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HomeMy WebLinkAbout2008-06-23 Workshop - Agenda and Reports.pdfDistrict of Maple Ridge COUNCIL WORKSHOP AGENDA June 23, 2008 11:00 am. Blaney Room, 1St Floor, Municipal Hall PLEASE NOTE CHANGE IN TIME The purpose of the Council Workshop is to review and discuss policies and other items of interest to Council. Although resolutions may be passed at this meeting, the intent is to make a consensus decision to send an item to Council for debate and vote or refer the item back to staff for more information or clarification. REMINDERS June 23 Closed Council 10:00 a.m. June 24 Council Meeting 7:00 p.m. ADOPTION OF THE AGENDA MINUTES - June 16, 2008 PRESENTATIONS AT THE REQUEST OF COUNCIL UNFINISHED AND NEW BUSINESS 4.1 Detached Garden Suites - Second Open House Follow-up Report Staff report dated June 16, 2008 providing an update on the second open house for Detached Garden Suites and a summary of feedback received. Council Workshop June 23, 2008 Page 2 of 4 4.2 Metro Vancouver's Growth Strategy Staff report dated June 19, 2008 providing an update on the status of the Regional Growth Strategy review. Report to be circulated separately. 4.3 District of Mission's Official Community Plan Staff report dated June 18, 2008 recommending that, in response to the request of the District of Mission for comments on its draft Official Community Plan, the District of Mission acknowledge opportunities to work in cooperation with the District of Maple Ridge in promoting common interests. 4.4 Smoking Bylaw No. 5495-1997 Staff report dated June 13, 2008 providing information on provincial and municipal non-smoking legislation, regulations and bylaws for discussion and staff direction. 4.5 Parks Bylaw Amendment - Smoking Ban Discussion of June 24, 2008 Council Meeting Item No. 1007 - Maple Ridge Parks Regulation Amending Bylaw No. 6555-2008 4.6 UBCM Resolutions Staff report dated June 18, 2008 recommending that the resolution attached to the report be forwarded for presentation at the 2008 Union of British Columbia Municipalities' convention. 4.7 Rotary Field Hours of Operation Discussion of the extension of hours of operation. 5. CORRESPONDENCE The following correspondence has been received and requires a response. Staff is seeking direction from Council on each item. Options that Council may consider include: Acknowledge receipt of correspondence and advise that no further action will be taken. Direct staff to prepare a report and recommendation regarding the subject matter Forward the correspondence to a regular Council meeting for further discussion. Other. Once direction is given the appropriate response will be sent. Council Workshop June 23, 2008 Page 3 of 4 5.1 TransLink's Transport 2040 - "A Transportation Strategy for Metro Vancouver, Now and in the Future Letter dated June 16, 2008 from Robert Paddon, Vice-President, Corporate and Public Affairs, TransLink introducing the draft version of TransLink's Transport 2040 document titled 'A Transportation Strategy for Metro Vancouver, Now and in the Future" and TransLink's 2007 Annual Report and asking for feedback and comments by on Transport 2040 by July 11, 2008. BRIEFING ON OTHER ITEMS OF INTEREST/QUESTIONS FROM COUNCIL MATTERS DEEMED EXPEDIENT ADJOURNMENT Checked by: Date: Council Workshop June 23, 2008 Page 4 of 4 Rules for Holding a Closed Meeting A part of a council meeting may be closed to the public if the subject matter being considered relates to one or more of the following: personal information about an identifiable individual whoholds or is being considered for a position as an officer, employee or agent of the municipality or another position appointed by the municipality; personal information about an identifiable individual who is being considered for a municipal award or honour, or who has offered to provide a gift to the municipality on condition of anonymity; labour relations or employee negotiations; the security of property of the municipality; the acquisition, disposition or expropriation of land or improvements, if the council considers that disclosure might reasonably be expected to harm the interests of the municipality; law enforcement, if the council considers that disclosure might reasonably be expected to harm the conduct of an investigation under or enforcement of an enactment; litigation or potential litigation affecting the municipality; an administrative tribunal hearing or potential administrative tribunal hearing affecting the municipality, other than a hearing to be conducted by the council or a delegate of council the receiving of advice that is subject to solicitor-client privilege, including communications necessary for that purpose; information that is prohibited or information that if it were presented in a document would be prohibited from disclosure under section 21 of the Freedom of Information and Protection of Privacy Act; negotiations and related discussions respecting the proposed provision of a municipal service that are at their preliminary stages and that, in the view of the council, could reasonably be expected to harm the interests of the municipality if they were held in public; (I) discussions with municipal officers and employees respecting municipal objectives, measures and progress reports for the purposes of preparing an annual report under section 98 [annual municipal report] a matter that, under another enactment, is such that the public may be excluded from the meeting; the consideration of whether a council meeting should be closed under a provision of this subsection of subsection (2) (0) the consideration of whether the authority under section 91 (other persons attending closed meetings) should be exercised in relation to a council meeting. (p) information relating to local government participation in provincial negotiations with First Nations, where an agreement provides that the information is to be kept confidential. r. I 11I Ie1 DISTRICT OF MAPLE RIDGE TO: His Worship Mayor Gordon Robson DATE: June 16, 2008 and Members of Council FILE NO: CP/046/07 FROM: Chief Administrative Officer ATTN: Council Workshop SUBJECT: Detached Garden Suites - Second Open House follow-up report EXECUTIVE SUMMARY: On December 10, 2007, Council received a Discussion Paper on Detached Garden Suites as information and endorsed a report outlining the Public Consultation Process and Time-line for this project. A three-phased process was endorsed by Council incorporating Background work, Public consultation and Technical review and Policy / Bylaw preparation and amendments. The consultation process identified that two Open House sessions would be hosted; the first one was successfully conducted on January 30, 2008 and the second one was conducted on May 28, 2008. This memo provides an update on the Second Open House and a summary of the feedback received. RECOMMENDATION: That the Detached Garden Suites - Second Open House follow-up report dated June 16, 2008 be received as information. Second Open House: The Second Detached Garden Suites Open House occurred on May 28, 2008 from 4:00 to 8:00 pm in the Municipal Hall with almost 60 people participating. The Open House was widely advertised and included four newspaper advertisements; the posting of Open House details on the District website; and letters of invitation were mailed and emailed to local stakeholders, associations and committees. Detached Garden Suite material and a Questionnaire (Appendix A) were distributed at the open house. The questionnaire was further posted on the District's website until June 6, 2008 for interested participants who were unable to attend the open house (Appendix B). Most of the Open House participants were supportive of the concept of Detached Garden Suites in Maple Ridge and many positive comments were heard. A brief analysis of the questionnaire comments are as follows: • Out of 60 participants almost all participants supported allowing Detached Garden Suites in the community. 42 completed questionnaires received with 8 participants not supporting this concept. These 19 % of the participants who are opponents of a Detached Garden Suite program stated reasons such as: 4.1 - It will negatively affect the property values - It will change single family zoning to higher density - It may be used as an "Investment tool" which will change the character of a single family neighborhood - It may impact privacy and security of the neighborhood when renters come in - It may add increased noise levels, lack of maintenance/garbage disposal - It will encourage more off-site parking (parking along roads) and hence greater car-thefts - There are already many illegal suites existing; this will add to the problem - Owners do not live on property, challenging to enforce - Owners pay higher water and sewer charges - Owners may have to pay higher taxes 81 % of the participants were supportive of a Detached Garden Suite program noting reasons such as: - It will be a different housing form - It will be an option to house family/ relatives on the same parcel - It will be a mortgage-helper especially with the rising housing prices - It will contribute towards affordable rental housing stock in the community - It will be good for elders who have accessibility challenges - It will give an option to age-in-place with the care-taker living on site - It may reduce Secondary Suites as people will have to make a choice - It may be an opportunity to convert existing illegal units and make them safer - It is a good infill tool - It will have less impact on a larger parcel - It will have lesser impact on the neighborhood character if allowed in the rear yard • Several respondents were curious about the design guidelines and the time-line when the proposed regulations would be adopted. • Some participants were concerned about the monitoring issues regarding occupancy (making sure owner lives on property), parking, pets, noise, car-thefts, etc. • 67 % of the proponents say they would build a Detached Garden Suite for a parent/relative or friend; 19 % say they would build it and move into it to be able to have extended family in the main house; and 28% say they would build it to serve as a mortgage helper. • In general, the participants who returned a completed questionnaire, noted the following: - 48 % note the permitted maximum size of the Detached Garden Suite (65 m2 or 700 ft2) is small and suggest allowing a greater maximum size, to be able to build a two bedroom unit, especially on parcel sizes 1 acre and more; - Others suggest that they should be allowed as of right on ALR land and bigger lots (parcel sizes 1 acre and above only); - Others noted the additional parking required for the Detached Garden Suite should be on-site (not on the Street). Neighborhood compatibility (external look of the Detached Garden Suite) is also important. A potential change in the single family neighborhood character seemed to be of concern. - Some others were concerned about conversion of existing detached accessory structures to make it habitable; -2- - Some were concerned about owners not living on property and enforcement challenges related to this; - Safety in the neighborhood was also noted as a concern; - Some raised concerns about having to pay higher utility fees and maybe higher property taxes. Next Steps: Over the summer, staff along with the Technical Working Committee will be preparing the Detached Garden Suite Policy and Bylaw Amendments for presentation to Council in September or October 2008. CONCLUSION: Based on the Open House response, there appears to be positive support of the concept of Detached Garden Suites and the participants commended Council for taking up this initiative. Benefits of this form of housing are numerous and the participants have reinforced this belief. The participants generally supported the proposed regulations except for some concerns with permitted maximum size and enforcement. Prepared by: Rasika Aharya, B-Arch, M-Tech (Planning), UD (SFU) Plan lI ~Apprqvadlby.- CP, MCI P DirectorfPIanning A' ( Approved Frank Quinn, MBA. P.Eng / GM: Public Works & Development Services n __r ' Concurrence: J. L. (Jim) Rule / Chief Administrative Officer RA/dp The following appendices are attached hereto: Appendix A: Open House-display boards Appendix B: Questionnaire -3- APP 'x 'A Welcome to the second Open House on Detached Garden Suites mold V - V Definition: "A Detached Garden Suite use means a self-contained residential use, accessory, subordinate and detached from a single family residential use, limited to one habitable unit built on the same lot in the rear yard". -i__--; 1 Potential eligible zones: N Zones with lots 557sqm. (6000sq.ft.) NOTE. Properties in ALR are subject to and above ALC Approval A series of recommendations to minimize impacts and assist in the proper siting and administration of Detached Garden Suites have been prepared: • One Detached Garden Suite per lot; • Properties less than 0.4 hectares (1 acre) in area may have an at grade Detached Garden Suite subject to compliance with the criteria prescribed in the Bylaw; • Properties 0.4 hectares (1 acre) or greater in area may have: an at grade Detached Garden Suite or a Detached Garden Suite above an accessory structure (ie garage) subject to compliance with the criteria prescribed in the Bylaw; • Not permitted on parcel size less than 557 m2 (6000 ft2); • Is permitted only if the registered owner resides on the property (Housing Agreement with the District required); 2 • Is not permitted where the following uses exist: Secondary Suite, Temporary Residential Use, Temporary Tourist use, Boarding Use and Accessory Employee Residential Use; • Must not be strata-titled or subdivided and is permitted only on the same lot as the One Family Residential use; • Must provide verification from an Engineer or a Certified Professional confirming the septic capacity and adequate water quantity and potability, if located on a property not serviced by municipal sewer and water; • A Building Permit is required along with the applicable fees; • Required fees must be paid to the District for any necessary service upgrades; • Is only permitted in the rear yard of a single family house (if not variance permit will be required); • Is not allowed on a property situated within the flood plain unless the Detached Garden Suite floor is above the established flood level; • Must have a minimum gross floor area of 37M2(398 ft2) and a maximum floor area of 65m2 (700 ft2), not to exceed the total lot coverage permitted in the zone or 10 % of the lot, whichever is less; • Must have a minimum of one on-site unobstructed parking space per Detached Garden Suite. • Addressing of the Detached Garden Suite must be related to the single family residential use on site (for e.g.: 11195 Brown Avenue, will have a Detached Garden Suite on the same lot addressed as 11195-A); 3 Graphic examples of Detached Garden Suites One Bedroom units with 37 rn (398 ft2) area and 45 m2 (484 ft2) area - H 1-1 rim One Bedroom unit, portable kind with a 25 year life-span, by CMHC with 62 m2 (665 ft2) area It -T - Heigh (I) Properties less than 1 acre: Must not exceed a height of 4.5 metres, except properties zoned RS-2 (One Family Suburban Residential) and RS-3 (One Family Rural Residential) must not exceed a height of 6.0 metres. (ii) Properties 1 acre or larger: Must not exceed a height of 6.0 metres, except for a Detached Garden Suite permitted above a detached accessory residential structure (garage), must not exceed a height of 7.5 metres; ri Siting Must not be sited less than: • 2.4 metres from the rear lot line, except when the Detached Garden Suite is permitted above an accessory residential use (garage), the minimum distance from rear lot line must be 7.5 metres; 1.5 metres from an interior side lot line; 4.5 metres from an exterior side lot line; I pert, hue I —Singje family ,es,denbal eLtD 61 Avenue • 2.4 metres from a building used for one family residential use. This distance could be more depending on the proportion of glazed areas on the main house wall facing the Detached Garden Suite to comply with the prevalent BC Building Code requirements. • Access: One unobstructed pathway, at least 1.5 metres wide is required between the front street and the Detached Garden Suite. • Private Outdoor Space: Minimum 25% of the gross floor area of the Detached Garden Suite must be provided as private outdoor space, (may include any covered/uncovered sundeck/patio or veranda). • Lands in the Agricultural Land Reserve seeking a permit for 'Detached Garden Suite" will be subject to approval by the Agricultural Land Commission. 5 Next Steps: - Thank you for participating in this Open House! Second Open House May 28, 2008 WE ARE HERE! Council update following the second Open Early June 2008 House Drafting Detached Garden Suite handout/ June/July 2008 brochure and Policy and Bylaw preparation Presentation of the Bylaws and Policy to July 2008 Council APPEIX '8' 4 Dcp Greater Hehts Second Open House Questionnaire on Detached Garden Suites: Please circle your preferred choice: I support the concept of Detached Garden Suites use in the community Y/N I would be interested in having a Detached Garden Suite use: Y/N If you answered yes to the above question, please explain why you would be interested in having a Detached Garden Suite: • I would build it for a parent/relative/friend Y/N • I would rent it as a mortgage helper Y/N • I would move into it and rent my main house Y/N • I would have my caretaker live in it Y/N • Other 3) I agree with the proposed Detached Garden Suites regulations. Y/N Please identify the regulations that you feel are most important and why: C) d) 4) I have concerns with the proposed Detached Garden Suites regulations: Y/N Please identify the regulations that you are most concerned with and why: C) d) Please identify any suggestions that you may have to address any of your above noted concerns: Thank you for completing this questionnaire. Completed questionnaires may be left at the Open House registration table; emailed to racharva@maleride.ca or faxed to 604-466-4327. Please note that the deadline to submit comments is Friday June 6, 2008. Any questions please contact: Rasika Acharya Planner 604-467-7395 MAPLE BrUsh . TO: FROM: SUBJECT: PURPOSE: DISTRICT OF MAPLE RIDGE His Worship Mayor Gordon Robson DATE: June 19, 2008 and Members of Council FILE NO: Chief Administrative Officer ATIN: Workshop Regional Growth Strategy - Update At the June 9, 2008 Council Workshop, Council directed that "the draft regional growth strategy information received from Metro Vancouver be reviewed by District staff to ensure the information is consistent with the District of Maple Ridge Official Community Plan and that staff report back to Council." The following report provides an update on the status of the Regional Growth Strategy review, and includes staff comments pertaining to the PowerPoint presentation made at the June 6, 2008 Metro Vancouver Land Use and Transportation Committee meeting. RECOMMENDATION: That the report "Regional Growth Strategy - Update" dated June 19, 2008 be received as information. BACKGROUND: In October 2007, the Board of Metro Vancouver authorized staff to initiate public discussion on the issues and options to be addressed in the Regional Growth Strategy review. In November 2007 Metro Vancouver issued a report Choosing a Sustainable Future for Metro Vancouver - Options for Metro Vancouver's Growth Management Strategy". That report identified a number of key issues that would inform the drafting of a Regional Growth Strategy. Between December 2007 and April 2008, Metro Vancouver received feedback from members of the public, local governments, agencies and groups. For information, at the November 26, 2007 Workshop, Council received a letter from Metro Vancouver offering to make a presentation and resolved to receive the request as information. At the March 3, 2008 Council Workshop, Council reviewed the Metro Vancouver Consultation results, noting that the report would be submitted to Metro Vancouver Land Use and Transportation Committee on March 7, 2008. It was mentioned that Metro Vancouver will develop a Draft Regional Growth Strategy for presentation to the public and municipal councils. It was the consensus of Council that comments will be provided to Metro Vancouver following receipt of the Draft Metro Vancouver Growth Strategy. At the April 21, 2008 Workshop, Council received a presentation from staff of Metro Vancouver and discussed the growth strategy with them Points of discussion included Green Zone designated properties, transit corridors, the definition of the "rural" zone, the District's Regional Context Statement, and mapping inconsistencies. On April 25, 2008 Metro Vancouver released an Incomplete Draft of the Regional Growth Strategy entitled "Actions for a Sustainable Region". At that time the Region requested that municipalities review the April 25 Incomplete Draft and provide comments on the basis that the comments were 4.2 staff comments only. It was noted that comments could be received up to May 30 but any comments received on that day would not be included in the presentation to the Land Use and Transportation Committee on June 6. Comments received on May 30 would be included in the next draft document which was anticipated to go to the Land Use and Transportation Committee in July. On May 30, 2008 Maple Ridge submitted its comments on the Incomplete Draft to the Division Manager, Regional Development. The letter very clearly noted that the comments were "staff to staff" and in no way reflected the position or opinions of District Council, noting that a Formal Draft would be sent to Council by the Board, and that we looked forward to a more formal process in which both our community and Council would be involved. (refer to letter attached). On June 6, 2008, a PowerPoint presentation on the "Preliminary Working Draft: Metro Vancouver's Regional Growth Strategy" was presented to the