 (31,767) (119,691) 80,668 Transfers from own funds: Total revenue 124,043 (19,257) (101,986) 81,299 Deduct Total expenses Change in fund balance 124,043 (19,257) (101,986) 81,299 Accumulated surplus, end of year $ 261,245 $ 214,010 $ 302,878 $ 81,299 These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 37

127 Capital Regional District Statement 42 Reserve Funds General Government Operating Reserves Statement of Continuity (Unaudited) IW ES Ops Operating Reserve Opening balance $ 267,933 Add Other revenue from own sources: Interest earnings 4,154 Other revenues 56,682 Transfers from own funds: Total revenue 60,836 Deduct Total expenses - Change in fund balance 60,836 Accumulated surplus, end of year $ 328,769 Capital Regional District Statement 43 Reserve Funds Protective General Operating Reserves Statement of Continuity (Unaudited) December 31, 2016 Animal Care Services Operating Reserve Animal Care Legacy Operating Reserve Electoral Area Soil Deposits Emergency & Removal Response 911 Operating Operating Reserve Reserve Opening balance $ 2,553 $ 12,888 $ 50,369 $ 72,455 Add Other revenue from own sources: Interest earnings ,031 5,502 Other revenues 313 (13,022) 5,653 29,225 Transfers from own funds: Total revenue 468 (12,795) 8,684 34,727 Deduct Total expenses Change in fund balance 468 (12,795) 8,684 34,727 Accumulated surplus, end of year $ 3,021 $ 93 $ 59,053 $ 107,182 These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 38

128 Capital Regional District Statement 43 Reserve Funds Protective General Operating Reserves Statement of Continuity (Unaudited) Emergency Response 911 Projects Operating Reserve HAZMAT Incident Response Operating Reserve Noise Control Operating Reserve Nuisance & Unsightly Premises Operating Reserve Opening balance $ 139,448 $ 34,218 $ 1,975 $ 22,505 Add Other revenue from own sources: Interest earnings 8, ,332 Other revenues 17,102 (2,922) 242 2,115 Transfers from own funds: Total revenue 25,573 (2,408) 362 3,447 Deduct Total expenses Change in fund balance 25,573 (2,408) 362 3,447 Accumulated surplus, end of year $ 165,021 $ 31,810 $ 2,337 $ 25,952 Capital Regional District Statement 43 Reserve Funds Protective General Operating Reserves Statement of Continuity (Unaudited) SGI Emergency Program Operating Reserve SSI Emergency Program Operating Reserve Opening balance $ 91,773 $ 5,877 Add Other revenue from own sources: Interest earnings 1, Other revenues (32,758) - Transfers from own funds: Total revenue (31,425) 91 Deduct Total expenses - - Change in fund balance (31,425) 91 Accumulated surplus, end of year $ 60,348 $ 5,968 These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 39

129 Capital Regional District Statement 44 Reserve Funds Fire Protection Operating Reserves Statement of Continuity (Unaudited) December 31, 2016 Durrance Road Fire Operating Reserve Electoral Area Fire Services Operating Reserve Opening balance $ 1,406 $ 57,027 Add Other revenue from own sources: Interest earnings 22 3,823 Other revenues ,629 Transfers from own funds: Total revenue ,452 Deduct Total expenses - - Change in fund balance ,452 Accumulated surplus, end of year $ 1,550 $ 74,479 Capital Regional District Statement 45 Reserve Funds Planning & Development Operating Reserves Statement of Continuity (Unaudited) December 31, 2016 Climate Action & Adapt Operating Reserve GIS Data Maintenance Operating Reserve JDF Community Planning Operating Reserve Regional Growth Strategy Operating Reserve Opening balance $ - $ 56,032 $ 32,591 $ - Add Other revenue from own sources: Interest earnings 440 1,709 1,980 9,520 Other revenues 7,085 (30,309) 4, ,007 Transfers from own funds: Total revenue 7,525 (28,600) 5, ,527 Deduct Transfers to own funds: Total expenses Change in fund balance 7,525 (28,600) 5, ,527 Accumulated surplus, end of year $ 7,525 $ 27,432 $ 38,574 $ 694,527 These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 40

130 Capital Regional District Statement 45 Reserve Funds Planning & Development Operating Reserves Statement of Continuity (Unaudited) Regional Planning Services Operating Reserve Opening balance $ 377,256 Add Other revenue from own sources: Interest earnings 19,290 Other revenues 1,133,861 Transfers from own funds: Total revenue 1,153,151 Deduct Transfers to own funds: Total expenses - Change in fund balance 1,153,151 Accumulated surplus, end of year $ 1,530,407 Capital Regional District Statement 46 Reserve Funds Recreational & Cultural Operating Reserves Statement of Continuity (Unaudited) December 31, 2016 Regional Parks Operating Reserve Regional Parks Legacy Operating Reserve Panorama Recreation Operating Reserve Panorama Rec Legacy Operating Reserve Opening balance $ - $ - $ - $ - Add Other revenue from own sources: Interest earnings 1, Other revenues 85,000 12,905 27,919 5,242 Transfers from own funds: Total revenue 86,009 13,066 28,275 5,319 Deduct Transfers to own funds: Total expenses Change in fund balance 86,009 13,066 28,275 5,319 Accumulated surplus, end of year $ 86,009 $ 13,066 $ 28,275 $ 5,319 These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 41

131 Capital Regional District Statement 46 Reserve Funds Recreational & Cultural Operating Reserves Statement of Continuity (Unaudited) Sooke & EA Rec Facilities Operating Reserve Seaparc Legacy Operating Reserve Arts and Culture Grants Operating Reserve Opening balance $ - $ - $ 51,307 Add Other revenue from own sources: Interest earnings ,028 Other revenues 401 2, ,744 Transfers from own funds: Total revenue 407 2, ,772 Deduct Transfers to own funds: Total expenses Change in fund balance 407 2, ,772 Accumulated surplus, end of year $ 407 $ 2,501 $ 162,079 Capital Regional District Statement 47 Reserve Funds Sewer Operating Reserves Statement of Continuity (Unaudited) December 31, 2016 East Coast Interceptor Operating Reserve LWMP Core & WS Operating Reserve LWMP Onsite Operating Reserve LWMP Peninsula Operating Reserve Opening balance $ - $ 1,151,906 $ - $ 13,909 Add Other revenue from own sources: Interest earnings 1,686 47,436 4,295 1,480 Other revenues 112,920 (387,872) 69,180 9,921 Transfers from own funds: Total revenue 114,606 (340,436) 73,475 11,401 Deduct Transfers to own funds: Total expenses Change in fund balance 114,606 (340,436) 73,475 11,401 Accumulated surplus, end of year $ 114,606 $ 811,470 $ 73,475 $ 25,310 These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 42

132 Capital Regional District Statement 47 Reserve Funds Sewer Operating Reserves Statement of Continuity (Unaudited) North East Trunk Sewer Operating Reserve North East Trunk #2 Operating Reserve North West Trunk Sewer Operating Reserve S.P.W.W.S. Sewer Operating Reserve Opening balance $ - $ - $ - $ - Add Other revenue from own sources: Interest earnings 24,742 2,674 18,023 9,248 Other revenues 1,044, , , ,387 Transfers from own funds: Total revenue 1,069, , , ,635 Deduct Transfers to own funds: Total expenses Change in fund balance 1,069, , , ,635 Accumulated surplus, end of year $ 1,069,532 $ 181,796 $ 874,533 $ 636,635 Capital Regional District Statement 47 Reserve Funds Sewer Operating Reserves Statement of Continuity (Unaudited) Magic Lake Sewer Operating Reserve SSI Septage Composting Operating Reserve Maliview Sewer Operating Reserve Ganges Sewer Operating Reserve Opening balance $ - $ 10,030 $ - $ - Add Other revenue from own sources: Interest earnings Other revenues 5,000 18,815 17,880 21,500 Transfers from own funds: Total revenue 5,035 19,002 17,996 21,639 Deduct Transfers to own funds: Total expenses Change in fund balance 5,035 19,002 17,996 21,639 Accumulated surplus, end of year $ 5,035 $ 29,032 $ 17,996 $ 21,639 These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 43

133 Capital Regional District Statement 48 Reserve Funds Water Operating Reserves Statement of Continuity (Unaudited) December 31, 2016 Beddis Water Operating Reserve Cedar Lane Water Operating Reserve Fulford Water Operating Reserve Highland/ Fernwood Water Operating Reserve Opening balance $ - $ - $ - $ - Add Other revenue from own sources: Interest earnings Other revenues 9,256 1,110 5,000 2,500 Transfers from own funds: Total revenue 9,316 1,117 5,032 2,516 Deduct Transfers to own funds: Total expenses Change in fund balance 9,316 1,117 5,032 2,516 Accumulated surplus, end of year $ 9,316 $ 1,117 $ 5,032 $ 2,516 Capital Regional District Statement 48 Reserve Funds Water Operating Reserves Statement of Continuity (Unaudited) Lyall Harbour Boot Cove Operating Reserve Magic Lake Estates Water Operating Reserve Surfside Park Water Operating Reserve Sticks Allison Water Operating Reserve Opening balance $ - $ - $ 645 $ - Add Other revenue from own sources: Interest earnings Other revenues 1,500 15, ,000 Transfers from own funds: Total revenue 1,511 15, ,014 Deduct Transfers to own funds: Total expenses Change in fund balance 1,511 15, ,014 Accumulated surplus, end of year $ 1,511 $ 15,106 $ 1,153 $ 2,014 These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 44

134 Capital Regional District Statement 48 Reserve Funds Water Operating Reserves Statement of Continuity (Unaudited) Skana Water Operating Reserve Opening balance $ - Add Other revenue from own sources: Interest earnings 28 Other revenues 3,900 Transfers from own funds: Total revenue 3,928 Deduct Transfers to own funds: Total expenses - Change in fund balance 3,928 Accumulated surplus, end of year $ 3,928 Capital Regional District Statement 49 Reserve Funds Environmental Health Operating Reserves Statement of Continuity (Unaudited) December 31, 2016 Regional Source Control Operating Reserve Saanich Peninsula Source Control Operating Reserve Solid Waste Operating Reserve Stormwater Quality Core Operating Reserve Opening balance $ - $ 42,200 $ 12,137,373 $ - Add Other revenue from own sources: Interest earnings 20,923 2, ,032 5,721 Other revenues 337,000 2,911 (73,579) 92,142 Transfers from own funds: Trans from revenue - - 5,197,969 - Total revenue 357,923 5,712 5,311,422 97,863 Deduct Transfers to own funds: Total expenses Change in fund balance 357,923 5,712 5,311,422 97,863 Accumulated surplus, end of year $ 357,923 $ 47,912 $ 17,448,795 $ 97,863 These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 45

135 Capital Regional District Statement 49 Reserve Funds Environmental Health Operating Reserves Statement of Continuity (Unaudited) Stormwater Quality Sannich Pen Operating Reserve Stormwater Quality SGI Operating Reserve Stormwater Quality SSI Operating Reserve Stormwater Quality Sooke Operating Reserve Opening balance $ 5,277 $ 3,027 $ - $ 29,431 Add Other revenue from own sources: Interest earnings ,077 1,431 Other revenues (3,785) ,342 (6,377) Transfers from own funds: Trans from revenue Total revenue (3,692) ,419 (4,946) Deduct Transfers to own funds: Total expenses Change in fund balance (3,692) ,419 (4,946) Capital Regional District Statement 50 Reserve Funds Transportation Operating Reserves Statement of Continuity (Unaudited) December 31, 2016 SSI Transit Operating Reserve Opening balance $ 266,229 Add Other revenue from own sources: Interest earnings 4,128 Other revenues 29,246 Transfers from own funds: Total revenue 33,374 Deduct Transfers to own funds: Total expenses - Change in fund balance 33,374 Accumulated surplus, end of year $ 299,603 Accumulated surplus, end of year $ 1,585 $ 3,686 $ 18,419 $ 24,485 These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. These statements should be read in conjunction with the 2016 Audited Financial Statements and accompanying notes. 46

136 Appendix 3 Capital Regional District DBRS RATING METHODOLOGY

137 JUNE 2015 METHODOLOGY Rating Canadian Municipal Governments PREVIOUS RELEASE: SEPTEMBER 2014

138 Rating Canadian Municipal Governments DBRS.COM 2 Contact Information Brenda Lum Managing Director Tel blum@dbrs.com Paul Holman Managing Director, Credit Policy pholman@dbrs.com Table of Contents Scope and Limitations 3 Introduction to DBRS Methodologies 3 Rating Canadian Municipalities Overview 3 Critical Rating Factors 4 Primary Factors 5 Additional Factors 7 Financial Risk Factors 8 Key Metrics 8 General Considerations in Evaluating a Canadian Municipal Government s Financial Risk Profile 8 Rating the Specific Instrument and Other Criteria 10 Appendix 1: DBRS Adjustments to Reported Financial Figures 11 DBRS is a full-service credit rating agency established in Privately owned and operated without affiliation to any financial institution, DBRS is respected for its independent, third-party evaluations of corporate and government issues, spanning North America, Europe and Asia. DBRS s extensive coverage of securitizations and structured finance transactions solidifies our standing as a leading provider of comprehensive, in-depth credit analysis. All DBRS ratings and research are available in hard-copy format and electronically on Bloomberg and at DBRS.com, our lead delivery tool for organized, Web-based, up-to-the-minute information. We remain committed to continuously refining our expertise in the analysis of credit quality and are dedicated to maintaining objective and credible opinions within the global financial marketplace. Public Finance June 2015

139 Rating Canadian Municipal Governments DBRS.COM 3 Scope and Limitations This methodology represents the current DBRS approach for ratings of Canada municipal governments. It describes the DBRS approach to credit analysis, which includes consideration of historical and expected critical rating and financial risk factors as well as industry-specific issues, regional nuances and other subjective factors and intangible considerations. Our approach incorporates a combination of both quantitative and qualitative factors. The methods described herein may not be applicable in all cases; the considerations outlined in DBRS methodologies are not exhaustive and the relative importance of any specific consideration can vary by issuer. In certain cases, a major strength can compensate for a weakness and, conversely, a single weakness can override major strengths of the issuer in other areas. Further, this methodology is meant to provide guidance regarding the DBRS methods used in the sector and should not be interpreted with formulaic inflexibility, but understood in the context of the dynamic environment in which it is intended to be applied. Introduction to DBRS Methodologies DBRS publishes rating methodologies to give issuers and investors insight into the rationale behind DBRS s rating opinions. In general terms, DBRS ratings are opinions that reflect the creditworthiness of an issuer, a security or an obligation. DBRS ratings assess an issuer s ability to make timely payments on outstanding obligations (whether principal, interest, preferred share dividends or distributions) with respect to the terms of an obligation. In some cases (e.g., non-investment grade corporate issuers), DBRS ratings may also address recovery prospects for a specific instrument given the assumption of an issuer default. DBRS operates with a stable rating philosophy; in other words, DBRS strives to factor the impact of a cyclical economic environment into its ratings wherever possible, which minimizes rating changes due to economic cycles. Rating revisions do occur, however, when more structural changes, either positive or negative, have occurred, or appear likely to occur in the near future. DBRS also publishes criteria which are an important part of the rating process. Criteria typically cover areas that apply to more than one industry. Both methodologies and criteria are publicly available on the DBRS website and many criteria are listed below under Rating the Specific Instrument and Other Criteria. Rating Canadian Municipalities Overview This methodology applies to Canadian municipalities covered by DBRS. Large local governments, in particular, have a number of similarities and differences that can have a significant influence on the outcome of the rating process. Similarities include: a stable revenue base owing to well-defined though relatively limited taxing powers, a wide array of responsibilities for the provision of relatively customary public services, fairly stable political systems and local economies and a generally meaningful reliance on provincial governments, which share their tax base and have a considerable influence over the funding and operating environments of municipalities. While municipalities benefit from their relationship with senior government levels and this is evident in certain pillars of the rating municipal governments are primarily rated based on their own merits, and DBRS does not assume any implicit senior government support. The level of economic diversification and overall financial strength can vary substantially among Canadian municipalities, which partly explains the wide range of ratings in the sector. These are just a few of the important attributes assessed during the rating process. Overall, large Canadian municipalities currently rank solidly in the investment-grade category. Public Finance June 2015

140 Rating Canadian Municipal Governments DBRS.COM 4 Critical Rating Factors The table below presents the key factors defining municipal government ratings. It is followed by a brief overview of the characteristics of each factor expected for the various rating categories. Critical Rating Factors Rating Category AAA AA A BBB Economic Structure Population and taxable assessment growth has been consistently above the provincial average over the last five to ten years. The economy comprises a broad mix of industries, with no undue reliance on any single sector, which helps reduce volatility and cyclicality in GDP growth. Income and taxable assessment per capita stand out relative to peers. The labour force is highly skilled and unemployment is below average. Population and taxable assessment growth are sound and fairly consistent year over year. The economy boasts a relatively diversifi ed mix of industries but may be influenced by a few large industries, resulting in average volatility overall. The economy is dynamic and constantly evolving, but certain sectors may require reform to secure long-term growth prospects. Income and taxable assessment per capita are consistent with other large peers. The labour force is skilled and unemployment is low and stable. Population and/or taxable assessment growth has been steadily below average or inconsistent in recent years. The economy may be relatively small or reliant on seasonal industries, with a limited number of key industries accounting for a substantial portion of economic activity, resulting in above- average volatility. Income and taxable assessment per capita may be below average. The job market is dynamic, although the unemployment rate may be above average. Population is small and/or has been steadily declining in recent years. The economy is relatively small and far from major urban centres, with one seasonal or challenged industry accounting for a substantial portion of economic activity. Income and taxable assessment per capita are markedly below the provincial average, highlighting low wealth levels. The job market is characterized by an unemployment rate that may be above the provincial average. Fiscal Management Budgets are consistently balanced using very conservative assumptions and incorporating meaningful contingencies to help manage unforeseen events. Very tight expenditure management, with a strong track record of surpluses as measured by DBRS. Demonstrated ability to address unexpected adverse budget deviations to protect fiscal balance. Property taxes and user fees are low, providing ample room to raise taxes if necessary. Transparency and timeliness in reporting are exemplary. Fiscal sustainability is emphasized by the government, but reliance on one-time funding or sizable tax increases may be exhibited at times to balance the bud- get. Budget contingencies vary year to year, although assumptions are generally prudent. Results, as measured by DBRS, maintain a balanced position year over year. Expenditure management is prudent, with limited in-year slippage. Property taxes and user fees are in line with peers, providing moderate flexibility to raise taxes. Transparency is good and financial reporting is timely. The fiscal management framework is well developed, but some key planning documents or reports may lack details. Budget pressures tend to linger but are viewed as sustainable, al- though reliance on one-time funding and/ or sizable tax increases to balance the budget is high. Fiscal results may exhibit greater volatility due to lower ability to manage in- year budgetary pressures. Budget assumptions are deemed conservative, although the use of contingencies may be limited. Reduced ability and/ or willingness to manage downturns through meaningful expenditure restraint or revenue-raising initiatives. Property tax and user fee burdens may already be somewhat high, limiting the ability to further raise taxes and fees if needed. The fiscal management framework lacks structure and transparency, with only limited planning documents. Budget pressures tend to linger and are viewed as potentially unsustainable, resulting in steady reliance on one- time funding and/or sizable tax increases to balance the budget. Reduced ability and/ or willingness to manage downturns through meaningful expenditure restraint or revenue- raising initiatives. Tax and user-fee bur- dens are high and delinquencies are building up. Public Finance June 2015

141 Rating Canadian Municipal Governments DBRS.COM 5 Critical Rating Factors (CONTINUED) Financial Management Debt and Liquidity Debt is low and capital requirements for the foreseeable future are manageable and are not expected to pressure debt materially. Debt and liquidity management practices are exemplary and very conservative. The debt structure is very prudent, with low refi nancing risk, a smooth maturity profi le and minimal unhedged exposure to interest rate reset risk and foreign currency fluctuations. The borrowing platform is well established and recognized. Liquidity is substantial and in excess of short-term debt outstanding. Unfunded pension liabilities, if any, are low and being addressed. Debt is moderately low. Although capital requirements may be sizable, they are not expected to put excessive pressure on debt. Debt and liquidity management practices are sophisticated and conservative. The debt structure is prudent but may at times entail sizable refi nancing needs, an uneven maturity profi le or material exposure to interest rate reset risk. The borrowing platform is well established and recognized. Liquidity is significant relative to short-term debt and refinancing needs. Unfunded pension liabilities may be sizable but are being addressed. Debt is sizable, and although management may have been successful at containing upward pressure in recent years, significant capital requirements have the potential to lead to significant increases going forward. Interest costs consume a material portion of the budget. Debt and liquidity management practices are conservative but may lack formality or sophistication relative to those of frequent borrowers. The debt structure is prudent but may at times entail sizable refi nancing due to an uneven maturity profi le or material exposure to interest rate reset risk. The borrowing platform is not well established, although the track record of execution of annual borrowing programs may be good. Liquidity is limited. Unfunded pension liabilities may be considerable and steadily growing. Debt is sizable and steadily growing, owing to large capital needs. Interest costs may already consume a material portion of the budget. Debt and liquidity management practices are lacking structure and sophistication relative to those of frequent borrowers. The debt structure is prudent but may at times entail sizable refi nancing due to an uneven maturity profi le or material exposure to interest rate reset risk. There is no established borrowing platform since the municipality infrequently accesses the debt market. Liquidity is negligible. Unfunded pension liabilities may be considerable and steadily growing. Relations with Senior Government The legislative framework defining municipal responsibilities and revenue-generating powers is supportive and fosters financial sustainability. Adequate provincial monitoring is provided. Sizable and reliable funding support may be provided by the provincial government, especially for capital investments. Cooperative relationship with senior government and track record of supportive tax and program policy objectives. Limited interference in areas of municipal responsibility. The legislative framework defining municipal responsibilities and revenue- generating powers is supportive and fosters financial sustainability. Adequate provincial monitoring is provided. Senior government funding support is meaningful but may display volatility depending on the economic and fiscal environment. Reasonable level of cooperation with senior government, although policy objectives may diverge in some areas. The legislative framewor defining municipal responsibilities and revenue- generating powers is rigid and may lack the guidelines necessary to foster fi nancial sustainability. Provincial monitoring is limited. Less cooperative relationship with senior government. History of downloading of responsibilities or interruption of funding programs by the provincial government during downturns. The legislative framework defi ning municipal responsibilities and revenue- generating powers is inadequate and lacks the guidelines necessary to foster financial sustainability. Provincial monitoring is absent. Less cooperative relationship with senior government. History of downloading of responsibilities or interruption of funding programs by the provincial government during downturns. A well-defined basket of responsibilities, developed and diverse economic and taxable assessment bases and relatively supportive provincial governments characterize Canada s largest municipal governments and lend support to their credit ratings. Nonetheless, economic disparities and varying fiscal management styles and capital needs are only a few of the considerations that lead to differing credit quality among major Canadian cities. DBRS endeavours to rate each issuer through the cycle and does not penalize an issuer at economic troughs nor reward it at economic peaks unless such changes are structural and are expected to materially alter future financial metrics and/or qualitative rating considerations. Below is a summary of the key considerations and drivers of DBRS ratings that characterize Canadian municipal governments. Primar y Factors Econom ic Structure Similar to provinces, the economy of a municipality constitutes a key consideration in the credit assessment of its government, as it is the primary determinant of the capacity of a government to raise the revenue necessary to fulfill its service responsibilities and carry its debt. Both the composition and the location of a municipal economy provide valuable insight into the volatility, dynamism and growth potential of a municipality and its propensity to create jobs and generate wealth. A diversified economy located close to other large and dynamic urban centres and well integrated into the provincial transportation network will generally tend to fare better and experience more consistent population and taxable assessment growth over the longer term than a more isolated commodity-based economy. Public Finance June 2015

142 Rating Canadian Municipal Governments DBRS.COM 6 Critical Rating Factors (CONTINUED) In its analysis of the economic structure, DBRS focuses on (1) gross domestic product (GDP) and employment breakdown by major industry and major employer; (2) prospects of key industries and employers with competitive advantages; (3) track record of employment creation; and (4) adequacy of major infrastructure (e.g., roads, transit, land availability, electricity generation). Structural distortions within the economy, such as burdensome tax or regulatory systems, are also considered in the analysis. In the case of a small suburban commuter municipality highly reliant on a neighbouring urban centre for employment, DBRS may incorporate in its analysis consideration of some of the larger city s economic fundamentals, provided the municipality being rated is strongly integrated into its larger neighbour and is likely to retain this relationship over time, thanks to its close proximity, competitive taxes and/or considerable land availability, for example. Fiscal Management The review of the fiscal management framework is aimed at assessing the government s fiscal sustain- ability and prospects, looking at revenue generation, program responsibilities and fiscal discipline, as well as at the coherence and appropriateness of the strategies, policies and processes governing the planning and allocation of public funds. Particular attention is paid to the quality of the fiscal management framework in place, the service responsibilities entrusted by the provincial government to its municipalities, the adequacy of revenues to cover core programs and interest charges and the level of fiscal flexibility afforded by the system (i.e., the degree to which expenditures can be contained or revenues increased in order to protect fiscal soundness). DBRS also analyzes the volatility of fiscal results and the government s fiscal track record, which provides an indication of the government s commitment to fiscal soundness. DBRS reviews the effectiveness of the budgetary process, including the timeliness and comprehensive- ness of the government s planning, reporting and monitoring systems, as well as the ability of fiscal authorities to control in-year expenditure pressures. Additional considerations include the allocation of responsibilities and controls within the government organization, adherence to budget policies (e.g., balanced budget legislation) and the coherence and consistency of social and fiscal policies, with frequent changes in strategic goals generally perceived as weakness in the policy framework. In assessing the quality of the fiscal planning framework, DBRS compares recent years fiscal results with original budget estimates, putting emphasis on the frequency and extent of major budget deviations. Financ ial Management Debt and Liquidity The sustainability of a government s debt burden is a central consideration in the determination of the rating. DBRS carefully examines current and projected levels of capital investments and borrowing needs, and con- siders the full range of factors that could affect the debt burden and related servicing requirements. The primary focus is on tax-supported debt, which includes financial obligations for which taxpayers are directly accountable. Self-supporting debt, which is issued by or for the purpose of commercial or potentially commercial government enterprises and serviced by distinct user fees (e.g., electric utility or water service fees), is analyzed separately. A look into a government s financial management strategy, including the level of sophistication of its borrowing practices and overall debt structure, helps assess the potential volatility of debt-servicing requirements. In particular, analysts examine the composition and maturity structure of the debt stock and its sensitivity to changes in inflation, interest rates and exchange rates. DBRS aims to develop an outlook for debt and debt-servicing requirements to assess overall affordability. As a result of their fairly predictable expenditure base and steady stream of revenue, some municipal governments tend to minimize their cash balances. Large municipalities, in particular, also often benefit from superior access to capital markets because of high investor receptivity, which considerably reduces refinancing risk and further reduces the need for backup liquidity. Nonetheless, municipalities will often have sizable reserve funds in place, which, although generally ear- marked for specific capital projects, could be temporarily allocated to other purposes in the event of severe liquidity stress. DBRS analyzes cash balances and reserves in relation to expenditures, scheduled debt repayments and availability of external liquidity sources such as bank facilities. Liquid assets will generally only be netted against debt if the funds are unrestricted and earmarked for debt retirement. Relati ons with Senior Government While the creditworthiness of a Canadian municipality is primarily driven by the fundamentals of that municipality, the credit profile of the provincial government may also have a material influence on the rating since municipalities share their taxpayer base with their provincial counterparts and receive substantial provincial funding for capital projects and the delivery of certain programs. As a result, a fiscally and financially healthier provincial government will often have more resources to share with its municipalities and will do so in a more consistent fashion. Public Finance June 2015

143 Rating Canadian Municipal Governments DBRS.COM 7 Critical Rating Factors (CONTINUED) Service responsibilities, revenue-generating powers and all other determining features of the operating framework of municipalities are defined by the provincial government. As a result, the responsiveness of a provincial government to the realities faced by municipal governments, as well as the various constraints or flexibilities provided through the legislated framework, may also have significant implications for the credit profile of municipalities, highlighting the importance of carefully analyzing the dynamic between municipalities and their respective provincial governments. Conflicting tax or social policy objectives between levels of government may also introduce challenges in fiscal management, as municipalities share their tax base and, in certain jurisdictions, responsibility for certain programs with their senior counterparts. DBRS analysts pay particular attention to the sustainability and consistency of key provincial policies aimed at municipalities. Additi onal Factors Tax Co mpetitiveness The structure and level of taxation can have a bearing on a municipality s ability to attract and retain residents and businesses, which can in turn have implications for longer-term growth prospects or the government s ability to implement tax increases in the future, if necessary. DBRS looks at a municipality s tax competitiveness, particularly in relation to neighbouring jurisdictions, and at the composition and level of key user fees and any barriers the framework may pose to future growth. Demogr aphics and Social Structure Demographic and social trends have a significant impact on a government s fiscal position by affecting the labour force, income distribution and demand for municipal services. For example, cities with a rapidly growing population will often enjoy an expanding taxable assessment base, but they may also face greater public pressure to expand public services, such as transit, and infrastructure, roads and water plants. In contrast, mature cities will generally face less capital growth pressure, but their aging population may translate into out-migration, declining property values and a shrinking tax base. Owners hip of Valuable Municipal Corporations DBRS also incorporates into its analysis material benefits generated by the ownership of self-supporting corporations fulfilling commercial mandates. Electric utilities are the most common type of valuable corporations owned by major Canadian municipalities. These entities often generate steady dividend streams that contribute positively to fiscal results and could be monetized, if needed, to significantly reduce debt. However, ownership of poorly performing corporations can represent a drain on municipal resources and potentially add to tax-supported debt obligations. Transp arency and Governance An examination of budgeting practices and financial reporting provides an indication of how transparent a municipal government is and the degree to which it can be relied on. Characteristics demonstrating transparent management and reporting practices generally include a well- structured budgeting process, adequate and timely financial reporting, the adherence to high accounting and reporting standards and early adoption of new rules. DBRS considers the framework and track record of municipal governance, including the accountability, internal controls and oversight of the governing body, along with the expertise, integrity and ethics of senior management and elected officials, as part of the rating process. The presence of a risk management framework to assess and mitigate strategic, financial, operational, legal and reputational risks is also considered. Material weaknesses with respect to transparency or governance could result in downward pressure on the rating, or in rare cases, critical issues may prevent DBRS from being able to provide a rating at all. Public Finance June 2015