Metro Vancouver Land Use and Transportation Committee (PowerPoint presentation is attached). At the June 9, 2008 Council Workshop, Maple Ridge Council directed "that the draft regional growth strategy information received from Metro Vancouver be reviewed by District staff to ensure the information is consistent with the District of Maple Ridge Official Community Plan and that staff report back to Council". DISCUSSION: The June 6, 2008 presentation on the "Preliminary Working Draft" included an overview of the context and issues for discussion, namely: 1) proposed land use designations and guidelines; 2) Affordable Housing Objectives/targets; and 3) next steps in the process. The context component of the presentation highlighted the public outreach that had taken place and identified the challenges and proposed goals for the Strategy. Proposed Land Use Designations and Guidelines: Included in the PowerPoint presentation are numerous "preliminary draft" maps that are not titled. • Page 5, Slide 1- of the handout contains a map that appears to be a compilation of the information identified on the presentation slides that follow. • Page 5, Slide 2 - The map and accompanying text delineates Urban" and "Green Zone" areas within the District. "Urban" is described on Page 4 of the presentation as "Centres of Regional Significance, Industrial, Urban development Area, and Priority Development Areas. "Green Zone" is described as" Ecological/Recreation Area, Agricultural, and Rural". The information noted above, was not in the April 25th draft that staff had reviewed, nor was it presented during the May 30, 2008 Technical Advisory Committee meeting. The earlier draft (April 25, 2008) had identified lands outside of the Urban Area as being within three designations: "Agricultural", "Green Zone" and "Rural". This proposed "Green Zone" designation in the June 6, 2008 presentation is not consistent with the Green Zone identified in the Maple Ridge Regional Context Statement, nor Figure 7 Green Zone in the Official Community Plan. This information has been verbally relayed to staff at Metro Vancouver who have noted others have identified a similar concern, and the concept would not likely be pursued further. -2- This slide also identifies Thornhill as a Municipal Urban Reserve. On June 9, 2008 Council passed the following resolution "That Metro Vancouver be advised that the District of Maple Ridge requests that the urban reserve map in the draft regional growth strategy be revised to reflect the existing Livable Regional Strategic Plan map". That resolution was forwarded electronically to the Region on June 13, 2008. • Page 6, Slide 1 - the purpose of this slide is to identify the Metropolitan Core, Surrey Metro Centre and the Regional City Centres. It is noted that Maple Ridge is identified as a Regional City Centre. This designation appears to be consistent with the District's Regional Context Statement and Official Community Plan policies. • Page 6, Slide 2 - in addition to the City Centres, this map has identified the Municipal Town Centres and Special Activity Centres, such as educational facilities and International airport. • Page 7, Slide 1 - in addition to the above mapping information, this slide has identified the Industrial Areas within the region. The Industrial lands in Maple Ridge appear to include designated Industrial and Rural Resource Lands and some zoned industrial parcels. This designation appears to be consistent with the District's Official Community Plan. • Page 7, Slide 2 - this map identifies existing and proposed Transit in the Region. The Transit shown for Maple Ridge includes existing West Coast Express and Future Rapid Transit (Rail or Bus) into the City Centre. The expansion of Future Rapid Transit into the downtown is consistent with the District's Official Community Plan. • Page 8, Slide 1 - this map overlays existing and proposed Provincial Highways and Major Roads in the Region. In Maple Ridge, Lougheed Highway remains identified as the provincial highway. It has been previously identified that the Haney Bypass should be upgraded to four lanes, as well Maple Ridge has previously stated that the Lougheed Highway to Mission must be completed to four lanes. Abernethy to 256 Street was shown as a major regional road in a previous presentation. Given the scale of this mapping, it is unclear that this remains the case. Page 8, Slide 2 - identifies Rapid Transit Station Areas and Priority Development Areas. While the scale of this map makes it difficult to read, it appears that a Rapid Transit Station Area is not identified in the Maple Ridge City Centre, nor are any others identified within the District. It also appears that Lougheed Highway between the Pitt Meadows/Maple Ridge border and the City Centre is designated a Priority Development Area. The presentation materials do not discuss what a priority Development Area is, and further discussion will be required with the Region to ensure that this designation is appropriate, and consistent with the goals and policies contained within the Official Community Plan. • Page 9, Slide 1 - refer to earlier discussion on the Green Zone (bullet 2, in this section of the staff report). Page 9, Slide 2 - identifies Ecological and Recreational lands within the Green Zone. At this scale of mapping it appears that this information is consistent with our Regional Context Statement, and includes lands designated forest, Kanaka Creek Regional Park, Whonnock Lake Park, Maple Ridge Park, Malcolm Knapp Research Forest, Blue Mountain Provincial Forest, and watercourses identified on the natural features schedule of the Official Community Plan. • Page 10, Slide 1 - identifies Agricultural Lands within the Green Zone. At this scale of mapping, and given the closeness in the shading of colours, it is very difficult to verify that the Agricultural lands identified are accurate and consistent with our Official Community Plan. When the District -3- receives the formal draft from the Region, District staff will be requesting larger maps in order to conduct a thorough review. • Page 10, Slide 2 - this map identifies Rural Lands within the Green Zone. Please refer to previous comments regarding Green Zone (bullet 2, in this section of the staff report). • Page 11, Slide 1 - since this slide is a compilation of all previous slides, the earlier comments apply. Housing Obiectives/Targets: The slide identifies that housing affordability is a significant regional concern and identifies that there has been some concern raised regarding the use of targets, and that clarification will be needed to determine whether targets should be on the municipal or sub- regional scale. The District's Official Community Plan identifies that housing affordability is a municipal concern as well. Once the Regional Housing Targets are available, a thorough review of these numbers and regional expectations will be required. Regional Growth Strategy Review Process: The presentation includes a slide that identifies that initial consultation on issues, goals and strategies has been completed, and then highlights the next steps in the review process. The next step in the process includes the completion of a "Draft" plan by the Board and referral to municipalities, stakeholders and public for comment. This will be followed by formal consultation and the final development of the Plan. The formal approval process would then follow which will include first and second reading; a Public Hearing; third reading and a referral to affected local governments for acceptance. CONCLUSION: The above report reflects a cursory review of the PowerPoint presentation "Preliminary Working Draft" of the Regional Growth Strategy, recognizing that the material is evolving, and the presentation materials are at a scale that is difficult to thoroughly review. As noted in the Land Use and Transportation Committee presentation and this staff report, local governments will be forwarded a copy of the "Draft" document by the Board, and it is anticipated that this referral could happen as early as July, 2008. It is at that time that staff will conduct a very thorough review of the document and further discussion with Council is anticipated. Prepared by: Christine Carter, M.PI, M.C.I.P Manager ommunity Planning (9yedAbj?\Ja ic ering, CP, M.C.I.P Director f Plannin Approved Frank Quinn, M.B.A., P. Eng. GM: Public rIs & Development Services / Concurrence: / L. (Jim) Rule /Chief Administrative Officer Deep Roots Greater Heights May 29, 2008 Ms. Chris DeMarco Division Manager, Regional Development Metro Vancouver 4330 Kingway Burnaby, BC V51-1 4G8 Dear Chris: RE: Preliminary Comments on the "Incomplete Draft" Regional Growth Strategy dated April 25, 2008- The following are comments from staff at the District of Maple Ridge on the above noted document. I would like to state at the outset that these comments are "staff to staff" comments and in no way reflect the position or opinions of the District's Council. We recognize that this is an incomplete draft of the region growth strategy and that a formal draft will be sent to our Council by the Board of Metro Vancouver later this year. We appreciate the opportunity to offer our preliminary comments on this draft for your consideration and look forward to a more formal process in which both our community and Council will be involved. As a general comment, we would like to express the need for all Metro Vancouver plans to be coordinated and interlinked including the growth strategy, the solid waste and liquid waste plans. There is a feeling that the latter two are on a different time line than the growth strategy. Additionally, we feel that there is a need to coordinate and provide consistency with the Region, Translink and any Provincial plans that would impact the region, particularly in the area of transportation. Comments by pane number: Page 6 - the impression is given that we must update our entire Official Community Plan within two years of the Regional Growth Strategy adoption when it is actually the Regional Context Statement that must be updated. I appreciate that the Official Community Plan contains the RCS but the impression that we must go through a complete Official Community Plan review would not be the correct one; Page 8 - the section on accommodating growth doesn't mention institutional uses and yet they can have a large impact on growth issues. Also, the section on Building Liveable Communities does not mention special needs housing (see also p. 37 for the same comment). District of Maple Ridge 11995 Haney Place, Maple Ridge, BC V2X 6A9 Canada . T€1604-463-5221 . Fax: 604-467-7329 enquiries@mapleridge.ca . www.mapleridge.ca 100% Recycled Paper Page 12 - the use of 1 unit per hectare in the rural definition does not work for Maple Ridge as it does not match up with our zoning regulations. We would prefer that there not be any density levels in the definition but another method of describing the rural area be used. It may also be useful to include wording such as "may support small agricultural uses." The rural designation should also recognize that uses other than residential ones occur in the rural area i.e. it is not strictly residential. When it comes to the administration of the various designations, how would we add in areas? Land use changes may require LRSP amendments and how that would be accomplished regularly is an outstanding matter. Will there be a commitment on the part of the region to do regular updates to the plan? Page 13 - has the 33% reduction in GHGs been modelled? Page 14 - the map on this page should ensure that the Abernethy connector road is shown to the bridge. Related to this map is the question of our starred properties and how would we update this map if those properties are excluded from the Green Zone. How will they then be shown on this map? Do we have to apply to the region to have them put in an urban or rural designation? How will the region deal with lands that are removed from the ALR but still shown as agriculture? Will each municipality be required to apply for a regional designation change? Page 17 - 1.1.3 b) - the 1 unit/hectare needs to be revisited as mentioned earlier. Page 22 - special activity centres do not include prisons but they are major employers. What is meant by "high quality bicycle environment"? Page 23 - the region has changed nomenclature for the Town Centres to City Centres but the map stillindicates some are called Town Centres. Page 25 - Who is doing the referral to Translink - local government or the region? Page 28 - 2.3.5 - all applications should be reviewed not just those based on community need. Goal 3 - aquifers are not well addressed as part of our natural assets. Page 31- 3.1.2 - what about existing uses that don't comply now. Will we be honouring existing zoning? What if there is a residential use in the Green Zone such as a caretakers place? Page 35 - the map cuts off the eastern half of Maple Ridge. Goal 4 - this goal is silent on special needs housing. Page 38 - shouldn't the Province have more involvement in special needs housing? Where is health care in this issue? Page 40 - this is the only reference to heritage in the entire document. Should there be more reference to protecting or honouring our heritage resources? 4-4 -2- 100% Recycled Paper 1111111142 Page 41 - should there be a reference to wildfire hazards? Page 42 - what is the provincial role in this issue? Goal 5 - the plan is silent on support for transit to Maple Ridge's 256th Street employment area. We have recently met with Translink and the Province to ensure that their plans reflect our intentions so the growth strategy needs to be consistent on those issues. - will emergency management be addressed as well as reliability and redundancy of the transportation network? Other outstanding questions: - Is the Region moving towards a referral system? - How will enforcement be dealt with? How will the Region deal with municipalities or partners who do not comply with the growth strategy? - There is a need for a stronger agreement with the ALC regarding ALR lands and how the two agencies work together. - We are unsure about the use of housing targets and the goals that will be achieved with them. We would not be in favour of a process that placed us in competition with other municipalities especially those in our sub-region. - The idea of priority development areas will need more definition. - The new category of rural needs to be clearly defined and provide good "fit" in the region. We have a suburban designation in our Official Community Plan and we are unsure if it would be considered rural or urban. More discussion of this issue is required. - The matter of creating an Industrial designation will likely be a matter of concern with some municipalities particularly if the amendment process has not been resolved. While the protection of employment lands is vital, the methodology must be clear and agreed upon. - A clear amending process must be included in the strategy for all to review. Thank you again for the opportunity to comment at this early stage. We look forward to working with you as this process evolves and receiving another draft. Yours truly, Jane Pickering Director of Planning J P/d p 100% Recycled Paper RAN&`-% •• FT --L"Wt? - vi~M7 a - 15 Preliminary Working Draft: Metro Vancouver's Regional Growth Strategy Land Use and Transportation Committee June 6, 2008 Presentation Outline • Context • Preliminary Working Draft- Issues for Discussion Proposed Land Use Designations/Guidelines - Urban Area -Centres, Industrial Area, Urban Development Area, Priority Development Area - Green Zone Area - Ecological/Recreation, Agriculture, Rural Affordable Housing Objectives/Targets Completing the RGS: Next Steps, Process, Feedback 1 Public Outreach on Growth Strategy Options • November 2007 to January 2008 • Public Meetings held throughout the region • Presentation to Councils and municipal responses Choosing a Sustainable Future I for Metro Vancouver I , Metro Vancouver's Growth Strategy if SUS t: fr.. metro 11T(.I'IL - 2 AW Challenges and Drivers • Accommodating Growth While Maintaining Sustainability and Livability • Building Livable and Resilient Communities • Maintaining the Region's Economic Competitiveness • Protecting and Managing the Region's Natural Assets, including farm lands for food security • Mitigating and Adapting to Climate Change • Coordinating Growth and Development in the Broader Region • Maintaining Effective Transportation Accessibility for People and Goods Proposed Goals Create a compact metropolitan region Protect Metro Vancouver's natural assets Develop complete and resilient communities Promote an effective/sustainable transportation system 3 Regional Growth Management Map • Urban Area - Centres of regional significance - Industrial (production, distribution, servicing) - Urban Development Area (local centres and neighbourhoods) - Priority Development Areas • Green Zone Area - Ecological/Recreation Area - Agricultural - Rural AW Regulations or Guidelines? • Regulation/Designation: - Policy and area established in the growth strategy - To amend, will need a growth strategy amendment, two- thirds weighted Board vote • Guideline: - Policy established in the growth strategy - Implementation established through Board acceptance of a Regional Context Statement - To amend, will need a Regional Context Statement amendment, majority weighted Board vote U MET 2 ' • - I •. .'.' 01 -J 1 •1 'I I' I • H \\ t . I. I • -- • H • 901 U U I £ I f II 9 - • I U. r •. .. I • • -S . S r - - - - I 1- H - -- \ 'I w Eel H ii -; • _ p • • • j jL • S• - - L_ I 1'H I L 7tit 11 : ; , k6l~t \ ,.- Ip_ I a - t)14:..ru J1T !Q -/ LLML7T : I - -( AN TE ¶ GN ZONE TRANSIT • -. - - ROADS . .-* Housing Objectives/Targets • Housing affordability is a significant regional concern • Concern that "targets" as depicted in Preliminary Draft put too much onus on municipalities to deliver • Solution: clarity that targets are "needs- based" with shared responsibility • Debate over whether should be municipal or subregional targets 11 Regional Growth strategy Review Process Completion of Initial draft plan by Consultation Board and on issues, I referral to Consultation proposed municipalities, goals and stakeholders strategies and public for comment j.r1JI - -. - W-111 and 2nd Develop adinding final draft I plan and IPublic Hearing initiate - formal 3rd reading and approval refer to affected local process 4-A governments for acceptance 120 days Resolution of any disputes Adopt the Regional Growth Strategy Completing the Draft Strategy Initial feedback from TAC (Planning Directors) 12 The Region in 2040: • A contained urban footprint • Vibrant, accessible centres throughout the region • A transit-oriented region • Complete communities • A strong, diversified, innovative economy • Natural assets protected and enhanced • Productive agricultural lands, food security • Clean air and water, reduced greenhouse gases, protection from climate change • Diverse, affordable housing choices • A transit-oriented region • Efficient, affordable and sustainable transportation 1K] . H •jui lillel Deep Roots Greater Heights DISTRICT OF MAPLE RIDGE TO: His Worship Mayor Gordon Robson DATE: June 18, 2008 and Members of Council FILE NO: FROM: Chief Administrative Officer ATTN: Workshop SUBJECT: Mission Official Community Plan Bylaw 2352, 2007 PURPOSE: The District of Mission has referred a copy of its Draft Official Community Plan to the District of Maple Ridge for comments. The Mission Official Community Plan received first reading on May 5, 2008 and will be considered at a Public Hearing scheduled for June 25, 2008. A complete copy of the District of Mission Draft Official Community Plan is available for viewing in the Administration Office, or on the District of Mission website at www.mission.ca A copy of the Land Use Designations and Neighbourhood Plans, OCP Map 1, is attached as information. RECOMMENDATION: That the District of Mission be thanked for the opportunity to comment on its draft Official Community Plan; and That the District of Mission acknowledge opportunities to work in cooperation with the District of Maple Ridge in promoting common interests such as, but not limited to transportation and transit improvements; the mitigation of hazards such as forest interface management; shared economic development and tourism opportunities; and the connectivity of the Trans Canada Trail. That the report entitled Mission Official Community Plan Bylaw 2352, 2007 be forwarded to the District of Mission. DISCUSSION: The District of Mission draft Official Community Plan will replace its current OCP which was adopted in 1999. According to the Introduction contained in the Plan, the overall objective of the draft OCP is to update and strengthen the existing policy framework with a view to providing for the integrated social, economic and environmental well-being of the community over the course of the planning period (2005-2025) The following are some highlights of the draft Official Community Plan that may be of interest to Council: • Mission's population is expected to increase from 34,000 population in 2001 to 72,534 people by 2031 (Section 1.7). • A Regional Context Statement (RCS) is included in the draft OCP. The Regional Context Statement identifies how the local policies relate to the Fraser Valley Growth Strategy goals which are Increase Transportation Choice and Efficiency; Support and Enhance the Agricultural Sector; Manage Urban Land Responsibility; Develop a Network of Sustainable Communities; Protect the Natural Environment and Promote Environmental Stewardship; Protect and Manage Rural and Recreational Lands; Achieve Sustainable Economic Growth; and Manage Water, Energy Resources and Waste Responsibly (Section 1.8). • Section 1.0 of the draft OCP is committed to Protecting the Natural Environment and the District has committed to the addition of a smart growth checklist to assist in evaluating growth