144 Rating Canadian Municipal Governments DBRS.COM 8 Financial Risk Factors Key Me trics Recognizing that any analysis of financial metrics may be prone to misplaced precision, DBRS has limited its matrix of the key metrics below to a small sample of critical ratios. For each of these ratios, DBRS provides a range within which the issuer s financial risk would be considered as supportive for the rating category. However, the wide range of municipalities in existence throughout Canada, especially in terms of size, location, economic diversification and wealth, makes any attempt at generalization challenging and potentially misleading. As such, the values provided below are for Canada s larger cities, with populations exceeding 300,000, as their credit profiles are generally supported by diversified economies and sophisticated management frameworks. This rating methodology can still be used for smaller municipalities, although unique strengths or weak- nesses, such as overreliance on a single industry or location in a shrinking, economically challenged region, may distort the analysis and reduce the relevance of the guidelines significantly, requiring financial metrics considerably stronger than noted below for a rating category. Furthermore, the ratings in the matrix below should not be understood as the final rating for a large city with matching metrics. The final rating is a blend of both the operating risk and financial risk considerations in their entirety. While DBRS does not have any set weightings for how these key metrics are considered in the final rating, it is typical that an entity s operating risk will carry moderately more weight in the final issuer rating than will its financial risk. Canadian Municipal Government Financial Risk Metrics Key Ratio AAA AA A BBB Net tax-supported debt per capita 1 < $500 $500 to $2,500 $2,500 to $4,000 > $4,000 Net tax-supported debt as a percent- age of taxable assessment < 0.5% 0.5% to 2% 2% to 6% > 6% Interest costs as a percentage of total revenues < 1.5% 1.5% to 9% 9% to 15% > 15% 1 Refer to Appendix 1 for an explanation of DBRS adjustments to reported financial figures. DBRS ratings are based heavily on future performance expectations, so while past metrics are important, any final rating will incorporate DBRS s opinion on future metrics, a subjective but critical consideration. It is also not uncommon for a government s key ratios to move in and out of the ranges noted in the ratio matrix above. In the application of this matrix, DBRS looks beyond the point in time ratio. Notwithstanding these potential limitations, the key ratios are very useful in providing a good starting point in assessing a government s financial risk. A government s financial risk is largely a quantitative assessment of the government s present financial strength and an estimation of its future profile over a reasonable time horizon. General Considerations in Evaluating a Canadian Municipal Government s Financial Risk Profile In addition to the information already provided with respect to key financial metrics, DBRS s broader financial risk review includes five key areas: economy, fiscal balance, revenues, expenditures and additional measures for balance-sheet and financial flexibility. Within each area, DBRS focuses on key metrics and considerations that are assessed over time, recognizing that the trend in the ratios is also important to the rating and that ratios alone cannot be used as an absolute test of financial strength. Econom y A sound record of sustained economic growth is prime evidence of a municipality s ability to generate wealth for its population and fiscal resources for its government. DBRS looks at the level and trend of various summary indicators and seeks to understand the growth potential of the municipality in relation to that of the province and other municipalities across the country. Public Finance June 2015

145 Rating Canadian Municipal Governments DBRS.COM 9 General Considerations in Evaluating a Canadian Municipal Government s Financial Risk Profile (CONTINUED) Fiscal Balance Fiscal results are viewed by DBRS as a reliable indicator of management proficiency and commitment to fiscal soundness. Analysts look at the operating balance (operating revenues minus program expenditures and interest charges) as the primary indicator of fiscal flexibility, while the net fiscal balance (inclusive of capital expenditures) better reflects overall fiscal sustainability and the potential financing requirements in a given year. DBRS notes that in most provinces, municipalities are required under legislation to balance their operating budgets, although large capital investments may at times translate into sizable post-capex deficits and upward pressure on debt and tax rates. Analysts examine historical as well as prospective results, focusing on the cyclicality and sensitivity of the budget and financing requirements to adverse developments. While repeated sizable net shortfalls are perceived negatively by DBRS, the impact of such shortfalls will generally be discounted if the shortfalls are the result of catch-up capital investments or non-recurring events rather than a structural imbalance about which a government is showing little initiative. DBRS refers to this practice as rating through the cycle. Revenu es The revenue analysis covers the major components of a government s revenue base, focusing on diversification, volatility and ability to grow key sources when needed, as well as the extent of the tax effort imposed on residents and corporations. Key revenue sources for municipal governments include residential, commercial and industrial property taxation; user fees for services such as water and waste management; senior government grants; and earnings from government enterprises. Since Canadian municipalities do not tax income, they generally benefit from a more stable revenue base than provincial governments, although it is at the expense of more limited revenue growth prospects. Special emphasis is put on the resilience of major revenue sources, on the overreliance on provincial government transfers and on the competitiveness of the city s tax rates relative to neighbouring jurisdictions. Constraints in revenue-generating powers, such as legislated caps on certain property tax rates, and structural defects in the government s tax system are also analyzed closely. DBRS may make certain adjustments to reported revenue figures in order to exclude non-recurring items and, ultimately, better reflect the underlying fiscal situation of a municipality. Expend itures DBRS distinguishes between three major types of expenditures: service programs, capital investments and debt servicing, with particular emphasis placed on identifying major trends, actual and potential areas of pressures and sources of rigidities. Through its analysis of program expenditures, DBRS seeks to understand the government s primary service responsibilities and the relationship between key expenditure items and factors such as demo- graphics and economic conditions in order to identify potential sources of fiscal volatility and cost pressure. Analysts review major program responsibilities established by the provincial government, focusing on the coherence and sustainability of each program and expected cost implications in relation to thirdparty revenue sources, if any, such as senior government grants. Relative to their provincial and federal counterparts, Canadian municipalities are responsible for a dis- proportionately large proportion of public infrastructure, including municipal roads, water and sewer facilities and transit assets. As a result, capital investments account for a considerable portion of municipal budgets and constitute the primary driver of debt. Historically, capital spending has been more cyclical than ongoing program expenditures, as capital funding from senior governments has fluctuated with their fiscal results and as municipalities in times of financial hardship have often opted to reduce capital spending to better their budget balance. This practice led to significant underinvestment at both the provincial and municipal levels in the 1980s and 1990s and to the accumulation of significant deferred maintenance deficits in most large Canadian municipalities despite the marked ramp-up in capital investments observed in recent years. DBRS analysts seek to get a clear understanding of current and future capital requirements faced by the municipality, focusing on the state of good repair of major public infrastructure and on the estimated future costs of addressing growth-related needs. Financing methods and accounting rules for capital spending are also reviewed in order to fully appreciate the debt implications of projected capital needs and verify whether accrued costs are reported consistently across municipalities. Of all three expenditure categories, debt servicing is definitely the most rigid and can constitute a meaningful portion of a government s budget. As a result, the stability and trend of a municipality s interest and debt payments are an especially important consideration. Public Finance June 2015

146 Rating Canadian Municipal Governments DBRS.COM 10 General Considerations in Evaluating a Canadian Municipal Government s Financial Risk Profile (CONTINUED) In analyzing debt-servicing requirements, particular attention is paid to the municipality s debt structure and management strategy, incorporating findings from the analysis of the debt and liquidity profile. DBRS notes that in the current low-rate environment, the importance of debt-servicing requirements is probably understated; therefore, increased emphasis on a municipality s debt maturity profile and refinancing strategy is warranted. Balanc e-sheet And Financial Flexibility Considerations The sustainability of a municipality s debt burden is a central consideration in the determination of a credit rating. DBRS carefully examines current and projected levels of indebtedness and considers the full range of factors that could affect the debt burden and related servicing requirements. The primary focus is on tax-supported debt, which includes financial obligations for which taxpayers are directly accountable. This concept captures tax-supported debt directly issued by the municipality as well as the financial obligations of any other related tax-supported organization that is within municipal jurisdiction (e.g., transit authorities). Debt is measured by DBRS net of sinking funds and other quality assets set aside explicitly for debt-retirement purposes. The resulting debt figure is compared with the capacity to carry debt of the municipality as represented by its taxable assessment. It is also analyzed relative to total tax revenues on a per capita basis. Although other financial commitments, such as capital lease obligations and unfunded pension liabilities, are not included in the calculation of tax-supported debt, they are also considered in the analysis of debt affordability. Self-supporting debt, which is issued by or for the purpose of commercial or potentially commercial municipal government enterprises and serviced by distinct user fees (e.g., electric utilities or water services), is analyzed separately by DBRS for its affordability. Such debt is generally allocated a much smaller weighting in the credit review, provided the services clearly have a commercial value and are mostly (if not entirely) funded by user fees, and the burden is not excessive for the municipality and is highly unlikely to require government support. Rating the Specific Instrument and Other Criteria The issuer rating (which is an indicator of the probability of default of an issuer s debt) is the basis for rating specific instruments of an issuer, where applicable. DBRS uses a hierarchy in rating long-term debt that affects issuers that have classes of debt that do not rank equally. In most cases, lower-ranking classes would receive a lower DBRS rating. For more detail on this subject, please refer to the general rating information contained in the DBRS rating policy Underlying Principles. For a discussion on the relationship between short- and long-term ratings and more detail on liquidity factors, please refer to the DBRS policy Short-Term and Long-Term Rating Relationships and the criteria Commercial Paper Liquidity Support Criteria for Corporate Non-Bank Issuers. Guarantees and other types of support are discussed in Guarantees and Other Forms of Explicit Support. Public Finance June 2015

147 Rating Canadian Municipal Governments DBRS.COM 11 Append ix 1: DBRS Adjustments to Reported Financial Figures In certain circumstances, DBRS may adjust the financial results reported by a municipal government in order to (1) allow for a better comparison among peers, (2) capture all material tax-supported debt, (3) exclude debt deemed to be self-supporting within the reporting entity and/or (4) present fiscal results that are more reflective of the impact of government activities on indebtedness. The most frequent adjustments relate to the following areas: Tax-Supported Debt: In an effort to capture the full extent of debt obligations to the account of taxpayers, DBRS adds up the debt of all activities and entities supported in a significant fashion by tax proceeds, such as public transit, road investments and general facilities. However, DBRS excludes from its calculation of tax-supported debt certain debt items related to activities that are deemed self-supporting (i.e., activities that are funded in a significant fashion by user fees and that could potentially be monetized to repay the related debt obligations if the municipality faced a serious financial squeeze). These activities include electricity generation and distribution, water treatment and distribution and social housing. In addition, DBRS may consider debt leveraged against long-term senior government grants (e.g., federal fuel tax grants) to be self-supported and may therefore exclude such debt from tax-supported debt calculations provided: (i) the grants fully cover debt servicing requirements of the related debt; (ii) the term of the debt does not exceed the useful life of the assets being funded; (iii) the municipality discloses the value of such debt in its financial statements; and (iv) the commitment from the senior government is secured in legislation or by established government policies. Capital Expenditure Treatment: DBRS converts capital expenditures from an amortization basis to a pay-as-you-go basis to get fiscal results that are more reflective of the full extent of municipal government spending and of external financing needs for a given year. Non-Recurring Items: Fiscal results sometimes include extraordinary items that introduce distortions in results and hinder yearover-year comparisons of results. These may include asset sales performed to boost revenues and balance budgets in challenging fiscal times, restructuring costs or write-offs of tax receivables. DBRS attempts to remove all material non-recurring items from reported results in order to better understand the underlying fiscal position of a municipality. Public Finance June 2015

148 2015, DBRS Limited, DBRS, Inc. and DBRS Ratings Limited (collectively, DBRS). All rights reserved. The information upon which DBRS ratings and reports are based is obtained by DBRS from sources DBRS believes to be reliable. DBRS does not audit the information it receives in connection with the rating process, and it does not and cannot independently verify that information in every instance. The extent of any factual investigation or independent verification depends on facts and circumstances. DBRS ratings, reports and any other information provided by DBRS are provided as is and without representation or warranty of any kind. DBRS hereby disclaims any representation or warranty, express or implied, as to the accuracy, timeliness, completeness, merchantability, fitness for any particular purpose or non-infringement of any of such information. In no event shall DBRS or its directors, officers, employees, independent contractors, agents and representatives (collectively, DBRS Representatives) be liable (1) for any inaccuracy, delay, loss of data, interruption in service, error or omission or for any damages resulting therefrom, or (2) for any direct, indirect, incidental, special, compensatory or consequential damages arising from any use of ratings and rating reports or arising from any error (negligent or otherwise) or other circumstance or contingency within or outside the control of DBRS or any DBRS Representative, in connection with or related to obtaining, collecting, compiling, analyzing, interpreting, communicating, publishing or delivering any such information. Ratings and other opinions issued by DBRS are, and must be construed solely as, statements of opinion and not statements of fact as to credit worthiness or recommendations to purchase, sell or hold any securities. A report providing a DBRS rating is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. DBRS receives compensation for its rating activities from issuers, insurers, guarantors and/or underwriters of debt securities for assigning ratings and from subscribers to its website. DBRS is not responsible for the content or operation of third party websites accessed through hypertext or other computer links and DBRS shall have no liability to any person or entity for the use of such third party websites. This publication may not be reproduced, retransmitted or distributed in any form without the prior written consent of DBRS. ALL DBRS RATINGS ARE SUBJECT TO DISCLAIMERS AND CERTAIN LIMITATIONS. PLEASE READ THESE DISCLAIMERS AND LIMITATIONS AT ADDITIONAL INFORMATION REGARDING DBRS RATINGS, INCLUDING DEFINITIONS, POLICIES AND METHODOLOGIES, ARE AVAILABLE ON Corporate Headquarters DBRS Tower 181 University Avenue Suite 700 Toronto, ON M5H 3M7 TEL

149 Appendix 4 Capital Regional District ADDITIONAL FINANCIAL ANALYSIS FISCAL YEAR ENDED DECEMBER 31, 2016

150 1) Net Tax-Supported Debt Per Capita Tax-Supported Debt includes financial obligations for which taxpayers are directly accountable. Net Tax-Supported Debt per Capita is a measure of CRD s debt, excluding member municipality debt, expressed in terms of the amount attributable to each citizen under CRD s jurisdiction. This indicator is an important factor when analyzing CRD s ability to continue paying its debt service costs through current levels of tax revenue. This indicator has been trending down as CRD reduces debt and is close to the AAA rating threshold of $500. In 2016 the tax-supported debt per capita was $560. 2) Net Tax-Supported Debt as a Percentage of Assessment A second measure to assess debt affordability, this ratio takes the same net tax-supported debt as above and expresses it in terms of taxable assessment. This indicator has been trending down as CRD reduces debt and is 0.26% in 2016, well within the AAA rating threshold of 0.5%. 1

151 3) Interest Costs / Total Revenue This is the percentage of revenue committed to payment of interest on temporary and long-term debt (excluding municipal debt) for CRD services. A high percentage indicates greater use of revenues for servicing interest on outstanding debt, and less ability to adjust to unplanned events and changing circumstances. Interest costs have been trending down as CRD reduces debt. Interest as a percentage of total revenue was 6% in 2016, resulting in a AA rating. 4) Debt Service Costs / Total Revenue Related to indicator 3, this is the percentage of revenue committed to the payment of interest and principal on temporary and long-term debt. A high percentage indicates greater use of revenue for the repayment of debt, and less ability to adjust to unplanned events and changing circumstances. The CRD s debt service cost (excluding municipal debt) over revenue for the last four years averages 18.1%, while 2016 result was 14.7%. (in $000 s) 2013 Actual 2014 Actual 2015 Actual 2016 Actual Debt Service Costs 35, %* 34, %* 33, %* 30, % Total Revenue 167, , , ,586 * Different than presented in 2015, which included municipal debt and revenue. Going forward, flow-through municipal debt and revenue is excluded. 2

152 CAPITAL REGIONAL DISTRICT Debt Service Costs to Total Revenue 25.0% generally accepted upper limit from lending authorities 20.0% 15.0% 10.0% 5.0% ) Principal and Interest as Proportion of Debt Service Costs Debt servicing costs for debt incurred, through MFA or otherwise, will at first be primarily interest, with a small amount of principal included. As debt matures, the principal portion of the payment will increase, and the interest portion will decrease. This is due to the interest charge being calculated off the present outstanding balance of the debt, which decreases as more principal is repaid. The smaller the debt principal, the less interest is charged. In 2016, CRD debt (excluding municipal debt) has, on average, matured to the point where principal payments are 59% of total debt servicing costs, while interest payments are only 41%. CAPITAL REGIONAL DISTRICT 2016 Debt Servicing Costs 41% 59% CRD Direct Principal Costs CRD Direct Interest Costs 3

153 6) Current Ratio The current ratio is a measure of the liquidity of an organization, meaning CRD s ability to meet current obligations (accounts payable) through current assets (cash and accounts receivable) of the organization. A high ratio indicates a greater ability to meet budgeted and unexpected expenditures. A decrease in liabilities and an increase in cash has resulted in an improvement of the current ratio. Generally a current ratio greater than one is considered healthy for a government entity. (in 000 s) 2013 Actual 2014 Actual 2015 Actual 2016 Actual Current Assets 45, : 1 62, : 1 48, : 1 102, : 1 Current Liabilities 22,936 32,407 19,281 21, CAPITAL REGIONAL DISTRICT Current Ratio ) Contributions to Reserves / Total Reserves The following graph shows the percentage of total reserve contributions to total reserve balances. For the last four years, the CRD has been contributing an average of 18.2% per year to reserves. The CRD continues to increase its reserve contributions in order to sustain the existing infrastructure, maintain consistent debt servicing levels, and leverage grant funding. (in 000 s) 2013 Actual 2014 Actual 2015 Actual 2016 Actual Reserve Contributions 11, % 12, % 19, % 21, % Total Reserves 80,245 80,523 88, ,817 4

154 CAPITAL REGIONAL DISTRICT Total Contributions / Total Reserves 25.0% 20.0% 15.0% 10.0% 5.0% ) Total Assessment Value Property assessment values are calculated by BC Assessment and determine the value of a property for tax purposes. In general, the assessed value tends to be lower than the appraised fair market value of a property and forms the basis for annual property tax. Total assessment value increased by 5% in 2016 (2% in 2015) as a result of the real estate market as well as increases in new construction in the Capital Region. This trend is expected to continue in ,000 CAPITAL REGIONAL DISTRICT Total Assessment Values 80,000 $ Millions 75,000 70,000 65, Municipal Rural Statistics from B.C. Assessment Authority 9) Total Debt The CRD borrows long and short-term debt predominantly through the Municipal Finance Authority (MFA), who pools the borrowing and investment needs of BC communities to offer better rates of borrowing. In addition to debt incurred directly, the CRD also incurs long-term debt on behalf of its member municipalities. The additional debt servicing costs are offset by corresponding receivables from municipalities. In 2016 CRD s direct debt decreased by 7.7% to $215 million, while municipal debt increased 5.6% to $153 million. 5

155 CAPITAL REGIONAL DISTRICT Total Debt $ Millions CRD direct debt Municipal debt 10) Tangible Capital Assets CRD s tangible capital assets include land, engineering structures, buildings, equipment, and vehicles. Where assets have an anticipated useful life of more than one year, the practice is to amortize or allocate part of the asset's expense each year through its useful life, instead of expensing the entire cost in the year the asset was purchased. Net book value is an approximation of the remaining value of the assets that CRD uses in the provision of services. At the end of 2016, CRD has acquired a total $1.47 billion in assets. After accumulated amortization, CRD is left with assets totaling a net book value of $1.01 billion. CAPITAL REGIONAL DISTRICT Tangible Capital Asset Values $ Millions 1,600 1,400 1,200 1, Tangible Capital Asset Net Book Value Tangible Capital Asset Acquisition Value Accumulated Amortization 11) Capital Investment vs. Amortization The amount spent on tangible capital assets or capital investment, less amortization is called net investment. If capital investment is consistently higher than amortization, net investment will be positive, indicating that productive capacity is increasing. Conversely, if capital investment is consistently lower than amortization, net investment will be negative, indicating that productive 6

156 capacity is decreasing. On an annual basis, CRD is acquiring assets at a faster rate than assets are amortizing. In 2016, CRD was acquiring assets 1.34 times faster than amortization (down from 1.52 times faster in 2015), indicating that productive capacity is increasing. CAPITAL REGIONAL DISTRICT Capital Investment vs. Amortization Capital Investment Amortization 7

157 Appendix 5 Capital Regional District AUDIT FINDINGS REPORT FISCAL YEAR ENDED DECEMBER 31, 2016

158 Capital Regional District Audit Findings Report For the year ended December 31, 2016 For the meeting on June 7, 2017 kpmg.ca/audit

159 Capital Regional District Audit Findings Report for the year ended December 31, The contacts at KPMG in connection with this report are: Randy Decksheimer Audit Engagement Partner Tel: (250) rdecksheimer@kpmg.ca Table of Contents Executive summary 3 Audit results 5 Adjustments and differences 7 Selected Financial Information 9 Appendices 12 Heather Crow Audit Senior Manager Tel: (250) hcrow@kpmg.ca

160 Capital Regional District Audit Findings Report for the year ended December 31, Executive summary Purpose of this report* The purpose of this Audit Findings Report is to assist you, as a member of the Finance Committee, in your review of the results of our audit of the consolidated financial statements of Capital Regional District ( the District ) as at and for the year ended December 31, This Audit Findings Report builds on the Audit Plan we presented to the Finance Committee on March 1, Changes from the Audit Plan There have been no significant changes regarding our audit from the Audit Planning Report previously presented to you. Audit results Our planning report identified a number of areas of audit focus. These include: Core Area Wastewater Treatment Program ( Sewer Program ) Hartland Landfill Closure and Post-Closure Costs Contaminated Sites Deferred Revenue New Accounting Policy: Financial Instruments These matters are discussed further in this report. Adjustments and differences We identified one adjustment: to correct revenue earned in fiscal 2015 approximating $420,000 that had been deferred and recorded in the current fiscal year. The adjustment would reduce current year surplus and increase opening accumulated surplus. The entry is not material and remains uncorrected. See page 10 The establishment of surplus reserves in 2016 enabled the transfer of funds accumulated in deferred revenue to revenue and to the reserve balances in the current year. We had recommended this and we are pleased to report that the matter has been attended to. This Audit Findings Report should not be used for any other purpose or by anyone other than the Finance Committee. KPMG shall have no responsibility or liability for loss or damages or claims, if any, to or by any third party as this Audit Findings Report has not been prepared for, and is not intended for, and should not be used by, any third party or for any other purpose.

161 Capital Regional District Audit Findings Report for the year ended December 31, Executive summary (ctd.) Finalizing the audit As of May 9, 2017, we have completed the audit of the consolidated financial statements, with the exception of certain remaining procedures, which include amongst others: completing our discussions with the Finance Committee; obtaining a signed management representation letter; obtaining evidence of the Board s approval of the financial statements. We will update the Finance Committee on significant matters, if any, arising from the completion of the audit, including the completion of the above procedures. Our auditors report will be dated upon the completion of any remaining procedures. Control and other observations We did not identify any control deficiencies that we determined to be significant deficiencies in ICFR. Significant accounting policies and practices In the current year, the District adopted Public Sector Accounting Board Standard PS 3450 Financial Instruments and PS 2600 Foreign Currency Translation effective January 1, The standards address accounting for certain financial instruments at fair market value and deferring certain gains and losses in value until they are realized. The early adoption of these standards was applied prospectively without adjustment to the reporting in previous years. There was no material adjustment to the opening balances as a result of adopting the standards. Independence We confirm we are independent with respect to the District (and its related entities), within the meaning of the relevant rules and related interpretations prescribed by the relevant professional bodies in Canada and any other standards or applicable legislation or regulation. Critical accounting estimates Overall, we are satisfied with the reasonability of critical accounting estimates. The critical areas of estimates relate to: Landfill closure and post-closure care, post-employment benefits, useful lives of tangible capital assets, and liability for contaminated sites.

162 Capital Regional District Audit Findings Report for the year ended December 31, Audit results Inherent risk of material misstatement is the susceptibility of a balance or assertion to misstatement which could be material, individually or when aggregated with other misstatements, assuming that there are no related controls. We highlight our significant findings in respect of significant financial reporting risks as identified in our discussion with you in the Audit Plan, as well as any additional significant risks identified. Significant financial reporting risks Core Area Wastewater Treatment Project Hartland Landfill Closure and Post- Closure Costs Our response and significant findings The CRD s core area wastewater treatment project includes a number of conveyance infrastructure projects. Project costs have initially included studies, planning, engineering and the acquisition of certain assets. Costs capitalized at December 31, 2016 total $42.9M. During the 2014 fiscal year, the Core Area Wastewater Treatment Project (formerly known as Seaterra) was demobilized after rezoning was denied for the initial site proposal. Activity on the project was suspended. During 2016, a Project Board was established and decisions were made on site location and budget. Total expected capital costs for the project approximate $765M. Public sector accounting standards require that When conditions indicate that a tangible capital asset no longer contributes to a government's ability to provide goods and services, or that the value of future economic benefits associated with the tangible capital asset is less than its net book value, the cost of the tangible capital asset should be reduced to reflect the decline in the asset's value. Management performed an analysis to identify any potential impairment on costs previously capitalized based on the decisions made by the Project Board. Management identified and recorded an impairment charge of $2.6M in KPMG obtained an understanding of management s process of identifying project costs that were impaired. We reviewed management s analysis and concur with the determination of impairment amounts. A sample of assets additions were selected for testing and agreed to supporting documentation. No issues were noted. Landfill closure and post-closure costs are recognized in the financial statements including disclosure in the notes. The eventual estimated costs are accrued annually as the capacity of the site is being utilized. The last detailed assessment of costs was performed in Management performed an analysis and updated significant assumptions in the current year. With an estimated 33 years to closure, and changing technologies, management has determined that another detailed assessment of costs need not be performed until sometime in the future. The estimated remaining capacity of the landfill site is 42%. At December 31, 2016 the District has recognized a liability of $8.8 million ( $8.3 million) for landfill closure and post closure costs. We discussed the projections and discount rates used to determine the closure and post-closure liabilities for the landfill with management and recalculated management s disclosed liabilities. We concur with management s position that the estimates are reasonable for purposes of the annual financial statements. Once the plans for composting waste are finalized, the closure cost estimates should be revisited to reflect likely changes in closure timing and current plans.

163 Capital Regional District Audit Findings Report for the year ended December 31, Contaminated Sites Deferred Revenue Adoption of New Accounting Policy: Financial Instruments and Foreign Currency Translation In 2015, the District adopted the new accounting standard, Liability for Contaminated Sites PS3260. Under the standard, a liability is to be recognized when contamination of a site or part of a site not in productive use exceeds an accepted environment standard and the entity is directly responsible, or accepts responsibility, for the damage; a liability should be measured at the entity s best estimate of the costs directly attributable to remediation of the contamination; lack of a site assessment does not negate the requirement to assess whether a liability exists. KPMG reviewed the District s contaminated sites policy and performed a walkthrough to understand the process which was taken by management to assess the completeness of sites assessed, the classification between productive and non-productive, and assessment of contamination. KPMG selected a sample of properties to assess whether they were appropriately classified as in productive use. In addition, KPMG selected a sample of contaminated sites, inspected supporting documentation and reviewed the estimate for contamination remediation costs. The total estimated liability at December 31, 2016 is $3.7M ( $3.6M). This estimate is included in the financial statement line item Other long term liabilities and detailed in the notes to the financial statements. No issues were noted. KPMG tested a sample of additions and transfers of deferred revenue and agreed to supporting documentation. KPMG reviewed significant deferred revenue accounts to determine the nature of the amounts being deferred. In prior years there had been an accumulation of primarily taxation revenue recorded as deferred on the statement of financial position. The amounts relate to projects requiring accumulation of requisitioned funding over time or funding specific to future projects that had not yet been completed. Such amounts generally do not meet the deferral criteria and should be recorded as surplus funds. During the fiscal year, a bylaw was passed to establish operating reserves for the funds previously recorded in deferred revenue to be recognized as revenue in the current year and applied to the appropriate reserve. No issues were noted. New accounting standards, Financial Instruments PS3450 and Foreign Currency Translation PS2601 have been approved by PSAB and are effective for years commencing on or after April 1, Early adoption is permitted. Effective January 1, 2016, the District prospectively adopted the two standards. There was no material adjustment to the opening balances. Equity instruments quoted in an active market and free-standing derivatives are to be carried at fair value. All other financial instruments, including bonds, can be carried at cost or fair value depending on the public sector entity s choice. This choice must be made on initial recognition of the financial instrument and is irrevocable. Instruments denominated in foreign currencies must be adjusted to reflect the exchange rate in effect at the reporting date. A new statement, the Statement of Remeasurement Gains and Losses, has been included in the financial statements. Unrealized gains and losses incurred on fair value accounted and foreign currency denominated financial instruments are now presented in this statement. Realized gains and losses will continue to be presented in the Statement of Operations.

164 Capital Regional District Audit Findings Report for the year ended December 31, Adjustments and differences Adjustments and differences identified during the audit have been categorized as Corrected adjustments or Uncorrected differences. These include disclosure adjustments and differences. Corrected adjustments We did not identify any adjustments that were communicated to management and subsequently corrected in the financial statements. Uncorrected differences The management representation letter includes the Summary of Uncorrected Audit Misstatements, which disclose the impact of all uncorrected differences considered to be other than clearly trivial. See below for comments on one adjustment arising from the audit. Professional standards require that we recommend that all identified differences be corrected.

165 Capital Regional District Audit Findings Report for the year ended December 31, Adjustments and differences (ctd.) Based on both qualitative and quantitative considerations, management have decided not to correct certain differences, and represented to us that the uncorrected differences individually and in the aggregate are, in their judgment, not material to the financial statements. As at and year ended December 31, 2016 Description of differences greater than $175,000 individually Management recorded the revenue earned in F2015 (funds transferred to CRD from Multi material BC for December 2015 collection) in F2016. Income effect (Decrease) Increase Assets (Decrease) Increase Financial position Liabilities (Decrease) Increase (420,185) Total differences (420,185) Equity (Decrease) Increase We concur with management s representation that the differences are not material to the consolidated financial statements. Accordingly, the differences have no effect on our auditors report.

166 Capital Regional District Audit Findings Report for the year ended December 31, Selected Financial Information As part of the audit, there are certain key ratios and trends that we review. We share these ratios with the Finance Committee and Management and welcome any questions related to our interpretation of trends. The information may assist the Finance Committee in adding context on the significance and impact of some of the issues and comments in the accompanying report. We look forward to adding to the nature and relevance of the material in future as we develop an increased volume of data from our municipal and regional district clients. 70,000,000 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 - TCA Reinvestment The District continues to invest in tangible capital assets at a higher rate than the depreciation of the assets. Increase in capital spending will trend going forward as the wastewater treatment program moves forward. Acquisitions Amortization

167 Capital Regional District Audit Findings Report for the year ended December 31, ,000, ,000, ,000, ,000, ,000, ,000,000 80,000,000 60,000,000 40,000,000 20,000,000 - Long Term Debt CRD Direct Debt Member Municipalities CRHC The District incurs debt directly, and on behalf of its member municipalities through agreements with the MFA. Repayments of interest on long-term debt are included in the annual operating expenditure for each function, but repayment of the principal is not. In 2005, the Community Charter and Municipal Liabilities regulation provided that municipality s (district s) annual cost of servicing its aggregate liabilities for the year could not exceed 25 percent of its annual revenue for the previous year. CRD direct debt has decreased steadily over the past five years, while member municipalities debt has increased. Long term debt will increase as borrowing for the core area wastewater treatment project continues.

168 Capital Regional District Audit Findings Report for the year ended December 31, ,000, ,000,000 80,000,000 60,000,000 40,000,000 Reserve funds for specific purposes The accumulated surplus for the District is made up of amounts invested in tangible capital assets, operating reserves, for both the District and Capital Region Housing Corporation, and reserves set aside for regional, sub-regional and local purposes. The amounts shown in the graph relate to reserve funds set aside for specific purposes as detailed in schedule E in the financial statements. These reserves are tracked on a per service basis. Each year, the amount presented is the accumulated amount. As indicated in the graph, since 2014, the reserves have continued to grow. 20,000,

169 Capital Regional District Audit Findings Report for the year ended December 31, Appendices Appendix 1: Required communications Appendix 2: Draft auditors report Appendix 3: Draft management representation letter Appendix 4: Current developments

170 Capital Regional District Audit Findings Report for the year ended December 31, Appendix 1: Required communications In accordance with professional standards, there are a number of communications that are required during the course of and upon completion of our audit. These include: Auditors report the conclusion of our audit is set out in our draft auditors report attached to the draft financial statements. Audit findings report - as attached. Engagement letter - the objectives of the audit, our responsibilities in carrying out our audit, as well as Management s responsibilities, are set out in the engagement letter. Management representation letter In accordance with professional standards, copies of the management representation letter are provided to the Finance Committee. The management representation letter is attached.

171 Capital Regional District Audit Findings Report for the year ended December 31, Appendix 2: Draft auditors report To the Chair and Directors of the Capital Regional District INDEPENDENT AUDITORS REPORT We have audited the accompanying consolidated financial statements of the Capital Regional District, which comprise the consolidated statement of financial position as at December 31, 2016, the consolidated statements of operations, change in net debt, remeasurement gains and losses and cash flows for the year then ended, and notes, comprising a summary of significant accounting policies and other explanatory information. Management's Responsibility for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial 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 financial statements that are free from material misstatement, whether due to fraud or error. Auditors' Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity 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 financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Capital Regional District as at December 31, 2016, and its consolidated results of operations, its consolidated remeasurement gains and losses, its consolidated change in net debt and its consolidated cash flows for the year then ended in accordance with Canadian public sector accounting standards.

172 Capital Regional District Audit Findings Report for the year ended December 31, Appendix 3: Draft management representation letter June 7, 2017 Ladies and Gentlemen: We are writing at your request to confirm our understanding that your audit was for the purpose of expressing an opinion on the financial statements (hereinafter referred to as financial statements ) of Capital Regional District ( the Entity ) as at and for the period ended December 31, General: We confirm that the representations we make in this letter are in accordance with the definitions as set out in Attachment I to this letter. We also confirm that, to the best of our knowledge and belief, having made such inquiries as we considered necessary for the purpose of appropriately informing ourselves: Responsibilities: 1) We have fulfilled our responsibilities, as set out in the terms of the engagement letter dated May 9, 2017, for: a) the preparation and fair presentation of the financial statements and believe that these financial statements have been prepared and present fairly in accordance with the relevant financial reporting framework b) providing you with all relevant information, such as all financial records and related data, including the names of all related parties and information regarding all relationships and transactions with related parties, and complete minutes of meetings, or summaries of actions of recent meetings for which minutes have not yet been prepared, of shareholders, board of directors and committees of the board of directors that may affect the financial statements, and access to such relevant information c) such internal control as management determined is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Management also acknowledges and understands that they are responsible for the design, implementation and maintenance of internal control to prevent and detect fraud. d) ensuring that all transactions have been recorded in the accounting records and are reflected in the financial statements. Internal control over financial reporting: 2) We have communicated to you all deficiencies in the design and implementation or maintenance of internal control over financial reporting of which management is aware. Fraud & non-compliance with laws and regulations: 3) We have disclosed to you: a) the results of our assessment of the risk that the financial statements may be materially misstated as a result of fraud b) all information in relation to fraud or suspected fraud that we are aware of and that affects the Entity and involves: management, employees who have significant roles in internal control, or others, where the fraud could have a material effect on the financial statements c) all information in relation to allegations of fraud, or suspected fraud, affecting the Entity s financial statements, communicated by employees, former employees, analysts, regulators, or others

173 Capital Regional District Audit Findings Report for the year ended December 31, d) all known instances of non-compliance or suspected non-compliance with laws and regulations, including all aspects of contractual agreements, whose effects should be considered when preparing financial statements e) all known actual or possible litigation and claims whose effects should be considered when preparing the financial statements Subsequent events: 4) All events subsequent to the date of the financial statements and for which the relevant financial reporting framework requires adjustment or disclosure in the financial statements have been adjusted or disclosed. Related parties: 5) We have disclosed to you the identity of the Entity s related parties. 6) We have disclosed to you all the related party relationships and transactions/balances of which we are aware. 7) All related party relationships and transactions/balances have been appropriately accounted for and disclosed in accordance with the relevant financial reporting framework. Estimates: 8) Measurement methods and significant assumptions used by us in making accounting estimates, including those measured at fair value, are reasonable. Misstatements: 9) The effects of the uncorrected misstatements described in Attachment II are immaterial, both individually and in the aggregate, to the financial statements as a whole. Commitments & contingencies: 10) There are no other liabilities that are required to be recognized and no other contingent assets or contingent liabilities that are required to be disclosed in the financial statements in accordance with the relevant financial reporting framework, including liabilities or contingent liabilities arising from illegal acts or possible illegal acts, or possible violations of human rights legislation. 11) There are no other environmental matters that may have an impact on the financial statements. Yours very truly, By: Mr. Robert Lapham, Chief Administrative Officer By: Mr. Nelson Chan, Chief Financial Officer

174 Capital Regional District Audit Findings Report for the year ended December 31, Attachment I Definitions Materiality Certain representations in this letter are described as being limited to matters that are material. Misstatements, including omissions, are considered to be material if they, individually or in the aggregate, could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. Judgments about materiality are made in light of surrounding circumstances, and are affected by the size or nature of a misstatement, or a combination of both. Fraud & error Fraudulent financial reporting involves intentional misstatements including omissions of amounts or disclosures in financial statements to deceive financial statement users. Misappropriation of assets involves the theft of an entity s assets. It is often accompanied by false or misleading records or documents in order to conceal the fact that the assets are missing or have been pledged without proper authorization. An error is an unintentional misstatement in financial statements, including the omission of an amount or a disclosure. Related parties In accordance with Canadian public sector accounting standards related party is defined as: one party that has the ability to exercise, directly or indirectly, control, joint control or significant influence over the other. Two or more parties are related when they are subject to common control, joint control or common significant influence. In accordance with Canadian public sector accounting standards, a related party transaction is defined as: a transfer of economic resources or obligations between related parties, or the provision of services by one party to a related party, regardless of whether any consideration is exchanged.

175 Capital Regional District Audit Findings Report for the year ended December 31, Attachment II Summary of Audit Misstatements Schedule(s) Corrected Adjustments None Uncorrected Adjustments To correct revenue earned in fiscal 2015 approximating $420,000 that had been deferred and recorded in the current fiscal year. The adjustment would reduce current year surplus and increase opening accumulated surplus. The entry is not material and remains uncorrected.

176 Capital Regional District Audit Findings Report for the year ended December 31, Appendix 4: Current developments Public Sector Accounting Standards: The following is a summary of current Public Sector Accounting Standards developments: Standard Related Party Transactions and Inter-entity Transactions Assets, Contingent Assets and Contractual Rights Summary and implications Two new Handbook sections were approved in December 2014, effective for fiscal years beginning on or after April 1, Related parties include entities that control or are controlled by a reporting entity, entities that are under common control and entities that have shared control over or that are subject to shared control of a reporting entity. Individuals that are members of key management personnel and close members of their family are related parties. Disclosure of key management personnel compensation arrangements, expense allowances and other similar payments routinely paid in exchange for services rendered is not required. Determining which related party transactions to disclose is a matter of judgment based on assessment of: o the terms and conditions underlying the transactions; o the financial significance of the transactions; o the relevance of the information; and o the need for the information to enable users understanding of the financial statements and for making comparisons. A related party transaction, with the exception of contributed goods and services, should normally be recognized by both a provider organization and a recipient organization on a gross basis. Related party transactions, if recognized, should be recorded at the exchange amount. A public sector entity s policy, budget practices or accountability structures may dictate that the exchange amount is the carrying amount, consideration paid or received or fair value. Three new Handbook sections were approved in March 2015, effective for fiscal years beginning on or after April 1, The intended outcome of the three new Handbook Sections is improved consistency and comparability. The standard includes enhanced guidance on the definition of assets and disclosure of assets to provide users with better information about the types of resources available to the public sector entity.

177 Capital Regional District Audit Findings Report for the year ended December 31, Disclosure of contingent assets and contractual rights is required to provide users with information about the nature, extent and timing of future assets and potential assets and revenues available to the public sector entity when the terms of those contracts are met. Asset Retirement Obligations A new standard is under development addressing the recognition, measurement, presentation and disclosure of legal obligations associated with retirement of tangible capital assets in productive use. PSAB currently contains no specific guidance in this area. PSAB recently released an Exposure Draft following the consideration of comments received in response to the previously released Statement of Principles. The proposed ARO standard would require the public sector entity to record a liability related to future costs of any legal obligations to be incurred upon retirement of any controlled tangible capital assets ( TCA ). The Exposure Draft also proposes to remove section PS3270 Solid Waste Landfill Closure and Post-closure Liability from the Public Sector Handbook, resulting in identical recognition and measurement concepts for all asset retirement obligations. This is an important change for those public sector entities who are operating, and have closure and post-closure liabilities associated with solid waste landfills. The liability will be recognized earlier, and in larger amounts than were recorded under the incremental usage method. This will also have an impact on net debt; organizations will have to anticipate the difference between the liability under the proposed PS3280 and as currently measured under PS3270. As a result of the proposed standard, the public sector entity will have to: o consider how the additional liability will impact net debt, as a new liability will be recognized with no corresponding increase in a financial asset; o carefully review legal agreements, senior government directives and legislation in relation to all controlled TCA to determine if any legal obligations exist with respect to asset retirements; o begin considering the potential effects on the organization as soon as possible to coordinate with resources outside the finance department to identify AROs and obtain information to estimate the value of potential AROs to avoid unexpected issues. The standard has a proposed effective date of April 1, Restructuring Transactions A new Handbook section was approved in March 2015, effective for fiscal years beginning on or after April 1, A restructuring transaction is a transfer of an integrated set of assets and/or liabilities, together with related responsibilities for program delivery or administrative operations, that does not involve a payment or other consideration that approximates the fair value of what is transferred. The new standard requires the transferor remove the assets and liabilities transferred from its books at their carrying amount at the restructuring date. The recipient would recognize the assets and liabilities received at their carrying amount with applicable adjustments at the restructuring date. Both the transferor and the recipient would recognize the net effect of the transfer and any compensation involved as revenue or an expense.

178 Capital Regional District Audit Findings Report for the year ended December 31, Restructuring-related costs are recognized as expenses when incurred. Financial information prior to the restructuring date would not be restated. Financial Instruments New accounting standards, Financial Instruments PS3450 and Foreign Currency Translation PS2601 have been approved by PSAB and are effective for years commencing on or after April 1, Early adoption is permitted. Equity instruments quoted in an active market and free-standing derivatives are to be carried at fair value. All other financial instruments, including bonds, can be carried at cost or fair value depending on the public sector entity s choice. This choice must be made on initial recognition of the financial instrument and is irrevocable. Instruments denominated in foreign currencies must be adjusted to reflect the exchange rate in effect at the reporting date. A new statement, the Statement of Re-measurement Gains and Losses, will be included in the financial statements. Unrealized gains and losses incurred on fair value accounted and foreign currency denominated financial instruments will be presented in this statement. Realized gains and losses will continue to be presented in the Statement of Operations. Revenue PSAB is proposing a single framework to categorize revenues to enhance the consistency of revenue recognition and its measurement. A Statement of Principles was issued in 2013 and an Exposure Draft is anticipated to be published in early Adoption of these principles would result in a need to assess current accounting policies. In the case of revenues arising from an exchange, a public sector entity must ensure the recognition of revenue aligns with the satisfaction of related performance obligations. For unilateral revenues, recognition occurs when there is authority to record the revenue and an event has happened that gives the public sector entity the right to the revenue.

179 kpmg.ca/audit KPMG LLP, an Audit, Tax and Advisory firm (kpmg.ca) and a Canadian limited liability partnership established under the laws of Ontario, is the Canadian member firm of KPMG International Cooperative ( KPMG International ). KPMG member firms around the world have 174,000 professionals, in 155 countries. The independent member firms of the KPMG network are affiliated with KPMG International, a Swiss entity. Each KPMG firm is a legally distinct and separate entity, and describes itself as such KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved.

180 2016 CRD Statement of Financial Information Presentation to Capital Regional District Finance Committee Wednesday, June 7, 2017

181 2016 Executive Summary 1. Financial Reporting Timeline 2. What are the Financial Statements 3. How do the Statements Relate 4. Highlights from Statements 5. Additional Information 6. Financial Metrics and Indicators In 2016, the Capital Regional District continued focus on supporting Regional Priorities identified in the Corporate and Strategic Plan Investments made for the Future Capital investment was 1.3x the rate of depreciation Managing the Cost of Debt Less than 15% of total revenue was spent on long-term debt payments Diversifying Revenue Streams Almost ½ of revenue came from sale of services while just over ¼ from requisition

182 Financial Cycle Timeline 2017 Final Budget to be approved by March 31 (operating & capital) Mar Financial & Service Planning start of the service planning process Jul 2017 Provisional Budget approved by Committee of the Whole Nov 2017 PUBLIC FEEDBACK FINANCIAL AUDIT 2016 Year End related activities, accruals, adjustments, etc. Feb Audited Financial Statements to be approved by June 30 Jun 2017 Service Plans reviewed and recommended by committee & commissions Oct 2017 CRD Audited Financial Statements Legislation requires statements be approved by June 30 and submitted to the Ministry of Community, Sport, and Cultural Development Financial Statements are prepared on an accrual basis (as required by PSAB) Consolidated statements include all CRD services and CRHC 3

183 What are the financial statements? Financial Position Operations Change in Net Debt Remeasurement Gains and Losses Cash Flows The overarching statement that summarizes CRD s financial position at a point in time. Changes in the financial position are summarized in the following four statements. Explains the change in the overall financial position during the accounting period except those reported in the Statement of Remeasurement Gains and Losses. Reconciles the change in net debt for the current and prior year. Net debt is a financial performance measure unique to public sector financial reporting. Explains the change in the overall financial position due to remeasurements related to unrealized gains and losses on specific financial assets and liabilities recorded at fair value. Explains the change in cash and cash equivalents from the prior year and provides information about the ability to generate cash to meet cash requirements. 4

184 How do the statements relate? Statement of Financial Position Financial Assets Cash & Cash Equivalents XXX XXX Other Assets XXX XXX XXX XXX Financial Liabilities Accounts Payable XXX XXX Other Liabilities XXX XXX XXX XXX Net Financial Assets (Debt) XXX XXX Non-Financial Assets Tangible Capital Assets XXX XXX Other Non-Financial Assets XXX XXX XXX XXX Accumulated Surplus is comprised of; Accumulated Operating Surplus XXX XXX Accumulated Remeasurement Gains/Losses XXX XXX Explaining Changes in Financial Position Statement of Cash Flow Operating Transactions X X Capital Transactions X X Investing Transactions X X Financing Transactions X X X X Cash & Equivalents at Beginning of Year X X Cash & Equivalents at End of Year X X Statement of Net Debt Annual Surplus X X Acquisition of Tangible Capital Assets X X X X Net Debt at Beginning of Year X X Net Debt at End of Year X X Statement of Operations Revenue X X Expenses X X X X Accumulated Surplus Beginning of Year X X Accumulated Surplus End of Year X X Statement of Remeasurement Gains Accumulated Remeasurement Opening X X Net Remeasurement Gains (Losses) X X Accumulated Remeasurement Close X X 5

185 1. Statement of Financial Position Summary of Consolidated Statement December 31, 2016 with comparative information for 2015 ($M) B/(W) $ B/(W) % Financial Assets % Financial Liabilities % Net Debt (36) (89) 53 60% Non-Financial Assets 1,013 1, % Accumulated Surplus $977 $918 $59 6% Change in Financial Assets Change in Financial Liabilities A net decrease in the acquisition of tangible capital assets and timing of accounts payable (+35M) Increase in recoverable debt from member municipalities (+9M) Primarily due to the net change in additions (+24M) and retirement (-32M) of long-term debt 6

186 2. Statement of Operations Summary of Consolidated Statement December 31, 2016 with comparative information for 2015 ($M) B/(W) $ B/(W) % Revenue % Expenses % Annual Surplus % Accumulated Surplus Beginning of Year % Accumulated Surplus End of Year $978 $918 $60 7% Change in Revenue 2016 Annual Surplus Driven primarily through increases in Sale of Services (+9M), Transfers from Government (+4M), and Developer Contributions (+2M) Offset by a reduction in other Revenue (-5M) Financial statements are prepared in accordance with Public Sector Accounting Board (PSAB) standards Operating Surplus +4M, and +56M increase in capital and reserve equity 7

187 3. Statement of Net Debt Summary of Consolidated Statement December 31, 2016 with comparative information for 2015 ($M) B/(W) $ B/(W) % Annual Surplus % Acquisition of Tangible Capital Assets (36) (51) 15 30% Amortization of Tangible Capital Assets (5) (14)% Other (1) (1) - 82% Change in Net Debt % Net Debt Beginning of Year (89) (119) 30 25% Net Debt End of Year ($36) ($89) $53 60% Change in 2016 Net Debt The CRD continues to reduce long term debt resulting in an improved debt position in 2016 by $53M 8

188 4 & 5. Remeasurement & Cash Flow Remeasurement of Gains & Losses ($M) Accumulated remeasurement gains and losses, beginning of year B/(W) $ B/(W) % Unrealized gain (loss) on investment (0.4) - (0.4) - Accumulated remeasurement gains and losses, end of year ($0.4) $- ($0.4) - Change in MFA investment reporting. Elect for early adoption of PS3450 Financial Instruments, now carried at fair value, results in remeasurement loss in Remeasurement loss is unrealized unless market conditions are similar at time of investment maturity. Statement of Cash Flow ($M) 2016 Operating Activities 80 Capital Activities (33) Investing Activities 18 Financing Activities (12) Net Cash and Cash Equivalents 53 Cash and Equivalents Beginning of Year 37 Favourable bank interest rates vs term investments resulted in +18M cash from investing activities. Higher cash amounts mainly due to annual surplus in Operating Activities. The Consolidated Statement of Cash Flow inherently explains the change in cash from the end of the prior year to the end of the current year, as a result comparison to 2015 is not necessary however this is available in the financial statements in appendix 1. Cash and Equivalents End of Year $90 9

189 Additional Information Additional Statements & Schedules (Appendix 1) 6. Schedules of Long Term Debt 7. Schedule of Guarantee and Indemnity Agreements 8. Schedule of Supplies of Goods and Services 9. Schedule of Remuneration and Expenses Directors 10. Schedule of Remuneration and Expenses Employees 11. Statement of Severance Unaudited Financial Statements (Appendix 2) a. Revenue Funds Statement of Financial Position b. Revenue Funds Statement of Surplus/Deficit c. General, Sewer and Water Revenue Funds Statement of Operations d. Capital Funds Statement of Financial Position e. Capital Funds Statement of Financial Activities f. Capital Funds Statement of Capital Financing g. Reserve Funds Statement of Continuity 10

190 Financial Metrics and Benchmarking DBRS is the largest rating agency in Canada and fourth largest in the world. Using the rating methodology for municipal government, CRD results are shown below. $5,000 10% 20% $4,500 9% 18% $4,000 8% 16% $3,500 7% 14% $3,000 6% 12% $2,500 5% 10% $2,000 4% 8% $1,500 3% 6% $1,000 2% 4% $500 1% 2% $- 0% 0% net tax-supported debt per capita net tax-supported debt as % of assessment interest costs as a percentage of revenue AAA AA A BBB The capacity for the payment of financial obligations is exceptionally high and unlikely to be adversely affected by future events. The capacity for the payment of financial obligations is considered high. Differs from AAA only to a small degree. Unlikely to be significantly vulnerable to future events. The capacity for the payment of financial obligations is substantial. May be vulnerable to future events, but considered manageable. Adequate credit quality. The capacity for the payment of financial obligations is considered acceptable. May be vulnerable to future events. Rating Canadian Municipal Governments: Canadian Municipal Government Financial Risk Metrics, by DBRS (Dominion Bond Rating Service) dbrs.com/research/294971/rating-canadian-municipal-governments.pdf, May

191 Additional Financial Analysis Capital Investment vs. Amortization Investments made for the Future 2013 Capital Investment Amortization 2016 Capital investment was 1.3x the rate of depreciation Through 2016 net book value of tangible capital assets is $1 billion $ Millions 1,600 1,400 1,200 1, Tangible Capital Assets Tangible Capital Asset Net Book Value Tangible Capital Asset Acquisition Value Accumulated Amortization 12

192 Additional Financial Analysis Debt Service Costs to Total Revenue 25.0% generally accepted upper limit from lending authorities 20.0% 15.0% Managing the Cost of Debt Less than 15% of total revenue was spent on long-term debt payments 10.0% 5.0% In 2016, CRD debt on average has matured to where principal payments are 59% of debt servicing costs, while interest payments are 41% 41% Debt Servicing Costs 59% Principal Portion of Payment Interest Portion of Payment 13

193 Additional Financial Analysis 2016 Sources of Revenue Sale of Services Requisition Other Revenue Municipal Debt Servicing Diversifying Revenue Streams Almost ½ of revenue came from sale of services while just over ¼ from requisition 6% 24% 27% 43% 14

194 Additional Financial Analysis Quick Ratio: Measure of short-term liquidity or the ability to pay immediate financial obligations (greater than 1 is ideal) Debt-to-Equity Ratio: Measure of financial leverage, or using debt to increase value (essential public service utilities average 1.2) Nanaimo Cowichan Valley CRD C Okanagan Comox Valley Peace River N Okanagan Average 0.0 Peace River C Okanagan Comox Valley Nanaimo N Okanagan Cowichan Valley CRD Average Interest Coverage Ratio: Measures how easily a company can pay interest on outstanding debt (greater than 2 is ideal) Capital Reserve Health: Measure of ability to finance long-term investment projects, also acts as buffer during financial hardship % % 30% % 10% 0.0 CRD Cowichan Valley Nanaimo N Okanagan Peace River Comox Valley C Okanagan Average 0% Nanaimo Comox Valley Peace River C Okanagan CRD Cowichan Valley N Okanagan Average CRD from 2016 Audited Financial Statement, Source for Rest: Local Government Statistics 2015, by Ministry of Community, Sport & Cultural Development, May 2017 Excluded from comparison due to size of region (less than $10M or greater than $300M in costs); Alberni-Clayoquot, Central Coast, Metro Vancouver, Mount Waddington, Powell River, Skeena-Queen Charlotte. Excluded from comparison due to data integrity from ministry database; Fraser Valley 15

195 REPORT TO FINANCE COMMITTEE MEETING OF WEDNESDAY, JUNE 7, 2017 SUBJECT Climate Action Revenue Incentive Program (CARIP) 2016 Reporting ISSUE To report on the Capital Regional District s (CRD) progress towards Climate Action Charter Commitments for the 2016 operational year. BACKGROUND In 2008, the CRD signed the BC Climate Action Charter and additionally committed to reducing operational greenhouse gas (GHG) emissions 33% below 2007 levels by The Climate Action Revenue Incentive Program (CARIP) is a provincially funded conditional grant program that provides funding to BC Climate Action Charter signatories equivalent to 100% of the carbon taxes they pay directly. To be eligible for the program, Charter signatories must report publicly on their plan and progress toward meeting climate action goals, including progress towards carbon neutrality through an annual CARIP Survey CARIP REPORT The 2016 CARIP Climate Action/Carbon Neutral Progress Survey template is developed by the Province and provides local governments a tool to publicly report on progress towards Climate Action Charter commitments, including: status of carbon neutrality operational GHG emissions actions taken to reduce corporate and community-wide energy consumption and GHG emissions, and prepare for climate change impacts In 2016, the CRD achieved carbon neutrality within corporate operations by offsetting corporate GHG emissions with the CRD Landfill Gas Emissions Reduction Project. Staff continued to work to reduce operational emissions to meet the 2020 GHG emissions reduction target. The 2016 CRD CARIP Climate Action/Carbon Neutral Progress survey is included within Appendix A, as Climate Action Revenue Incentive (CARIP) Public Report for The CRD 2016 corporate GHG inventory is included in Appendix B, and the CRD approach to meeting operational GHG reduction targets can be found in the Corporate Climate Action Strategy (Appendix C). Actions taken by the CRD Climate Action Program to support community-wide and local government energy and GHG emissions reductions can be found in the Climate Action Program 2016 Annual Report, which was recommended by the Environmental Services Committee on May 24, 2017, for Board approval (Appendix D). 2016/17 CORPORATE CLIMATE ACTION HIGHLIGHTS In 2016, the CRD Board endorsed the CRD Corporate Climate Action Strategy (Appendix C), which identifies a policy framework and actions to meet the CRD corporate climate action commitments through integrating climate action into everyday business across the organization. FINT

196 Finance Committee June 7, 2017 Climate Action Revenue Incentive Program (CARIP) 2016 Reporting 2 In 2017, staff are working on the following priority activities: continue implementation of climate lens review process on all future capital projects; launch the Zero Emissions Fleet Initiative to significantly reduce GHG emissions from lightduty vehicles in the CRD fleet; establish a corporate energy management process for buildings, facilities and infrastructure; and develop technical standards for new construction to ensure high energy performance and lowcarbon criteria are incorporated into design of all new facilities. In addition to the above, staff are working to develop a communications plan to share corporate progress on climate action with staff, Board and the public. 2016/17 COMMUNITY CLIMATE ACTION HIGHLIGHTS In 2016, staff from divisions and departments across the CRD undertook 87 actions to reduce energy consumption and GHG emissions from within the community, including advancing the Regional Growth Strategy, completing the Regional Food and Agriculture Strategy, and developing a report: Climate Projections for the Capital Region. In 2017, the CRD Board endorsed the Regional Climate Action Strategy (RCAS). Building on the work being done by the CRD, residents, businesses, local, federal and provincial governments and First Nations, the RCAS will guide the CRD services to support community-focused climate mitigation and adaptation over the next five years. ALTERNATIVES Alternative 1 That the Finance Committee recommend to the Capital Regional District Board: That the 2016 Climate Action Revenue Incentive Program (CARIP) Report be received for information. Alternative 2 That the 2016 Climate Action Revenue Incentive Program (CARIP) Report be sent back to staff for more information. IMPLICATIONS ENVIRONMENTAL/CLIMATE LENS IMPLICATIONS By working to reduce GHG emissions from operations, CRD can reduce its contribution to climate change and demonstrate strategies for emissions reductions to others in the Region. The CRD 2016 corporate GHG inventory can be found in Appendix B. The CRD approach to meeting operational GHG reduction targets can be found in the Corporate Climate Action Strategy (Appendix C).