and development proposals (Section 1.1) • The District of Mission owns two active gravel pit operations within the municipality and will continue to collaborate with the FVRD to work toward a coordinated, region-wide plan for aggregates (Section 1.4) • The District policy supports the establishment of a Hazardous Development Permit Area and the implementation of the recommendations in the District of Mission Community Wildfire Protection Plan (Section 1.7). • The residential projections indicate that single detached units, with an 80% increase, will still be the dominant housing form in 2031 (Section 2.1) and there is a commitment to the consideration of proposals for secondary dwelling units, including secondary suites, coach houses and granny flats (Section 2.3.7) • The OCP commits to neighbourhood planning, and similar to Maple Ridge has identified Planning triggers that must be satisfied prior to commencing a neighbourhood plan in Silverdale (Section 2.2.10) • Like Maple Ridge, the OCP identifies compatibility criteria for allowing single family and multi- family residential infill development (Section 2.4.1) • A large section of the Plan is devoted to Economic Development and Jobs, with policies that focus on business retention, the retention of commercial and industrial tax base, promoting Mission as a film industry location, and promotion of tourism opportunities (Section 3.1). • The OCP has a policy to actively pursue with West Coast Express a greater frequency of trips between Mission and Vancouver, including weekend service and two-way travel. (Section 3.1.10) • Similar to Maple Ridge, the District of Mission has a policy that states they will explore options for developing additional rural industrial and business park sites, and have identified locational criteria to assist in this exercise (Policy 3.3.4). • There is a large section of the plan devoted to A Strong Downtown, including policies for downtown revitalization, supporting the Business Improvement Area, marketing and promotion, considering the relocation of City Hall and other civic facilities to the downtown, and the potential development of the waterfront and commuter rail areas (Sections 4.1 and 4.2) • The Section on Enhancing Mobility Choices contains the transportation related policies. The District has committed to preparing a Transportation Plan. The Transit policies promote West Coast Express and encourage an upgrading of the service to include a greater frequency of trips, weekend service and two-way travel. Mission is also exploring opportunities for locating a second West Coast Express station in the southwest Mission area (Section 7.3) • It is noteworthy that Policy 7.3.6 states that Mission will "promote regular and reliable bus system links to neighbouring communities such as Abbotsford and Maple Ridge". Inter Departmental Comments The Fire Department did not identify any concerns with the Mission Draft Official Community Plan and supports Mission in its efforts to establish a Hazardous Development Permit Area and the implementation of the recommendations in the District of Mission Community Wildfire Protection Plan, particularly in forested areas adjacent to the District of Maple Ridge (Section 1.7). It is noted -2- that Maple Ridge is also undergoing a similar exercise and there may be opportunities for the two municipalities to share information and cooperate in the implementation of these plans. The Engineering Department provided the following comments: • It is recommended that the role of inter-municipal works be more clearly identified. For example, access to some Mission properties are solely through Maple Ridge roads (e.g. 287 Street), and that some utilities are also located within roads in Maple Ridge. • The balancing and planning of Mission and South Coast regional transit demand for WCE should be identified. • Section 7.3 identifies the exploration of a second West Coast Express Station. The policy may wish to include a commitment to working with Maple Ridge for a joint southwest Mission/south east Maple Ridge location to benefit employment and development needs. • Maple Ridge suggests that in section 7.3.6 the promotion of regular and reliable bus system links be carried out through participating and sharing of Abbotsford and Maple Ridge Area Transit Plans • Maple Ridge supports policy 7.1.1 to embark on a Transportation Plan and recommends that the Transportation Master Plan be prepared with the acknowledgement that travel expands beyond the District boundaries and that the east west links have to identify and integrate with adjacent municipalities. The use of regional modeling is recommended. • Maple Ridge recommends that in policy 7.1.6 the cooperation of Translink (South Coast Transportation Authority) and Maple Ridge be identified as a goal. • Maple Ridge is also emphasizing the expansion of capacity of Lougheed Highway and suggests that policy 7.2.6 reflect a commitment to work with the Province for the four laning of Lougheed Highway, and identify that Maple Ridge has similar goals. It is suggested that the efforts of Mission, Maple Ridge and the Province be coordinated to ensure a reliable and consistent network and level of service. • As a note of housekeeping, policy 7.2.7 of the draft OCP should distinguish between circles and roundabouts. • Maple Ridge commends policy of 8.2.4 and recommends that Mission also identify collaboration with Maple Ridge for other utilities such as water distribution systems. • Policy 3.1.10 references policy 6.3.3. However, Maple Ridge cannot locate 6.3.3. • The importance of the power generation facilities to energy security should be highlighted. The District of Maple Ridge acknowledges the 5.1.13 and 5.1.15 on the preservation of the recreational values of the Stave and Ruskin area. The Economic Development Department has not identified any concerns with the Economic Development and Jobs section of the Plan and notes that there may be opportunities to partner on various initiatives such as the promotion of economic development and tourism opportunities. The Parks and Leisure Services Department note that there does not appear to be any reference in the draft Official Community Plan regarding the proposed alternative route for the Trans Canada Trail going through Mission from the Mission tree farm to the Mission Bridge. Parks and Leisure Services state that Maple Ridge and Pitt Meadows have designated a route that ends close to the tree farm and that it is important that the trail continue from that point. 992 SUMMARY: The District of Mission draft Official Community Plan is a comprehensive policy document that will guide the future growth of that Community for years to come. It is noted that many of the policies identified in the Plan are common to those found in the Maple Ridge Official Community Plan, and for that reason Maple Ridge encourages that both municipalities cooperate in advancing opportunities identified within both Plans, especially those relating to transportation, expansion of West Coast Express and Transit, tourism, forest interface management, and the Trans Canada Trail. Ckc Prepared by. Christine Carter, M.PI, M.C.LP Manager Community Planning pp ng,CP, M .C. I. P Directo of Planning (L- Approved by: y'rank Quinn, M.B.A., P. Eng. M: Puc Works B&-Qevelopment Services Concurrence: J. L. (Jiry) Rule Chief Administrative Officer 4- -.- f A iI..gJl1.L - - I- -. d...._, - Beep Roots Greater Heights District of Maple Ridge TO: His Worship Mayor Gordon Robson DATE: June 13, 2008 and Members of Council FILE NO: FROM: Chief Administrative Officer ATTN: Council Workshop SUBJECT: Smoking Bylaw No. 5495 - 1997 EXECUTIVE SUMMARY: Recently, the Provincial Government introduced legislation to protect employees and the public from the harmful effects of second hand smoke, and to limit the display and promotion of tobacco products to youth. As of March 31, 2008 it is against the law to: • Smoke in fully or substantially enclosed public places and workplaces; • Smoke within 3 metres of public and workplace doorways, open widows and air intakes; • Display tobacco products anywhere where tobacco is sold if accessible to youth under 19; • Advertise tobacco using certain methods such as countertop displays, hanging advertisements and self serve displays where youth have access; and, • Sell tobacco in public hospitals and health facilities; public universities and colleges, public athletic and recreational facilities; and provincial buildings. A ban on tobacco use in schools and on school grounds was effective September2, 2007. Enforcement of the Provincial Government regulations is carried out by Tobacco Enforcement Officers employed by local health authorities. The introduction of this legislation over rules the District of Maple Ridge Smoking Bylaw No. 5495 - 1997. That bylaw restricted smoking in all public and workplaces with the exception of designated smoking rooms or patios in restaurants, primary liquor establishments and gaming facilities. The Provincial Government also announced that local governments may adopt local bylaws which are more restrictive than the Provincial legislation. For example, local governments could restrict smoking on all outdoor patios or increase the buffer zone required from doorways. To that end, the Lower Mainland Local Government Association established a task force after the 2007 Annual General Meeting with the objective to coordinate efforts to reach consistency of regulations for smoke free public spaces across the Lower Mainland. At the May 8, 2008 Annual General Meeting of the LMLGA, the task force presented the following potential policy directions to deal with local government smoking regulations: Prohibit smoking on restaurant/bar patios Prohibit smoking within 7.5m of entryways, windows, air intakes, and the perimeter of patios 4.4 Prohibit smoking on playing fields, within 7.5m of playgrounds and other places where children gather or play; and Prohibit smoking in public gathering places where people sit or stand together in close proximity. The Smoking Task Force recommended that these policies be referred to LMLGA member governments with a request that they be considered for adoption by September of 2008 with an effective date no later than December 31, 2009. RECOMMENDATION(S): Submitted for Council discussion and direction. DISCUSSION: Background Context: Recently, the Provincial Government introduced legislation under the Tobacco Control Act to restrict places where individuals can smoke. Since March 31, 2008, it is unlawful to smoke in any substantially enclosed public places or work places. In addition, smoking within 3 metres of any doorways, windows and air intakes is also unlawful. A ban on tobacco use in schools and on school grounds was introduced in September of 2007. This legislation replaces the current District of Maple Ridge Smoking Bylaw No. 5495 - 1997. Over the last few years, hospitality sector representatives and local governments have been lobbying the provincial government to enact legislation to control the use of tobacco products in public places. The idea was simply to have standard legislation throughout the province. The introduction of the Tobacco Control Act does provide for a province wide law; however, the ability for local governments to further restrict where tobacco can be used has led to various restrictions throughout the province. In the mind of some hospitality sector representatives, this has caused an uneven playing field in terms of whether patrons of their establishments can smoke on their property in areas which meet the provincial criteria in terms of substantially unenclosed patio areas. Intergovernmental Issues: As part of the Provincial legislation on the use of tobacco, the government announced that local governments could introduce local smoking bylaws to further restrict the use of tobacco products in public places. Council has received a request from the local Medical Officer recommending that Council support the policies on smoking regulations submitted by the Lower Mainland Local Government Association Smoking Task Force. The Task Force recommended that smoking be prohibited on all outdoor patios; within 7.5m of entryways, windows, air intakes and the perimeter of patios; within 7.5m of playgrounds and other places where children play; on all playing fields; and in outdoor public gathering places where people sit or stand together in close proximity. The Task Force has recommended that these policies be considered for adoption by local governments no later than September of 2008 with an implementation date of December 31, 2009. C) Financial Implications: Currently, the provincial regulations governing tobacco use are enforced by provincial enforcement officers. Should Council direct staff to prepare a local bylaw governing the use of tobacco products then the enforcement of these regulations would be the responsibility of local Bylaw Enforcement Officers. CONCLUSIONS: Since the adoption of the Tobacco Control Act some local governments have introduced local smoking bylaws further restricting places where people can smoke. The Lower Mainland Local Government Association has forwarded a number of policies dealing with smoking regulations and requested that members adopt the policies by September of 2008 with an implementation date of December of 2009. In order for these policies to be enforced a Maple Ridge Smoking Bylaw will have to be adopted by Council. Staff are requesting direction from Council in terms of preparing a local smoking bylaw. Prepared by: Brock McDonald Director: Business Licenses, Permits and Bylaws / K L ( Approved Frank Quinn'P.Eng., PMP b7' GM: Public Works & Development Services Z~ Concurrence J.L. (Jim) Rule Chief Administrative Officer BM/id [*1 District of Maple Ridge Deep Roots Greater Heights TO: His Worship Mayor Gordon Robson DATE: May 28, 2008 and Members of Council FILE NO: FROM: Chief Administrative Officer ATTN: Council Workshop SUBJECT: PARKS BYLAW AMENDMENT - SMOKING BAN EXECUTIVE SUMMARY: In September 2007 the Ministry of Health introduced new legislation banning the use of tobacco in schools and on school grounds. As part of the implementation of the new regulations the School District has posted signs at each of the school sites in Maple Ridge and Pitt Meadows. In considering that many of the schools in our community also have sports fields that are used by community sports groups in the evenings and weekends, it has been suggested that now that this is the rule at school grounds, it may be desirable to consider regulations in other park areas used by children and youth to be consistent with the School District in this regard. RECOMMENDATION: That Bylaw No. 6555-2008 be given first, second and third readings. DISCUSSION: Background Context: Additional new regulations under the tobacco control Act will be introduced by the Health Ministry in March 2008, that will also restrict the use of tobacco within 3 meters of any entrance way, window or air handling system outside all public buildings, It is anticipated that this will necessitate the amendment of building control bylaws within both municipalities at that time. Where the regulation requires a minimum distance from a doorway or window of 3 meters, some jurisdictions may consider increasing the distance beyond the minimum requirement. Desired Outcome: That a smoke free environment be created in areas that are in close proximity to where children or youth may be participating in sport or other healthy outdoor pursuits. Strategic Alignment: This initiative is consistent with Commission and School District goals to encouraging healthy choices for the residents in our community Citizen/Customer Implications: Many of our sports clubs already encourage parents and other spectators not to smoke while attending sporting events through their web pages and other publications. Interdepartmental Implications: It is not anticipated that the proposed amendment to the parks bylaw for this purpose will result in an increased workload for the bylaws departments in either of the two communities, due to the leadership already being shown by our sports groups. 4.5 Business Plan/Financial Implications: It is anticipated that the costs associated with the installation of signage at the above noted locations will be funded from the associated parks maintenance accounts. Policy Implications: A parks bylaw amendment would be required. Alternatives: Some other communities have chosen not to adopt bylaws in this regard; however some communities have installed signage in parks indicating that certain designated areas are "smoke free zones", requesting that people not to smoke within 30 feet of these areas. CONCLUSIONS: Parks and Leisure Services staff believes that both initiatives in this regard will be supportive of the Council's efforts to promote healthy and active lifestyles for the residents of Pitt Meadows LD PrepeeY'y: David Boag, Director, Park&çaciIities g Approved $': Mike Mbay, General Community DevelopTh I / Concurrence: J.L. (Jim) Rule '- Chief Administrative Officer 9111211 CORPORATION OF THE DISTRICT OF MAPLE RIDGE Bylaw No. 6555 - 2008 A Bylaw to further amend Maple Ridge Parks Regulation Bylaw No. 3414-1984 WHEREAS it is deemed expedient to further amend Maple Ridge Parks Regulation Bylaw No. 3414-1984 as amended; NOW THEREFORE, the Council of the District of Maple Ridge enacts as follows: This Bylaw may be cited for all purposes as Maple Ridge Parks Regulation Amending Bylaw No. 6555 - 2008. That Maple Ridge Parks Regulation By-law No. 3414-1984 be amended by: Adding the following under General Park Regulations: 11. The use of tobacco is prohibited within 10 meters (33 feet) of any sport field, athletic surface, children's playground or water play-park located in a municipal park. and that the subsequent sections be renumbered accordingly. READ a first time this day of ,2008. READ a second time this day of 12008. READ a third time this day of 12008. ADOPTED this day of 12008. Presiding Officer Corporate Officer 4 TO: FROM: SUBJECT: District of Maple Ridge His Worship Mayor Gordon Robson DATE: June 18, 2008 and Members of Council FILE NO: 0230-20-08/UBCM/1 Chief Administrative Officer ATTN: Council Workshop UBCM Resolution EXECUTIVE SUMMARY: The deadline for receipt of resolutions for consideration at the 2008 UBCM Conference is June 30th. Staff has prepared a resolution requesting the Province create a carbon calculator that would be available to all local governments to host and promote on their websites. At this time it is up to each local government to develop its own calculator if it wishes to use this tool. The calculator is an easy way for residents to establish the size of their personal carbon footprint and to monitor their efforts to reduce their impact on the environment. The calculator would support Council's direction to establish a program to solicit private funding for municipal projects that will reduce GHG emissions in the community. RECOMMENDATION: That the resolution attached as Appendix I to the report dated June 18, 2008 titled 'UBCM Resolution" be supported and forwarded to UBCM for presentation at the UBCM Convention in September 2008. (h Prepared by: Ceri Mario Manager of Legislative Services Apthvedby. Paul Gill, B.B.A., C.G.A., F.R.M. G7ral Manager: Corporate & Financial Services I Concurrnce: J.L. (Jim) Rule / Chief Administrative Officer /cm Y:\Cierks Documents UBCM RESOLUTIONS 2008 UBCM Resolutions\Report re resolutions 2008-06-I8.doc . Appendix I District of Maple Ridge CARBON CALCULATOR WHEREAS many local governments have an interest in reducing greenhouse gas emissions in their communities, and citizens are increasingly concerned about the environmental impact of their activities on their community; AND WHEREAS the creation of a single carbon calculator available to all local governments would save money and confusion and result in an increased confidence level among users of the information; THEREFORE BE IT RESOLVED that the Province of British Columbia be requested to provide free-of-charge a carbon calculator for both lifestyle-based and travel-related carbon footprint calculations, that municipalities could host and promote on their own websites. TRANS7IINK YOP M&C/ CA0' TransUnk 1600 - 4720 Kingsway Burnaby, BC V5H 4N2 Canada Tel 604 453-4500 ,Fax 604-453-4637 GM www.transhnk. bc. ca June 16, 2008 Mayor Gordy Robson District of Maple Ridge 11995 Haney Place Maple Ridge, BC V2X 6A9 Dear Mr. Robson: 0th e Action South Coast British Columbia iransoorttion Authority Included in this package is a draft version of TransLink's Transport 2040 document- "A Transportation Strategy for Metro Vancouver, Now and in the Future" and TransLink's 2007 Annual Report. This draft Strategy has been developed with the advice and guidance we have received to date from all of you and other Lower Mainland stakeholders. TransLink is currently consulting on the final draft of Transport 2040 and we would sincerely appreciate receiving your feedback. This 30-Year Strategy will be finalized and presented to the TransLink Board for approval on July 3 1st. We would gratefully appreciate receiving any comments that you and your colleagues might have by July 11, 2008. Please provide all comments to Amelia Shaw using one of the following methods noted below. Via postal mail: Amelia Shaw Manager, Public Consultation TransLink 1600-4720 Kingsway Burnaby, BC V5H4N2 Via phone: 604-453-4656 Via email: ameliashaw@ trans link. bc.ca Transport 2040 and the 2009 10-Year Plan will also be presented, with an opportunity for discussion, at TransLink's upcoming Local Government Forum on Saturday, June 21st from 8:30 a.m. - 12:00 noon at the Four Seasons Hotel in Vancouver. We-look forward to your participation. If you have any questions or concerns with the attached reports please do not hesitate to contact Amelia Shaw or myself. We look forward to your response. Sincerely, Robert Paddon Vice-President, Corporate and Public Affairs Direct Line: 604-453-4696 E-mail: robertpaddon@translink.bc.ca cc: Jim Rule, City Manager 5.1 -:; • • -•_c-• - Advises whether parameters and assumptions (including financial estimates) in 10-year transportation and financial plans are reasonable Approves short-term fares Approves customer satisfaction survey process Approves customer complaint process Oversees sale of major assets Publishes an annual report and submits it to the Mayors Council I .