197 Finance Committee June 7, 2017 Climate Action Revenue Incentive Program (CARIP) 2016 Reporting 3 ECONOMIC IMPLICATIONS The 2016 CRD CARIP grant is expected to be approximately $69,000. This grant will help fund the climate action analyst position located within the Financial Services department. CONCLUSION As a signatory of the BC Climate Action Charter, the CRD has established targets to reduce operational GHG emissions, is working towards these targets, and participates in the Provincial Climate Action Revenue Incentive Reporting Program. The CRD was carbon neutral in operational emissions in 2016, and continues to meet its Climate Action Charter Commitments. To receive CARIP grant funding, the CRD is required to submit the Climate Action Revenue Incentive (CARIP) Public Report for 2016 to the Province, and make this report publicly available. RECOMMENDATION(S) That the Finance Committee recommend to the Capital Regional District Board: That the 2016 Climate Action Revenue Incentive Program (CARIP) Report be received for information. Submitted by: Concurrence: Concurrence: Nancy Moore, CRM, Manager, Risk & Insurance Management Nelson Chan, MBA, CPA, CMA, Chief Financial Officer Kevin Lorette, P.Eng., MBA, Acting Chief Administrative Officer LF:ngm Attachments: Appendix A: 2016 Climate Action Revenue Incentive (CARIP) Public Report for 2016 Appendix B: CRD 2016 Corporate GHG Emissions Inventory Appendix C: CRD Corporate Climate Action Strategy Appendix D: CRD Climate Action Program Annual Report

198 Climate Action Revenue Incentive (CARIP) Public Report for 2016 Local Government: Capital Regional District 625 Fisgard Street Victoria, BC, Canada V8W 1R7 Report Submitted by: Name: Liz Ferris Role: Climate Action Analyst Phone: Date: June 1 st, 2017 The Capital Regional District has completed the 2016 Climate Action Revenue Incentive Program (CARIP) Public Report as required by the Province of BC. The CARIP report summarizes actions taken in 2016 and proposed for 2017 to reduce corporate and community-wide energy consumption and greenhouse gas emissions (GHG) and reports on progress towards achieving carbon neutrality. 1 P a g e

199 2016 BROAD PLANNING ACTIONS Broad Planning Actions Broad Planning refers to high level planning that sets the stage for GHG emissions reductions, including plans such as Official Community Plans, Integrated Community Sustainability Plans, Climate Action Plans or Community Energy Emissions Plans. Land use planning that focuses on Smart Growth principles (compact, complete, connected, and centred) plays an especially important role in energy and GHG reduction. Community-Wide Actions Taken in 2016 Advanced in Regional Growth Strategy preparation Completed Regional Food and Agriculture Strategy Developed draft Regional Climate Action Strategy Developed the Climate Projections for the Capital Region report Community-Wide Actions Proposed for 2017 Adopt Regional Growth Strategy Begin implementation of Food and Agriculture Strategy Complete SGI Food and Agriculture Strategy Complete Agricultural Land Use Inventory and Agricultural Water Demand Modelling (grant dependent) Develop future climate change projections for the capital region Approve and implement Regional Climate Action Strategy Finalize the Climate Projections for the Capital Region report and develop communication materials Corporate Actions Taken in 2016 Implemented energy monitoring software for 400+ CRD utility accounts to obtain baseline usage data Reviewed division guidelines for developing leasehold and capital improvement projects Developed climate-lens for decision making for all new capital projects Developed Corporate Climate Action Strategy Corporate Actions Proposed for 2017 Ongoing land acquisition strategy to purchase forested lands/carbon sequestration Implement the Corporate Climate Action Strategy Implement climate-lens for decision making for all new capital projects Update the procurement policy to align procurement and vendor selection with the CRD's corporate climate policy, and develop supporting decision criteria and matrix Broad Planning 2 P a g e

200 What is (are) your current GHG reduction target(s)? Corporate Emissions Reduction: 33% below 2007 levels by 2020 Has your local government used the Community Energy and Emissions Inventory (CEEI) to measure progress? What plans, policies or guidelines govern the implementation of climate mitigation in your community? Community Energy and Emissions (CEE) Plan Climate Action Plan Integrated Community Sustainability Plan Official Community Plan (OCP) Regional Growth Strategy (RGS) Do not have a plan Other: Does your local government have a corporate GHG reduction plan? Does your local government have a climate reserve fund or something similar? Yes/No Yes/No Yes/No Yes/No N/A Yes/No Yes/No Yes/No Yes/No Yes/No 2016 BUILDINGS AND LIGHTING ACTIONS Building and Lighting Actions Low-carbon buildings use the minimum amount of energy needed to provide comfort and safety for their inhabitants and tap into renewable energy sources for heating, cooling and power. These buildings can save money, especially when calculated over the long term. This category also includes reductions realized from energy efficient street lights and lights in parks or other public spaces. Community-Wide Actions Taken in 2016 Offered and promoted Food Service Establishment Water, Energy and GHG Savings Program providing energy assessments and pre-rinse spray valve and aerator installations free of charge in partnership with FortisBC and City Green Solutions, with support from the City of Victoria Provided and promoted top up incentives to CRD residents for the Provincial Oil to Heat Pump Incentive Program Delivered social media energy conservation education campaign in partnership with BC Hydro Distributed and revised the Climate Action To Go Kits. Available for residents and teachers (grades K-12), kits include resources and tools to reduce home energy use and GHG emissions Supported industry workshop centered on upcoming BC Energy Step Code Engaged local governments on BC Energy Step Code and adaptation Promote available home retrofit incentive programs to CRD residents Community-Wide Actions Proposed for 2017 Co-host a Resilient Region Exchange Breakfast event centred on low-carbon buildings Complete the Food Service Water and Energy Savings Program Provide and promote additional Oil to Heat Pump top up incentives to regional households Distribute and promote the revised and new Climate Action To Go Kits Develop and deliver energy literacy education and outreach Engage local government staff and industry on BC Energy Step Code and climate adaptation 3 P a g e

201 Promote available home retrofit incentive programs to CRD residents Corporate Actions Taken in 2016 Established policies for new and existing buildings and facilities to minimize GHG emissions and maximize lifecycle cost savings Conducted an LED upgrade with estimated 150,000 kwh reduction and $25,500 savings annually at SEAPARC recreation facility Began to phase out old technology fluorescent light fixtures and replace with high efficiency LED fixtures within various buildings Engaged energy consultant reviews of LED Lighting applications, indoor and outdoor applications Built lighting replacement program for energy conservation and efficiency review Began natural gas boiler upgrade with estimated 61 ton Carbon Dioxide reduction and $40,000 savings annually at SEAPARC recreation facility Completed rehabilitation of existing roof at Greenglade. The new roof coating improves thermal heat retention in facility, thus reducing energy consumption Pursued BOMA Best Certification to assist developing energy utilization baseline data for all facilities managed by the Facility Management division Conducted building Hazardous Materials Assessments in CRD owned buildings Completed inventory of buildings containing asbestos and identified actions to address issues Installed programmable thermostats in the buildings at Parks HQ, programmed to reduce power usage in the evenings and on weekends Used low-voc interior 100% acrylic latex paint No pressure treated wood used in direct ground contact applications Returned surplus paints and stains to paint recycling facility when possible Used LEED certified building materials where possible Commissioned East Sooke Fire Hall Engaged local contractors wherever possible Corporate Actions Proposed for 2017 Establish a corporate energy management process for buildings, facilities and infrastructure that includes: monitoring and reporting of facility energy consumption and energy management in existing buildings using the real-time utility data, metrics that communicate progress towards the CRD GHG target, contextual information on changes in level of service, e.g.: total corporate GHG emissions and GHG emissions/square foot of buildings operated by CRD Establish technical standards for new construction to ensure high energy performance and lowcarbon criteria are incorporated into design of new facilities, including: aligning standards with new provincial Energy Step Code (e.g., Passive House Standard), ensuring standards are incorporated in requests for proposals as baseline Complete recommendations from the Panorama and SEAPARC energy assessments that minimize GHG emissions and energy use, including upgrading to high-efficiency natural gas boilers, implementing ice plant heat recovery at SEAPARC and investigating the waste heat recovery opportunity at Panorama Continue replacement program for LED fixtures Install new refrigeration piping and insulated concrete slab installation, for improved efficiency and energy reductions 4 P a g e

202 Review and install new dehumidification system for arena A&B for improved energy efficiencies and possible heat reclaim at Panorama Recreation Center Continue to use low-voc interior 100% acrylic latex paint policy Continue to use alternatives to pressure treated wood in direct ground contact applications Continue to return all surplus paints and stains to paint recycling facility Continue to engage local contractors wherever possible Continue use of LEED certified building materials Continue lighting upgrades in FM managed buildings Conduct boiler retrofit at Panorama Rec Center Conduct integrated design process for heat recovery program at Panorama Recreation Center Update asset management process to incorporate evaluation of and/or low carbon technologies at the time of asset renewal Incorporate energy efficiency into regional water supply infrastructure renewal projects through strategic asset management plans Design heating, ventilation and air conditioning systems that minimize the use of fossil fuels (heating oil and natural gas) and consider renewable energy sources ENERGY GENERATION ACTIONS Energy Generation Actions A transition to renewable or low-emission energy sources for heating, cooling and power supports large, long-term GHG emissions reductions. Renewable energy including waste heat recovery (e.g. from biogas and biomass), geo-exchange, micro hydroelectric, solar thermal and solar photovoltaic, heat pumps, tidal, wave, and wind energy can be implemented at different scales, e.g. in individual homes, or integrated across neighbourhoods through district energy or co-generation systems. Community-Wide Actions Taken in 2016 Provided top up incentives to CRD residents for the Provincial Oil to Heat Pump Incentive Program Distributed and promoted Climate Action To Go Kits, resources and tools to reduce energy use and GHG emissions for residents and K-12 classrooms Community-Wide Actions Proposed for 2017 Continue to provide top up incentives to CRD residents for the Provincial Oil to Heat Pump Incentive Program Distribute and promote new and updated Climate Action To Go Kits, resources and tools to reduce energy use and GHGe for residents and K-12 classrooms Corporate Actions Taken in 2016 Reviewed landfill gas utilization to ensure continued long-term beneficial use of landfill gas for the region Continued operating the Saanich Peninsula Thermal Energy Recovery pilot project, which reduces GHG emissions by approximately 370 tonnes CO2-e/year 5 P a g e

203 Continued operating the Pump as Turbine (PAT) or onsite hydro generation system at the Sooke River Road Water Treatment Facility Used power saving plugs and power bars for equipment left plugged in Initiated Panorama Recreation Center (PRC) Boiler Replacement / Energy Integration Study. This study was to identify opportunities to maximize the utilization of waste heat from various facility systems and operations. The waste heat could supplement the thermal energy demand and natural gas consumption within the PRC. However, due to budget constraints this initiative has been deferred. Processed brush pile from invasive species removal into biofuel in Parks Corporate Actions Proposed for 2017 Investigate increased utilization of landfill gas as an alternate energy source and conduct business case analysis to produce RNG in partnership with Fortis BC Continue operating the Saanich Peninsula Thermal Energy Recovery pilot project, which reduces GHG emissions by approximately 370 tonnes CO2-e/year Continue operating the Pump as Turbine (PAT) or onsite hydro generation system at the Sooke River Road Water Treatment Facility Investigate heat reclaim as part of the new dehumidification system upgrade at Panorama Recreation Center Continue to have brush pile from invasive species removal processed into biofuel Energy Generation Is your local government developing, or constructing: A district energy system A renewable energy system Is your local government operating: A district energy system A renewable energy system Is your local government connected to a district energy system that is operated by another energy provider? Are you aware of the Integrated Resource Recovery guidance page on the BC Climate Action Toolkit? Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No 2016 GREENSPACE/ NATURAL RESOURCE PROTECTION ACTIONS Greenspace Actions Greenspace/Natural Resource Protection refers to the creation of parks and greenways, boulevards, community forests, urban agriculture, riparian areas, gardens, recreation/school sites, and other green spaces, such as remediated brownfield/contaminated sites as well as the protection of wetlands, waterways and other naturally occurring features. Community-Wide Actions Taken in P a g e

204 Adopted the Food & Agriculture Strategy, which identifies the CRD s role in food and agriculture, along with recommendations, associated actions and resourcing requirements Developed and adopted the Regional Trails Management Plan to guide development, operations and management decision-making for Regional Trails Provided Community Gardens at the Greenglade location. This project has allowed for individuals to plant and grow a variety of edible and non-edible items each year Initiated a nature-based preschool program in Central Saanich (Centennial Park) to educate young children (3-5 yrs) on nature/the forest and its importance creating environmental ambassadors Continued an ongoing land acquisition strategy to purchase and conserve forested lands increasing carbon sequestration Continued restoration of high ecological value habitats in 20 active restoration sites in Regional Parks Undertook reforestation/ revegetation of previously contaminated & remediated site at the Thetis Lake Pistol Range Participated in the Green Shores Local Government Working group and promote Green Shores to encourage shoreline property owners to protect shorelines using more softer green approaches Hosted workshop for local government staff to learn about Sea Level Rise adaptation taking place in mainland cities Offered Grow an Edible Garden workshops to residents to support them choose the right varieties of food plants they can grow on their property. Workshop covered the basics of plant nutrition, soil fertility and preparation, designs for garden beds and efficient ways to water plants Engaged residents at community events and farmers markets on local food security, watershed protection, providing Growing Solutions Fresh Food calendars for local food harvest Developed a Growing Solutions Planting Schedule for local food harvest planning Participated on advisory committee and review provincial adaptation video series Supported the completion of the Oak Bay High School Bowker Creek Restoration Project Supported keyline design study and education for agricultural rainwater management Participated in outreach with the Capital Region Invasive Species Partnership Implemented Elk and Beaver Lake Initiative to enhance lake function Piloted Residential Edible Plant Gardening Workshop Engaged 188 regional school aged children in the earning of their CRD watershed warden badges Conducted Native Plant Workshops promoting drought tolerant plants, replacing of high water use lawns, increasing food security, and composting with a focus on the restoration of the Douglas Fir and Garry Oak ecosystems Administered multi-stakeholder watershed focused initiatives (Gorge Watershed Initiative, Esquimalt-Lagoon Stewardship Initiative, Bowker Creek Initiative) Administered two Integrated Watershed Management Committees (one for community members, one for municipal staff); hosted 6 meetings total Community-Wide Actions Proposed for 2017 Implement the Regional Food & Agriculture Strategy Implement the Regional Trails Management Plan Continue promotion of urban gardens Expand the nature-based preschool program in Central Saanich (Centennial Park) to educate young children (3-5 yrs) on nature/the forest and its importance creating environmental ambassadors Continue Green Shores Local Government Working Group participation 7 P a g e

205 Continue to offer residential Grow an Edible Garden workshops Distribute and promote Growing Solutions resources Continue support of the keyline design study and education for agricultural rainwater management Continue administration of multi-stakeholder watershed focused initiatives (Gorge Watershed Initiative, Esquimalt-Lagoon Stewardship Initiative, Bowker Creek Initiative) Continue administration of two Integrated Watershed Management Committees (one for community members, one for municipal staff) Continue Elk and Beaver Lake Initiative to enhance lake function Host a natural asset management workshop for regional stakeholders Corporate Actions Taken in 2016 Maintained green space planted with indigenous species on closed portions of Hartland landfill Continued enhancement of Panorama Recreation Center landscaping and garden areas Trail management of Panorama Recreation Center forested areas and nature trails Maintained green roof, rooftop garden, and living wall at CRD headquarters facility Corporate Actions Proposed for 2017 Maintenance of green space planted with indigenous species on closed portions of Hartland landfill Maintain green roof, rooftop garden, and living wall at CRD headquarters facility Greenspace Does your local government have urban forest policies, plans or programs? Yes/No 2016 SOLID WASTE ACTIONS Solid Waste Actions Reducing, reusing, recycling, recovering and managing the disposal of the residual solid waste minimizes environmental impacts and supports sustainable environmental management, greenhouse gas reductions, and improved air and water quality. Community-Wide Actions Taken in 2016 Maintained existing waste diversion and residuals management programs Conducted waste stream analysis to assess success of kitchen scraps ban and other initiatives and to plan new programs with GHG reduction potential Expanded recycling program at 479 Island Hwy for example separating wood out of garbage and sending it for recycling Installed of recycling stations for waste diversion at Panorama Recreation Center Hosted Hartland Happening, a community open house and tours of Hartland landfill and recycling facility Educated residents about safely managing home renovation and demolition waste 8 P a g e

206 Provided community outreach services to promote waste reduction and diversion Provided school and community tours of the Hartland Landfill and Recycling Facility to promote waste reduction and diversion Promoted the online Blue Box collection schedule and calendar reminder Community-Wide Actions Proposed for 2017 Maintain existing waste diversion and residuals management programs Enhance kitchen scraps education to divert additional materials from the landfill Corporate Actions Taken in 2016 Undertook Regional Parks initiative to encourage staff to bring in cardboard, paper, Styrofoam, plastic, electronics and organic materials for recycling and divert from the landfill Returned stale fuel, oil, tires and batteries for recycling Encouraged staff to print double-sided and avoid use of colour printing wherever possible Used sign making Printer/Cutter, that uses Eco-Solvent (Low Volatile Organic Compounds (VOC), Non-toxic) Re-used vinyl sign liner-paper as packaging. Save and re-purpose paper roll ends. Source recycled/recyclable materials, i.e.: use a rigid paper-based recyclable rigid display board instead of plastic materials Collected recyclable materials within Regional Parks and returned to appropriate recycling depots (bottles, cans, metal etc.). Corporate Actions Proposed for 2017 Conduct feasibility study with Fortis for innovative landfill gas utilization Issue RFEOI for Integrated Resource Management and submit beneficial bio solids reuse plan to Ministry by May 31, 2017 Continue running previously established staff recycling programs in place Continue In House diversion of general refuse, plastic containers, packing materials, sorting and disposal Continue Re-use of vinyl sign liner-paper as packaging. Save and re-purpose paper roll ends. Source recycled/recyclable materials, i.e.: use a rigid paper-based recyclable rigid display board instead of plastic materials Solid Waste Does your local government have construction and demolition waste reduction policies, plans or programs? Does your local government have organics reduction/diversion policies, plans or programs? Yes/No Yes/No 2016 TRANSPORTATION ACTIONS 9 P a g e

207 Transportation Actions Transportation actions that increase transportation system efficiency, emphasize the movement of people and goods, and give priority to more efficient modes, e.g. walking, cycling, ridesharing, and public transit, can contribute to reductions in greenhouse gas emissions and more livable communities. Community -Wide Actions Taken in 2016 Continued use of CNG fueled collection vehicles used to collect curbside recyclables As part of the People Power initiative, the free Play in the Park program offered fire bike safety workshops and promotional water bottles as well as funded the purchase of a mobile skate park and large water canteen to encourage community members to walk, cycle or roll to the event; these purchases will also be used at other community events and will encourage active transportation options Constructed 250 m of the E&N Rail Trail a multi-modal cycle trail Humpback Connector completed between Wilson Street and Esquimalt Road in the City of Victoria Delivered the Active and Safe Routes to School Program Delivered the People Power Program to increase use of active transportation Facilitated Discussion of CRD taking on a broader role in regional Transportation including active transportation and TDM Deployed and promoted Smart Drive Challenge for residents to increase fuel efficient driving habits and use of active modes Promoted EV vehicle and charging infrastructure incentive programs Co-Hosted Resilient Region Exchange centred on multi-modal transportation Sponsored Bike to School and Bike to Work Week 2016 Community-Wide Actions Proposed for 2017 Continue use of CNG fueled collection vehicles used to collect curbside recyclables Continue active transportation integration with our Play in the Park program: more workshops and education, promotion and prizing Construct approximately 1km of the E&N Rail Trail Humpback Connector between Maplebank Road (Songhees First Nation), Admirals Road (Ministry of Transportation and Infrastructure) and Hallowell Road (Town of View Royal) Deliver Active and Safe Routes to School Program (last year of 2 year pilot project) Deliver People Power Programming to increase use of active transportation (last year of 2 year pilot project) Complete region-wide Origin Destination transportation survey Install EV Charging station for SEAPARC recreation facility Undertake EV education and literacy in partnership with the Emotive Program Promote EV vehicle and charging infrastructure incentive programs Co-Host Resilient Region Exchange for low-emission transportation including EV Host active transportation fair Corporate Actions Taken in 2016 Established a green fleet policy to achieve continuous, significant reductions in GHG emissions from the CRD fleet and strive towards zero emissions for all new fleet vehicles 10 P a g e

208 Signed the west coast electric fleets initiative pledge to increase the update of electric vehicles within the CRD fleet Conducted feasibility analysis and established partnerships for a 2017 launch of the Zero Emissions Fleet Initiative, which will aim to reduce GHG emissions from the light-duty segment of the CRD fleet through piloting of alternative fuel vehicles (hydrogen fuel cell, battery electric and e-bikes) and the use telematics and fleet optimization Procured first electric vehicle within the CRD fleet, and continued to right-size and replace end-of life units with lower emissions units, where feasible Used teleconference technology and installed Skype capability in meeting rooms Coordinated staff meetings and group travel to minimize trips between CRD locations Continued No idling policy on Regional Parks vehicles Installed real-time utility monitoring system (Prism) for all electricity, natural gas, oil and water with future potential for fleet capability Purchased a fuel efficient diesel engine aquatic weed harvester (Tier 3 emissions) for use at Elk/Beaver lakes Corporate Actions Proposed for 2017 Implement the green fleet policy to achieve continuous, significant reductions in GHG emissions from the CRD fleet and strive towards zero emissions for all new fleet vehicles Launch the Zero Emissions Fleet Initiative, which will aim to reduce GHG emissions from the lightduty segment of the CRD fleet through piloting of alternative fuel vehicles (hydrogen fuel cell, battery electric and e-bikes) and the use telematics and fleet optimization Establish a fleet management system that includes: GHG footprint calculations, installing/engaging a monitoring system to improve fleet performance, evaluating and expanding a telematics system to the whole fleet as appropriate, issuing an annual report of total vehicles, utilization, volume of fuel consumed, GHGs emitted and costs of ownership and maintenance, reviewing data collected to inform fleet policy and asset management and procurement processes Continue replacement of vehicles to those with diesel engines/lower displacement engines for reduced greenhouse gas emissions Identify opportunities for greater regional resilience in the CRD fleet (emergency preparedness) by: researching possibilities to use electric vehicles as a power source during outages, incorporating strategies to enhance emergency preparedness and resiliency through the use of electric vehicles into corporate plans, where appropriate Issue tender for waste management hauling contract that includes options for the use of CNG fueled trucks Install 7 EV charging stations for use by corporate fleet (Two 479 Island Hwy, Two at Fisgard Headquarters, 2 at SEAPARC and 1 on Salt Spring Island) Pilot 2 Hydrogen Fuel Cell Vehicles within the CRD fleet Pilot the use of electric bicycles within the Source Control Program Continue to encourage efficient use of vehicles while at work including minimizing idling, as well as minimizing unnecessary vehicle trips and optimizing trip routing to minimize mileage. Install bike racks at Greenglade Recreation facility Continue to use teleconference technology Continue to coordinate staff meetings and group travel to minimize trips between CRD locations Local vendors used wherever feasible to reduce transportation Continue to implement no idling policy on Regional Parks vehicles 11 P a g e

209 Continue to replace end-of-life gas and diesel vehicles with zero emissions vehicles when possible, including adding more battery electric vehicles to the fleet Identify, develop or procure a tool to support selection of new vehicles based on utilization, operational needs, potential for electric vehicles and right-sizing Review and identify path to meeting highest level of the West Coast Electric Fleet Pledge (striving towards purchasing at least 10% zero emissions vehicles for all new light-duty fleet purchases) Better utilize SAP asset management system to support preventative maintenance program and track all costs (including purchase-card purchases) associated with each fleet unit Conduct an in-depth analysis of the entire CRD fleet to identify ways to optimize fleet utilization and efficiency and to reduce emissions and cut costs Identify, develop or procure a tool to support preparation of high-level business cases that demonstrate life cycle costs and payback (fuel and maintenance) for investing in efficient vehicles Institute fleet management best practices by: engaging all fleet vehicle operators in energyefficient driver training program, recognizing staff that demonstrate efficient driving practices as part of the climate action recognition program Renew the draft corporate fleet policy (2007) and develop or identify tools to support implementation of the policy, including: guidelines and/or a tool to evaluate operational needs in advance of vehicle purchase based on industry best practices, a tool to incorporate life cycle costs and GHG emissions impacts as priorities during fleet purchasing process Add two additional battery electric vehicles to the CRD fleet to be available for staff to test out and determine the locations and uses where a battery electric vehicle is a good fit to replace gas or diesel vehicles Test the use of electric bikes for the Source Control program inspections to replace existing gas powered vehicle use, and evaluate opportunities for other downtown or short trip applications. Test hydrogen fuel cell electric vehicles to replace existing gas-/diesel-powered vehicles that are used for longer trips and heavier-duty applications Move towards centralized responsibilities for fleet vehicle acquisition, use and maintenance while maintaining a distributed approach to day-to-day operational activities (scheduling, fueling, determining local needs and performing maintenance and repairs), based on a renewed corporate fleet policy Transportation Does your local government have policies, plans or programs to support: Walking Cycling Transit Use Electric Vehicle Use Other (please specify) Does your local government have a transportation demand management (TDM) strategy (e.g. to reduce single-vehicle occupancy trips, increase travel options, provide incentives to encourage individuals to modify travel behavior)? Does your local government have policies, plans or programs to support local food production (thus reducing transportation emissions)? Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No 12 P a g e

210 2016 WATER AND WASTEWATER ACTIONS Water and Wastewater Actions Managing and reducing water consumption and wastewater is an important aspect of developing a sustainable built environment that supports healthy communities, protects ecological integrity, and reduces greenhouse gas emissions. Community-Wide Actions Taken in 2016 Led campaigns related to minimizing water use at home and work. Promotional material was provided on CRD website, as well as at the operational centre at 479 Island Highway. Flush toilets at, Hamsterly, Eagle and Beaver Beach and Thetis Lake are closed down for all except the summer months to save water. All other washrooms are pit toilets. All other washrooms in the parks are pit toilets Purchased of an aquatic weed harvester to positively affect the biological health of Elk/Beaver Lake Integrated climate change considerations into Inflow and Infiltration Management Plan update Continued offering free fixture replacements for hair wash sprayers, aerators, and pre-rinse spray valves to promote water and energy conservation Initiated a new partnership with Camosun College to replace water cooled equipment and find water and energy savings synergies between two campuses. Involves linking them to progressive actions done by UVic Applied a newer water audit tool to multi-tenant commercial properties to promote water and energy conservation Continued to promote more efficient commercial water use in industrial/commercial/institutional permits Initiated Just Ask campaign to encourage restaurants to limit their glasses of water to customers by request. Target 100 restaurants participating Reviewed existing Food Services Code of Practice within Sewer Use Bylaw 2922 Piloted Grease Interceptor maintenance tracking program to increase inspection efficiency Initiated H2Otel regional initiative to support hotels in reducing water consumption via free online EPA WATERSENSE tool Developed partnership for on-site wastewater treatment for food carts at public space Expanded pilot project to assess the increase pump-out intervals of residential onsite septic systems Promoted wise and efficient use of water in residential buildings Undertook residential Fix A Leak week outreach and education campaign Conduct irrigation workshops to promote proper design, installation, operation, and maintenance of irrigation systems Piloted Residential water reduction/shower behaviour campaign Developed and implemented a water wise social media campaign to encourage residential water savings Co-host a Water Balance Accreditation workshop in partnership with Inter-regional Education Initiative for practitioners in the CRD Continue ongoing hydrological monitoring on 7 creeks throughout the region as input to watershed evaluation and assessment tool and to monitor changes in hydrology as our climate changes 13 P a g e