-- - - - fr I I ThansLink creates and mpements pians to meel the transportation needs of etrc Vancouver New TransLink Governance Model ky© rrfi Composed of all mayors in Metro Vancouver Appoints chair of Mayors Council Appoints TransLink board of directors Appoints Commissioner & Deputy Commissioner(s) Receives and approves transportation and financial plans as Laid out in the Legislation rLLJ'r ctf t©r Appoints chair of board of directors Appoints CEO Establishes subsidiaries and appoints boards & chairs Supervises the management of the affairs of TransLink Prepares & implements Long-term transportation strategies (30-year) & 10-year transportation and financial strategic plans Proposes to the Commissioner a customer satisfaction survey process and conducts surveys annually Proposes to the Commissioner a customer complaint process and implements it Publishes an annual report Holds a public annual general meeting Approves project & program public consultation plans TransLink is dedicated to Creating and sustaining a transportation system that meets the needs of residents. businesses, and goods movers, in a manner that protects the environment and supports the economic and social objectives of the region. Responsible for the regional transit. cycling and commuting options. AirCare, and intelligent Transportation System programs, TransLink also shares responsibility for the Major Road Network (MRN) with municipalities in Metro Vancouver. Created in 1998, TransLink has increased transit ridership by 37 per cent between 1998 and 2007. TransLinks services are delivered through subsidiary companies and contractors including: coast Mountain Bus company Ltd., West Vancouver Blue Bus, B.C. Rapid Transit company Ltd. (SkyTrain). and West coast Express Ltd. Under Legislation introduced by the provincial government in 2007, lransLinks governance structure was changed. It now has the ability to provide services under agreements with municipalities from Pemberton to Hope. 3 3 I I I * I I I I I I I I 7 I I I I I 7 3 3 7 7 3 3 'IE HimAkU RCi C S[KHODERS "Managing projected growth, while cutting emissions and improving the liveability of the region, are essential elements of the Gateway Council's vision of a sustainable Gateway transportation system." Gateway Council "Making communities more accessible to cycling, walking, and other transportation options is an important step to reducing emissions and creating healthy communities throughout the region." Better Environmentally Sound Transportation "With a much higher proportion of seniors in the regional population, there will be a growing need for accessibility in the transportation system." Vancouver Board of Trade "Transportation investments will need to enhance and guide development, to support principles to contain urbanization, and reduce kilometres driven." Fraser Basin Council "While technological innovation over the next 30 years certainly will create efficiencies, the nations and cities which have adopted fundamentally more efficient land- .',,, ,.,;H "' 'ignificant TWIT- Ak Wosk Centre for Dialogue U I I I I I I - \ L_ - '1' 1- -• / - 'i ., F' i r ' r' T r.ie'.r. r I- i- 1- \ Transport 204O sets out strategies to meet the transportation chattenges of the comIng decades in a way that protects what we vatue the most Together Creating a Sustainable Future C Gcvernmertt . TrattsLnk P~ans SD-t'eair Strategy / Metro \ncc'er ReLrtet &rcw'tn : (' natremtrt Pr This document lays out the challenges facing the region over the next 30 years, identifies key goals, and proposes strategies to reach those goals while remaining true to our values. It will be implemented through rolling 10-year plans, which will be produced with input from full public and stakeholder consultation activities. The Greater Vancouver Regional District, operating under the name Metro Vancouver, is currently in the process of updating its,segional growth strategy, so it is timely that TransLink is also looking at its long- range plan. Both strategies are informed by a tradition of strategic thinking about transportation and land use in the region, and both address new challenges not contemplated by Transport 2021 and the Livable Region Strategic Plan of 1996 In fall 2007. TransLink consulted with key stakeholder groups, local government representatives, and subject area experts to define the challenges, identity goals, and develop strategies for the next 30 years. This document reflects that input, and its implementation will require coordination with agencies including Metro Vancouver Municipalities, the Ministry of Transportation. Transport Canada, airport and port authorities, and other transport and non- governmental organizations. close coordination is required to ensure that public transit and other transportation infrastructure investments are consistent with and supportive of regional land use plans and environmental visions for the region I I I I 1 I I I I I 1 I I 1 I I I I H TrertsLfrik tO-Year Tn'sportat: ire n P.aris Surrey/Delta/White Rock Langleys North Shore Vancouver/UEL Burnaby/New West • • - Richmond Metro Vancouver 2040 Employment & Population Projection A growing population is a sign of success and the basis for a vibrant region with a strong economy. Our challenge in the next 30 years is to provide mobility for another 1 million people, so we can work and play in a way that makes us feel proud of this place. Population 2040 projection and % increase (2006 - 2040) r Employment ili 2040 projection and % increase (2006 - 2040) Population browth: 2006-204U - 3.2 miLLion - 2040 2.2miLLian 2006 By 2040, 1 million more people will live in the Metro Vancouver area. Metro Vancouver Population Age Profile: 2006-2031 30,000 20,000 t&.030 0 10000 207000 30,003 Female popuz!or k'iLe p.00laticn Metro Vancouver Population Age Future Projection - ' Whether we are successful in keeping 25% people moving while maintaining a vibrant economy, protecting air quality 66 ' and greenspaces, and supporting years '. the region's social needs will depend .sU years . on how well growth is managed. 13% , ' If housing, lobs, and services are ' P. , developed in locations that support public transit development, more trips can be made on foot, by bike, or on transit. complete communities are more easily linked to other areas, reducing dependence on private vehicles By 2031, the median age By 2031, a quarter of our of British Columbians population will be will be 46. over the age of 65. I I I I I I I I I I I I I I I I I I I I I I I ] 1 all 3' G In 2006, the population of Metro Vancouver was 2.2 million. By 2040, that number could increase by one- third to more than three million, with about one-quarter of those residents aged 65 or older. These changes could greatly increase pressure on existing transportation infrastructure and systems if private vehicle use continues its growth trend. For older people, this development pattern supports "aging in place", and supports independent living. An older population has greater need for localized and midday travel as well as the need for highly accessible transit services. With more people able to meet their travel needs using sustainable modes, including walking. streetscapes become more people- oriented and attractive, and fewer people require private vehicles to get around Metro Vancouver contains one of the world's most diverse populations. In 2006, almost 40 per cent of the region's population were born outside Canada. In recent years, immigration has been the largest component of population growth in the region, signaling the importance of providing customer information about transportation services in a manner that transcends language barriers OUR DIVERSE POPULATION IS GROWING AND AGING How we meet the challenge of keeping I miil:on more People mobile will detemine our success as a region, especially when one-nuarter of the popuiaton wilt oe over 65 years old in 2OO Average Household Expenditure (Excluding Personal Taxes) Owning a car is a significant household 'r-ssottc' expenditure. Canadian Automobile Association estimates that the • i'iutot annual cost for a -. - compact car is $6500 while a mini-van costs $8,500. I' DRAMATIC GEOGRAPHY PRESENTS OPPORTUNITIES AND CHALLENGES More peopLe are choosing noosing in vibrant communities but many J obs are hard to reach on transit- U, I I I! t i I > Ii I I I I Ic: 0 I I I I I' 'U I . I Commuting to Business Parks em em em em f-c fl em em em em em em em em em em em em em em em em em em em em em em em r-c em em em em em em ae em em em em em em em em em em 92% utomohi1s rtvsr/pass-iosr Commuting to Metro Core in Vancouver em em em em QQRP Rugg em em em em em QQQQ 49% 39% The Lower Mainland of British Columbia is a region bounded by mountains, rivers, the Pacific Ocean, and the U.S. border The dramatic geography is beautiful but presents significant transportation and development challenges. For the last 40 years, regional policy favoured and continues to support concentrated development in a network of regional city centres, connected by high quality transit so that green- spaces and agricultural lands are protected. The strategy has been successful in part. the transit- friendly metropolitan core has seen a dramatic increase in residential development as have most neighbourhoods close to SkyTrain stations. White regional city centres have been successful in attracting high-density residential and commercial development, many of the region's new jobs have located in outlying business parks The number of office jobs in business parks in the region has grown dramatically over the past two decades, posing a significant challenge from a transportation perspective. Business park locations are generally not within walking distance of places where people live, shop, or eat, and are difficult and time consuming to get to on public transit. As a result. the vast majority of people that work in business parks drive to work. Complicating matters further the fastest growing areas are in southern and eastern communities, where the transit, cycling, and walking mode shares are currently relatively low. Business parks and new residences are also competing with industry for space to expand, putting the squeeze on land and forcing industry to the edges of the region This trend forces trucks to drive greater distances and frustrates attempts to increase transit mode share because so many job locations are outside city centres or other complete communities Olt 5% 3% Business parks are growing four times faster than urban centres. If current trends continue, employment locations will become more dispersed, and it will be difficult to provide transportation options that are both cost effective and attractive. oo o'o 12% I Metro Vancouver 24 Hour Transportation Mode Share for 2004 I I I I - a a. I I I 0 oo 77% 11% 11% 2% em em em em em em em em fl em em n em em em em em em em em em em em em em em em em em em em em em em em em em em em em em em em em em em em em em em em em em em em em em em em em em _ - em em em em em em em em em em em em em em em em TRAVEL PATTERNS REFLECT DEVELOPMENT Thps are more diverse as poputcuon rises and people "rave more Metro Vancouver residents made an average of 6.4 million trips per day in 2004, up 17 per cent over 1999, even though the population grew by only six per cent in the same period. While new lob locations have become increasingly decentralized, the average commuting distances have decreased very slightly, due in part to the concentration of higher density residential growth in the metropolitan core and in regional city centres And while transit ridership rose 38 per cent between 1998 and 2007, the number of private vehicles trips grew lust as quickly, keeping mode shares at approximately 11 per cent and 77 per cent respectively. Two per cent of trips are made on bikes and 11 per cent by toot. Transportation mode share varies markedly across the region. In the Vancouver/University Endowment Lands area. 40 per cent of trips are by sustainable modes-walking, cycling and transit. In municipalities east of the Pitt River and south of the Fraser River, 90 per cent of trips are taken as a driver or passenger in a private vehicle. Because most population growth is occurring in these eastern and southern communities, increasing the mode share for sustainable transportation options will be a significant challenge. = S r.iior -ansftri.ps 1 5CC 124 on trsnsft trios 1 I ID 9 .5 2301 173 ,iLco eost. 0ri;s I We're riding transit more—ridership has gone I up 38 per cent between 1998 and 2007 while population has increased by 13 per cent. 2 Cars and light trucks Heavy vehicles . Other transport (aircraft, marine, railway) Heating/buildings Cement plants and concrete processes Other toe amount or greennause gases emiuea year[y. 0 GHGs emitted per person 00 per year from s1krn round-trip commute -. GHGs emitted per .01 Tonnes per year I'r 'per year from a 60 n e I round-trip commute .01 Tonries per year Tonnes per year - 41 -- 46- I onnes per year I Metro Vancouver Commuting Modes and Greenhouse Gas Emissions (GHGs) Metro Vancouver's Greenhouse Gas Emissions I I I I I Bicycle/walking I Electric trolley bus 112C passengers) I Sky Train electric tight rail car iO passengers', New hybrid I diesel-electric bus (5 Passengers New diesel bus • (2 passengers) Two-person car pool .0 (c'asolins enoine) I B Driver travelling alone in car baseline enne) ii I Io C ii Is U, 'I lj a The United Nations' International Panel on Climate Change, a group of 2.500 climate experts, says the evidence is undeniable that climate change is caused by burning fossil fuels. They warn that effects are already occurring and more severe effects are inevitable unless greenhouse gas (SHO) emissions are sharply reduced. Last year. the B.C. government set a bold target to reduce greenhouse gas emissions in the province by 33 per cent by 2020 from 2007 levels. Light- and heavy-duty vehicles accounted for 35 per cent of greenhouse gas emissions in Metro Vancouver in 2005. With over half of the provinces registered vehicles and population living in Metro Vancouver. transportation in this region will clearly need to lead the way in reducing provincial emissions. TransLink can be part of the solution by helping people make smart transportation choices There are three key ways to reduce GHGs from transportation: Lowering the amount of total vehicle kilometres travelled by reducing car trips and encouraging walking, bike, or transit use New and emerging energy efficient and clean vehicle technologies Lower carbon transportation fuels Cleaner engines and fuels will help reduce GHG emissions in the region, but are not sufficient on their own to meet provincial targets. Reducing the number of vehicle trips will be key to the success of transportation-based climate change solutions. As a transportation provider, TransLink also needs to plan for changes to our local environment and region that might occur, such as changes to weather patterns and increased risk of flooding CLIMATE CHANGE IS REAL 2fl5pOLt2tiOfl choices can make a difference; vehicles account for 35 per cent of greenhouse gas emiss:ons in ill/ E,ro Vancouver I t I I I I I II l' > a u 4- o C U uI 1 3 2005 Metro Vancouver Smog-Forming Pollutant Sources -' Cars and Light trucks Heavy vehicles .Other transport (aircraft, marine, railway) Heating/buiLdings Cement plants and concrete processes Other point sources Other area sources Solvent evaporation Non-road (Lawn, construction equip. etc.) Annual Emissions From Different Types of Vehicles Driven for 16,000 km U 1 2 3 / C Ct' CO, emissions in tonnes Although metropolitan Vancouver's air quality currently compares well to other major North American cities, some locations do not always meet air quality objectives. Emissions of such air contaminants as nitrogen and sulphur oxides can contribute to reduced visibility and pose adverse health effects, such as cardiovascular and respiratory problems. Transportation, including tight and heavy-duty vehicles, marine vessels, and non-road engines/equipment, is a major source of air emissions. In fact, light duly vehicles were the largest source of smog-forming pollutants in the region in 2005. Metro Vancouver was the first Canadian metropolitan area to develop and implement an Air Quality Management Plan (AQMP) in 199/4 Several initiatives in this AQMP yielded significant emission reductions over the past decade. However, emissions of some air contaminants, including particulate matter, are forecast to increase due to growth in population, vehicle ownership and economic activity. Considering this forecast, as well as new information about climate change, air quality, and health effects, Metro Vancouver developed and adopted a new AQMP in 2005. TransLink administers the AirCare light-duty vehicle emission inspection and maintenance program This program has reduced emissions of hydrocarbons, carbon monoxide, and nitrogen oxides ranging from I 1 to 25 per cent. One of the challenges of 20/40 is to build on positive results to date, and continue to find new approaches to reduce transportation emissions or encourage use of more environmentally friendly modes in order to improve the region's air quality. At the same time. TransLink's own fleet of vehicles, rail cars, and vessels is a direct source of criteria air contaminants. TransLink has therefore developed an emissions policy to AIR QUALITY NEEDS PROTECTION Transportation is the 1 2rcgest single source of ;ooHutants that cLoco the sir and affects oeopLe's health address its influence on the region- wide transportation system and its own fleet, and has been experimenting' with the use of alternative fuels. TransLink strives to meet the challenge of reducing its own vehicle emissions in the pursuit of improved regional air quality while providing better transportation choices for regional residents Metro Vancouver Historical Average Fuel Prices In 2007, the price of a barrel of oil surpassed $100 for the first time in history and analysts predict further price increases, Triple Threat to TransLink Risino fusE nn:ss can raciuca sates or'ie. ThansLini': is sffscd tr 'Ci_Irez walls. Less gas ax revenue - - --- -, - --, Increased • More demand - - - - capital and - - . for transit operating Costs , I I I I I I I I I I Io I I 1 a I a a a a a a a a RISING FUEL PRICES ARE A NEW REALITY ,As fuel prices increase, people change their transportation behaviour-a reality we need to plan for The rate of oil production is forecast to peak and begin declining over the coming decades, while global demand for oil continues to grow It is prudent to anticipate significantly higher fuel prices and start planning for a future where fossil fuels are less available. If there is any good news arising from these serious challenges, it is that changing our transportation choices and behaviours to reduce greenhouse gas emissions will generate other spin-off benefits, including a cleaner environment, a more globally competitive economy, less congestion, safer roads, more complete communities and better health In this future, public transit, as well as walking and cycling, will play a larger role in our daily lives. TransLink receives 12 cents per litre from fuel sales in Metro Vancouver, regardless of the price at the pump When prices rise, many people look to alternative modes of travel, or forgo trips, to save money. TransLink also pays higher rates for fuel to operate the bus fleet, which is growing larger to meet demand for more transit service throughout the region Instead of getting more money to pay for transit when fuel gets more expensive. TransLink gets less revenue and pays out more to cover rising costs and meet demand Fuel taxes are a transportation revenue source, and many people believe that transportation-based revenue sources are the appropriate way to fund transit However, to fund public transportation - both current and expanded service - stable and secure funding sources are needed. Fuel taxes are becoming less secure in this world of high fuel prices metro vancouver- Canada's Trade and • Tourism Gateway to Asia-Pacific Economies U I, Yukon Territory I - I I hr,,oh Cei ob,o Metro I Aceesstothe Vancouvar POo,hc R,n, S .- SeattLe;, ti 4 I Metro Vancouver is Canada's trade and tourism gateway to Asia-Pacific economies. I I I Metro Vancouver I Port Growth I I I 1 I I I I I There are plans to triple freight I container traffic in Vancouver area I ports by 2020. I Metro Vancouver's economy accounts for over 55 per cent of the provincial Gross Domestic Product and is home to more than half the province's population. Service industries account for more than 80 per cent of employment in the region, which has emerged as Canada's primary gateway to the Asia-Pacific. As a gateway, the region contributes significantly to regionaL provincial and national economies, both through the movement of goods on rail and roads and due to the value of international passenger travel. f\iith container traffic expected to triple we are challenged to ensure efficient access for trucks to key gateway facilities, including the Vancouver Port, Vancouver International Airport, and the four U.S. border crossings. At the same time, Metro Vancouver has become a centre for high-tech industries, and our reputation as a highly [iveable city attracts members of the "creative class.' To ensure our region remains economically attractive. and to protect the region in times of economic instability, we need to maintain the high quality of life here A key part of supporting the economy and keeping the region a great place to live is ensuring that transportation is efficient, effective and affordable. After housing, transportation is generally a household's largest expense. To reduce the financial burden of transportation on people and businesses, we need to create a region where owning a car is an option and not a necessity. Transportation infrastructure is key to a healthy economy, but much of what we rely on is starting to age and will need significant maintenance or rehabilitation by 2040. As infrastructure reaches or surpasses its life expectancy. the region will have to decide how to replace what has worn El i 0 t l 850 As Canada's gateway to the Asia-Pacific, t4etro Vancouver relies on transportation to move peope and goods in a way that promotes a heaLthy economy, envrcrim el— t and quaftty or Lire out and how to build new facilities to meet the demands of a growing economy and population Across Canada, the size of the infrastructure deficit-the gap between what is needed and the resources available to fund roads, bridges, transit and other essential investments-is growing. The Conference Board of Canada estimates the infrastructure deficit for urban transit systems at $23 billion over the next few years; the urban road and bridge infrastructure deficit is pegged at $66 billion and growing. KEEPING THE ECONOMY MOVING IN A GROWING REGION I I I I I I I I I I I I I I I I 3 I I I I I I I 1 I I MITIGATING AND I RESPONDING TO RISK Safety from accidents, and security in the face of uncertain Umes and envi ronmental realities, demand pnor!ty locus TransLink must be well prepared for emergencies and natural disasters, so it can respond quickly and efficiently, in coordination with other emergency services. The safety and security of the regions inhabitants and visitors will continue to be a priority over the coming 30 years as our region becomes more populous. A leading safety issue now is the loss of life from traffic accidents, a continuing challenge despite advances in vehicle safety technology. Transit is inherently safer than private vehicle travel, so a widespread shift away from automobiles onto transit would benefit public safety. Public safety would also benefit if the needs of pedestrians and cyclists were better met Cycling and pedestrian safety solutions will require innovation and partnerships as the issues are complex and their implications can be far reaching. TransLink must continue to be vigilant and proactive to ensure vehicle technology and facility design, operator training, and operating procedures keep the system safe for transit users. Ensuring passengers feel safe and secure is always important. and will continue to be the subject of continuous improvement. Security-the prevention of injury from aggression or terrorism-has become a greater concern in the world since attacks on New York City in 2001. Madrid in 2004, and London in 2005. Since these events, security has been increased in transit systems, airports, ports, and border crossings globally, and will remain a key consideration when planning transportation systems in the future. Coastal British Columbia, located in a seismically active zone, faces other difficult realities. While the probability of a major earthquake is low, the associated risk is extremely high, because of the concentration of human habitation in this region. Also, long- term impacts associated with climate change may become a threat to the region. such as the risk of sea-level rise and potential for increased flooding. TransLink must be well prepared for emergencies and natural disasters, so it can respond, quickly and efficiently, in coordination with other emergency services, if required. A BRIGHT FUTURE TOMORROW DEPENDS ON OUR VISION TODAY The decisions we make today w 1 determine how atiracuve, viDranL and su5alnaOLe our region l,s 30 years irom now, I I I I 1 I I I I I I I 1 I 1 I A sustainable transport system is one that allows the basic access and development needs of individuals, companies, and societies to be met safely and in a manner consistent with human ecosystem health, and promotes equality within and between successive generations. It is affordable, operates efficiently, offers choices of transportation, and supports a competitive economy as well as balanced regional development. It limits emissions and waste within the planets ability to absorb them, uses renewable resources at or below their rates of generation, and uses non-renewable resources at or below the rates of development of renewable substitutes while minimizing the impact of the use of land and the generation of noise. Source: adopted by the Ministers of Transport of the European Union, 2001 Our vision for 2040 is built on a desire to balance the needs of a healthy economy with environmental protection, social equity, and support. In 2040, TransLink is seen as a sustainability enabler and has deployed every possible method to make travel smarter: expanded infrastructure and services; innovative technologies, enhanced priority to non-automobile alternatives: convenient access to transit, especially for people with mobility or cognitive challenges: easy- to-use travel information and massive public outreach. Greenhouse gas emissions from transportation sources have been greatly reduced. TransLink has adopted low and zero-emissions technologies and implemented full life-cycle cost principles for decision making. Trips by private vehicle are far less common and less necessary, as land use and transportation plans are integrated and people live in more complete communities Transportation and land use decisions have changed lives and lifestyles, having drawn people to vibrant residential areas where it is easy to get around on foot or by bike, and the Frequent Transit Network is close at hand. This network provides frequent, reliable transit service on designated corridors throughout the day, everyday. It serves all the key employment. educational, commercial, and recreational destinations for residents and visitors. Rapid transit lines are well maintained, refurbished, and have been extended to serve developed areas. A host of measures - new technology system design, policing, and information services - ensure that we enjoy one of the safest and most secure transportation systems in the world. With a population of more than three million people, one-quarter of whom are over 65 years old, safety and accessibility are critical to ensure mobility, both physical and social The Pacific Gateway seaports and airports are thriving and are a powerful economic engine in fine tune as the region takes its place at the forefront of the global transition to cleaner economies. Our transportation practices have been crucial to this leadership position, especially the strategic investments in road and rail, superb critical incident management, and road priority for transit and trucks. We have maintained our global position as one of the best places in the world to live, because we acted in ways that valued the environment and the people of this beautiful region. I Fl (iUAL 1 Greenhouse gas emissions from transportation are aggressively reduced, in support of provincial and regional targets GOAL ? Most trips are by transit, walking and cycling GOAL 3 The majority of jobs and housing in the region are located along the Frequent Transit Network GOAL 4 Traveling in the region is safe, secure, and accessible for everyone GOAL 5 Economic growth and efficient goods movement are facilitated through effective management of the transportation network. GOAL 6 Funding for TransLink is stable, sufficient, appropriate and influences transportation choices. I I I I I I I I I I I OUR FUTURE CAPTURED IN SIX STRATEGIC GOALS After several months of consultation and planning, TransLink has developed a set of six broad goals to serve as the framework for future actions. Our Transport 2040 goals reflect a desired future for the region, where challenges have been addressed through effective strategies that, in turn, translate into a series of Linked plans. The goals expressed in Transport 2040 go beyond simply meeting the region's transportation needs. Our strategy also reflects transportation's critical relationship with goals for the environment, the economy and our society. It is not enough to just provide transportation, but we must do it in such a way that it also addresses all these goals. I I I J I I I I- I I I I S S I ----- - I-- I I S I I I I I 1 I I I I I 41 TransLink's strategies to achieve our goals for the next 30 years are closely aligned with one another, meaning that by achieving one goat, we also make progress in achieving another. For example, when we improve quality of life in the region through developing more complete communities along a Frequent Transit Network, we also reduce greenhouse gas emissions and smog-forming pollutants through fewer automobile trips-lust to name the major benefit. There is an important reason behind the connectedness of our 2040 strategies. Many of the looming concerns such as climate change, congestion, sprawl. and increasing fuel prices, point to the need for a different approach to moving people and goods around the region. Every one of our proposed strategies reflects this vision of a quantum change to a new definition of normal' in our transportation behaviour. To fulfill the expectations of all sectors for a sustainable transportation system, we are therefore responding with an integrated "web of broad strategies, most of them addressing more than one goal. Each strategy will provide the context for its own specific range of strategic initiatives. Land use shapes the trips people have to make to get to work, to shop, and for social interaction, thereby affecting the transportation network over time. At the same time, transportation networks can help to shape land use, for example a SkyTrain station increases the access to regional destinations, making a neighbourhood more attractive, and encourages more people to live nearby. Planning for transportation needs to consider land use plans, and vice versa. As a result, TransLink's Transport 2040 and Metro Vancouver's updated Regional Growth Strategy are being developed in parallel, with the two strategies closely tied together and mutually reinforcing. The proposed land use objectives and policies of the Regional Growth Strategy include development of a compact urban form with complete communities and growth concentrated in the Metropolitan Core. Regional City Centres, and along a Frequent Transit Network with the main concentrations of development linked together by high quality transit service. The result of this settlement pattern is that average urban densities are higher and lobs, shopping, and services tend to be located closer together, facilitating access by pedestrians or by cycling, or along corridors that are served by high quality transit. This land use pattern is supportive of travel by walking, cycling, and transit. The key concept is that people are not solely reliant on private automobiles for their trips and have a range of transportation choices to meet their mobility needs. In turn, TransLink's investments are supportive of the region's desired land use pattern. For example, high quality transit infrastructure between Regional City Centres and the metropolitan core supports and reinforces the proposed corridors and centres concept of the proposed Regional Growth Strategy. TransLink will continue coordination with Metro Vancouver on the Regional Growth Strategy to ensure that the development and implementation of the two strategies are consistent and mutually supportive. Future Frequent Transit Network Concept — frequent service at Least 15 hours per day, everyday I, LEGEND Rapid T—E — Proposed Nopid traniVr '.. Ereqoent Bet Conr.ptn MepopoliUn Core Soneir COODO BeqOfldI city CO5tPD c:.. / I z 1 a I I I I I I I I I I I I I I I I Priority must be placed on investments that fill system gaps to improve bicycle, pedestrian, and transit access, and connect modes of travel, Better Environmentally Sound Transportation 1.1 Make substantial investment in transit: Add capacity on existing services to serve existing demand and attract new ridership Invest in new rail and bus infrastructure and accelerate a phased implementation of the Frequent Transit Network Coordinate transit investment with land use development plans to serve and stimulate high density and mixed use areas and reinforce a compact region. 1.2 Provide significant support for walking and cycling: Initiate and support expansion of cycling at both local and regional levels Improve integration of cycling and transit Improve walking and pedestrian facilities to destinations along and within the Frequent Transit Network Upgrade access to key transit stations and facilities. 1.3 Support improvements to inter-regional travel alternatives. 1.4 Develop TravelSmart program to encourage and assist people in making sustainable travel choices, including trip reduction and increased use of transit, walking, and cycling. 1.5 Complete strategic road projects that facilitate goods movement. Land use takes shape over long periods of time, and therefore the foundation has already been laid To be ready to meet the transportation demands that 2040 will bring, we must invest now Accommodating a larger population, addressing global warming, and securing our economic growth means investing to shape new patterns of living, working. and moving. This region has long recognized the importance of using transit to both serve and shape land use. Two new concepts have emerged that take Transport 2040 beyond simply providing transit supply. First, the increasingly urgent need for TransLink to be much more pro-active in linking transit to land use. And second, the importance of frequent bus services in creating transit-supportive communities - pointing to the timely development of a Frequent Transit Network. By working with municipalities to better integrate transportation and land use, we can create a Frequent Transit Network that helps attract a large portion of the population, influences their choices in homes and lobs, and encourages the creation of complete communities within the region. The Frequent Transit Network concept will provide transit service at least every 15 minutes from morning to night, every day of the week on corridors with densities and land uses that promote maximum ridership Good pedestrian and cycling infrastructure builds livable communities and encourages transit use and makes walking and cycling real and attractive options for people Although the strategy will give priority to transit, cycling, and walking, we also need to make strategic investments in roads to support goods movement that is central to much of our economy Convenience and efficiency of service in terms of travel times are key considerations for the vision of regional transportation in 2040. Substantial growth of ridership for public transit will depend on this, Vancouver Board of Trade 2.1 Maximize the capacity of the existing transportation network in collaboration with partner agencies: Manage road capacity to prioritize buses, trucks, and other high priority vehicles Implement transit priority measures and intelligent transportation systems Develop price incentives to shift travel behaviour (e.g. encourage off-peak travel and trips by walking, cycling, and transit) Implement critical incident processes to reduce delays and congestion on both the road and transit networks. 2.2 Work with the public and private sectors to achieve land use patterns that support transportation goals: I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I Create dense, vibrant communities around the Frequent Transit Network where walking, cycling, and transit are the main modes of travel Locate public sector investments on the Frequent Transit Network Increase densities at rapid transit stations and hubs Develop supportive parking policies. 2.3 Keep infrastructure in good condition with regular maintenance and make renewal a priority: Ensure the transit system (vehicles, infrastructure, facilities) is kept in good working condition Keep all regional roads and bridges well maintained and replace/ rehabilitate as necessary C) Upgrade existing transit stations to ensure optimal usage. 2.4 Reduce emissions and adverse environmental impacts from TransLink's operations, services, and infrastructure. Funding and resources will always be limited so we must focus on maximizing what we already have - and on ensuring that what we build is efficient and effective, and as well used as possible. Although much of our system is working at capacity already, we must actively pursue innovative ideas to increase its use Flexible hours programs or innovative pricing of transportation infrastructure can be used to encourage people to shift their travel times to less congested periods Telecommuting can be encouraged. About 90 per cent of the vehicles on the major roads are private automobiles By reducing vehicle use, we reduce the need for road capacity - and the most effective tool for reducing auto use is land use planning. When people live near the Frequent Transit Network. they wilt drive less because amenities are closer - and that will ensure adequate road space for trucks, buses, and emergency vehicles To enable more people to get around by walking, cycling, and taking transit, we must offer highly effective facilities that compete with the auto in convenience and travel time. Our existing investments in critical infrastructure must also be protected and upgraded. Transit infrastructure will need to be maintained at high levels And by 2040 or sooner, many water crossings and road and rail infrastructure will need to be replaced or undergo significant rehabilitation Significant investments in our transportation network have already been made, and will continue to be made, so it makes financial sense to preserve what we already have. / JJ —cY NI -------- kJ — FN J/ J) - j_ Major Road Nrwo,kCnnpt - P,oniI Hghw Federal Ahoriy E" Z_ ,, , Metropolitan Core Regional City Centre 47 Major Roads and Bridges - p -'- :T 1 ".-i/ I I I I I I J I I I I I I I I I I I I I I t , 4 I I I I A successful structure would strategically invest in accessible, affordable, safe, multi-modal transportation systems, built to fit the community, for movements of people, goods and services.' Fraser Basin CouncU 3.1 Make transit appealing to customers by ensuring it is safe, attractive, easy to use, and provides good value. 3.2 Optimize the safety, security, and usability of the system through design, enforcement and policing, technology, and information. 3.3 Implement Access Transit and achieve full accessibility of the transit system to meet the range of needs and abilities of users. 3.4 Improve the resilience of the network and provided integrated emergency and risk management systems with prevention, preparedness, response, and recovery. 3.5 Plan for natural hazards and for adaptation to climate change impacts. TransLink's new Access Transit program, reflecting a major consultation effort in 2007, will enable more people to ride transit more often, with a system that is fully accessible The goal is to create, as soon as possible, a highly accessible, inclusive, and safe system that ensures we can welcome all members of our diverse communities to transit. It is also a forward-thinking initiative that will simultaneously prepare us to capture and serve the access needs of the baby-boomer generation as it reaches retirement age. Creating a highly secure transportation system is of equal importance In light of heightened concerns about security and dealing with emergencies, a host of improvements will optimize the safety of the system for everyone. Looking to the challenges posed by potential disasters both near term and in the future. TransLink will amplify its focus on developing preparedness plans to make the entire transportation system as resilient as possible. Our 30-year strategy will consider a full range of complex issues and needs, including a major focus on risk assessment, contingency planning, emergency preparedness, and developing the required capacities and resilience I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I Funding sources should be broadened to include both transportation related sources and general sources - they may include measures such as agency investments, public private partnerships, tolling, tax exempt bonds, and make full use of TransLink7 s assets for revenue generation. Gateway Council 4.1 Ensure a diverse mix of funding sources, including transportation- related sources. 4.2 Anticipate and develop alternatives to manage risk in revenue sources, including securing new sources of operating revenue. 4.3 Raise national profile of municipal infrastructure needs and continue to pursue funding from senior levels of government. 4.4 Broaden non-transportation revenue base - from real estate, advertising, and commercial partnerships - in a way that supports desired transportation outcomes. 4.5 Price the road and transit systems to provide incentives to shift travel patterns (e.g. time, place, mode) and to generate revenue for improvements. Current funding streams will not provide sufficient resources to achieve our 30-year strategy-or even basic operations, and urgently needed improvements and expansion. New and stable revenue sources must be developed that reflect the value created for residents, businesses, and transportation system users. TransLink will pursue with vigour a broad-based funding system that includes user fees set in proportion to usage, appropriate tax revenue allocated by all levels of government, and other revenues derived from real estate, advertising, and commercial partnerships TransLink's current main sources of revenue include income from transit services (largely fares and advertising), property tax, and fuel tax. Property taxes reflect the fact that the region as a whole benefits from an effective transportation system. It is also important that funding of transportation be related to usage of the system. In transit this is reflected through transit fares. Fuel taxes are a form of user-fee for the road system Other cities also draw on revenue from other transportation-related sources, such as vehicle levies and road or congestion pricing. These sources can create flexibility by obtaining the required levels of funding as welt as offering the possibility of influencing travel behaviour. 