211 Offered and promoted Food Service Water and Energy Savings Program providing energy assessments and pre-rinse spray valve and aerator installations free of charge in partnership with FortisBC and City Green Solutions Community-Wide Actions Proposed for 2017 Continue to lead campaigns related to minimizing water use at home and work. Promotional material was provided on our website, as well as at the operational centre at 479 Island Highway. Corporate Actions Taken in 2016 Continued program to reduce Inflow and Infiltration into our sanitary collection system at our various services. This effort is paying off to reduce the amount of extra pumping and processing required at the wastewater pump stations and treatment plants. Continued to phase out direct drive motors for more efficient variable frequency drives to optimize energy usage within the Integrated Water Service department. Continued operation of rain water collection and use within toilets at the CRD Headquarters facility Continue ongoing conversations to Low flow toilets and taps within CRD facilities Used environmentally friendly cleaning supplies and recycled paper products in washrooms and kitchen areas of corporate facilities. Corporate Actions Proposed for 2017 The Capital project to reuse the wastewater stream by filtering and pumping it to the screening works will be completed for Clover Point Sanitary Pump Station. This project will eliminate the need for the large volume of domestic water currently being used for this purpose. Low flow toilets and taps(ongoing conversions each year) (PRC) Installation of new low flow water taps Arena B change rooms. The project is completed, PRC will monitor water saving. Installation of new low flow toilets Arena B change rooms. On-going this year. Water Conservation Does your local government have water conservation policies, plans or programs? Yes/No 2016 CLIMATE CHANGE ADAPTATION ACTIONS Climate Change Adaptation Actions For local governments, adaptation to a changing climate can take the form of changes in policy, management, technology and behaviour that minimize negative impacts or exploit opportunities. It can involve both hard and soft solutions, including: changes in infrastructure engineering, planning, zoning, bylaws, and public education. Climate Change Adaptation Actions Taken in 2016 Partnered with Pacific Climate Impacts Consortium to develop and update future climate projections for the Capital Region Developed winter readiness standard operating procedures to account for the increased number of severe winter storms that come with wind and rain and impact the operations infrastructure within the Integrated Water Service. 14 P a g e

212 Began development of a climate change adaptation strategy for the Greater Victoria Water Supply Area which includes assessment of vulnerability and risk Created green infrastructure common design guidelines for storm water source control Established three year partnership with Green Shores Local Government Working Group and host education and outreach sessions to achieve to achieve broad-based recognition and use of green shores by property owners, professionals, contractors and government Presented to PIBC, APEG BC and Natural Resources Canada Adaptation Platforms on CRD sea level rise study results. Participated in the BC Climate Risk Network Developed corporate policy to accelerate corporate climate adaptation activities to enhance resilience and prepare infrastructure and assets (including parks and the watershed) to withstand the impacts of climate change Climate Change Adaptation Actions Proposed for 2017 Continue to review facilities which currently do not have back-up electrical power and develop a risk-based plan to protect these facilities. This is in recognition of the number of severe wind and rain storms that are resulting in wide-spread utility power outages for extended periods of time Publish and distribute green infrastructure common design guidelines for storm water source control Complete climate adaptation strategy for the Greater Victoria Water Supply Area Conduct assessment of potential impacts of climate change on water supply reservoirs Develop Climate Change Adaptation Strategy for Regional Water Supply area Undertake community-wide adaptation education campaign Develop process to identify climate impacts and consider adaptation within corporate risk registers, enterprise risk management and asset management Consider climate adaptation in all new capital projects through the climate lens review template Continue to establish long-term monitoring plots to detect changes in forest stands Continued assessment and upgrade of drainage structures to meet a 13% increase in design flow projected as a result of climate change Identify opportunities for greater regional resilience in the CRD fleet by: researching possibilities to use electric vehicles as a power source during outages and incorporating strategies to enhance emergency preparedness and resiliency through the use of electric vehicles into corporate plans, where appropriate Resources you have used to support climate change adaptation (e.g. Plan2Adapt, Preparing for Climate Change: Implementation Guide) Plan2Adapt, Preparing for Climate Change: Implementation Guide Guidance from provincial government on vulnerability of forests to climate change Review of scientific literature on climate change and watersheds/forests/hydrology Guidance on climate change for water supply utilities Review of US forest service reports on adapting to climate change in the Pacific Northwest Reviewing and incorporating results of research in the water supply area In 2016 did you consider climate change impacts in any of the following areas? (check if yes) 15 P a g e

213 Risk reduction strategies Risk and Vulnerability assessment Asset management Infrastructure upgrades (e.g. stormwater system upgrades) Cross-department working groups Emergency response planning Land-use policy changes (eg. OCP, DPA) Economic diversification initiatives Ecosystem-based approaches (incl. shorelines) Incentives (e.g. property owner reducing storm water run-off) Public education and awareness Research (e.g. mapping, participation in studies) Other (Please Identify): 2016 OTHER CLIMATE ACTIONS Other Climate Actions This section provides local governments the opportunity to report other climate actions that are not captured in the categories above. Community-Wide Actions Taken in 2016 Active wildfire prevention and preparedness programs to greatly reduce the likelihood of a large scale wildfire in the forested water supply area Active program of developing forest fuel breaks to reduce the spread and increase the potential for quick suppression of a wildfire Annual overview flights to detect tree mortality from insects and diseases that could threaten forests in the water supply area Monitoring and control of invasive species that could interfere with the establishment and growth of young forest stands in the water supply area Delivered the Ready Set Solve: the CRD student climate challenge, an applied learning challenge that invites post-secondary students to solve real sustainability and climate change challenges in the capital region Supported elementary and middle school classes to participate in Planet Protector Academy, a digital-led classroom program about environmental issues, empowering students to lead change. Distribute a digital climate newsletter for local governments and community Supported CRD Roundtable on the Environment. Host quarterly Resilient Region Exchange events for community, industry and staff and council Host Climate Action Inter-municipal Steering Committee and Working Group meetings for municipal staff and elected officials Community-Wide Actions Proposed for 2017 Produce a Climate Projections for the Capital Region report 16 P a g e

214 Support delivery of Cool It! Climate Leadership Training, an interactive environmental workshop and contest for students in grades 4 to 7. Environmental Educators use videos, games, quizzes and discussion to build on students knowledge of climate change Progress report on the Regional Climate Action Strategy Continue to distribute a digital climate newsletter for local governments and community Continue to host quarterly Resilient Region Exchange events for community, industry and staff and council Host Climate Action Inter-municipal Task Force and Working Group meetings for municipal staff and elected officials Corporate Actions Taken in 2016 Use of chipper in the management of debris generated by forest fuel reduction rather than burning Corporate Actions Proposed for 2017 Provide membership of all committees and commissions an orientation to CRD s corporate climate policy at the start of each new session Include climate lens considerations within staff reports to the CRD Board and committees Develop a mechanism for financing (seed funding) for studies or components of capital projects that support CRD s corporate climate action policy Establish an ongoing staff climate action working group to share knowledge across the organization and continually evaluate best opportunities for accelerating climate action Integrate a requirement to document alignment with the CRD's corporate climate action policy into strategic asset management plans for new and retrofit facilities and infrastructure. Establish a process to collect the GHG emissions for all contracted services considered "in scope" for GHG reporting Develop a communications plan to share corporate progress on climate action with staff and public. Consider identified climate impacts within risk registers in the enterprise risk management process Develop conservation demand management program for staff to raise awareness about energysaving habits and behaviours To seek funding to conduct the PRC Energy Integration study. Other Are you familiar with the Community Lifecycle Infrastructure Costing Tool (CLIC)? Have you used CLIC? Yes/No Yes/No INNOVATION AND PEER-TO-PEER LEARNING 17 P a g e

215 Innovation This section provides the opportunity to showcase an innovative Corporate and/or Community-Wide GHG reduction or climate change adaptation activity that your local government has undertaken and that has had or has the potential to have a significant impact. Projects included here may be featured as success stories on the B.C. Climate Action Toolkit and/or shared with other local governments to inspire further climate action. Please add links to additional information where possible. Community-Wide Innovative Action In 2016, CRD implemented the People Power Program. People Power motivates, supports and encourages residents to safely walk, roll and cycle more often with over 15 different events, workshops and initiatives. People Power uses a collective impact model to harness the skills and knowledge of partner organizations. Working with non-profits, recreation centres and local governments, the program includes bike skills courses for youth, seniors and new Canadians, development of a bike map for Salt Spring Island, Living Streets resource guide and micro-grant program and social connect mapping for older adults and their caregivers. Find out more at Corporate Innovative Action In 2016, CRD began systematic assessment of the design flow capacity of all drainage structures (culverts and cross drains beneath roads) in relation to 13% increase estimate for project change in the intensity, frequency and duration of winter precipitation. Results will be used to develop a longterm risk-based drainage structure replacement program. In 2016, CRD also released the Corporate Climate Action Strategy to integrate a climate lens into the everyday business and operations of the organization. Every capital project greater than $ 100,000 in value will now be evaluated through a climate lens- determining how the project will impact the organization s corporate GHG footprint, and if the project has considered future climate change impacts into design criteria. The strategy provides a road-map for meeting the corporate GHG reduction target of 33% reduction below 2007 levels, by 2020 through policy, actions and goals. Programs, Partnerships and Funding Opportunities Local governments often rely on programs, partnerships and funding opportunities to achieve their climate action goals. Please share the names of programs and organizations that have supported your local government s climate actions by listing each entry in the box below. Programs and Funding Pacific Climate Impacts Consortium Pacific Institute for Climate Solutions Natural Resources Canada 18 P a g e

216 Canadian Forest Service University of Alberta Province of BC-Ministry of Energy and Mines University of Victoria- Institute for Integrated Energy Systems Fortis BC BC Hydro Power Smart Province of BC Victoria Foundation Traffic Safety Commission Real Estate Foundation of British Columbia Natural Resources Canada Scout Environmental Camosun College University of Victoria RBC Blue Water 2016 CARBON NEUTRAL REPORTING Local governments are required to report on their progress in achieving their carbon neutral goal under the Climate Action Charter. Working with B.C. local governments, the joint Provincial-UBCM Green Communities Committee (GCC) has established a common approach to determining carbon neutrality for the purposes of the Climate Action Charter, including a Carbon Neutral Framework and supporting guidance for local governments on how to become carbon neutral. Prior to completing this survey, please ensure that you are familiar with guidance available on the B.C. Climate Action Toolkit website, especially Becoming Carbon Neutral: A Guide for Local Governments in British Columbia. Reporting Emissions Did you measure your local government's corporate GHG emissions in 2016? If your local government measured 2016 corporate GHG emissions, please report the number of corporate GHG emissions (in tonnes of carbon dioxide equivalent) from services delivered directly by your local government: 2,436 Yes/No If your local government measured 2016 corporate GHG emissions, please report the number of corporate GHG emissions (in tonnes of carbon dioxide equivalent) from contracted services: (included in corporate emissions total) TOTAL A: CORPORATE GHG EMISSIONS FOR ,436 tco2e Reporting Reductions and Offsets 19 P a g e

217 To be carbon neutral, a local government must balance their TOTAL corporate GHG emissions by one or a combination of the following actions: undertake GCC-supported Option 1 Projects undertake GCC-supported Option 2 Projects (community GHG emissions reduction projects that meet project eligibility requirements) purchase carbon offsets from a credible offset provider If applicable, please report the 2016 GHG emissions reductions (in tonnes of carbon dioxide equivalent (tco2e)) being claimed from Option 1 GHG Reduction Projects: OPTION 1 PROJECTS REDUCTIONS Energy Efficient Retrofits Solar Thermal Household Organic Waste Composting Low Emission Vehicles Avoided Forest Conversion TOTAL B: REDUCTIONS FROM OPTION 1 PROJECTS FOR 2016 tco2e If applicable, please report the names and 2016 GHG emissions reductions (in tonnes of carbon dioxide equivalent (tco2e)) being claimed from Option 2 GHG Reduction Projects: OPTION 2 PROJECT NAME REDUCTIONS CRD Landfill Gas Emissions Reduction Project 2,436 TOTAL C: REDUCTIONS FROM OPTION 2 PROJECTS FOR ,436 tco2e If applicable, please report the number of offsets purchased (in tonnes of carbon dioxide equivalent (tco2e)) from an offset provider for the 2016 reporting year: 20 P a g e

218 (NOTE: DO NOT INCLUDE ANY FUNDS THAT MAY BE SET ASIDE IN A CLIMATE ACTION RESERVE FUND) OFFSET PROVIDER NAME OFFSETS TOTAL D: OFFSETS PURCHASED FOR 2016 tco2e TOTAL REDUCTIONS AND OFFSETS FOR 2016 (Total B+C+D) = 2, 436 tco2e Corporate GHG Emissions Balance for 2016 Your local government's Corporate GHG Emissions Balance is the difference between total corporate GHG emissions (direct + contracted emissions) and the GHG emissions reduced through GCC Option 1 and Option 2 projects and/or the purchase of offsets. CORPORATE GHG EMISSIONS BALANCE FOR 2016 = (A (B+C+D)) = 0 tco2e If your Corporate GHG Emissions Balance is negative or zero, your local government is carbon neutral. CONGRATULATIONS! GCC CLIMATE ACTION RECOGNITION PROGRAM Green Communities Committee (GCC) Climate Action Recognition Program The joint Provincial-UBCM Green Communities Committee (GCC) is pleased to be continuing the Climate Action Recognition Program again this year. This multi-level program provides the GCC with an opportunity to review and publicly recognize the progress and achievements of each Climate Action Charter (Charter) signatory. 21 P a g e

219 This year a new recognition level has been added Level 3: Accelerating Progress on Charter Commitments. Recognition is provided on an annual basis to local governments who demonstrate progress on their Charter commitments, according to the following: Level 1 Demonstrating Progress on Charter Commitments: for local governments who demonstrate progress on fulfilling one or more of their Charter commitments Level 2 Measuring GHG Emissions: for local governments that achieve level 1, and who have measured their Corporate GHG Emissions for the reporting year and demonstrate that they are familiar with the Community Energy and Emissions Inventory (CEEI) Level 3 Accelerating Progress on Charter Commitments: for those local governments who have achieved level 1 and 2 and have demonstrated undertaking significant action (corporately or community wide) to reduce GHG emissions in the reporting year (ie: through undertaking a GHG reduction project, purchasing offsets, establishing a reserve fund). Level 4 - Achievement of Carbon Neutrality: for local governments who achieve carbon neutrality in the reporting year. For purposes of Level 3 recognition, if applicable, please identify any new or ongoing corporate or community wide GHG reduction projects (other than an Option 1 or Option 2 project) undertaken by your local government that reflects a significant investment of time or financial resources and is intended to result in significant GHG reductions: PROJECT NAME: Based on your local government's 2016 CARIP Climate Action/Carbon Neutral Progress Survey, please check the GCC Climate Action Recognition Program level that best applies: Level 1 Demonstrating Progress on Charter Commitments Level 2 Measuring GHG Emissions Level 3 Accelerating Progress on Charter Commitments Level 4 - Achievement of Carbon Neutrality Not Sure 22 P a g e

220 APPENDIX B 2016 Corporate GHG Emissions Inventory CRD s 2016 operational GHG emissions were 2,436 tonnes Co 2 -e. This represents a marginal (4.5%) increase from 2015 (2,331 tonnes Co 2 -e), and a decrease from 2007 levels (2,806 tonnes Co 2 -e). This year-over-year increase is the result of: colder winter temperatures in 2016 resulting in increased heating demand compared to 2015 improved GHG collection methods resulting in more accurate GHG reporting for the 2016 operational year 2016 operational GHG emissions by source To meet the target of a 33% reduction in GHG emissions by 2020, the CRD will need to reduce operational emissions by 556 tonnes compared to 2016 levels. FINT

221 Finance Committee June 7 th 2017 Climate Action Revenue Incentive Program Appendix B: 2016 Corporate GHG Emissions Inventory 2 Because of the lag time between operational year and GHG reporting, actions taken today won t be visible until the 2017 GHG inventory is reported in mid The Corporate Climate Action Strategy (Appendix C) identifies actions, activities and GHG emissions reductions projects that, if fully resourced and implemented, will meet the GHG reduction target. Operational GHG emissions, relative to 2020 target Carbon Neutrality The CRD has been carbon neutral within corporate operations since 2012, including in the 2016 operational year. To achieve carbon neutrality, the CRD has developed a carbon emission reduction unit (CERU) project to capture methane from the Hartland Landfill and destroy approximately half of the methane through flaring 1. This process transforms the methane into carbon dioxide, which has a lower global warming potential. The resulting credits were third-party verified, and CRD has applied these historical credits against the corporate inventory to achieve carbon neutrality since The CRD has conducted a landfill gas utilization study, and staff are currently investigating other uses for landfill gas, in the future. When the historical CERU credits have all been applied, CRD will need to develop a new carbon reduction project or purchase carbon offsets on the open market to continue to achieve carbon neutrality. 1 The other half is currently turned into electricity through a process of co-generation. Staff are investigating other beneficial uses for landfill gas. FINT

222 Corporate Climate Action Strategy November 2016 i

223 This document represents current information as of the time of publication. The Capital Regional District will be periodically updating and revising this plan to reflect changes in direction and other developments. Please view the plan online at for current information. This strategy was developed by staff from divisions and departments across the organization, with the support of Pinna Sustainability. ii Corporate Climate Action Strategy

224 Table of Contents Executive Summary...2 Imperative for Climate Action...4 Climate Action Achievements...8 The Path to Policy Framework & Action Plan : Climate lens : Management & operational decision-making : Metrics & reporting : Adaptation : Fleet management : Existing buildings, facilities & infrastructure : New buildings, facilities & infrastructure Implementation & Monitoring...42 Appendices Appendix A: Climate lens review template Appendix B: Organizational processes

225 Executive Summary This Corporate Climate Action Strategy reflects on what the Capital Regional District (CRD) has accomplished to date and renews corporate climate action efforts by establishing a framework including long-term goals, policy and short-term actions to achieve the Board s strategic priorities to integrate a climate lens into decision-making and to accelerate corporate mitigation and adaptation activities. A key outcome of this strategy will be the integration of climate action into everyday business across the CRD s divisions. This strategy is accompanied by a Regional Climate Action Strategy, which is broader in scope and provides a vision, goals and strategic direction to support climate action across the capital region. target riorities In 2008, the CRD Board set a target 33% to reduce operational GHG emissions from In 2015, the CRD Board identified 2 strategic priorities relating to 2007 levels by 2020 corporate climate action: provide a climate lens for Board decision-making accelerate corporate mitigation and adaptation activities 2 Corporate Climate Action Strategy

226 policy Corporate climate action policy statement: The CRD will demonstrate leadership within operations and the management of CRD-owned facilities, assets and lands to reduce greenhouse gas emissions and adapt to climate change. The CRD will provide a climate lens for Board decision-making. Implementation of this policy and all related subpolicies will be guided by the CRD Corporate Climate Action Strategy and is the responsibility of all divisions and departments. Seven long-term goals: goals 3. Monitor, report and communicate metrics to These goals, supported by sub-policies and short-term actions, will achieve the Board s strategic priorities and 2020 target. The first three goals address governance and decision-making while the remaining four target service delivery. 1. Use a climate lens for Board decision-making that demonstrates how decisions align with CRD s GHG reduction target, climate action objectives and strategic priorities. 2. Integrate climate change considerations into CRD management and operational decisionmaking. enhance continuous improvement across the organization. 4. Accelerate corporate climate adaptation activities to enhance resilience and prepare for future climate change impacts. 5. Achieve continuous, significant reductions in GHG emissions from the fleet and strive towards zero emissions for new fleet vehicles. 6. Accelerate a reduction in energy use and GHG emissions in existing buildings, facilities and infrastructure. 7. Achieve high-performance standards and strive towards net-zero energy for all new construction. The CRD is on track, with current GHG emissions at 17% below 2007 levels Executive Summary 3

227 Imperative for Climate Action Impacts of a changing climate The CRD has clearly acknowledged and committed to taking action to address climate change within our operations as well as at the regional level to reduce contributions to climate change and to prepare for the uncertainty a changing climate brings. The impacts of climate change are already being felt globally and locally, and these impacts will continue to intensify and affect the capital region for decades to come. At a global scale, climate change has already resulted in a warmer atmosphere, warmer and more acidic oceans, reduced amounts of snow and ice and higher sea levels. More locally, according to the Pacific Climate Impacts Consortium Plan2Adapt Tool, climate model projections for this region indicate that: year-round temperatures will rise dry spells in the summer will extend storm activity will become more frequent and intense, with higher winds and more precipitation falling during storm events sea levels will rise and will be subject to larger storm surge and wave effects, further increasing the risks of sea level rise The Pacific Climate Impacts Consortium (PCIC) has produced regionally downscaled climate modelling for our region. The results of this work predict an increase in mean temperature, an increase in annual precipitation, a decrease in snowfall and an increase in frost-free days. The Georgia Basin Impacts Study (conducted by PCIC in 2012 and updated in 2016) refines these projections and indicates a trend towards reduced precipitation during summer months and towards additional precipitation in winter months. The CRD is currently working with PCIC to update this climate modelling and to identify further impacts relevant to our region. Additionally, the Environmental Protection division has undertaken a study to examine future sea level rise impacts for the capital region. This knowledge will position the region to ensure all existing and future CRD-owned lands, buildings and infrastructure are able to withstand anticipated climate impacts. 4 Corporate Climate Action Strategy

228 In addition to reducing operational contributions to climate change, the CRD can also enable emissions reductions and climate action on a broader scale through procurement of goods and services and through engagement programs with staff, committees and the public that fall within its operational sphere of influence. Imperative for Climate Action 5

229 Corporate action on climate The CRD includes 13 municipalities and three electoral areas that cover the southern tip of Vancouver Island and the nearby Gulf Islands. As a regional district, the CRD provides: region-wide services for all residents (e.g., regional parks, solid waste management) sub-regional services for two or more jurisdictions (e.g., recreation facilities) local decision-making and services for rural electoral areas (e.g., fire protection) In order to provide these services, the CRD maintains and operates vehicles, equipment, buildings, facilities, infrastructure, landfills, paths and parks. With respect to corporate climate action, the CRD is seeking to reduce the impacts from providing these services by reducing greenhouse gas (GHG) emissions while also preparing to provide these services in the face of an uncertain and changing climate. These two aspects are called "mitigation" (reducing greenhouse gas emissions) and "adaptation" (preparing for a changing climate). Residents are accustomed to high levels of service from the CRD and expect facilities and infrastructure to improve over time. Climate action offers the ability to align with industry best practices and meet service levels while reducing GHG emissions. Climate action activities like preventative maintenance, recommissioning and infrastructure renewal often save costs while reducing energy demand and fossil fuel use when factored over the lifetime of an asset. Accounting for these operational benefits when capital projects are being scoped and budgeted for will be key to realizing these benefits while continuing to meet service levels. Although the CRD s operations are a small part of the larger community, the CRD plays an important role in demonstrating how to make significant reductions in emissions and prepare operations for potential future impacts while continuing to provide services that meet the needs of the community. In addition to reducing operational contributions to climate change, the CRD can also enable emissions reductions and climate action on a broader scale through procurement of goods and services and through engagement programs with staff, committees and the public. This strategy recognizes the important role the CRD has to play to enable climate action in areas that fall within the CRD s operational sphere of influence. Regional action on climate Regional action on climate change is addressed through the CRD s Regional Climate Action Strategy (RCAS). The RCAS focuses on actions the CRD s community-based services can undertake to influence the reduction of community greenhouse gas emissions. These reductions can be made through urban land use decisions, low carbon transportation systems, energy-efficient building construction and retrofits, community waste reduction and the transformation of this waste into a resource, and by valuing natural assets for their carbon sequestration potential. In order to respond to a changing climate, the RCAS also focuses on understanding the region s vulnerabilities, preparing the region s communities and ensuring that natural assets are resilient. The RCAS provides strategic direction to support climate action across the capital region. It presents a vision, goals and a target that recognize the important role the CRD and partners can play in addressing climate change. 6 Corporate Climate Action Strategy

230 Scope of CRD Climate Action Strategies Corporate Climate Action Strategy Regional Climate Action Strategy Focus internal external how we deliver services how we operate the services we deliver Areas of decision-making Actions that the CRD can undertake to reduce operational GHG emissions and adapt to climate change within its: facilities fleet infrastructure operational policies, procedures and guidelines management policies purchasing decisions staff engagement How CRD governance and decision-making can address corporate climate action through: strategic direction budget allocation service plan approval Actions that CRD community-based services can undertake, within their mandate, to influence the reduction of community GHG emissions through: urban land use planning low carbon transportation systems energy-efficient building construction and retrofits community waste reduction and the transformation of waste into a resource valuing natural assets for their carbon sequestration potential How the region can adapt to a changing climate by: understanding the region s vulnerabilities to climate change preparing the region s communities for the impacts of climate change ensuring that natural assets are resilient CRD role direct indirect The Corporate Climate Action Strategy and Regional Climate Action Strategy present goals, policies and short-term actions to address organizationwide approaches to climate change over the coming years. The responsibility for addressing climate change falls across all services, divisions and departments of the CRD, and climate change is additionally addressed within many service plans and service-specific strategies, such as the adaptation strategy for the Regional Water Supply Area. Imperative for Climate Action 7

231 Climate Action Achievements Climate action is not new to the CRD, having undertaken numerous initiatives to reduce the impact of its operations over the last decade, following the Board s 2008 directive to reduce GHG emissions by The CRD has been an early leader in reducing emissions in local government operations. The following list of key initiatives illustrates the organization's commitment to taking climate action both to mitigate impact and to prepare for a changing climate in the future Achieve LEED Gold designation for CRD headquarters Phase Sign BC Climate Action Charter. Develop Corporate Climate Change Action Plan to achieve carbon-neutral operations by Begin fuel switching fleet from gasoline to diesel where possible. Begin right-sizing fleet vehicles to match operational needs Begin to annually monitor and report on corporate GHG emissions (buildings, infrastructure, fleet) and provide qualitative reporting of actions. The CRD has been carbon neutral in corporate operations since Publicly report GHGs through provincial SMARTTool. Install refrigeration system waste heat recovery at SEAPARC Leisure Centre. Develop Saanich Peninsula Wastewater Treatment Plant (SPWWTP) motor control centre waste heat capture project. Commission wastewater heat recovery system at SPWWTP. Fuel switch Panorama Recreation Centre to use wastewater heat recovery system from SPWWTP, reducing 370 tonnes carbon dioxide equivalent (CO 2 e) per year Complete inventory of fleet vehicles and equipment. Add two hybrid vehicles to the fleet. Install solar panels for hot water heating at Salt Spring Island Library. Build Salt Spring Island Library to LEED Gold equivalent. Become a carbon neutral local government. 8 Corporate Climate Action Strategy

232 The Hartland gas utilization facility. Case Study: Becoming carbon-neutral & capturing methane In 2008, the CRD signed the British Columbia Climate Action Charter, committing to the goal of being carbon neutral in corporate operations by Carbon neutrality requires four steps: measure, reduce, offset and report. Since 2012, the CRD has been carbon neutral within corporate operations through a combination of GHG reduction projects and the purchase of qualified offsets. Since 2013, the CRD has been achieving its carbon-neutral commitments by using credits generated through capturing and destroying methane at Hartland landfill. Methane is a GHG generated from the anaerobic decomposition of organic waste that has more than 25 times the global warming potential of carbon dioxide. By destroying the methane-based landfill gas through combustion, the CRD reduces the amount of GHG emissions entering the atmosphere. In 2015, the CRD achieved a landfill gas capture rate of 66%. In 2013 and 2014, about half of the collected gas was captured and destroyed, and the resulting credits were applied to offset the CRD s corporate climate footprint. The other half of the gas was used to fuel an on-site electricity generator. Staff are currently investigating the best way to use the landfill gas resource and are conducting a landfill gas utilization study. In the future, the CRD hopes to find other ways to use this resource, for example, by fuel switching facilities away from natural gas to renewable natural gas. Climate Action Achievements 9

233 Case Study: District Energy System In 2011, the CRD established a pilot wastewater energy recovery system, called the district energy system project (DES). The DES project extracts waste heat from treated wastewater at the Saanich Peninsula Wastewater Treatment Plant and boosts the heat through a heat pump to heat the swimming pool at the Panorama Recreation Centre. By recovering heat from the wastewater, Panorama is able to use less natural gas to heat the swimming pool. In 2015, the CRD conducted a review of this system to determine the actual GHG emissions savings from this project. The review found the project had reduced operational GHG emissions by an average of 370 tonnes CO 2 e/year, equivalent to approximately 15% of the CRD s total 2015 operational GHG emissions. A majority of the funds to develop the DES were provided by the Province through the Gas Tax Agreements Innovation Fund. The DES project is one example of a project that has helped the CRD stay on target to meet the commitment to reduce operational GHG emissions 33% below 2007 levels by Above: Dan Robson, Manager of Saanich Peninsula and Gulf Islands Operations for the CRD s Integrated Water Services department, stands in front of the process pumps, which boost waste heat. Right, top: Waste heat is extracted from the treatment process at the Saanich Peninsula Wastewater Treatment Plant. Right, bottom: Waste heat is used to heat the Panorama Recreation Centre s swimming pool. This reduces the rec centre s operational GHG emissions by an average of 370 tonnes CO 2 e/year. 10 Corporate Climate Action Strategy

234 Climate Action Achievements 11

235 2013 Conduct energy assessment at Panorama (potential to reduce 151 tonnes CO 2 e/year). Conduct energy assessment at SEAPARC (potential to reduce 105 tonnes CO 2 e/year). Install solar photovoltaic panels at Juan de Fuca administration building. Install rainwater capture system on Juan de Fuca administration building Initiate sea level rise study. Work with Fraser Basin Council to conduct E3 fleet review. Begin high-efficiency boiler upgrade at Kings Road housing complex (planned to reduce 14 tonnes CO 2 e/year) Complete sea level rise study. Increase energy efficiency of Fisgard HVAC system by rebalancing the system and tuning green roof data collection to reduce requirements. Develop Fisgard data centre heat recovery. Conduct lighting retrofit study at Fisgard (potential to reduce 132,000 kwh/year). Add window tinting in CRD-owned and tenanted locations to reduce air conditioning requirements. Replace bathroom aerators at Fisgard, reducing hot water for hand washing by 75%. Install high-efficiency boilers at McPherson Theatre. Conduct lighting retrofits in island water services locations. Continue to reduce inflow and infiltration into sanitary collection system, reducing extra pumping and processing requirements at pump stations and treatment plants. Improve routing of preventative maintenance work to reduce unnecessary trips. Install Skype capability in meeting rooms, where appropriate, to increase use of teleconference technology and reduce travel between CRD offices (biggest impact in relation to Gulf Islands meetings). Emterra, a contracted services provider, converts blue box program recycling collection trucks to compressed natural gas, reducing 2,800 tonnes CO 2 e/year. Achieve landfill gas collection efficiency of 66%. Work with CRD tenants to implement energy management program for Island Health leased facilities. 12 Corporate Climate Action Strategy

236 Case Study: Procurement & engagement: extending climate action beyond operations The CRD strategic plan envisions that The Capital Region will always be: livable and vibrant, stewards of the environment, and supported by a prosperous and sustainable economy. With this vision, the CRD commissioned Phase 2 of the CRD headquarters building (located at 625 Fisgard Street in downtown Victoria) to be one of the first LEED Gold certified buildings in the capital region. The building includes many sustainable features: a 60,000 litre rainwater storage tank used for flushing toilets that, combined with the use of efficient fixtures such as dual-flush toilets and water-free urinals, resulted in a 76% reduction in potable water consumption extensive green roofs on four roof surfaces an intensive green roof garden on the second floor patio, just off the lunch room natural lighting and automatic light sensors in all work spaces exterior sun shades and UV glazing on all windows The building s green features are complimented by the way employees engage with the building. The CRD s staffled wellness committee has led a buildingwide campaign to burn calories not carbon by taking the stairs instead of the elevator. The staff lunch room has soft and hard plastic recycling, and organic waste collection bins are located on each floor of the building in both phases. These initiatives provide a strong platform to more deeply engage staff and embed climate action into everyday activities within the CRD operational environment. The CRD s headquarters, located at 625 Fisgard Street in Victoria. Climate Action Achievements 13

237 2016 Begin boiler retrofit at SEAPARC (planned reduction of 62 tonnes CO 2 e/year). Conduct lighting retrofit in pool and arena at SEAPARC (planned reduction of 150,000 kwh/ year). Install real-time utility monitoring system (Prism) for all electricity, natural gas, oil and water with future potential for fleet capability. Sign the West Coast Electric Fleets Pledge. Begin conducting electric vehicle fleet suitability assessment. Initiate pilot of telematics system by installing it in 40 fleet vehicles through Fleet Champions program. Integrate climate change considerations into Inflow & Infiltration Management Plan update. Develop climate lens for decision-making, to be used for all new capital projects. Commission East Sooke Fire Hall. Purchase first fully electric vehicle, a Kia Soul. Fleet includes four hybrid vehicles and three Smart cars. Planned Purchase two electric cargo bikes for source control inspection program. Pilot zero emissions vehicles, including fuel cell electric vehicles. Develop future climate change projections for the capital region. Develop climate change adaptation strategy for Regional Water Supply Area. Conduct boiler retrofit at Panorama. Conduct integrated design process for heat recovery at Panorama. Implement the Corporate Climate Action Strategy. 14 Corporate Climate Action Strategy

238 Case Study: Wastewater treatment The CRD is developing a wastewater treatment facility that will come online in The Craigflower Pump Station, built in 2015,was designed using LEED principles and includes multiple climate-smart features, such as energy-efficient equipment that self-adjusts at variable speeds to minimize electrical demand. The Project Board s Terms of Reference include the following key goals: optimizing opportunities to recover resources from waste as part of an integrated waste management approach minimizing GHG emissions (which are considered in scope for the CRD s GHG reporting) GHG emissions associated with the operation of this facility will be minimized through the project design and by employing the policies outlined within this strategy. The treatment plant will also be built to consider the future impacts sea level rise could have on the facility. Climate Action Achievements 15

239 The Path to 2020 Tracking corporate GHG emissions The CRD s operational GHG emissions reduction target aims to reduce emissions by 33% by 2020, relative to a 2007 baseline. In 2007, CRD operations resulted in approximately 2,806 tonnes of carbon dioxide equivalent (CO 2 e) emissions. Of these emissions, 47% resulted from fuels used in fleet vehicles and 53% resulted from energy used in buildings, facilities and infrastructure. The CRD s GHG inventories are based on the methodology developed by the Province of BC for local governments that defines traditional services to be included in the inventory. (See sidebar on page 18 for more details.) Energy consumption data for buildings, facilities and infrastructure was extracted from historical utility records, and this data provides an accurate representation of the 2007 inventory for all applicable services. However, due to the organizational structure of the CRD, fleet fuel is 2007 operational GHG emissions by source 47% Total fleet 1,312 tonnes CO 2 e Total buildings, facilities & infrastructure 1,494 tonnes CO 2 e 53% diesel 581 tonnes CO 2 e biodiesel B5 34 tonnes CO 2 e gasoline 697 tonnes CO 2 e 1% 25% 21% 2007 total 2,806 tonnes CO 2 e 23% 11% natural gas 637 tonnes CO 2 e heating oil 303 tonnes CO 2 e 19% electricity 547 tonnes CO 2 e 16 Corporate Climate Action Strategy

240 purchased for operations across numerous service areas, making it very challenging to prepare a representative inventory of fuel used in After setting the corporate GHG emissions reduction target in 2008, the CRD undertook a multi-year effort to develop a baseline fleet inventory. The first year a comprehensive fleet inventory became available for the CRD fleet is 2011, and thus the 2011 data is used to calculate the 2007 baseline for fleet. Since 2011, the CRD has continued to annually track the inventory data for fleet and buildings, facilities and infrastructure. The CRD continues to improve its understanding of how energy is used throughout the organization, and adjustments are made annually to improve data tracking. In 2016, fleet telematics and utility energy monitoring systems in buildings, facilities and infrastructure are being deployed to support a significant improvement in understanding how and where energy is used throughout CRD operations operational GHG emissions by source 54% Total fleet 1,249 tonnes CO 2 e Total buildings, facilities & infrastructure 1,082 tonnes CO 2 e 46% diesel 497 tonnes CO 2 e 21% biodiesel B5 63 tonnes CO 2 e fleet propane 23 tonnes CO 2 e 3% 1% 2015 total 2,331 tonnes CO 2 e 30% natural gas 708 tonnes CO 2 e gasoline 666 tonnes CO 2 e 28% 12% 4% 1% heating oil 84 tonnes CO 2 e propane 15 tonnes CO 2 e electricity 275 tonnes CO 2 e In 2015, changes to the BC Recycling Regulation led to the exclusion of emissions related to collection of recycling materials from local government inventories. The packaging and paper industry is now responsible for these emissions. As a result, the 2007 inventory, and all other years, in this strategy have been updated to reflect this change, ensuring that a year-to-year comparison is based on a consistent scope. Because of this, the emissions in this strategy are different than those reported in the CRD s historical climate action reports. The Path to

241 Traditional services: What is included in the CRD's corporate GHG emissions inventory? The emissions that result from energy used to deliver traditional local government services must be captured in local government inventories. "Traditional services" are defined by the Carbon Neutral Working Group (established to advise the Joint Provincial UBCM Green Communities Committee) in the Carbon Neutral Workbook and include: administration and governance drinking water, stormwater and wastewater solid waste collection, transportation and diversion roads and traffic operations arts, recreation and cultural services fire protection The methodology for calculating the GHG emissions for these services is outlined in the Province's BC Best Practices Methodology for Quantifying GHG Emissions. The CRD owns facilities that fall outside the scope of these traditional service areas and are therefore not captured in the CRD's GHG emissions inventory or reduction target. However, the CRD continues to undertake initiatives to reduce energy use and GHG emissions in areas such as Capital Region Housing Corporation facilities, buildings that the CRD leases to Island Health and through gas capture at Hartland landfill. Increasing service levels, decreasing emissions Since 2007, the CRD has added 21 new services to meet the needs of an expanding population. This has resulted in the addition of several new buildings, facilities, infrastructure and fleet vehicles. GHG emissions from the fleet have decreased by 5% while on-road fleet vehicles have increased by 13%. GHG emissions from buildings, facilities and infrastructure have decreased by 28% while six new buildings and two pump stations have been added to the CRD s portfolio for GHG accounting, including: Salt Spring Island Library Galiano Island Library Community Centre Juan de Fuca administration building McPherson Theatre Port Renfrew Fire Hall East Sooke Fire Hall Trent Pump Station Craigflower Pump Station Despite these service level increases, the overall GHG emissions from corporate operations have gone down by approximately 17% since This reduction is the result of several factors: 74% decrease in the use of fuel oil for heating and hot water due to the CRD s focused efforts to switch to lower carbon fuel sources 15% decrease in electricity consumption in CRD buildings, facilities and infrastructure resulting from the CRD s energy-efficiency initiatives decrease in the GHG intensity of electricity supplied by BC Hydro 18 Corporate Climate Action Strategy

242 decrease in the GHG intensity of natural gas supplied by Fortis, due to provincial regulations for renewable and low carbon fuels improvements in fuel efficiency when replacing fleet vehicles with similar models, due to fleet right-sizing and federal regulations for fuel efficiency in light duty vehicles Operational GHG emissions, relative to 2020 target GHG emissions from buildings, facilities & infrastructure 2020 GHG emissions target GHG emissions from fleet 3,250 t CO 2 e 2,806 t CO 2 e 2007 baseline 2,330 t CO 2 e 17% below ,880 t CO 2 e 33% below ,500 t CO 2 e 1,000 t CO 2 e 500 t CO 2 e The Path to

243 Achieving the 2020 target In order to achieve the CRD s target to reduce operational emissions 33% by 2020, emissions need to decrease a further 450 tonnes CO 2 e from 2015 over the next four years. This poses a challenge, given that the CRD is continuing to expand its assets over this time period and given that the CRD has already implemented significant projects to reduce operational emissions. Meeting the reduction target will require continuous effort to minimize emissions for expanding services and making further reductions in existing services. However, the CRD has learned from early projects and, through this strategy, is establishing a strong policy and process framework to ensure staff, committees and the Board are making decisions using a climate lens. This section outlines one potential path to how the CRD can achieve the target. Although this is not the only path, it is useful to provide perspective on what it will take over the next few years to be successful. Estimated GHG reductions from initiatives currently planned or in process are approximately 83 tonnes CO 2 e/year by the end of 2020, broken down as follows (percentage of the 450 tonnes of CO 2 e reduction needed to hit the target is shown at end of each line): replace SEAPARC oil boilers with high efficiency gas = 62 tonnes CO 2 e (14%) replace Panorama boilers with high efficiency gas = 15 tonnes CO 2 e (3%) reduce gasoline use in new fleet vehicles by 10% due to federal regulations that result in higher fuel efficiency in similar replacement vehicles = 6 tonnes CO 2 e (1%) The CRD has identified potential new initiatives that could generate GHG reductions. Estimated GHG reductions from these initiatives are estimated as follows (annual GHG emissions reductions shown): energy-efficiency retrofits in buildings using fossil fuels (estimate 5% reduction in fossil fuels at largest buildings and facilities, not including recreation centres) = 16 tonnes CO 2 e (4%) SEAPARC ice plant heat recovery = 40 tonnes CO 2 e (9%) replacing 24 vehicles with electric vehicles by end of 2020 (six vehicles per year 2017+) = 101 tonnes CO 2 e (22%) Panorama waste heat recovery integrated design = 399 tonnes CO 2 e (89%) switching to renewable natural gas for remaining natural gas use = 550 tonnes CO 2 e (122%) Precisely which initiatives will be implemented will be identified through further analysis by the respective service areas and approved through the annual service planning cycle. If all potential initiatives identified above were implemented, the CRD would reduce GHG emissions by 1,190 tonnes, which equates to a 59% reduction in GHG emissions relative to Corporate Climate Action Strategy

244 If all identified potential new initiatives were implemented, the CRD would reduce GHG emissions by 1,190 tonnes, which equates to a 59% reduction in GHG emissions relative to In 2016, the SEAPARC Leisure Complex undertook an extensive energy and GHG savings retrofit. New LED lights are expected to reduce electricity consumption by 150,792 kwh/year, and a condensing, high-efficiency, natural gas boiler system is expected to reduce GHG emissions by 61 tonnes CO 2 e/year. The Path to

245 policy 22 Corporate Climate Action Strategy

246 The CRD will demonstrate leadership within operations and the management of CRD-owned facilities, assets and lands to reduce greenhouse gas emissions and adapt to climate change. The CRD will provide a climate lens for Board decision-making. Implementation of this policy and all related sub-policies will be guided by the CRD Corporate Climate Action Strategy and is the responsibility of all divisions and departments. The Path to

247 Policy Framework & Action Plan Building on success As 2020 approaches, the time frame for implementing projects to achieve the CRD s ambitious GHG emissions reduction target is closing. Fortunately, the CRD has demonstrated success in completing complex projects, has the organizational knowledge to identify and implement these projects and has set the groundwork for this task with inventories, energy assessments and monitoring systems in place. Additionally, there are opportunities to build off of and learn from region-wide work and partnerships with various municipalities. Together, these assets position the CRD to build from previous experience and success to implement the actions outlined in this section. Changing processes The CRD is in a time of change; many internal processes are being updated to improve the organization s management systems and decisionmaking processes. These changes create an opportunity to align the CRD s corporate operations with the climate action priorities of the CRD Board, as outlined in the Capital Regional District Corporate Plan Integrating goals The CRD s governance structure reflects the diversity of the community to ensure decisionmaking represents community interests. Committees and commissions, composed of community members appointed by the Board, provide advice and recommendations to a number of CRD services and initiatives and typically bring business to the Board. In this community-based governance model, the CRD requires clear decision tools to elevate climate change, strong policy to communicate priorities, and transparent data, metrics, reporting and communication practices to ensure multiple audiences are informed on the key climate action issues facing the community. To this end, the policy framework in this section contains governance-oriented goals to integrate climate action into CRD decision-making and communications processes and service-oriented goals to embed climate action into service delivery. The following policy framework and action plan will align service delivery and programming with these governing directives, enabling climate action to be embedded into the culture of the organization. 24 Corporate Climate Action Strategy

248 A key outcome of this strategy will be to integrate climate action into everyday business across the CRD s departments, divisions and services. Policy Framework & Action Plan 25

249 1 1: Climate lens GOVERNANCE-ORIENTED GOALS Policy statement: The CRD will integrate a climate lens into decisionmaking to ensure that operational decisions align with the CRD s targets and strategic priorities by implementing all policies outlined in this strategy. Specifically for capital projects, this will be achieved by conducting a climate lens review on: all capital projects over $100,000 in value all studies, reports and feasibility analyses undertaken in support of future capital projects over $100,000 in value all contracts over $100,000 in value, and contracts less than $100,000, that are in scope for GHG reporting purposes Goal: Use a climate lens for Board decision-making that demonstrates how decisions align with CRD s GHG reduction target, climate action objectives and strategic priorities. The CRD Board has made climate change a priority and has requested a climate lens be provided for Board decision-making. The climate lens template is intended to be a tool that provides the Board with the information needed to understand the climate-related implications at the time that significant capital investments are being made. This tool will help ensure the CRD s projects align with corporate climate action policy while also providing a useful tool for analysis and communications. The lens will address both mitigation and adaptation and will consider possible climate impacts of projects and how these can be addressed. See Appendix A: Climate lens review template. 26 Corporate Climate Action Strategy

250 Action Associated Division(s) & Department(s) Resources Timing 1-1. Implement the climate lens template to provide a climate lens review on capital projects (see page 44). All divisions and departments Within existing Ongoing 1-2. Provide membership of all committees and commissions an orientation to the CRD's corporate climate policy at the start of each new session. Risk, Insurance & Facility Management division Within existing Ongoing 1-3. Include climate lens considerations within staff reports to the CRD Board and committees. All divisions and departments Within existing Ongoing Policy Framework & Action Plan 27

251 GOVERNANCE-ORIENTED GOALS 2 Policy Statement: The CRD will integrate climate change considerations into management and operational decision-making through budget planning, service planning, project management, enterprise risk management, asset management, energy management and procurement decisions. 2: management & operational decision-making Goal: Integrate climate change considerations into CRD management and operational decision-making. Across the CRD s service areas are numerous corporate processes that support efficient and effective delivery of services on an ongoing basis. The most effective manner of incorporating climate action into management and operational decisionmaking will be to identify the key points in these existing processes where climate change should be considered (e.g., when designing a new building, when purchasing a new fleet vehicle, when allocating budget for facility maintenance activities, etc.). The CRD has recently engaged in several organizational changes, providing a direct opportunity to embed climate action considerations during this time of renewal. As a result, some processes have been recently updated and some are planned to be updated during the next one to two years. Eight organizational processes have been identified that will be updated to consider climate change: budget planning (see page 45) capital project initiation (see page 46) fleet vehicle and equipment purchasing (see page 47) project management strategic asset management planning (Integrated Water Services department) asset management planning procurement policy enterprise risk management 28 Corporate Climate Action Strategy

252 Action Associated Division(s) & Department(s) Resources Timing 2-1. Incorporate climate change considerations into budget planning cycle (see page 45). All divisions and departments Within existing Annually, in conjunction with service planning 2-2. Prepare an annual summary across divisions to present to senior management prior to service plan reviews. Risk, Insurance & Facility Management division Within existing Annually, in conjunction with service planning 2-3. Update the project management process to incorporate climate action policy into project requirements documents and projectlevel decision making. Environmental Planning & Engineering division Risk, Insurance & Facility Management division Within existing Immediately 2-4. Update the asset management process to incorporate evaluation of most energy-efficient and/or low-carbon technologies at time of renewal. Financial Services division Within existing Include climate change policy and target considerations during capital project initiation process (see page 46). All divisions and departments Within existing Immediately and ongoing 2-6. Develop a mechanism to provide financing (seed funding) for studies or components of capital projects that support the CRD's corporate climate action policy. Risk, Insurance & Facility Management division Financial Services division New Integrate a requirement to document alignment with the CRD's corporate climate action policy into strategic asset management plans for new and retrofit facilities and infrastructure. Financial Services division Within existing Establish a staff climate action engagement program that includes a climate action recognition program that acknowledges climate leadership among CRD employees. Human Resources division Risk, Insurance & Facility Management division Within existing Establish an ongoing staff climate action working group to share knowledge across the organization and continually evaluate best opportunities for accelerating climate action. Risk, Insurance & Facility Management division Within existing Update the procurement policy to align procurement and vendor selection with the CRD's corporate climate policy, and develop supporting decision criteria and matrix. Legislative & Information Services division Risk, Insurance & Facility Management division Within existing 2017 See also Action 4-4 to consider climate change within the enterprise risk management process. Policy Framework & Action Plan 29

253 3 3: Metrics & reporting GOVERNANCE-ORIENTED GOALS Policy Statement: The CRD will monitor and report on progress towards the GHG emissions reduction target and climate action goals and will communicate progress to staff, stakeholders and the public. Goal: Monitor, report and communicate metrics to enhance continuous improvement across the organization. Addressing the service-oriented goals in this strategy will require a coordinated effort to collect targeted data, report on progress and communicate performance to various internal and external audiences. Mechanized data collection allows managers to set a data collection program in place and understand the year-over-year cost and climate change implications of their decisions. Reporting and communicating enables informed decision-making and demonstrates the impact of investments made to leadership and across the organization. The CRD has implemented a utility data tracking and monitoring tool and is planning to pilot a fleet data logger telematics tool. 30 Corporate Climate Action Strategy

254 Action Associated Division(s) & Department(s) Resources Timing 3-1. Establish a corporate energy management process for buildings, facilities and infrastructure that includes: monitoring and reporting of facility energy consumption and energy management in existing buildings using the real-time utility data Financial Services division Risk, Insurance & Facility Management division Within existing New 2017 metrics that communicate progress towards the CRD GHG target contextual information on changes in level of service, e.g.: total corporate GHG emissions GHG emissions/square foot of buildings operated by CRD 3-2. Establish a process to collect the GHG emissions for all contracted services considered "in scope" for GHG reporting (see sidebar on page 18 for more details). Financial Services division Risk, Insurance & Facility Management division Establish a fleet management system that includes: GHG footprint calculations installing/engaging a monitoring system to improve fleet performance Customer & Technical Services division Risk, Insurance & Facility Management division 40 telematics provided through Fleet Champions program evaluating and expanding a telematics system to the whole fleet as appropriate issuing an annual report of total vehicles, utilization, volume of fuel consumed, GHGs emitted and costs of ownership and maintenance reviewing data collected to inform fleet policy and asset management and procurement processes New resources required for additional telematics devices 3-4. Incorporate outcomes of energy management monitoring into an adaptive management process to ensure continuous improvement. Risk, Insurance & Facility Management division Within existing Develop a communications plan to share corporate progress on climate action with staff and public. Corporate Communications division Risk, Insurance & Facility Management division New 2017 Policy Framework & Action Plan 31

255 4 4: Adaptation SERVICE-ORIENTED GOALS Policy Statement: The CRD will accelerate corporate adaptation activities to improve resilience and prepare CRDowned buildings, facilities, infrastructure, assets, and lands, including regional parks and the regional watershed, to withstand the impacts of climate change through developing and implementing a corporate climate change adaptation plan. Goal: Accelerate corporate climate adaptation activities to enhance resilience and prepare for future climate change impacts. Projected climate changes in our region may pose challenges and opportunities to CRD operations. Understanding these projections in detail will allow CRD divisions to anticipate future impacts and prepare for the changes ahead. As noted in the Imperative for Climate Action on page 4, climate model projections by the Pacific Climate Impacts Consortium for this region indicate that: year-round temperatures will rise dry spells in the summer will extend storm activity will become more frequent and intense, with higher winds and more precipitation falling during storm events sea levels will rise, and will be subject to larger storm surge and wave effects further increasing the risks of sea level rise Addressing identified issues and opportunities in the short term will allow time to adapt buildings, facilities, infrastructure and fleets to withstand and prosper under these future predicted conditions. 32 Corporate Climate Action Strategy

256 Action Associated Division(s) & Department(s) Resources Timing 4-1. Complete downscaled climate projections report and identify potential impacts of climate change for the region. Environmental Protection division Within existing 2017 Environmental Planning & Engineering division Risk, Insurance & Facility Management division Integrated Water Services department 4-2. Identify potential impacts of sea level rise on CRD assets. Environmental Planning & Engineering division Within existing 2018 Integrated Water Services department 4-3. Develop a corporate climate adaptation plan for the CRD. Risk, Insurance & Facility Management division Integrated Water Services department Parks & Environmental Services department Planning & Protective Services department New Consider identified climate impacts within risk registers in the enterprise risk management process. Risk, Insurance & Facility Management division Within existing Ongoing 4-5. Consider climate adaptation in all new capital projects through the climate lens review template (see page 44). Risk, Insurance & Facility Management division Within existing Ongoing 4-6. Identify opportunities for greater regional resilience in the CRD fleet (emergency preparedness) by: researching possibilities to use electric vehicles as a power source during outages incorporating strategies to enhance emergency preparedness and resiliency through the use of electric vehicles into corporate plans, where appropriate Customer & Technical Services division Protective Services division Risk, Insurance & Facility Management division Green Municipal Fund grant (proposed) Within existing Policy Framework & Action Plan 33

257 5 5: Fleet management SERVICE-ORIENTED GOALS Policy Statement: The CRD will reduce fuel use from CRD-owned vehicles and equipment through fuel conservation, vehicle right-sizing, driving behaviour and procurement of fuel-/carbon-efficient vehicles and equipment to ensure most efficient vehicles by end use. Goal: Achieve continuous, significant reductions in GHG emissions from the fleet and strive towards zero emissions for new fleet vehicles. The CRD owns and operates approximately 350 vehicles and pieces of equipment to support service delivery throughout the region. Fleet vehicles are distributed at operational hubs throughout the region and offer publicly visible opportunities to demonstrate leadership. Within the current fleet, about 100 units have been identified by the fleet manager as having potential to be replaced with electric vehicles or lower emissions units. This potential needs to be further examined to determine if operational needs for the identified units could be met within lower emissions vehicles currently on the market. driver training while maintaining distributed fleet operations would position the CRD to take action to reduce GHG emissions and costs. Since 2007, the CRD has been identifying opportunities and taking action to improve the efficiency and utilization of fleet assets and has been testing best available technology to meet the operational demands of the fleet. As technology improves to meet service delivery demands, the ability to renew the fleet with more efficient and zero emissions vehicles will also improve. In a distributed region, with services offered on islands and across long distances, there are opportunities to enhance the efficiency of the fleet while maintaining a distributed operational approach. The opportunity of centrally managing decisions related to procurement, replacement, preventative maintenance, fuel management and 34 Corporate Climate Action Strategy

258 Action Associated Division(s) & Department(s) Resources Timing 5-1. Continue to replace end-of-life gas and diesel vehicles with zero emissions vehicles when possible, including adding more battery electric vehicles to the fleet. Customer & Technical Services division Risk, Insurance & Facility Management division Within existing Ongoing 5-2. Identify, develop or procure a tool to support selection of new vehicles based on utilization, operational needs, potential for electric vehicles and right-sizing. Customer & Technical Services division To be determined Review and identify path to meeting highest level of the West Coast Electric Fleet Pledge (striving towards purchasing at least 10% zero emissions vehicles for all new light-duty fleet purchases). Customer & Technical Services division Within existing Better utilize SAP asset management system to support preventative maintenance program and track all costs (including purchase-card purchases) associated with each fleet unit. Financial Services division Information Technology & GIS division To be determined Conduct an in-depth analysis of the entire CRD fleet to identify ways to optimize fleet utilization and efficiency and to reduce emissions and cut costs. Customer & Technical Services division To be determined Identify, develop or procure a tool to support preparation of high-level business cases that demonstrate life cycle costs and payback (fuel and maintenance) for investing in efficient vehicles. Customer & Technical Services division Within existing Institute fleet management best practices by: engaging all fleet vehicle operators in energy-efficient driver training program recognizing staff that demonstrate efficient driving practices as part of the climate action recognition program Customer & Technical Services division Human Resources division Risk, Insurance & Facility Management division Efficient driver training program requires a fleet safety supervisor and better fleet management system Renew the draft corporate fleet policy (2007) and develop or identify tools to support implementation of the policy, including: guidelines and/or a tool to evaluate operational needs in advance of vehicle purchase based on industry best practices a tool to incorporate life cycle costs and GHG emissions impacts as priorities during fleet purchasing process Customer & Technical Services division Within existing Action table continues on page 37. Policy Framework & Action Plan 35

259 This electric car reduces greenhouse gas emissions over 95% compared to an equivalent gas-powered vehicle. 36 Corporate Climate Action Strategy

260 Action Associated Division(s) & Department(s) Resources Timing 5-9. Add two additional battery electric vehicles to the CRD fleet to be available for staff to test out and determine the locations and uses where a battery electric vehicle is a good fit to replace gas or diesel vehicles. Customer & Technical Services division Green Municipal Fund grant (proposed) Test the use of electric bikes for the Source Control program inspections to replace existing gas powered vehicle use, and evaluate opportunities for other downtown or short trip applications. Customer & Technical Services division Environmental Partnerships division Green Municipal Fund grant (proposed) Risk, Insurance & Facility Management division Test hydrogen fuel cell electric vehicles to replace existing gas-/diesel-powered vehicles that are used for longer trips and heavier-duty applications. Customer & Technical Services division Risk, Insurance & Facility Management division Green Municipal Fund grant (proposed) Move towards centralized responsibilities for fleet vehicle acquisition, use and maintenance while maintaining a distributed approach to day-to-day operational activities (scheduling, fueling, determining local needs and performing maintenance and repairs), based on a renewed corporate fleet policy. Customer & Technical Services division Risk, Insurance & Facility Management division Within existing Short term See also Action 3-3 to establish a fleet management metrics, reporting and review process. Since 2007, the CRD has increased the number of on-road fleet vehicles by13% However, GHG emissions from the fleet have gone down by 5% Policy Framework & Action Plan 37

261 SERVICE-ORIENTED GOALS 6 Policy Statement: The CRD will reduce energy use and GHG emissions within existing buildings, facilities and infrastructure through demand management, recommissioning, fuel switching, life cycle costing and efficiency measures. 6: Existing buildings, facilities & infrastructure Goal: Accelerate a reduction in energy use and GHG emissions in existing buildings, facilities and infrastructure. In 2015, operation of the CRD s buildings, facilities and infrastructure resulted in approximately 46% of the CRD s emissions, presenting a significant opportunity for reductions. The CRD has identified opportunities to reduce energy use in existing assets and has completed some noteworthy upgrades to date. This has resulted in an overall reduction of GHG emissions from these assets of 28% between 2007 and The CRD has on-the-ground experience identifying innovative opportunities to reduce GHG emissions from existing buildings and taking action to deliver projects that realize these savings. This experience within the organization will be helpful when working with other service areas to reduce emissions in existing buildings, facilities and infrastructure. The CRD aims to continue upgrading existing buildings, facilities and infrastructure to reduce energy use and GHG emissions over the coming years. Using life cycle costing approaches to make decisions on major renovations and conducting energy-efficiency retrofits in existing assets will reduce the energy use and climate change impacts of service delivery while reducing costs and often enhancing user experiences. 38 Corporate Climate Action Strategy

262 Action Associated Division(s) & Department(s) Resources Timing 6-1. Incorporate energy efficiency into all regional water supply infrastructure renewal projects through strategic asset management plans. Infrastructure Engineering division To be determined Ongoing 6-2. Complete recommendations from the Panorama and SEAPARC energy assessments that minimize GHG emissions and energy use, including upgrading to high-efficiency natural gas boilers, implementing ice plant heat recovery at SEAPARC and investigating the waste heat recovery opportunity at Panorama. Risk, Insurance & Facility Management division Parks & Environmental Services department division Within capital plans New Reduce GHG emissions through fuel switching to renewable natural gas (RNG), and conduct business case analysis to produce RNG. Environmental Resources Management division Risk, Insurance & Facility Management division To be determined ongoing 6-4. Develop conservation demand management program for staff to raise awareness about energy-saving habits and behaviours. Human Resources division Risk, Insurance & Facility Management division Some new resources required Complete a review of the 15 largest energy-consuming buildings and facilities every four years to develop a list of priority opportunities for energy and GHG emissions reductions and incorporate opportunities into service plans (see page 45). Risk, Insurance & Facility Management division Within existing 2018 See also Action 3-1 to establish an energy management metrics, reporting and review process. Since 2007, the CRD has added to its portfolio: 2new pump stations 6new buildings 21new services However, GHG emissions from buildings, facilities and infrastructure have gone down by 28% Policy Framework & Action Plan 39

263 SERVICE-ORIENTED 7GOALS Policy Statement: The CRD will strive towards net-zero energy for all new buildings and facilities and ultra-efficient infrastructure through design, life cycle costing, commissioning, material use and energy supply. 7: new buildings, facilities & infrastructure Goal: Achieve high-performance standards and strive towards net-zero energy for all new construction. Over time, the CRD will need to build and commission new buildings, facilities and infrastructure to meet new service demands. This provides an opportunity to create high-performance assets that use less energy, result in fewer GHG emissions, require less maintenance and save money over time. While projects that minimize energy consumption may come with a higher capital cost, this is often offset through reduced energy costs throughout the project s lifetime, in addition to significant reductions in GHG emissions. Life cycle costing is an important approach to ensure these benefits are considered at the outset of all significant capital projects. This commitment can require an investment of staff resources at the outset of the project to ensure the costs are quantified appropriately, and thus life cycle costing is typically most effective for larger capital investments. 40 Corporate Climate Action Strategy

264 Action Associated Division(s) & Department(s) Resources Timing 7-1. Establish technical standards for new construction to ensure highenergy performance and low-carbon criteria are incorporated into design of new facilities, including: aligning standards with new provincial Energy Step Code (e.g., Passive House Standard) Environmental Planning & Engineering division Risk, Insurance & Facility Management division Within existing 2017 ensuring standards are incorporated in requests for proposals as baseline 7-2. Design heating, ventilation and air conditioning systems that minimize the use of fossil fuels (heating oil and natural gas) and consider renewable energy sources. Environmental Planning & Engineering division Risk, Insurance & Facility Management division Built into total project costs Ongoing 7-3. Incorporate life cycle costing to calculate the business case for all capital projects over $100,000 in value. Environmental Planning & Engineering division Risk, Insurance & Facility Management division Built into total project costs 2019 Integrated Water Services department 7-4. Update the project management process to require commissioning of all new buildings to ensure they are operating at maximum efficiency. Environmental Planning & Engineering division Risk, Insurance & Facility Management division Built into operating costs 2019 Integrated Water Services department 7-5. Include climate action considerations in the capital project initiation process (see page 46): require established technical standards use building materials that sequester carbon (e.g., choose wood over concrete) consider renewable energy options Environmental Planning & Engineering division Risk, Insurance & Facility Management division Integrated Water Services department Built into total project costs 2019 Policy Framework & Action Plan 41

265 Implementation & Monitoring Process The CRD takes an adaptive management approach to its initiatives by using four stages of planning: prepare the plan, execute the plan, monitor and report on the plan and adjust it as necessary based on gathered information. This strategy adopts this approach, and this is demonstrated through the goals and initiatives outlined in the document. In particular, Goal 3: Metrics & reporting provides a framework for implementing stronger metrics, monitoring, reporting and reviewing/adjusting implemented initiatives within each applicable division. Implementation responsibilities As identified in the action tables, implementation of this strategy including planning, executing, monitoring, reporting and adjusting climate action initiatives within a division is the responsibility of many divisions across the CRD. The Corporate Climate Action Analyst within the Risk, Insurance & Facility Management division is available to assist all divisions with these steps. The Corporate Climate Action Analyst is also responsible for implementing certain actions, coordinating among departments where needed, collecting implementation metrics and stories and reporting back to the Board. the CRD s progress towards achieving the 2020 reduction target in addition to the following four metrics identified in the Capital Regional District Corporate Plan : number and impact of projects and partnerships demonstrating support for reductions in GHG emissions and for increased climate resiliency completion of corporate climate adaptation plan annual GHG emissions of corporate fleet annual GHG emissions of corporate buildings and infrastructure The Financial Services division and the Corporate Climate Action Analyst will continue to coordinate to develop annual corporate inventory and progress reports to meet the CRD s commitments under the Climate Action Charter and maintain eligibility for carbon tax grants from the Province. Review After five years of implementation, this strategy will need to be reviewed and updated. This will provide the CRD with the opportunity to consider whether to set a new GHG emissions reduction target, to review the continued relevance of the long-term goals and policy statements and to identify a new set of actions for the next five years. Monitoring & reporting Annually, the Corporate Climate Action Analyst will prepare a report for the Board that includes 42 Corporate Climate Action Strategy

266 Case Study: Recovering waste heat from the motor control centre In 2009, the CRD s Environmental Planning & Engineering division identified an opportunity to recover waste heat from the motor control centre at the Saanich Peninsula Wastewater Treatment Plant and use it as supplementary heat for treatment process hot water. A heat recovery system was installed and commissioned in February of The system has proven to be very effective in solving many operational problems and has also avoided the need for a new gas-fired process hot water boiler. Based on the operation records, the system has avoided approximately 55 tonnes CO 2 e/ year. The Saanich Peninsula Wastewater Treatment Plant. Implementation & Monitoring 43

267 Appendices Appendix A: Climate lens review template The climate lens review template provides information needed to understand the climaterelated implications of CRD projects, studies and contracts to support decision-making. Climate lens review templates must be completed on: all capital projects over $100,000 (new construction and retrofits) all studies, reports and feasibility analyses undertaken in support of future capital projects expected to be over $100,000 all contracts over $100,000, and all contracts less than $100,000, that are considered in scope for GHG reporting purposes (see sidebar on page 18 for more details) Mitigation The climate lens review template requires completion of the following questions related to GHG mitigation, i.e., efforts undertaken to reduce GHG emissions associated with the project: total expected operating emissions are these emissions in scope for the corporate GHG emissions inventory? does this project comply with corporate climate action policy and strategy? has the CRD s climate policy been added to the project requirements documentation? what steps have been taken to minimize GHG emissions from the project? Projects that do not comply with corporate climate action policy will require General Manager approval to proceed. Adaptation The template also requires a description of how the project s design has considered future climate impact, i.e., how the project has improved the resiliency of assets and infrastructure to the impacts of climate change. Note In 2018, the CRD will be developing a corporate climate adaptation plan (Action 4-3). The climate lens review template will be updated to align with that plan. The Climate Action Analyst will ensure the most up-to-date version of the climate lens review template is available to staff. 44 Corporate Climate Action Strategy

268 Appendix B: Organizational processes Budget planning process The graphic below outlines three key points where climate change will be considered in the current budget planning process. Finalizing the Budget MARCH 31 Approval of Financial Plan Bylaw February January Public Engagement on Financial Plan Annual Reporting March December APRIL 10 Mailing of requisition invoices April November May October Budget Planning June Budgeting for service delivery & priorities NOVEMBER Preliminary approval of CRD financial plan September Corporate Planning Two years before the new corporate planning cycle, energy assessments will be conducted to identify best opportunities to meet this strategy s goals in the CRD s largest facilities. Corporate Planning July August Presenting Service Plans Service Planning Implemented projects will be reviewed annually to determine successes or need for adjustments. Action 6-5 Service Planning Priority climate action initiatives will be incorporated into service plans, based on opportunities identified through energy assessments, feasibility analyses, strategic asset management plans, climate lens reviews of capital projects and other processes. Goal 2 Presenting Service Plans The climate-related actions package from all divisions will be presented to senior management before review of individual service plan budgets. Action 2-2 Appendices 45

269 Capital project initiation process Capital projects result from both internal drivers (e.g., asset management plans, failing facilities) and external drivers (e.g., strategic opportunities, a request from the public, request from the Board). Staff then follow a capital project initiation and approval process. This graphic details where and how staff will incorporate climate considerations into that process. Process steps 1Identification of project need 2 Preliminary analysis Where and how to consider climate implications within process When identifying the project need, use various organizational processes such as strategic asset management plans (SAMP) and risk register. When completing the preliminary analysis, conduct best practice review. In the supporting documentation, include climate action policy, SAMP and best practice highlights. 3Business case/ detailed analysis When conducting the business case analysis, add life cycle costing, including specific reference to cost of maintenance over expected life. In the supporting documentation, include an assessment of the project s impact on climate by using a climate lens review. 4 Feasibility analysis When adding the project to respective service plan(s) and financial plan(s), also add it to the SAMP or asset management review roster, as applicable. 5Initiation of capital project When completing the capital project initiation process, incorporate applicable corporate climate policy into the project requirements documentation. 46 Corporate Climate Action Strategy

270 Fleet vehicle and equipment purchasing process The Customer & Technical Services division leads the fleet vehicle and equipment purchasing process, which is guided by fleet policies developed in 2007 and earlier. In the CRD s current organizational structure, vehicles and equipment are owned and operated by individual divisions, while management of the fleet is more centralized, meaning that while the centralized team identifies when to replace units, and recommends preferred replacement units to match operational needs, the ultimate purchasing decisions rest within individual divisions. There are several opportunities to further embed a climate lens into fleet purchase decisions, and these include using tools to evaluate appropriate options, using life cycle considerations to inform purchase decisions and raising awareness among all staff involved in the procurement process and decisions. Existing process 1Generate list of units due for replacement 2 Notify relevant service areas 3Complete utilization form 4 Tender and get quotes 5Recommend vehicle make and model Climate considerations to be incorporated into process Fleet policy determines time of renewal. Customer & Technical Services division prepares high-level business case demonstrating opportunity to pay back new vehicle investment through fuel efficiency and reduced maintenance. Customer & Technical Services division provides high-level business case to division that will make the purchasing decision. Customer & Technical Services division reviews utilization and operational needs for electric vehicle potential, right-sizing and opportunities to pool vehicle use. Customer & Technical Services division incorporates minimum efficiency requirements into tender documents. When making the final purchase decision, the purchasing division clearly identifies how the recommended vehicle supports or does not support climate action policy. Life cycle costing is used to determine total cost of ownership. 6 Approvals General Manager signs off on recommended vehicle, ensuring alignment with corporate climate policy. Appendices 47

271 Case Study: The Summit The Summit at Quadra Village is a residential and dementia care facility that will be owned by the CRD and operated by Island Health. Groundbreaking for the Summit took place in June When completed, the facility will provide 320 new residences. The Summit is located at 955 Hillside Avenue in Victoria. The project team has worked hard to minimize the project s GHG emissions. The Summit has been registered with the BC Hydro New Construction program and has undergone extensive energy modelling to review options for energy-efficiency measures through improved building envelope, lighting and mechanical systems. After analysis of over 19 energy conservation measures, including high performance heat recovery, exhaust air heat pump, LED lighting and optimized glazing, the project architects were able to reduce annual GHG emissions by 395 tonnes CO 2 e over the original design and drop the estimated energy-use intensity by 38%, from 450 kwh/m 2 to 279 kwh/ m 2. Although this facility will not be in the scope of the CRD s GHG reporting, the CRD is still committed to ensuring that new facilities within its sphere of influence are built with climate action as a key priority. 48 Corporate Climate Action Strategy

272 CAPITAL REGIONAL DIStrict 625 Fisgard Street, Victoria, BC V8W 2S

273 APPENDIX D Climate Action Program 2016 Annual Report Capital Regional District Through the Climate Action and Adaptation Service Establishment Bylaw No. 3510, the Capital Regional District (CRD) Climate Action Program (CAP) serves the region by acting as a resource, hub and facilitator on climate change issues. The program directly supports stakeholders through five important roles: Assisting local governments in developing and implementing emissions reductions and climate adaptation policies, plans and programs under their community and corporate portfolios. Providing scientific information, data and indicators related to local and regional greenhouse gas (GHG) emissions and projected climate impacts for the capital region. Increasing public awareness of climate change issues and catalyzing action through partnerships with public and private sectors, non-governmental and community organizations. Liaising with senior levels of government on climate change related programs, policies and legislation that impact the capital region. Supporting the CRD in fulfilling its own corporate climate objectives, including the climate-related CRD Board strategic priorities. The contents of this report provide an overview of the CRD Climate Action Program s achievements from Further information on the CRD s corporate climate activities can be found in the 2016 Climate Action Revenue Incentive Program (CARIP) Report available at Climate Action Program 2016 Annual Report

274 Table of Contents 1. WHY TAKE ACTION? COMMITMENTS & REGULATIONS CLIMATE MITIGATION: GREENHOUSE GAS EMISSIONS & TARGETS... 2 Community GHG Emissions... 3 Community GHG Reduction Targets... 3 Direct and Indirect Control CLIMATE ADAPTATION: BUILD RESILIENCE CLIMATE ACTION PROGRAM OVERVIEW... 5 Supporting Local Governments... 5 Supporting CRD Corporate Operations Climate Action Initiative Highlights LOOKING AHEAD... 8 Climate Action Program 2016 Annual Report

275 Why Take Action? Climate change is a critical issue facing our planet today. Whether it is impacts to our environmental, economic and social systems or human health, our communities will continue to be challenged with finding ways to reduce energy and emissions, while preparing for the climate of tomorrow. Although the challenges are real, they are not insurmountable. By taking action on climate change in the capital region, we can protect valuable resources like clean air and water, create jobs and maximize local economic development, reduce costs for homeowners and businesses, enhance quality of life, reduce our risks and create a more resilient future. Commitments & Regulations The CRD is required to take action to reduce corporate and community GHG emissions, and prepare for the impacts of climate change under the following provincial regulation and commitments: Local Government (Green Communities) Statutes Amendment Act (Bill 27) requires regional districts and local governments to include targets, policies and actions for the reduction of GHG emissions in Regional Growth Strategies and Official Community Plans. The Act also provides powers to local governments to support mitigation and adaptation through development permit areas, development cost charges and parking and building code requirements. All local governments in the region, including the CRD, became signatories of the BC Climate Action Charter in This includes a commitment to: become carbon neutral in corporate operations starting in 2012 measure and report on our community s GHG emissions profile work to create compact, complete, more energy efficient rural and urban communities Since 2009, the CRD has participated in the provincial CARIP. By reporting annually on community and corporate climate actions, as well as corporate energy use, the CRD receives a rebate for the carbon tax it pays. Climate Action Program 2016 Annual Report - 1

276 Climate Mitigation: Greenhouse Gas Emissions & Targets The CRD provides data for the development of the provincial Community and Emissions Inventory (CEEI), an indicative inventory of energy consumption, GHG emissions and supporting indicators from community activities related to on-road transportation, buildings and solid waste. The inventory was the first of its kind in North America and, though narrow in scope, it is useful in informing regional policies, programming and actions. It also helps local governments meet their BC Climate Action Charter commitment to measure and report on community GHG emissions profiles Community GHG Emissions by Source (Capital Region) 55% 9% 36% Buildings On-Road Transportation Solid Waste Source: Community Energy & Emissions Inventory (CEEI, 2014), Province of BC 2 - Climate Action Program 2016 Annual Report

277 Community GHG Emissions The most recent CEEI report, released in 2010, shows the capital region emitted 1,552,234 tonnes of CO 2 e, with transportation largely responsible for region-wide emissions, followed by buildings and solid waste. For a more complete picture of the region s energy and GHG emissions consumption, it is important to also consider additional contributors such as cross-jurisdictional transportation (e.g., air travel) and the import and export of goods, energy and resources. Community GHG Reduction Targets The draft Regional Growth Strategy identifies a target for the capital region to reduce GHG emissions by 61% (from 2007 levels) by This ambitious target will require a decrease of 1 million tonnes of CO 2 e. Direct and Indirect Control There is a clear role for local governments to take action on mitigation and adaptation, with an estimated 44% of Canada s GHG emissions within the direct or indirect control of local governments. As climate change impacts increase in frequency and severity, many of the costs on infrastructure, social and economic systems and natural systems will be borne by communities. Substantially reducing the region s emissions requires significant climate action by all. As an organization, the CRD recognizes that while it has direct control of an estimated 1% of community emissions, it has a valuable leadership role to play. Achieving this target will not be possible without a substantial policy shift and full-scale implementation of initiatives such as multimodal transportation, energyefficient home retrofits, net-zero-energy-ready new construction, renewable energy technology adoption and waste reduction. Even with substantial local and global GHG emission reductions, our region will be impacted by climate change. Consequently, we will need to look for opportunities to integrate adaptation into our mitigation activities to create a low-carbon and resilient region. As one of several supporting documents to the draft Regional Growth Strategy, the CRD Regional Climate Action Strategy (approved in 2017) will focus on what CRD services can do within their current mandates to reduce community GHG emissions, and prepare for and adapt to climate change ,500, ,000, ,500, ,000, , Year 2007 Community GHG Emission Targets Year 2010 Year % Reduction Target Total Total Emissions Status Quo CRD Corporate GHG Emissions and Targets In 2008, the CRD Board committed to reducing operational GHG emissions by 33% by 2020, compared to 2007 levels. To support this goal and to adapt to climate change, in 2016, the CRD Board approved the creation of a Corporate Climate Action Analyst position housed in the CRD Risk & Insurance division, and approved the CRD Corporate Climate Action Strategy. Reporting CO 2 e generated by the CRD s corporate operations and services in 2016 will be reported in the CARIP report posted to the CRD website by June 1, 2017, as required by the Province. The CRD has been carbon neutral in its operations since Source: Community Energy & Emissions Inventory (CEEI, 2014), Province of BC Climate Action Program 2016 Annual Report - 3

278 Climate Adaptation: Build Resilience The climate is changing and the new normal for the region may be very unlike the past. Global climate models project an average increase of about 3 C in our region by the 2050s. The Pacific Climate Impacts Consortium (PCIC) has undertaken a comprehensive assessment of the projections of global climate models for our region. This assessment shows, as a result of global warming, the capital region will experience: hotter summer days and nights, longer summer dry spells with an extension of the dry season into September. milder winter days and nights, with a near loss of frost days and snowpack in all areas but the highest elevations in the region. stronger and more frequent extreme rainfall events. Scientists also project the capital region will be impacted by sea level rise. Without action, these changes threaten a variety of regional and local government services, as well as overall community health and wellbeing. The CRD will continue to consider the implications of a changing climate, share our learnings and continue to prepare. 4 - Climate Action Program 2016 Annual Report

279 Climate Action Program Overview The CRD Climate Action Program, housed in the Environmental Protection division, provides direct support to local governments, the CRD and the general public. The program operated on an annual budget of $310,970 which included 1.7, full-time employees. The program s budget is provided through an annual requisition from all of the municipalities and electoral areas. The program also relies on external grants and partnerships to undertake community climate action rogramming. In 2016, the CAP leveraged $63,800 in external funding to assist program delivery and supported partners in obtaining $13,500 for regional climate action programming. Supporting Local Governments Each community within the region has unique climate action priorities. To respond to the diverse and ongoing needs of local governments, the CRD coordinates the Climate Action Inter-Municipal Working Group and the Climate Action Inter-Municipal Task Force. Staff and elected officials participate in these groups to share information, collaborate, review current program deliverables and provide input on the direction of future work. In addition to facilitating these groups, the CAP provided customized support to local governments, including: coordinating a Forum of All Councils on the urgency of climate change. assisting with the development of community plans, programs, information reports and education initiatives. providing background information to new staff working on climate-related issues. attending public events and open houses. providing assistance on GHG inventory and balancing projects. hosting or sponsoring capacity-building workshops on topics such as: Surrey s Sea Level Rise Adaptation Strategy fleet electric vehicle and charging infrastructure ENERGY STAR for New Homes for building officials and builders developing a Climate Projections for the Capital Region report, based on the work undertaken by the Pacific Climate Impacts Consortium, which will offer local governments a common understanding of the potential impacts of climate change to the region. To facilitate further information sharing, the CAP produces a monthly e-newsletter that includes information, events, resources and funding opportunities for local government. Members of the Climate Action Inter-Municipal Working Group, the Climate Action Inter-Municipal Steering Committee and other interested local government stakeholders are included on the mailing list. Supporting CRD Corporate Operations While implementation of climate action remains the responsibility of each CRD department, the CAP provides support to departments on an as-needed basis. This includes, but is not limited, to: providing messaging for public outreach campaigns. disseminating climate mitigation and adaptation information to CRD departments. linking information from higher levels of government to operational needs and opportunities. supporting the development of relevant CRD-led planning documents (such as the Regional Growth Strategy, strategic plans, etc.). assisting CRD Environmental Engineering to include climate action in the Core Area Inflow and Infiltration Management Plan. supporting the CRD Corporate Climate Analyst on the development of the Corporate Climate Action Strategy and the CRD Zero Emissions Fleet Initiative. Climate Action Program 2016 Annual Report - 5

280 2016 Climate Action Initiative Highlights The CAP has a diverse portfolio that is shaped by the priorities and interests of the CRD Board and our partner local governments. Staff directly engaged more than 5,500 citizens and supported local organizations and businesses in climate change actions and awareness. Consulted with CRD Services, the CRD Climate Action Inter-Municipal Working Group and Steering Committee, CRD Roundtable on the Environment to develop a draft CRD Regional Climate Action Strategy, a companion document to the draft Regional Growth Strategy. The Strategy highlights a number of climate actions that CRD services can do, within their mandates, to support community climate action efforts. The Strategy is being developed to align with federal, provincial and regional initiatives to ensure a coordinated approach that identifies opportunities and maximizes region-wide benefits. In November 2016, the CRD Board referred the draft Strategy to the Forum of All Councils on the urgency of climate change for input from the region s leaders. Contributed to the development and promotion of the Adapting to Climate Change on the British Columbia Coast video series. The series provides an introduction to living with climate change on the BC Coast, with special attention to three subject areas: Coastal Flood Management; Rainwater Management; and Water Conservation. The actions shown in the video series have benefits that extend beyond resilience to climate change. READY SET SOLVE The CRD Student Climate Challenge Developed the draft Climate Projections of the Capital Region report, with assistance from CRD services and regional local governments staff. The report is based on the comprehensive assessment of the projections of global climate models for the region undertaken by the Pacific Climate Impacts Consortium to understand details of how its climate may change by the 2050s and 2080s. The draft report provides a summary of the results of the assessment and additional information that can be used to plan and adapt to the changes ahead. The report updates the previous Georgia Basin Projected Climate Change, Extremes and Historical Analysis (Georgia Basin Study) 2012 report and is a resource for planners, engineers, land use managers, policy makers and decision-makers. 6 - Climate Action Program 2016 Annual Report

281 Offered 185 top-up incentives ($150 each), through a partnership with CRD Integrated Watershed Management Program, to capital region residents participating in the provincial Oil to Heat Pump Incentive Program. Homeowners are encouraged to replace oil tanks with electric heat pumps, one of the most impactful ways to reduce home heating GHG emissions and protect the region s waterways. A further 90 incentives were coordinated on behalf of the District of Saanich. Top-up incentives were offered in 2016 on a first-come, firstserved basis. Delivered by City Green Solutions. Hosted the Resilient Region Exchange Breakfast Series. Building on 5 years of success, this quarterly breakfast meet-up is designed to bring together regional stakeholders working on climate and sustainability issues in the region. With community members (from general public, local government, business, public sector and non-profit organizations) attending each meeting, and approximately 600 online members, this series has earned a reputation for partnership development, project incubation and community building. In 2016, the series was made possible, in part, due to a funding partnership with BC Hydro. Collaborated with the not-for-profit Scout Environmental, to promote the Smart Drive Challenge Pilot Program. The initiative is a data-driven program designed to engage, educate, challenge and motivate drivers to drive better (more efficiently) and drive less (reduced distance). Across the region, 50 participants took part in the pilot, resulting in a 16% total reduction in fuel and GHG emissions. Installed free high-efficiency faucet aerators and prerinse spray valves in commercial kitchens, using natural gas heated hot water, through the Food Service Establishment Water, Energy and GHG Savings Program. Delivered in partnership with FortisBC and the CRD Water Conservation Program, with support from the City of Victoria by City Green Solutions, the program also provides a complimentary Water, Energy and Waste Reduction Opportunities Assessment to help businesses identify further opportunities for savings. Partnered with the region s libraries to offer the Climate Action To-Go Kit Program. Each kit includes books, videos, energy efficiency tools, LED light bulbs and select print materials geared for homes. Since 2014, the program has expanded each year with the development of a 2.0 Lifestyle kit in Currently 24 kits are in circulation with 20 more being developed. This initiative has been made possible, in part, due to a funding partnership with BC Hydro. Provided the Planet Protector Academy climate action program in local schools between January and July Offered in partnership with DreamRider Productions, 27 classes participated in the program, engaging a total of 706 elementary students and their families (over 2,000 people total) to take action on climate change. Following the program, 55% of families reported they are now switching off lights more, 61% are taking shorter showers, 66% are idling less, 64% are speeding less and 59% are driving less. Furthermore, 80% of participating teachers agreed the resource helped develop students motivation and personal responsibility for protecting the planet. Offered the Ready, Set, Solve Program with support from BC Hydro, Camosun College, the University of Victoria and in-kind support from the CRD Environmental Partnerships division. CAP staff coordinated student recruitment, hosted a kick-off workshop and celebration ceremony for 42 post-secondary students who signed up to solve 13 climate-related challenges submitted by local governments, not-for-profits and institutions. A judging panel and challenge hosts evaluated the final projects, some of which were implemented upon submission. Climate Action Program 2016 Annual Report - 7

282 Looking Ahead In 2017, the CAP will continue to support the CRD and local governments in their climate action goals, while undertaking projects that reduce community and corporate emissions, and better prepare our region for climate changes. Planning includes a number of projects, such as: Stepping Up to the Energy Step Code Program. With funding from BC Hydro Sustainable Communities, the CAP will support industry and local government education on the new voluntary regulation, the BC Energy Step Code. This ground breaking climate and energy provincial tool will allow builders and local governments to participate in the transition to net zero buildings. Cool It! Climate Leadership Training. Working with the non-profit BC Sustainable Energy Association, the CAP will offer educational programming (free-of-charge) that encourages students in grades 4 7 to take action to reduce energy use and emissions at home. People Power, Active Transportation and Healthy Communities Program. The CAP will continue to provide promotional support for this initiative led by the CRD Regional and Strategic Planning division, made possible with support from the Victoria Foundation, the Traffic Safety Commission and the Real Estate Foundation. The program focuses on motivating, supporting and encouraging residents to safely walk, roll and cycle more often, and runs in tandem with community-led infrastructure investments and data collection programs across the region. Growing Solutions Planting Schedule. Building off the success of the Growing Solutions Fresh Food Calendar, the CAP will finalize and promote a planting schedule resource that supports residents growing local food and maximizing their backyard harvest. BC Climate Action Charter Refresh. As part of the Green Communities Committee Joint Provincial-UBCM Adaptation Working Group, the CAP will provide input into the refresh of the BC Climate Action Charter, a key commitment in the BC Climate Leadership Plan. In addition, the Climate Action Program also intends to finalize the Regional Climate Action Strategy and the Climate Projections for the Capital Region report, and continue the Resilient Region Exchange Breakfast Series, Climate Action ToGo Kits in regional libraries, the CRD Oil to Heat Pump Top-Up Incentive and Food Service Establishment Water, Energy and GHG Savings programs. Capital Regional District 625 Fisgard Street, PO Box 1000 Victoria, BC, Canada, V8W 2S Climate Action Program 2016 Annual Report

283 REPORT TO FINANCE COMMITTEE MEETING OF WEDNESDAY, JUNE 7, 2017 SUBJECT Bylaw 4185: Temporary Borrowing for Capital Financing of Vancouver Island Regional Library ISSUE Temporary Borrowing Bylaw No for the Vancouver Island Regional Library District. BACKGROUND On October 14, 2015, Bylaw No Vancouver Island Regional Library District Borrowing Service Establishment Bylaw No. 1, 2014 and Bylaw 3915 Vancouver Island Regional Library District Loan Authorization Bylaw No. 1, 2014 were each given three readings by the Capital Regional District Board (the Board). These bylaws enabled the Board to borrow up to six million ($6,000,000) on behalf of the Vancouver Island Regional Library (VIRL), for the purposes of paying for a new library in the District of Sooke. Electoral approval of both Bylaw No and Bylaw No has been obtained through an alternative approval process. A temporary loan allows the borrowing of money for capital expenditures that are incurred before the long-term funding is issued by Municipal Finance Authority (MFA). The proposed temporary borrowing bylaw is an authorization to borrow short-term in accordance with the loan authorization Bylaw No IMPLICATIONS The VIRL is now ready to proceed with construction of the new library in Sooke. This proposed temporary borrowing bylaw will give the CRD access, pending the next MFA issue of long-term debentures, to financing according to the terms specified in loan authorization Bylaw No Money that is borrowed on a temporary basis will not exceed the difference between the total amount authorized by the loan authorization bylaw and the amount already borrowed in relation to that bylaw. The proceeds of borrowing long-term in relation to the loan authorization bylaw will be used to repay the money that is borrowed on a temporary basis. CONCLUSION A temporary loan allows the CRD Board to borrow money in compliance with a loan authorization bylaw, for capital expenditures that are incurred before the long term funding is issued by MFA. RECOMMENDATION That the Finance Committee recommend to the Capital Regional District Board: That Bylaw No. 4185, Temporary Loan (Vancouver Island Regional Library District) Bylaw No. 1, 2017 be introduced and read a first and second time, read a third time, and adopted. FINT

284 Finance Committee June 7, 2017 Temporary Borrowing Bylaw for Capital Financing 2 Submitted by: Concurrence: Concurrence: Amber Donaldson, MA, CPA, CMA, A/Senior Manager, Financial Services Nelson Chan, MBA, CPA, CMA, Chief Financial Officer Robert Lapham, MCIP, RPP, Chief Administrative Officer PD:ngm Attachment: Appendix A Bylaw No. 4185

285 CAPITAL REGIONAL DISTRICT BYLAW NO ************************************************************************************************************* A BYLAW TO AUTHORIZE TEMPORARY BORROWING ON BEHALF OF THE VANCOUVER ISLAND REGIONAL LIBRARY DISTRICT ************************************************************************************************************ WHEREAS: A. It is provided by Section 409 of the Local Government Act that the Board may where it has adopted a loan authorization bylaw, without further assents or approvals, borrow temporarily from any person under the conditions therein set out; B. The Board has adopted Bylaw No. 3915, cited as Vancouver Island Regional Library District Loan Authorization Bylaw No.1, 2014 in the amount of Six Million Dollars ($6,000,000); C. The issuance of the said Security Issuing bylaw has been temporarily deferred. NOW THEREFORE the Board of the Capital Regional District, in open meeting assembled, enacts as follows: 1. The Board is hereby authorized and empowered to borrow an amount or amounts not exceeding the sum of Six Million Dollars ($6,000,000) as the same may be required, at the prevailing interest rate. 2. The money so borrowed shall be used solely for the purpose set out in the said Bylaw No The proceeds from the Security Issuing bylaw, or so much thereof as may be necessary, shall be used to repay the money so borrowed. 4. This Bylaw may be cited as "Temporary Borrowing (Vancouver Island Regional Library District) Bylaw No. 1, READ A FIRST TIME THIS th day of 2017 READ A SECOND TIME THIS th day of 2017 READ A THIRD TIME THIS th day of 2017 ADOPTED THIS th day of 2017 CHAIR CORPORATE OFFICER

286 REPORT TO THE FINANCE COMMITTEE MEETING OF WEDNESDAY, JUNE 7, 2017 SUBJECT Capital Regional District Grants Update ISSUE This report provides an update since the previous Finance Committee meeting. BACKGROUND The Capital Regional District (CRD) Grants Dashboard (Appendix A) summarizes grant calls and agreements in progress, as well as grants awarded since January 1, Grants / Contributions Awarded No grant or contributions were received since the last grant staff report update. Grant Applications in Progress BC Rural Dividend Port Renfrew Tourism Trail ($100,000) In keeping with the CRD Board resolution adopted at the May 10, 2017, meeting, the CRD is currently working on an application that is to be submitted by May 31 to support and enhance Port Refrew s transition to a tourist economy. BC Rural Dividend Southern Gulf Islands Strategic Community Economic Sustainability Plan ($68,500) In keeping with the CRD Board resolution adopted at the May 10, 2017, meeting, the CRD is currently working on an application that is to be submitted by May 31 to support delivering long term economic, social and environmental sustainability to retain and attract young families in the Southern Gulf Islands. Federal Gas Tax Strategic Priorities Fund ($1,250,000) In keeping with the CRD Board resolution adopted at the May 10, 2017, meeting, the CRD is currently working on an application that is to be submitted by June 1 to support the expansion of the SEAPARC Leisure Complex fitness and multi-purpose space which will provide increased health and wellness opportunities to residents of Sooke and the Juan de Fuca Electoral Area. In addition, the CRD was originally seeking $750,000 for the grant request and upon further exploration, the new grant request will be $1,250,000 million. The updated amount reflects regional construction escalation and the addition of a 1000 square-foot mezzanine to the newly expanded fitness space. Federal Gas Tax Strategic Priorities Fund (Grant request amount is in progress) The CRD is currently working on an application that is to be submitted by June 1 to support the development of docks along the harbours for the Southern Gulf Islands to support providing transportation services between the gulf islands. FINT

287 Finance Committee June 7, 2017 Capital Regional District Grants Update 2 New Grant Opportunities Announced Federation of Canadian Municipalities (FCM) Munincipal Asset Management Program Announced on May 9, 2017, this program provides funding for projects that will help Canadian cities and communities of all sizes enhance their asset management practices. The goal of the program is to help municipalities make informed investment decisions for infrastructure assets, such as roads, buildings, water supply and sanitation systems, in order to deliver value for money while best serving citizens' needs. Government of Canada New Horizons for Seniors Program Announced on May 11, 2017, this federal Grants and Contributions program supports projects led or inspired by seniors who make a difference in the lives of others and in their communities. By supporting a variety of opportunities for seniors, the New Horizons for Seniors Program works to better the lives of all Canadians. Project examples include seniors: developing urban gardens in communities throughout the province; sharing the gift of music with youth and their peers; learning computer skills; educating peers about elder abuse; helping to preserve their native language; telling stories from the past to school children; creating a cookbook of traditional dishes; and speaking to groups of new retirees and those close to retirement about their positive experiences with volunteerism. GRANTS FORECAST Major opportunities forthcoming include: another round of community infrastructure funding either late 2017 or early 2018 under New Building Canada; and details of the Community Emergency Preparedness Fund is anticipated to receive additional information by UBCM in late RECOMMENDATION That the Finance Committee recommend to the Capital Regional District Board: That this report be received for information. Submitted by: Concurrence: Concurrence: Carlo Vijandre, PMP, AScT, FMP, Manager, Asset Management Nelson Chan, MBA, CPA, CMA, Chief Financial Officer Kevin Lorette, P.Eng., MBA, Acting Chief Administrative Officer CV:ngm Appendix A: CRD Grants Dashboard

288 Grants Administration Dashboard Externally Sourced Grant Funding STATUS LEGEND: Work in Progress ( =delay) Board Resolution Needed Application Done Project Done ( =payment pending) Application Declined Links to information Amber cell Red cell Grant Program Links Application Deadline Project Status Board Resolution Comments Grant Ask % of Total Project Cost Provincial Investment in Affordable Housing 15-Jun Carey Road Affordable Housing Project 8-Jun-16 $ 6,000,000 36% Federal Gas Tax - Strategic Priorities Fund 01-Jun-17 Expansion of SEAPARC Leisure Complex fitness and multi-purpose space 10-May-17 $ 1,250,000 83% GRANT APPLICATIONS IN PROGRESS Federal Gas Tax - Strategic Priorities Fund 01-Jun-17 Southern Gulf Islands Harbours and Docks Project In progress In Progress In Progress BC Rural Dividend Program (Intake 3) 31-May-17 Port Renfrew Tourism Trail project 10-May-17 $ 100,000 37% BC Rural Dividend Program (Intake 3) 31-May-17 Implementing a Strategic Community Economic Sustainability Plan 10-May-17 $ 68,500 77% Green Municipal Fund Ongoing intake Zero Emissions Fleet Initiative 12-Oct-16 Decision expected June 29th $ 349,706 34% Affordable Rental Innovation - CMHC Ongoing Intake Regional Housing First Program - Affordable Rental Housing 14-Dec-16 $ 30,000, % BC Canada 150 Celebrating BC Communities 10-Feb-17 Goldstream Powerhouse Preservation NA Highly competitive intake; proposal was not as suited to the grant objectives as other applications. $ 24,000 60% BC Ministry of Energy and Mines - Alternative Energy NA EV and E-Bike Charging Station Needs Analysis and Toolkit NA $ 20,000 47% BC & Yukon Swim To Survive Ongoing Intake Swim To Survive Program Panorama Recreation NA Grant will be awarded; total amount being confirmed. $ 5, % TOTAL GRANT ASKS IN PROGRESS (EXCLUDING CORE AREA LIQUID WASTE MANAGEMENT) FOR DIRECT ACCESS TO: (1) Grant calls in progress, see page 4; (2) Grants forecast, see page 5 $ 37,817,546 Page 1 of 5

289 Grants Administration Dashboard Externally Sourced Grant Funding STATUS LEGEND: Work in Progress (Red cell means delay) Board Resolution Needed Application Done Project Done Application Declined Links to information provided CORE AREA LIQUID WASTE MANAGEMENT - GRANT FUNDING STATUS Grant Program Links Contribution Terms and Purpose Status Board Resolution Comments Grant Ask Grant Award GRANNT APPLICATIONS IN PROGRESS Infrastructure Canada - 3P Funding Agreement Lesser of 25% of eligible costs or $83.4M for a bio-solids energy centre treatment (Federal funding) facility for wastewater sludge. $ 36,000,000 $ 41,000,000 Up to 50% of eligible costs to a maximum of $120M for construction of the Infrastructure Canada - Building Canada Fund McLoughlin Point Wastewater Treatment Plant, marine outfall pipe, and completion Funding agreements executed. Construction to start in April 2017 as per March 16, $ 120,000,000 $ 120,000,000 (Federal funding) of the Victoria Harbour crossing joint media release (Canada, BC, CRD). Up to 50% of eligible costs to a maximum of $50M to upgrade Clover Point and Infrastructure Canada - Green Infrastructure Fund Macaulay Point pump stations, implement attenuation tanks, and upgrade existing (Federal funding) pump stations and piping systems. $ 50,000,000 $ 50,000,000 The lesser of 1/3 total cost (excluding land acquisition cost) or $248M for Provincial Funding construction of the wastewater treatment plant, the energy centre for sludge 08-Mar-17 CRD Board approved execution of the Provincial Agreement. $ 248,000,000 $ 248,000,000 treatment, and conveyance system upgrades - all serving the Core Area. TOTAL GRANT CORE AREA LIQUID WASTE MANAGEMENT GRANTS IN PROGRESS $ 454,000,000 $ 459,000,000 Page 2 of 5

290 Grants Administration Dashboard Externally Sourced Grant Funding STATUS LEGEND: Work in Progress ( Red cell =delay) Board Resolution Needed Application Done Project Done ( Amber cell=payment pending) Application Declined Links to information GRANTS AWARDED SINCE JANUARY 1, 2015 Grant Program Links Dept Project Deadline Climate Action Rebate Incentive Program F&T NA F&T Risk and Facilities Management projects Risk and Facilities Management (Reporting instruction for 2017) $ 66,959 $ 66,959 Community Wellness Grant (Island Health) PPS NA For community population health initiatives. Health and Capital Planning Strategies, Community Health $ 186,667 $ 186,667 BC Community Energy Leadership Program PPS 30-Mar Kings Rd. Building Boiler Replacement Capital Region Housing Corporation - Project Completed $ 74,235 $ 20,780 Pacific Institute for Climate Solutions, Uvic IWS 30-Mar-16 Research on climate adaptation re: watershed Watershed Protection Division $ 10,000 $ 10,000 BC Asset Management (AM) Planning Program PES 30-May-16 Regional Parks Asset Management Regional Parks $ 25,465 $ 10,000 BC Asset Management (AM) Planning Program F&T 31-Aug-16 To develop AM tools for all CRD facility groups. Facilities and Risk Management $ 24,000 $ 10,000 BC Asset Management (AM) Planning Program F&T 31-Aug-16 IT Systems Assessment For Asset Management Information Technology $ 20,000 $ 9,850 Age-Friendly Communities PES 31-Dec-16 Reducing the Barriers to Low Income Seniors Capital Region Housing Corporation $ 20,000 $ 20,000 SGI Planning - Grant agreement: the agreement amendment has been signed Federal Gas Tax - Strategic Priorities Fund PPS 31-Dec-16 SSI and SGI Integrated Service Plan by the Chair and forwarded to UBCM on May 2, We are waiting for their $ 50,000 $ 50,000 UBCM - Strategic Wildfire Prevention Initiative PPS 31-Jan-17 Piers Island FireSmart Protection Project Protective Services $ 10,000 $ 10,000 New Horizons for Seniors PES 31-Jan-17 Community Arts and Health Project Panorama Recreation Centre $ 25,000 $ 25,000 Infrastructure Planning Grant (2015) Finance 31-Mar-17 Asset Management Framework Development Financial Services $ 22,793 $ 10,000 BC Hydro Custom Incentive Program PPS 31-Mar-17 SEAPARC Lighting Retrofit SEAPARC $ 270,525 $ 35,752 BC Ministry of Energy and Mines - Contribution F&T 30-Apr-17 Fuel Cell Electric Vehicle Project - Feasibily Risk and Facilities Management $ 15,000 $ 15,000 Trans-Canada Trail Foundation PPS 30-Jun-17 Sooke Hills Wilderness Regional Trail Regional Parks $ 1,935,000 $ 650,000 Bike BC 2016 PES 20-Jul-17 E&N Rail Trail Phase 1 - Maplebank to Hallowell Regional Parks $ 2,600,000 $ 1,000,000 BC Rural Dividend SSI 15-Dec-17 SSI Rural Accelerator SSI Administration and SSI Community Economic Development Commission $ 90,080 $ 72,080 Canada 150 Community Infrastructure Grant PES 31-Dec-17 Panorama Arena Floor and Dasherboards Panorama Recreation Centre $ 1,300,000 $ 500,000 Age-Friendly Communities PPS 31-Dec-17 Community Map - Connecting Older Adults Health and Capital Planning Strategies, Community Health $ 20,000 $ 20,000 BC Hydro Sustainable Communities Program PES 31-Dec-17 Stepping Up with the BC Energy Step Code Environmental Protection Division - Climate Action $ 39,250 $ 19,625 BC Fleet Champions Program F&T 27-Jan-18 EV Suitability Assessment - Data Loggers Risk and Facilities Management $ 60,880 $ 60,880 Canada 150 Community Celebration Grant SSI 31-Jan-18 SSI - Canada 150 Celebration Days of Fun SSI Administration $ 7,500 $ 7,500 Island Health Community Wellness Grant PES 31-Mar-18 Physical Literacy Opportunities for Youth Panorama Recreation Centre $ 17,649 $ 10,640 Island Health Community Wellness Grant PPS 31-Mar-18 Walk and Wheel to School Week Regional and Strategic Planning $ 18,560 $ 12,000 Victoria Foundation Community Grants PPS 31-Mar-18 Active Transportation and Healthy Communities Regional and Strategic Planning (Project acronym: ATHCP) $ 444,790 $ 100,000 Canada Cultural Spaces Fund F&T 31-Mar-18 Royal Theatre Upgrade Financial Services - SM $ 812,000 $ 400,000 Clean Water Wastewater Fund IWS 31-Mar-18 Port Renfrew Water Service Water Main IWS - Infrastructure Engineering $ 628,634 $ 488,103 Real Estate Foundation of BC PPS 31-Mar-18 Active and Safe Routes To School (part of ATHCP) Regional and Strategic Planning (Grant amount included in ATHCP budget of $444 $ 50,000 Stormwater-Harbours & Watershed: 10K for CRD; 40kpooled based on 10K grant Infrastructure Planning Grant (2017) PES 31-Mar-19 Bowker Creek Daylighting Feasbility Study $ 80,000 $ 40,000 for each of CRD, Oak Bay, Saanich, Victoria) BC Disaster Mitigation Program PPS 31-Mar-19 Port Renfrew / Pacheedaht FN Tsunami Warning Protective Services $ 550,000 $ 550,000 Regional Housing (The project cost includes grant contribution only; the amount Homelessness Partnering Strategy PPS 2019 To fund a variety of housing projects $ 793,652 $ 793,652 shown increases the agreement to $3,962,767. GRANTS AWARDED SINCE JANUARY 1, 2015 Project Status Lead signature and the return of the amendment Project Cost (Estimate) Grant Award $ 10,237,199 $ 5,266,488 Page 3 of 5

291 Grants Administration Dashboard Externally Sourced Grant Funding STATUS LEGEND: Work in Progress ( Red cell =delay) Board Resolution Needed Application Done Project Done ( Amber cell=payment pending) Application Declined Links to information GRANT CALLS IN PROGRESS Launch Date Application Deadline Resolution Needed Departments Alerted Community Emergency Planning Fund 15-Mar-17 TBC TBC Pending Municipal Asset Management Program - FCM 09-May-17 On-going intake Yes F&T IWS PES PPS New Horizons for Seniors Program Government of Canada 11-May Jun-17 No F&T IWS PES PPS Connect to Innovate 15-Dec Apr-17 Depends on $ value T&I, PPS, SSI Strategic Wildfire Prevention Program Ongoing 28-Apr-17 Yes PPS Active Communities Grant 16-Feb Jun-17 TBC All BC Rural Dividend Program (Intake 3) 21-Mar May-17 Yes PPS, SSI Federal Gas Tax - Strategic Priorities Fund 08-Mar Jun-17 Yes All Green Municipal Fund - Climate and Asset Management Grant Program Links 06-Apr Jun-17 Yes F&T, IWS, PES Investment Agriculture Foundation Ongoing 07-Jul-17 Depends on $ value PPS Infrastructure Planning Grant Ongoing 12-Jul-17 Yes IWS, PES, PPS National Disaster Mitigation Program (Floods) 22-Mar Aug-17 Yes PPS CEV Specialty-Use Vehicle Incentive 30-Jan Mar-18 Depends on $ value T&I - Facilities Management Ongoing Municipalities for Climate Change Program 15-Mar-17 Depends on $ value All intake Ongoing Green Municipal Fund Ongoing Yes F&T IWS PES PPS intake Infrastructure Planning Grant Ongoing 12-Jul-17 Yes IWS, PES, PPS Status To be administered by UBCM; program details under development Grant alert sent. Grant alert sent. Grant alert sent. Ongoing item; staff scan continuously for suitable opportunities. Grant details to be released on May 10. Grant alert sent. Grant alert sent. Grant alert sent. Ongoing item; staff scan continuously for suitable opportunities. Ongoing item; staff scan continuously for suitable opportunities Grant alert sent. Grant alert sent; deadline is the date posted or whenever the money runs out - whichever comes first. Grant alert sent. Ongoing item; staff scan continuously for suitable opportunities. Immediate focus is successful pursuit of Zero Emissions Initiatve Grant alert sent; grant proposal submitted to the CRD Board for endorsement (on Feb agenda; deferred to Feb. 22, 2017) Western Economic Diversification: Call for Proposals Connecting British Columbia Program BC Francophone Affairs Program Ongoing 17-Jun Sep-16 Next Deadline TBA Ongoing intake Ongoing intake Yes T&I, IWS, PES, PPS Depends on $ value Referred to IT for review No PPS, PES Grant alert sent: follow-up in progress. Referred to IT for review given the work conducted in the past to explore ways on increasing connectivity in the Electoral Areas. Grant alert sent; follow-up in progress. Page 4 of 5

292 Grants Administration Dashboard Externally Sourced Grant Funding STATUS LEGEND: Work in Progress ( Red cell =delay) Board Resolution Needed Application Done Project Done ( Amber =payment cell pending) Application Declined Links to information Funding Sources / Plans Description Possible Timing Links Federal Budget Highlights 2017 Federal Budget 2017 highlights provide perspective on upcoming priorities which may relate to grant opportunities. March 22, 2017 federal government budget highlights Provincial Budget Highlights 2017 Federal Infrastructure Funding Throne speech of February 15, 2017 highlights provide perspective on upcoming priorities which may relate to grant opportunities. A variety of budget commitments relate directly to CRD's mandate in the following areas: Climate Action, Asset Management, Water and Wastewater, Affordable Housing, Recreation and Cultural infrastructure. The website link in the right-most cell provides an overview of infrastructure funding programs. Additionally, links to media coverage providing insight on Known programs are included in the grants forecast below. Additional information will be released in the near term as noted on the website (see web February 15, 2017 provincial government throne speech highlights The experimental infrastructure bank will partner with private investors to fund infrastructure projects that may not otherwise be built for years. Ph 2 of Federal Infrastructure Funding to be expanded - details in early 2017 Federal Infrastructure Funding Website (aligns with 2016 Budget) senior level government direction and timeline are listed. link listed at the top of the rightmost cell). Small communities won't miss out on next wave of infrastructure funding (Sept. 20, 2016)) FUNDING INITIATIVES: ONGOING SCAN Federation of Canadian Municipalities (FCM) - Federal funding for Green Initiatives ($75 million) BC On The Move - Bike BC The Federal Government has announced $75 million in funding to help local governments reach climate action objectives. This funding will be dedicated to new programming that will provide a suite of grants to support studies, plans and pilot projects to enable better planning, analysis and decision-making related to municipal capital investments. These financial supports will be complemented by capacity-building initiatives such as peer learning groups, case studies, workshops, conferences and webinars. Under the BC on the Move 10-Year Transportation Plan, BikeBC will award approximately $18 million province-wide to support infrastructure projects over the period from The Program application details forthcoming; for the MAMP, the application package is expected to be available in May, Bike BC funding call occurred in the fall of FCM-GMF Municipal Asset Management Program ($50 million) FCM-GMF upcoming Climate Innovation Program ($175 million) BC On the Move - 10 Year Transporation Plan 2016 round of funding was announed February 12, 2016 (see Proposal Assessment section). Timing of future calls unknown. GRANTS FORECAST See website links in the right-most column for program information available to date. Note that typically, infrastructure grants will require SHOVEL READY projects (e.g: Asset plan is current; design drawings and environmental assessments are complete; matching funding - usually 50%- is assigned.) FCM-GMF upcoming Climate Innovation Program Bike BC (2017 round closed in Dec, 2016; probability of future calls unknown) Gas Tax - Strategic Priorities Fund (2nd intake announced March 8; online intake begins in April/17 New Building Canada - Small Communities Fund (3rd Round; generic grant information) Green Initiatives and Infrastructure (Preview of forthcoming initiatives) Energy Innovation - Clean Energy Innovation UBCM Asset Management Program (3rd, generic grant information) Page 5 of 5

293 REPORT TO FINANCE COMMITTEE MEETING OF WEDNESDAY, JUNE 7, 2017 SUBJECT 2017 Federal Budget Impact on Tax Exemptions ISSUE Provide additional information to the Capital Regional District (CRD) Board on impacts from changes to Taxable Benefit Deductions for municipal office-holders in the 2017 Federal Budget. BACKGROUND At the May 3, 2017, Finance Committee meeting, staff presented additional information on the 2017 Federal Budget; specifically, the proposal to eliminate tax exemptions that apply for nonaccountable expense allowances paid to members of provincial and territorial legislative assemblies and to certain municipal office-holders. At the time of the report, the anticipated change would be effective from January 1, 2018, onwards. Furthermore, the Committee passed the following resolutions: 1. That the Capital Regional District Board Chair submit, on behalf of the Capital Regional District Board, a late resolution to this year's Federation of Canadian Municipalities and Union of British Columbia Municipalities Annual General Meetings objecting to the change in government policy on non-exemption of expenses. 2. That staff be directed to provide a report to the Finance Committee on options to deal with the change in government policy on non-exemption of expenses. DISCUSSION Following the committee meeting, additional information from the Federal Government on Budget 2017 was released to indicate the changes to Taxable Benefit Deductions for municipal officerholders was revised and would now apply as of January 1, Based on the new updated information, and the resolution to lobby the Federation of Canadian Municipalities for consultation, analysis towards a report on options to deal with the change in government policy on non-exemption of expenses is premature. ALTERNATIVES Alternative 1 That the Finance Committee recommend to the Capital Regional District Board: 1. That this report be received for information; 2. That the current CRD Board Remuneration policy continue to apply; and 3. That the CRD undertake a comprehensive Board remuneration review in 2018, with implementation in 2019, as scheduled. Alternative 2 That staff be directed to proceed on providing a report on options to deal with the change in government policy on non-exemption of expenses. FINT

294 Finance Committee June 7, Federal Budget Impact on Tax Exemptions 2 CONCLUSION Based on updated information to Taxable Benefit Deductions in Federal Budget 2017, and the resolution to lobby the FCM for consultation, analysis towards a report on options to deal with the change in policy on non-exemption of expenses should coincide with the scheduled 2018 comprehensive Board remuneration review. RECOMMENDATION That the Finance Committee recommend to the Capital Regional District Board: 1. That this report be received for information; 2. That the current CRD Board Remuneration policy continue to apply; and 3. That the CRD undertake a comprehensive Board remuneration review in 2018, with implementation in 2019, as scheduled. Submitted By: Concurrence: Nelson Chan, MBA, CPA, CMA, Chief Financial Officer Robert Lapham, MCIP, RPP, Chief Administrative Officer NC:ngm

295 Nancy More From: Sent: To: Cc: Subject: Attachments: Dave Howe Tuesday, May 09, :56 AM Nelson Chan; Brent Reems Robert Lapham Fwd: Request for Expressions of Interest - next round of MNAI projects MNAI Request for Expressions of Interest May 2017.pdf; ATT00001.htm Fellows: can you determine next steps. Dave Sent from my ipad Begin forwarded message: From: Roy Brooke <roy@brookeandassociates.com> Date: May 8, 2017 at 5:51:58 AM PDT To: Roy Brooke <roy@brookeandassociates.com> Subject: Request for Expressions of Interest - next round of MNAI projects Hello everyone - We are pleased to share with you a Request for Expressions of Interest for local governments to participate in the next round of Municipal Natural Assets Initiative (MNAI) projects. The Request provides details of the next round, including information on what local governments should expect as a result of their participation. Expressions of Interest are due on Friday, July 14, This exciting step for MNAI and municipal natural asset management will double the number of Canadian projects while incorporating the lessons from the first round. This next round is contingent on a successful funding application; however, we believe that we have the basis for a strong application. Please share this Request with local governments that may be appropriate hosts for an MNAI project. With thanks, The MNAI team T W brookeandassociates.com E roy@brookeandassociates.com Click here for BCORP profile 1

296 Municipal Natural Assets Initiative (MNAI) Call for Expressions of Interest Letter due date: Friday, July 14, Purpose This document is to solicit non-binding expressions of interest in hosting a Municipal Natural Assets Initiative (MNAI) project. 2. Context In municipalities across Canada, infrastructure is showing its age, capital and operating costs are rising, and service delivery is strained by growing populations and shifting conditions. Ecosystems are in decline in many communities. Climate change will exacerbate these challenges. Municipal Natural Asset Management (MNAM) offers a solution to the twin problems of aging infrastructure and ecosystems decline. In order to provide community services in a cost effective and sustainable manner now and in to the future, local governments are looking for ways to improve management of the critical assets that supply these services. Asset management -- the process of inventorying a community s existing assets, determining the current state of those assets, and preparing and implementing a plan to maintain or replace those assets--allows municipalities to make informed decisions regarding a community s assets and finances. Unfortunately, local governments lack policies and methods to measure one class of assets: natural assets. Natural assets are ecosystem features that provide, or could be restored to provide, services just like 1

297 the other engineered assets, but historically have not been considered on equal footing or included in asset management plans. This concept is outlined in more detail here. In this context, the Municipal Natural Assets Initiative project offers a methodology and support for local governments to integrate these natural assets into core asset management and financial processes. The result is that natural assets are understood, managed and valued by local government in terms of the services that they can provide (e.g. localized or downstream flood management). At a minimum, this approach can help local governments manage risk by better understanding what services come from natural assets yet are not accounted for. MNAI s real value, however, is in helping local governments to manage natural assets using the same systems as for engineered assets, to secure sustainable service delivery. The Town of Gibsons, B.C. was the pioneer of municipal natural asset management. Since 2016, MNAI has been working in the pilot communities of City of Nanaimo, City of Grand Forks, District of West Vancouver, Region of Peel and Town of Oakville to refine, replicate and scale-up the original Gibsons approach. 3. Experience to date The MNAI approach is very closely aligned with standard asset management processes, with which most local governments will already be familiar (see Figure 1). Figure 1. Asset Management process. Source: Asset management BC 2