4 L I I I I MOV I NG FORWARD I MEANS WORKI NG- TOGETHER I Governments. stakehoclers. and The pubUc are key I to making Transport 204C our future reaLity I I The Principles Behind Transport 2040: Commitment to partnerships and collaboration with relevant agencies and stakeholders Minimization of our environmental impact, especially related to carbon use Full lifecycle cost accounting and good value for money Willingness to consider new approaches and concepts and ask tough questions about assumptions Maximization of benefits to society Respect for prevailing social values Transportation use pays for transportation services and projects Focus on needs of transit users and general public first From Vision to Reality Transport 2040 submitted to TransLink board of directors, Mayors' Council and Commissioner Summer 2008 2009 10-Year Transportation and Financial Plan (TFP) submitted to TransLink board for approval Summer 2008 Public, stakeholder, and government dialogue Fait 2008 Creating the 2009 10-Year TFP Winter 2008 2009 10-Year TFP submitted for approval Summer 2009 Update the 2009 10-Year TFP Annually Update the 30-Year strategy Every 5 years TransLink will coordinate the initiatives that arise from Transport 2040 with Metro Vancouver's updated Regional Growth Strategy and the Air Quality Management Plan to ensure that transportation and land use are integrated effectively. We will also work closely with regional municipalities to encourage land use decisions that support public transit and encourage walking and cycling To ensure the best use of resources, we will coordinate our efforts with provincial transportation plans for the region, and work with Transport Canada. the Ministry of Transportation, airport and port authorities, and non-governmental agencies on appropriate strategies, plans, and initiatives to support the goals identified in this strategy. The manner in which we move forward will help determine whether our efforts are successful. That is why TransLink is committed to engaging with stakeholders. governments, and the public in a way that is meaningful and effective. To that end, a comprehensive public education and engagement program will commence in fall 2008 to create the 2009 10-Year Transportation and Financial Plan and translate the strategies of Transport 2040 into specific programs and projects. The 2009 10-Year TFP will identify the financial and other resources required to implement the projects and services outlined in the plan.. There is no question that the task ahead will require considerable resources and ingenuity if we are to meet the challenge of creating a transportation system that truly meets our needs for the future. The history of the people of this region includes innovators and leaders who have changed the world and put us on the map. Our task is to focus that wealth of talent, energy, and ability towards making this great place even better. Together we will translate the vision of Transport 2040 into reality. I I a I I I I I I I I I I I I I I I I I TRANSf K A NNurLREPORT CONTENTS 2 PERFORMANCE HIGHLIGHTS 6 YEAR IN REVIEW 8 MANAGEMENT DISCUSSION & ANALYSIS 27 MANAGEMENT DISCUSSION & ANALYSIS APPENDIX 33 CONSOLIDATED FINANCIAL REPORT 7/s 2007 SouTh Coast 0r/tsn 0o1srnbia Tansportar:on Author;tj Annual Reuort was precared under the direction of the Board of Directors, is vesnuctanle for the contents of trie report, irniuding the selection of performance measures and the repooed results. Any ccinl/tr between the intenai pub Is/ed in this report and the Sour/s Coast British Columbia 77ansporrat'ois Authority Act SC//i be resoived by reference to the /Or. 7 Al! signfrcant rlecis;orcs events and icient f/ed rsk as of December .5 2007. have beeis considered in prepann rh report Onj,eivilf of the Boai of D rectors I Da/e Faike; Chaii Rx, '"-"a fr REVENUES 2001 ($000s)* Parking Sales Tax Parking Site Tax $14,750 $21,789 is' io Hydro Ley Mrs/Other 52 $17,566 TOTAL $896,393 EXPENDITURES 2001 ($000IS)* Other Programs Roads & Bridges - $:5,774 Debt Police Service Service Costs - --' $17,901 TransLirsk - Corporate 3 '- $29821 e, 4 TOTAL $808,414 Amount reported is in accordance with the SCBCTA Act and excludes AirCare operation. STRONG PERFORMANCE FUELS FUTURE GROWTH The region's economy is booming, pushing up diesel and gas sales volumes and providing more tax revenue for transit and road improvements. Transit operating costs went up, but the new revenue plus lower debt servicing costs created better-than-expected financial results. Combining those savings with federal tax credits for transit passes and a return to the region of federal fuel taxes in 2007, TransLink was able to buy more buses more quickly and replace older vehicles with clean-burning diesels and zero-emission electric trolleys. Saving money for tomorrow's needs We've added $88 million to our savings account - now over $408 million - to help cover the cost of planned transit and road investments in the future. The system became more efficient than ever in 2007 West Coast Express now recovers 90 per cent of its costs - up from 65 per cent in 1999; SkyTrain covers all of its operating costs with fares, and bus-only lanes and Global Positioning Systems get more service out of buses without adding equipment or staff. Transit fares and fuel tax revenue cover the bulk of transit operating costs TransL ink maintains a great credit rating by managing money carefully which keeps borrowing costs down. Vii _ ! ,.,. .t ,. 4 Al 01 TRANSIT TRIPS PER YEAR (MILLIONS) BIGGER , BETTER , FASTER, GREENER 2006 !Ilon1ranslttrlps Maintaining a commitment to zero emission transit One of the biggest transit highlights was the purchase of Metro Vancouver's 2007 'irtion transit trips third generation of trolley buses. The old trolleys were not accessible to disabled people, but the new trolleys are low-floor vehicles that can accommodate wheelchairs, scooters and walkers. 2007 transit improvements added Transit use rose 4.2 per cent seven million new rides and took People chose transit for more trips last year, taking advantage of the federal tax about 2,900 cars off the road daily, credit and a major increase in bus, Skylrain and West Coast Express service. preventing the release of approximately 12,000 tonnes of carbon dioxide annually. 400 NEW AND REPLACEMENT TRANSIT VEHICLES IN 2001 0 Replacement vehicle Expansion vehicle Since 1999, TransLink has purchased over west Coast Express 1,500 buses and diversified the fleet to provide a Community Shuttle 44 aa a app variety of new andexpanded services. HandyDART aa;aaa;a;;a;;,. 56 TransLink delivered more buses than ever before Standard Pus 000 DO 00 000000000 0 142 0000 000 in 2007, making good on promises in the 2005 Trolley Bus 157 to 2007 Strategic Transportation Plan to provide more transit service and road improvements. Type of vehicle Number ofueh,cles Total 400 --- ROADS, BRIDGES AND TRANSIT PROJECTS KEEP PACE MAJOR CAPITAL PROJECTS 2007 Cash Flow ($000's) MAJOR ROADS Coast Meridian Overpass $ 3,972 204 Street Overpass $ 5,241 BRIDGE REHABILITATION Knight Street Bridge Seismic Upgrade $ 92 Pattullo Bridge Rehabilitation $ 2,712 RAPID TRANSIT Canada Line* $ 150,669 Evergreen Line $ 2,467 BUSES Trolley Buses $ 137,330 Diesel /CNGs $ 64,315 Bus Communication $ 14,091 SKYTRAIN MK II VEHICLES Phase 1-2009(34) $ 3,713 GOLDEN EARS BRIDGE* $ 17,242 TOTAL $ 401,844 *Contribution from TrnsLink only On time and on budget Large capital projects like the Golden Ears Bridge and Canada Line are on time and on budget, despite a hot labour market for construction workers and rising prices for steel, fuel and concrete. Both projects-will open in 2009; the Golden Ears Bridge will pay for itself through tolls. TransLink is responsible for the Major Road Network, 2,310 kilometres of regionally-significant roads and three bridges. We provide funds to municipalities to maintain those roads, and share costs on minor capital improvements. 2001 DELIVERY CHECK LIST • Quieter, cleaner buses pollute less • More people are within walking distance of transit • Extra service on Vancity U-Pass routes reduces wait times We promised to put transit within • Longer trips are more attractive with increased highway coach service walking distance of more people across • Better connections between town centres the region and provide real choices for smarter travel. Here's what we did last year • New routes do a better job of connecting people with places to meet growing demand for transit: • Low-floor buses put mobility within reach of more people F- = F-- South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) THE YEAR IN REVIEW YEAR ENDED DECEMBER 31, 2007 (all tabular amounts in thousands) TREND 2007 2006 2005 2004 REVENUES Transit Fares and Advertising A $ 327,609 $ 309,472 $ 292,402 $ 264,448 Fuel Tax A S 267,636 $ 264,326 $ 254,628 $ 252,294 Other Taxes and Levies A $ 301,148 $ 289,766 $ 245,089 $ 158,792 AirCare V $ 15,975 $ 21,278 $ 26,653 5 25,148 Total A $ 912,368 $ 884,842 $ 818,772 $ 700,682 MAJOR ROAD NETWORK MRN Operating and Maintenance costs A $ 30,024 $ 29,553 $ 28,630 $ 27,384 Albion Ferry Operating Costs A S 5,750 $ 5,631 $ 5,258 $ 5,218 Total A S 35,774 $ 35,184 $ 33,888 $ 32,602 Albion Ferry Boarded Passengers 7 2,488 2,503 2,522 2,487 MINOR ROAD CAPITAL AUTHORIZED ALLOCATION (a) E $ 20,000 $ 20,000 $ 20,000 $ 20,000 MAJOR ROAD CAPITAL AUTHORIZED ALLOCATION E $ 35,000 $ 35,000 $ 35,000 $ 35,000 PUBLIC TRANSIT Service Hours A Operating Cost A Revenue Passengers (b) A Boarded Passengers (c) Coast Mountain Bus Bus A Community Shuttle (e) y Total Coast Mountain Bus A West Vancouver Transit A Contracted Community Shuttles (f) A SeaBus A SkyTrain A West Coast Express A HandyDART A Taxi Saver A 5.880 5,636 5,392 5,187 $ 585,882 $ 545,125 $ 500,211 $ 467,323 173,377 166,334 160,958 156,840 200,652 192,016 189,887 191,745 4,872 4,954 3,899 2,135 205,524 196,970 193,786 193,880 8,267 7,852 7,615 7,079 1,069 1,010 910 807 5,401 5,193 5,016 4,854 71,213 69,457 66,292 65,003 2,533 2,286 2,104 2,034 1,219 1,177 1,158 1,160 198 188 184 181 6 604 742 745 90 96 122 AIR CARE Vehicles Tested V 473 Excess Emitting Vehicles Identified (d) V 82 A There has been an upward trend since 2006 V There has been a downward trend since 2006 U The trend is unchanged from 2006 South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) THE YEAR IN REVIEW YEAR ENDED DECEMBER 31, 2007 (all tabular amounts in thousands) NOTES The MRN Minor Capital Program is a cost sharing partnership between TransLink and the municipalities. TransLink funding covers up to 50 per cent of the eligible costs of approved capital improvements on the MRN. "Revenue Passengers" are the number of people who purchased a ticket and traveled to a destination regardless of the number of transfers made to complete the trip. This indicates the level of use of the transit system. "Boarded Passengers" are the total number of passengers using the system, including the initial boardings and transfers along the way. This indicates the capacity the system needs to carry the passengers using all of the different modes (bus, SeaBus, SkyTrain and West Coast Express). In 2001 AirCare implemented a biennial (every two years) testing schedule for 1992 and newer vehicles so fewer vehicles are required to be tested. At the same time, more rigorous testing procedures have led to the identification of more excess emitting vehicles. Also, in 2007, a new seven-model year exemption for the newest model years has been established, resulting in a further reduction in vehicles being tested. CMBC operated two community shuttle routes in 2002, and the number of routes expanded to 12 by the end of 2005, The number of contracted community routes increased from two in 2002 to four in 2005. MAJOR CAPITAL PROJECTS Board Approvals as of Dec 31 2007 2007 Actual Costs Forecast Approvals 2008+ MAJOR ROADS Robert Bank Rail Corridor Program Fraser Highway Widening Coast Meridian Overpass North Fraser Perimeter Road 204 Street Overpass Main Street Widening Murray Clarke Connector BRIDGE REHABILITATION Knight Street Bridge Seismic U/G Pattullo Bridge Rehabilitation RAPID TRANSIT Canada Line * Evergreen Line ** BUSES Trolley Bus Purchase Diesel/C NGs Bus Communication SKYTRAIN MK II VEHICLES Phase 1 - 2009 (34) Phase 2-2010(14) GOLDEN EARS BRIDGE* $ 50,000 $ - $ 41,000 $ - $ 60,000 $ 3,972 $ - $ $ 18,000 $ 5,241 $ - $ $ 46,000 $ - $ 16,730 $ 92 $ 23,870 $ 2,712 $391,384 $150,669 $ 57,000 $ 2,467 $263,000 $137,330 $275,190 $ 64,315 $ 47,926 $ 14,091 $147,000 $ 3,713 $ - $ $166000 $ 17,242 $ $ 4,000 $ $ 60,000 $ $ 5,000 $ $ $ 38,900 $ $ 343,000 $ 37,055 $ 67,855 $ $ $ 46,000 $ * Contribution from TransLink only * * TransLink current funding commitment is $400 million South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS YEAR ENDED DECEMBER 31. 2007 (all tabular amounts in thousands) This Management Discussion and Analysis ("MD&A") provides a discussion and analysis of the financial and operating results of the South Coast British Columbia Transportation Authority ("SCBCTA" or "TransLink") for the 2007 fiscal year and should be read in conjunction with 2007 audited consolidated financial statements and accompanying notes. The statements have been prepared in accordance with Canadian generally accepted accounting principles for not-for-profit organizations. OVERVIEW OF BUSINESS The Greater Vancouver Transportation Authority was established in June 1998 under the Greater Vancouver Transportation Authority Act ("GVTA Act"), to provide for the planning, funding, management and operation of an integrated regional transportation system for the greater Vancouver region, effective April 1, 1999. In November 2007, the provincial legislature passed Bill 43, the Greater Vancouver Transportation Authority Amendment Act, 2007. Bill 43 significantly amends the existing GVTA Act and changes the name of the Act to the South Coast British Columbia Transportation Authority Act ("SCBCTA Act"). An overview of the new governance framework is included in appendix to this analysis. Under the SCBCTA Act, TransLink has the ability to extend its transportation service region north to Pemberton and east to Hope. The extension of the service area is subject to entering into service agreements with municipal jurisdictions. Our current mandate includes the public transit system, custom transit for persons with disabilities, a 2,310 lane-kilometre network of major roads, a vehicle emissions testing program and initiatives to encourage sustainable alternatives to travel by single-occupant vehicles. The purpose of our regional transportation system includes the support of provincial and regional environmental objectives, including greenhouse gas emission reduction and air quality management objectives. We have seven wholly-owned subsidiaries as well as contracts with independent operators for the delivery of transit, road services and travel alternative programs to manage the demand on the transportation system. We fund our operations, capital expenditures, and debt service payments with revenues from transit operations, taxation revenues, capital contributions from senior levels of government, and issuance of long term debt. The SCBCTA Act requires TransLink to produce a long term transportation strategy (30+ years) that is updated every five years, and a rolling 10-year plan that is updated annually. TransLink is required to consult with the public, governments and stakeholders in the service region as these plans are created. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS (CONTINUED) YEAR ENDED DECEMBER 31, 2007 (all tabular arnount5 in thousands) Transit Operations TransLink operates the public transit system in the greater Vancouver region, which is currently composed of 21 municipalities situated on 2,000 square kilometres of British Columbia's southwestern mainland. Our transit services are delivered primarily through three wholly-owned subsidiaries, utilizing a fleet of 1,407 buses, two passenger ferries, 210 light rail cars, and five commuter rail trains with 37 passenger cars. Coast Mountain Bus Company Ltd., our largest subsidiary, operates 97 per cent of the bus service, which includes 228 electric trolley buses, three B-Line rapid bus services, highway Express Coaches, Community Shuttle minibuses, and two SeaBus passenger ferries across Burrard Inlet. British Columbia Rapid Transit Company Ltd. operates the Expo and Millennium Skylrain lines, the world's longest automated light rapid transit system, connecting downtown Vancouver with the cities of Burnaby, New Westminster and Surrey. West Coast Express Ltd. operates five commuter trains each weekday morning from Mission City in the Fraser Valley to downtown Vancouver with return trips each afternoon. It also contracts out the TrainBus coach bus service, which supplements the commuter train service. TransLink contracts with independent operators for delivery of the following services, and supplies the 369 vehicles utilized by the contractors: HandyDART is a shared-ride custom transit service for people with physical or cognitive disabilities who cannot use conventional services. The service is operated by seven independent contractors utilizing a fleet of 309 HandyDART vehicles provided by TransLink. The supplementary Taxi Saver Program enables eligible users to make trips by taxi with substantial savings. Community Shuttle minibus services in Langley, New Westminster and Bowen Island are operated by independent contractors utilizing a fleet of 21 minibuses. The West Vancouver "Blue Bus" transit service is operated by the District of West Vancouver, utilizing a fleet of 41 buses. Our wholly-owned subsidiary, Canada Line Rapid Transit Inc., was created to oversee the procurement, design, construction and implementation of the Canada Line automated rapid transit line, which will link Vancouver, Richmond and the Vancouver International Airport. Under a private-public partnership agreement, InTransit BC Ltd. was awarded the contract to design, build, construct, operate, maintain and partially finance the Canada Line under a 35 year concession agreement. The Canada Line is scheduled to commence operations in fall 2009. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS (CONTINUED) YEAR ENDED DECEMBER 31. 2007 (all tabular amounts in thousands) Security Our South Coast British Columbia Transportation Authority Police Service ("SCBCTA Police Service") was established by the Province in 2005 as the first dedicated transit police service in Canada. The SCBCTA police maintain order,safety and security on transit facilities and adjacent areas, and are authorized to enforce laws and carry firearms. Roads and Bridges In partnership with the municipalities, we support the Major Road Network ("MRN"), a network of major roads throughout Metro Vancouver. Ownership of, and operational responsibility for, the MRN generally remains with the respective municipalities. We provide funding for the operation, maintenance and rehabilitation of the MRN, and share in the cost of eligible capital improvements. Included in the Major Road Network is the Albion Ferry service that connects Langley to Maple Ridge and Pitt Meadows across the Fraser River. Our wholly-owned subsidiary, Fraser River Marine Transportation Company Ltd., operates the Albion Ferries service utilizing two 22-vehicle ferries. We own and operate the following inter-municipal bridges and structures - Knight Street Bridge system, Pattullo Bridge, Westham Island Bridge, and the Albion Ferry docks. We are currently constructing the Golden Ears Bridge, a new six-lane bridge across the Fraser River in the 200 Street corridor, and associated roadways. Once the bridge is operational in 2009, it will replace the Albion Ferry service. The Golden Crossing General Partnership has been contracted to design, build, finance, operate, maintain and rehabilitate the bridge and its 14 kilometre associated road network TransLink Corporate TransLink Corporate is the organization's head office, responsible for organizational leadership and oversight, and the development of TransLink's strategic transportation and financial plans. Other functions centralized at the TransLink Corporate office include major capital project management, legal services, corporate finance, internal audit, marketing, public affairs, real estate services, and the transportation demand management program. We have also established a wholly-owned subsidiary, 592040 B.C. Ltd. (ITS Corporation), to research and develop intelligent transportation systems ("ITS") and technologies. The insurance needs of the organization are administered through our captive insurance company, Transportation Property and Casualty Co., which we co-own with BC Transit (90 per cent owned by TransLink, 10 per cent owned by BC Transit). South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS (CONTINUED) YEAR ENDED DECEMBER 31, 2007 (all tabular amounts in thousands) AirCare Under the SCBCTA Act, TransLink must develop and administer programs for certifying motor vehicle compliance with regulations under the Motor Vehicle Act with respect to exhaust emission standards. Our wholly-owned subsidiary, Pacific Vehicle Testing Technologies Ltd., manages the AirCare program which is a mandatory vehicle emissions testing program in the Metro Vancouver region. The inspection contractor for the AirCare program is Envirotest Canada, which operates the 10 inspection centres. Testing fees are set such that, over the lifetime of the contract, all program costs related to AirCare are recovered through user fees. ACCOUNTING POLICIES Significant accounting policies are disclosed in Note 2 of the Notes to Consolidated Financial Statements Significant Financial Statement Presentation Golden Ears Bridge TransLink has entered into a fixed-price contract with the Golden Crossing General Partnership (DBFO contractor) to design, build, finance, operate, maintain and rehabilitate the Golden Ears Bridge ("GEB"). Even though no capital payment to the DBFO contractor is required until substantial completion is reached, TransLink retains ownership of land and all other assets constructed throughout all phases of the DBFO agreement. Therefore, as the project progresses, TransLink is accruing the cost and related liability of the GEB, based on the estimated fair value of the GEB using the percentage-of-completion method. It is determined that the estimated fair value of the GEB, as at the date of substantial completion using the DBFO contractor's cost and funding models, is the best estimate of the cost of the GEB. Changes in Accounting Policies Financial Instruments Effective January 1, 2007, TransLink adopted the Canadian Institute of Chartered Accountants' new standards on financial instruments. The adoption of these standards has no material impact on opening fund balances or the financial statements for the year ended December 31, 2007. Under these new standards, all financial assets and liabilities are classified into one of the following five categories: held for trading, held-to-maturity, loans and receivables, available-for-sale financial assets or other financial liabilities. All financial instruments, including derivatives, are included on the balance sheet and initially measured at fair market value. Subsequent measurement and recognition of changes in fair value of financial instruments depends on their initial classification. Held for trading financial investments are measured at fair value and all gains and losses are included in net income in the period in which they arise. Available-for-sale financial instruments are measured at fair value with revaluation gains and losses included in fund balance. Loans and receivables, held-to-maturity financial investment and other financial liabilities are measured at amortized cost using the effective interest rate method. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS (CONTINUED) YEAR ENDED DECEMBER 31, 2007 (all tabular amounts in thousands) OPERATING ACTIVITY TransLink evaluates the performance of its operations using key performance measures that are linked to its goals and objectives. Selected operational highlights and performance measures are shown in the table below. (Figures in this table are in actual amounts) Scheduled Transit Service 2007 2006 Change Service hours 5,329,830 5117,220 212,610 4.2% Revenue passengers 172,070,840 165,073,200 6,997,640 4.2% Revenue passengers per capita 76.49 74.30 2.18 2.9% Service hours per capita Average fare per revenue passenger Operating cost per passenger kilometre Bus - Average operating cost per service hour Rail - Average operating cost per train kilometre Access Transit Service hours Revenue passengers Operating cost per revenue passenger Operating cost per service hour 2.37 2.30 0.07 2.9% $1.84 $1.82 $0.02 1.1% $0287 $0286 $0002 0.6% $104.59 $101.95 $2.64 2.6% $8.42 $8.29 $0.13 1.6% 2007 2006 Change 548,860 519,480 29,380 5.7% 1,308,320 1,260,250 48,070 3.8% $21.11 $20.49 $0.62 3.0% $50.32 $49.70 $0.62 1.2% The primary measures of transit operating activity are service hours and revenue passengers. During 2007, revenue passengers grew in step with our delivered service hours. Transit operations delivered 5.33 million service hours, an increase of 4.2 per cent compared to the same period in 2006. Revenue passengers for the same period were also 4.2 per cent higher than in 2006. Regional economic and population growth are significant drivers of passenger growth. The employed labour force in the region grew by three per cent in 2007, while the regional population has increased by 1.3 per cent during the year. Given that over 50 per cent of transit trips are commute trips for work, there is a substantive relationship between transit passenger levels and changes in the regional employment levels. Our strong passenger growth also reflects better service levels, our success in attracting new customers, as well as increased usage of transit services by our existing customers. This is supported by the 2.9 per cent increase in revenue passengers per capita in 2007, indicating that transit ridership is growing faster than the regional population. Sources: Statistics Canada Labour Force Survey; and BC Stats Municipal and Regional Population Estimates South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS (CONTINUED) YEAR ENDED DECEMBER 31, 2007 (all tabular amounts in thousands) Average fare per revenue passenger grew by 1.1 per cent in 2007 mainly due to an increase in sales of the higher priced two and three-zone transit passes. This change in average fare accounts for 20 per cent of the growth in our fare revenues for the year. The key measures of the cost effectiveness and efficiency of our transit operations are operating cost per passenger kilometre and operating cost per service hour or kilometre. Operating cost per passenger kilometre grew by 0.6 per cent in 2007 as costs grew slightly faster (4.8 per cent) than passenger kilometres (4.2 per cent). The efficiency of bus services is measured by operating cost per service hour while for rail services, the key efficiency driver is cost per train kilometre. In 2007, cost per bus service hour increased by 2.6 per cent and average cost per train kilometre increased by 1.6 per cent, primarily due to increased labour and vehicle maintenance costs. This cost increase is substantially lower than the 4.2 per cent increase in service hours delivered. Access transit services, which is the shared-ride custom transit service we provide under the HandyDART program for customers with physical or cognitive disabilities, is undergoing a major redesign to increase its availability and effectiveness for users. We have increased access transit service hours by 5.7 per cent in 2007. As there is typically a lag between the introduction of new services and ridership growth, and because a larger portion of the new hours were allocated to off-peak service, access transit revenue passengers grew at a slower pace (at 3.8 per cent) than service hours. While the cost of service expansion coupled with lagging ridership levels has resulted in an increase in operating cost per revenue passenger of three per cent in 2007, operating cost per service hour increased by only 1.2 per cent. This increase in cost per service hour is less than the rate of inflation. Consolidated Statement of Operations - Analysis This analysis will review 2007 results compared to 2006 and is organized by fund category. GENERAL FUND The following table summarizes the general fund net operating results for 2007 and 2006. 2007 2006 Change Revenues 896,393 863,564 32,829 Expenses 683,512 635,089 48,423 212,881 228,475 (15,594) Other 86 (155) 241 Excess of Revenues Over Expenses 212,967 228,320 (15,353) South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS (CONTINUED) YEAR ENDED DECEMBER 31. 2007 (all tabular amounts in thousands) Revenues Provincial legislation provides TransLink with access to sources of revenues that are used to fund the provision and support of transportation services. In 2007 revenues increased $32.8 million over 2006. Transit revenue grew by $18.1 million and taxation revenues grew by $14.7 million. Revenue growth in 2007 was derived mostly from regional economic and population growth rather than rate increases. The following table provides more detail on the components. Transit Revenue Transit Revenue 2007 2006 Change Transit Fares 317,649 301,521 16,128 Advertising & Other 9,960 7,951 2,009 327,609 309,472 18,137 Taxation Revenues Motor Fuel Tax 267,637 264,327 3,310 Property Tax 246,891 240,582 6,309 Parking Site Tax 21,789 20,341 1,448 Other 32,467 28,842 3,625 568,784 554,092 14,692 896,393 863,564 32,829 Transit fare revenue increase of $16.1 million (5.3 per cent) is primarily due to the 4.2 per cent increase in the number of passengers carried during the year, with West Coast Express again showing the largest increase at 10.8 per cent. Approximately 20 per cent of the revenue increase is due to average price per ride increasing. The use of prepaid fare media continues to grow as its relative value has increased. Gasoline prices have increased 55 per cent in the last five years while transit cash fares have increased 29 per cent and monthly passes have only increased 10 per cent. In July 2006 the federal government introduced the inclusion of monthly passes as an eligible non-refundable income tax credit further reducing the cost of transit for those who qualify. Sales of monthly and employer passes increased 136,000 or 8.5 per cent during the year. The average purchase price per pass also increased by $0.85 or 1.1 per cent due to faster growth in sales of two and three zone passes. Monthly and employer passes account for only 40 per cent of total fare revenue yet they account for $11.6 million or 72 per cent of the $16.1 million increase in fare revenues for 2007. The table below summarizes the rate and volume impact of these passes on the change in fare revenue. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS (CONTINUED) YEAR ENDED DECEMBER 31, 2007 (all tabular amounts in thousands) Revenue and purchases in thousands Monthly Passes 2007 2006 Change % change Purchases 1,590 1,467 123 8.4% Revenue $116,215 $106,051 $10,164 9.6% Average price per purchase $73.09 $72.29 $0.81 1.1 % Employer Pass 2007 2006 Change % change Purchases 150 137 13 9.8% Revenue $15,143 $13,651 $1,492 10.9% Average price per purchase $100.99 $99.97 $1.02 1.0% Both 2007 2006 Change % change Purchases 1,740 1,604 136 8.5% Revenue $131,358 $119,702 $11,656 9.7% Average price per purchase $75.50 $74.64 $0.85 1.1 % % of total fare revenue 41.4% 39.7% 72.3% Total Fare Revenue $317,649 $301,521 $16,128 5.3% Advertising & other revenue is contract-based and provides revenue at a guaranteed minimum (which increases annually) plus additional revenue if advertising sales are above the minimum. In 2007 advertising revenue exceeded the minimum by over $1 million and with the increased guaranteed minimum provided a $1.2 million increase to 2006. An additional $800,000 was realized from increased retail and park and ride lot revenue. Taxation Revenues Motor Fuel Tax revenue increased $3.3 million (1.3 per cent) over 2006. Revenues are from a $0.12 tax per litre on gasoline and diesel fuel sales-in the Metro Vancouver area. In 2007 the ratio of litres sold was 84 per cent gasoline and 16 per cent diesel. The diesel percentage has increased steadily over the past five years. From 2006 to 2007, gasoline sales grew 0.6 per cent, while diesel sales grew 11.3 per cent. Diesel sales accounted for $2.1 million of the revenue increase. In 2007 the average gasoline price at the pump was $1.08 per litre compared to $1.04 for 2006. This upward price trend has been constant over the past five years, with prices rising 55 per cent from $0.70 per litre (2002 dollars). Year 2007 was the first year that gasoline exceeded $1.20 per litre in the Metro Vancouver area. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS (CONTINUED) YEAR ENDED DECEMBER 31, 2007 (all tabular amounts in thousands) There is a strong correlation between high fuel prices and reduced gasoline consumption. This is reflected in a growing trend to more fuel-efficient vehicles and a switch to public transit from private vehicle use. These trends are supported by registered vehicles in the Metro Vancouver area averaging newer model years, more alternative technology vehicles being registered and by the increase in public transit ridership. The strong diesel fuel sales are seen to stem from a buoyant regional economy, notably in the construction sector (labour force growth of three per cent), that supports use of vehicles and machinery that primarily use diesel fuel. Property tax increased $6.3 million (2.6 per cent) over 2006. Property tax is collected on properties within Metro Vancouver based on TransLink board approved rates. The tax rates are set to achieve a target revenue amount, which for 2007 was to be three per cent greater than 2006. Actual revenues were slightly below this target as final property assessment rolls included reductions on assessed values due to a large number of successful assessment appeals. Residential class tax revenue formed the majority of revenues at $128.9 million (52 per cent), with the Business class at $98.7 million (40 per cent). Parking Site Tax was a new revenue source in 2006, implemented as part of the 2005-2007 financial strategy to find transportation service improvements. Non-residential parking sites within Metro Vancouver are taxed at a rate of $0.78 per square metre of deemed taxable parking area. Gross revenue for .2007 was $21.8 million, with collection costs of $0.6 million listed under expenditures. In 2008 under new legislation from Bill 43, this tax will cease. A tax entitled "Replacement Tax" will collect $9 million from non-residential property classes 2, 4, 5 and 6. Other revenues increased by $3.6 million from 2006 and include the Hydro Levy ($17.6 million) and Parking Sales Tax ($14.7 million). Parking Sales Tax accounts for the majority ($3.2 million) of the increase, as a result of a review initiated by TransLink staff. This review resulted in the Ministry of Small Business & Revenue performing an audit of sales growth and thereby increasing the annual revenue remitted to TransLink from $11.5 million to $14.5 million. Revenue for 2007 included adjustments for 2007 and prior years. EXPENSES Total general fund expenses have increased by $48.4 million compared to 2006. The following table presents the components of the increase. 2007 2006 Change Transportation Operations 601,101 560,159 40,942 Maintenance on Major Road Network 30,024 29,553 471 Interfund AirCare Charge - (2,697) 2,697 Administration 28,512 26,660 1,852 Transit Police and Security 17,901 12,849 5,052 Other Projects 5,974 8,565 (2,591) Total Expenses 683,512 635,089 48,423 South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS (CONTINUED) YEAR ENDED DECEMBER 31, 2007 (all tabular amounts in thousands) Transportation Operations includes the operating costs of transit subsidiaries, transit contractors, and the Albion Ferry service. Costs have increased by $40.9 million over 2006. The primary cost drivers in this category include labour,material, fuel and the impact of service expansion. A variety of other factors also influence costs Labour - TransLink subsidiaries employ a work force of over 5,700 employees, an increase of 12 per cent over 2006. Of these, 94 per cent are covered by five different labour contracts. Labour is the most significant cost to the subsidiaries, comprising 73 per cent of operating expenses. Economic increases for both unionized and exempt employees were three per cent in 2007 with a cost impact of approximately $10.9 million. Overtime costs increased by $3.5 million due to the continued operator and mechanic labour shortage and inclement weather conditions. Materials and Utilities - Costs increased by $4.9 million in 2007. The majority of the increase ($3.1 million) is due to maintaining higher cost older vehicles during the transition to the new trolley fleet and the maintenance requirements of increasingly sophisticated bus technology. Other factors include higher rail system maintenance costs and increased utilities and uniform expenses. Fuel - Fuel costs in 2007 decreased $1 million from 2006. This was achieved with a savings of $2.3 million by implementing seasonal bio-diesel, offset by a $1.3 million increase in natural gas consumption due to additional CNG buses going into service. Early in 2007, CMBC entered into a diesel fuel contract for the year, which covered their anticipated demand, at a price of 94.84 cents per litre. Service Expansion - Bus service increased by 225,000 hours (5.4 per cent) at a cost of approximately $17.5 million. This reflects both the full year impact of 2006 service expansion and the part-year impact of 2007 expansion. Service increased for the HandyDART fleet by 29,000 hours (5.6 per cent) at a cost of $1.1 million Other - Remaining factors to the transportation operations increase include higher fleet insurance costs ($1.6 million), operating costs for the new South of Fraser HandyDART facility ($800,000) and an increase in rolling stock lease charges ($0.6 million). Higher transit contractor maintenance and other costs have been offset by the $1 million reduction to SkyTrain property taxes. Maintenance on Major Road Network represents the funding provided to the municipalities for the operation, maintenance and rehabilitation of their respective portions of the Major Road Network (MRN). It also includes costs incurred by TransLink for MRN condition assessments, and for maintenance of TransLink-owned bridges. The $471,000 increase is due primarily to an agreed increase to the funding rate (from $1 2,485/lane kilometre to $12,735) and 0.1 per cent growth in lane kilometres. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS (CONTINUED) YEAR ENDED DECEMBER 31, 2007 (all tabular amounts in thousands) Interfurid AirCare Charge is the annual rental charge for AirCare testing equipment that is transferred from the General Fund to the restricted AirCare fund Administration is the TransLink corporate head office, including the staffing and support costs for transportation planning, capital management, real estate, finance, human resources and corporate affairs functions. The $1.9 million increase represents the net of higher salary costs ($3.7 million) due to economic and merit increases and approved additional positions, and the lower consulting, market research and communications expenditures that resulted from the implementation of the 2007 budget cost reduction initiative. Transit Police increases by $5.1 million over 2006. A $4.5 million increase in salaries reflects a major restructuring of sworn member salaries (up to 20 per cent) as a result of arbitration and the 2007 collective bargaining process. Retro payments back to December 2005 are included in 2007 actuals. The balance of the additional costs in 2007 are the result of the transfer of building maintenance from Coast Mountain Bus Company Ltd., the leasing of additional office space and parking, and the loss of the recruit grant fees for Police Academy training. Other Projects include various programs, one-time studies and projects as well as expenditures for activities that can no longer be capitalized or deferred. The most significant component of the overall $2.6 million decrease is the $2.1 million decrease in Parking Site tax implementation costs. Legislation has removed this form of revenue, resulting in a reduction in the number of appeals initiated. AIRCARE FUND This is a restricted fund used to record the revenues and expenses of the AirCare vehicle emissions testing program. Under legislation, AirCare fees are designed to recover program costs. 2007 2006 Change Revenue 15,975 21,278 (5,303) Expenses 17,360 26,209 (8,849) Deficit of Revenue over Expenditures (1,385) (4,931) 3,546 Revenues have decreased by $5.3 million, due to the increase of seven-model year exemptions for the newest model years and the bi-annual test fee reduction (from $47 to $45). There were 130,717 fewer inspections performed in 2007. Expenses have decreased by $8.9 million reflecting lower contract expenses from the closure of two test centres and a reduction in test lanes ($5.9 million), the cessation of the annualized equipment charge ($2.7 million) and the secondment of two employees to TransLink without replacement. The operating cost per vehicle inspections has decreased by 16 per cent. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS (CONTINUED) YEAR ENDED DECEMBER 31, 2007 (all tabular amounts in thousands) CAPITAL FUND This fund is used to record the acquisition costs of capital assets and any related long-term debt outstanding. This fund also includes capital contributions received and the funding paid to the municipalities for the Major Road Network. Revenue added to this fund includes interest earned on debt sinking funds and debt reserve deposits, as well as interest earned on surplus cash and federal funds held in a segregated investment account. Charges to the fund include interest related to borrowings and amortization of capital assets. The following summarizes Revenue and Expenses: Revenue 2007 2006 Change Capital contributions 323,921 263,622 60,299 Interest income 28,522 21,362 - 7,160 Revenues 352,443 284,984 67,459 Expenses Major Road Network capital funding 29,238 51,822 (22,584) Interest on debt 57,605 57,817 (212) Amortizationofcapitalandotherassets74,909 66,702 8,207 Expenses 161,752 176,341 (14,589) 190,691 108,643 82,048 Other Loss in foreign exchange (1,774) (8,858) 7,084 Fair value adjustment on financial instruments (7,200) - (7,200) Lossondisposalofcapitalassets (888)(129)(759) Other (9,862) (8,987) (875) Excess of revenue over expenses 180,829 99,656 81,173 Capital contributions are funds received from senior government. Note 10 in the consolidated financial statements detail the different sources and how much was received from each source. The $49.1 million received in 2007 out of the federal government's Gas Tax Agreement Funds represents year three's allocation and has been directed towards the capital cost of replacing 109 conventional service diesel buses, which have all reached the end of their service lives, with 109 alternative fuel (hybrid) buses. In 2006 the amount received out of this fund was higher ($73.7 million) as it reflected the receipt of the first two years' allocations. An amount of $34 million was received from the federal government's Public Transit Infrastructure Program Fund. This funding has been directed towards a further contribution to the purchase of 34 additional SkyTrain Mark II cars, 85 Community Shuttle expansion and replacement vehicles, and 125 Custom expansion and replacement vehicles. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS. (CONTINUED) YEAR ENDED DECEMBER 31. 2007 (all tabular amounts in thousands) Senior government contributions towards the Canada Line project have increased substantially as the project nears completion. In 2007, $240.8 million (2006— $149.6 million) was received from this project's funding partners: Government of Canada $167.4 million (2006- $125.6 million), Province of British Columbia $58.4 million (2006- $17.2 million), and the City of Vancouver $14.9 million (2006- $6.9 million). Interest income in 2007 is $7.2 million higher compared to 2006 as result of the overall increase in senior government funding which has generally been received in advance of when the funds are spent on eligible capital. This interest income has and will be directed towards funding eligible capital projects and also partly to offset the administrative costs incurred by TransLink in managing these programs. Also, the increase in funds invested in sinking and debt reserve funds has contributed to the increase in interest income. Major Road Network capital funding was $22.6 million less compared to 2006. This was partly due to the fact that two major road projects were completed (Dollar-ton Bridge Replacement and David Avenue Extension) and fairly large progress payments were made on two on-going major road projects (Fraser Highway Widening and 204th Street Overpass). In 2007, progress payments continue to have been made to these latter two major road projects, although at a reduced rate, as well as the Coast Meridian Overpass. Also, the various municipalities have been slower to implement minor road capital projects and request payment of TransLink contributions toward these projects. Interest on debt remained fairly constant despite long-term debt (including the current portion) increasing to $1,675 million at the end of 2007, (2006- $1,227.6 million). The bond interest increase of $8.5 million and $2.2 million in additional short-term borrowing costs (utilization of the MFA short-term borrowing facility) was almost fully offset by the $10.6 million increase in interest capitalized during construction, reflecting the higher annual average level of capital work-in-progress in 2007 compared to 2006 Amortization of capital and other assets increase of $8.2 million over 2006 reflects the significant additions to the in-service capital asset base in both 2006 and 2007, particularly in revenue vehicles which saw a net increase of $239.9 million in 2007 (2006 - $63.6 million). In 2007 this mostly reflects the delivery and acceptance of the 157 replacement New Flyer electric trolley buses and 126 replacement and expansion Nova buses. Loss on foreign exchange of $1.8 million (2006— $8.9 million) relates to the hedging of the foreign currency exposure on the import purchase denominated in Euro dollars. Fair value adjustment on financial instruments of $7.2 million has been fully explained in Note 3 to the consolidated financial statements. It represents the reduction in the fair value of the original cost of the Canadian non-bank sponsored Asset-Backed Commercial Paper held by a subsidiary of the Authority. Loss on disposal of capital assets reflects net book value in excess of proceeds On the disposal of buses. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS (CONTINUED) YEAR ENDED DECEMBER 31, 2007 (all tabular amounts in thousands) LIQUIDITY AND CAPITAL RESOURCES The sources of funds for operations, capital expenditures and debt service payments are primarily from taxation, transit revenues, capital contributions from senior levels of government and issuance of long-term debt. Operating activities: Cash provided by operations was $435.7 million (2006 - $488.7 million). The decrease of $53 million is summarized as follows; 2007 2006 Change General Fund 212,967 228,320 (15,353) Capital Fund 180,829 99,656 81,173 AirCare - Net (1,385) (4,931) 3,546 Fund Contributionsm 392,411 323,045 69,366 Items not involving cash Amortization of capital and other assets 75,104 66,711 8,393 Others 2,138 1,508 630 Changes in non-cash working capital (2) (33,942) 97,419 (131,361) Cash provided by operations 435,711 488,683 (52,972) Reference is made to Consolidated Statement of Operations for analysis of fund contributions. 12) Includes accounts receivables, inventory, prepaid expenses, accounts payable, and employee future benefits. The $69 million change in fund contributions is due to a higher level of senior government funding. The $131 million change in working capital is due to a major reduction in Canada Line payables. Investing activities: Cash invested was $754.3 million compared to $630.6 million for 2006, a net increase of $123.8 million. 2007 2006 Change Purchase of Capital assets 632,839 Financial instrument assets 121,486 640,441 (9,874) (7,602) 131,360 Cash used for investments 754,325 630,567 123,758 The significant investments in capital assets in 2007 were Canada Line $336.7 million (2006 - $322.5 million), Golden Ears Bridge $18.3 million (2006- $74.7 million), trolley buses $137.3 million (2006 -$83.6 million), and conventional buses (expansion and replacement) $64.3 million (2006 - $43.4 million). The significant increases in financial instruments includes an increase in short-term investments, $64 million (2006 —$14.9 million increase), an increase in long-term investments, $50.2 million (2006 —$1.5 million) and an increase in debt reserve deposits, $7.3 million (2006 - $3.5 million). This increase reflects the significant amount of senior government funding that has been received in advance of when the eligible capital spending is made. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS (CONTINUED) YEAR ENDED DECEMBER 31, 2007 (all tabular amounts in thousands) Financing activities: Financing activities resulted in net proceeds of $410.4 million compared to $143.2 million in 2006. 2007 2006 Change Bonds issued 527,000 150,000 377,000 Bond issue costs (3,952) (1,125) (2,827) Bonds matured (76,869) (30,848) (46,021) Increase in debt sinking funds (24,580) (18,263) (6,317) Principal payments on capital leases (11,171) (6,580) (4,591) Golden Ears Bridge contractor funding - 50,000 (50,000) Cash provided by financing activities 410,428 143,184 267,244 Bonds are issued through the Municipal Finance Authority of British Columbia ("MFA"). MFA is the central borrowing agency responsible for financing capital requirements of municipalities and regional districts in the Province. (MFA has been bond rated by Fitch Ratings, AAA, Standard & Poor's, AAA, and Moody's Investors Service, Aaa). In addition, TransLink has also been rated by Moody's Investors Service, Aa3 Stable and by Dominion Bond Rating Service, AA. Contributions to the debt sinking funds, including interest earned, are used to repay the related debt at maturity. • Long-term debt (including the current portion) at 2007 was $1,675 million (2006 -$1,227.6 million). • At the end of 2007 there was no longer any obligations under capital leases (2006 - $11.2 million). • In 2006 the DBFO contractor for the Golden Ears Bridge project paid TransLink a once off $50 million licensing fee that was used to fund TransLink's contribution to this project. The following summarizes the change in Cash balance during the year: 2007 2006 Change Operations 435,711 488,683 (52,972) Investing (754,325) (630,567) (123,758) Financing 410,428 143,184 267,244 Increase in cash 91,814 1,300 90,514 Cash, beginning of year 21,457 20,157 1,300 Cash, end of year 113,271 21,457 91,814 South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS (CONTINUED) YEAR ENDED DECEMBER 31, 2007 (all tabular amounts in thousands) INVESTMENT IN CAPITAL ASSETS TransLink requires continued investment in fleet and infrastructure to increase the capacity of the transportation network, and to maintain and improve service reliability safety and environmental performance. Notable activities during 2007 for the two major construction projects and vehicle, facilities and roads capital programs include: Canada Line • Project remains on schedule for service commencement on or before November 30, 2009. Over 55 per cent of the construction timeline has been achieved with 29 of the 52 month construction schedule completed. The Project remains on budget. All scheduled contributions from funding agencies have been received. Milestone payments applied to date total $980 million, slightly higher than budgeted. • Significant advancement on all fronts of the project: o Second tunnel and elevated guide way work ahead of schedule. o Restoration along Cambie Street has begun. o Pre-cast yard completed and station construction underway. Golden Ears Bridge Project remains on schedule with substantial completion on or before June 30, 2009 and 22 of the 40 month construction schedule being completed. • Net costs to date of $93.2 million include a deduction for the up-front $50 million license fee payment received from the Golden Crossing General Partnership. • Foundation work in the riven densification piling for the north bridge approach and preloading for the Lougheed Highway interchange has been completed. • Final agreement has been executed with the project tolling operator, V-Flow, to design, build, operate and maintain the GEB electronic toll collection system. Fleet • Bus fleet deliveries: o Diesel - 126 forty-foot vehicles and 16 sixty-foot articulated vehicles. o Trolley - 137 forty-foot vehicles (order complete) and 20 sixty-foot articulated vehicles. o Other - 44 Community Shuttle vehicles and 56 HandyDART vehicles. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS (CONTINUED) YEAR ENDED DECEMBER 31, 2007 (all tabular amounts in thousands) • West Coast Express 6th spare locomotive delivered. Third SeaBus: Preliminary design completed and RFP issued in December. May 2009 completion date. • SkyTrain vehicles: Preliminary and final design reviews completed and construction commenced. Delivery of first vehicles scheduled for early 2009. Facilities • Maintenance and Transportation Training Centre: Functional design completed and rezoning application submitted with review now underway by District of Maple Ridge. Approval of rezoning application is expected mid 2008. • Skylrain Operations and Maintenance Centre Expansion: Building construction commenced in November and track expansion detailed design has been completed. • Skylrain Station Upgrades: Commenced preliminary design for Broadway and conceptual design for Main Street stations. Roads & Bridges North Fraser Perimeter Road: This project is currently in the planning stage. Fraser Highway Widening: Construction is on going. • Coast Meridian Overpass: Design-build proposals have been received and contract will be awarded in January 2008, with completion anticipated in 2010. • 204 Street Overpass: Opened Spring 2007 ahead of schedule. • Main Street Widening: This project is currently in the planning stage. • Murray-Clarke Connector: A memorandum of understanding has been signed between the City of Port Moody and TransLink to advance the project. • Roberts Bank Rail Corridor: TransLink committed $50 million to this $307 million program and signed a Memorandum of Understanding with numerous other funding parties. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS (CONTINUED) YEAR ENDED DECEMBER 31, 2007 (all tabular amounts in thousands) LOOKING AHEAD Looking ahead to 2008 and 2009, the focus of organizational effort will be to develop a long-term transportation strategy, develop a 10-year transportation and financial plan and transition to a new governance model TransLink's new legislation provides more options for additional funding and provides greater certainty for funding sources. TransLink is able to access an additional three cents of fuel tax if matched by an equal amount of increases from other sources (including fares, property taxes and other revenues). Flexibility now exists to invest in real estate associated with future transportation development. We have the ability to increase our property tax and fare revenues by two to three per cent without seeking external approvals. Senior government both at the federal and provincial levels are implementing policy and actions to reduce greenhouse gas emissions and increase transit investment. The federal government transfer of a portion of the fuel tax revenues they collect to cities (roughly equivalent to five cents/litre) has been made permanent. The Province of British Columbia announced a transit plan that outlines $10 billion of investment in our service region, and a commitment of $4.2 billion of funding for these projects. Within our region, there is tremendous support for a quantum leap in investment in transportation and the population of our service regions continues to grow. These factors, along with senior government programs that support increased investment in transportation, will drive an acceleration of investment in transportation infrastructure. Senior government assistance will assist greatly, but a significant amount of funding will need to come from local sources. Our challenge will be to attain a consensus on what will be the most appropriate means to fund the required investment. Expansion beyond what is affordable within our current revenues will require an extensive public consultation process with our key stakeholders and the public. The expanded programs and funding sources will require the approval of the Mayors' Council and the continued support of senior governments to move ahead Current funding enables us to maintain existing service levels. There are risks, with the most significant being fuel costs, interest rates, and access to qualified human resources. Fuel costs have an impact on our transit costs, fuel tax revenues, ridership and required capacity. Fuel tax revenues represent 30 per cent of our revenues and fuel costs are seven percent of our transit operating budget costs. Interest rates impact our cost to borrow and fund infrastructure. Borrowing for the balance of 2008 and through 2009 is estimated to be $800 million. A one per cent increase to the currently projected five per cent long term rate would increase annual costs by $8 million. All industries are facing a labour shortage influenced by the demographics of the baby boomer bubble reaching retirement age in a time of expansion. We are meeting the challenges, the most significant of which is in the area of skilled trades. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS (CONTINUED) YEAR ENDED DECEMBER 31, 2007 (all tabular amounts in thousands) In 2008, TransLink will be supplementing the new governance, planning and funding structure mandated by provincial legislation. The board of directors is now established through a selection process that identifies individuals who have expertise in the disciplines required to govern TransLink. The Mayors' Council appoints the board from those individuals recommended from the selection process and approves additional funding required to expand the system. A new CEO will be appointed by the board in 2008 to take over the reins from Pat Jacobsen, who, after seven years of leadership, has decided to pursue other challenges. TransLink is well positioned to take on the future. We have over $400 million in accumulated funding, which, along with growth in our base revenues, will enable us to fund our current commitments. There is unprecedented support for the need to invest, but we will require time to gain a consensus on what form new revenues should take to enable us to fund the required expansion. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS APPENDIX YEAR ENDED DECEMBER 31, 2007 (all tabular amounts in thousands) GOVERNANCE FRAMEWORK The South Coast British Columbia Transportation Authority Act ("the Act") establishes a multi-tiered governance structure for TransLink that includes the following entities: the Board of Directors, the Mayors' Council on Regional Transportation and the Regional Transportation Commissioner. In addition, a Screening Panel, established annually, is responsible for nominating candidates for appointment to the Board and setting Director compensation. Mayors' Council The Mayors' Council is comprised of all of the mayors in the transportation service region. Currently, it is composed of the 21 mayors of municipalities within Metro Vancouver. The Mayors' Council appoints the Board of Directors, the Regional Transportation Commissioner and up to two Deputy Commissioners, subject to processes stipulated in the Act. It approves or rejects any supplements to TransLink's 10-year strategic plan. Regional Transportation Commissioner The Regional Transportation Commissioner is appointed by the Mayors' Council. The Commissioner advises TransLink and the Mayors' Council of the reasonableness and appropriateness of the projections and parameters included in the base plan submitted by TransLink each year. The Commissioner also approves cash fare increases above inflation, and approves the TransLink's plans for annual customer surveys, its customer complaint process and any proposed disposition of major assets. Screening Panel The Screening Panel is established annually and comprised of one eligible individual appointed by each of the following entities: the Minister of Transportation, the Mayors' Council, the Institute of Chartered Accountants of British Columbia, the Vancouver Board of Trade, and the Greater Vancouver Gateway Society. The Screening Panel nominates candidates for appointment to the Board and sets the level of compensation payable to the Board members. Board of Directors The Board is the legal governing body of TransLink and has responsibility for stewardship of the affairs of TransLink by overseeing the conduct of business, supervising Management (which is responsible for the day-to- day conduct of the business), and endeavoring to ensure that all major issues affecting the business and affairs of TransLink are given proper consideration. The Board engages the Chief Executive Officer (CEO) and delegates responsibility to the CEO for the day-to-day leadership and management of the organization. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS APPENDIX (CONTINUED) YEAR ENDED DECEMBER 31, 2007 (all tabular amounts in thousands) In performing its functions, the Board is responsible for fostering the long-term success of TransLink and considers the legitimate interests held by stakeholders, including the Mayors' Council, the Provincial Government, suppliers, customers, the public, and TransLink's employees. The Board has responsibility and the mandate to make decisions in the interest of TransLink within the limits established by the Act. As of January 1, 2008, the Board is comprised of the following Directors: Chair: Dale Parker Members: James Bruce, Cindy Chan Piper, R.W. (Bob) Garnett, Sarah Goodman, Nancy Olewiler, Robert Tribe, Leslie (Skip) Triplett, David Unruh The Board Governance Manual defines the roles and responsibilities and the processes for accountability of the Board, Board Chair, Committees, Committee Chairs and Directors, and establishes guidelines that outline how the Board will carry out its duties of stewardship and accountability. The Board Manual incorporates the Board's responsibilities as set out in the Act. Nomination of Directors The Board is composed of nine part-time Directors appointed by the Mayors' Council on the recommendation of the Screening Panel. The terms of the first Directors (appointed effective January 1, 2008) are: three Directors appointed for three years, three Directors appointed for two years, and three Directors appointed for one year. Thereafter, each Director is appointed for a three year term. Directors may be re-appointed and may serve for a maximum of six years. The recruitment of Directors is undertaken with the objective of ensuring the Board is composed of members who have the skills and experience to effectively monitor the performance of TransLink, and add value and provide support to Management in establishing strategy, reviewing risks and opportunities, and accountability to the public. Pursuant to the Act, the Board must establish a Board Skills and Experience Profile which is recorded in the Articles, and reflects the personal characteristics and specific competencies viewed as required for the Board. In order to provide guidance on the skills and experience required in new Director candidates, the Governance Committee develops and updates a Director Recruitment Profile that sets out the skills and experience sought in new Director candidates. The Director Recruitment Profile is developed considering the optimal board composition as set out in the Board Skills and Experience Profile, the skills and experience of existing Directors, and the "gaps" to be filled by the appointment of new Directors. The Board Skills and Experience Profile and Director Recruitment Profile are provided to the Mayors' Council and Screening Panel, who use them as the basis for nominating and selecting the Directors. The Screening Panel is South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS APPENDIX (CONTINUED) YEAR ENDED DECEMBER 31, 2007 (all tabular amounts in thousands) required to nominate at least five candidates for appointment by September 15 of each year. The Mayors' Council is to appoint three of the nominees as Directors within 45 days of receiving the Screening Panel's list of nominees Compensation The Screening Panel sets the compensation for the Directors. Pursuant to the Act, the Screening Panel conducts an annual review of Director compensation to ensure Directors are appropriately compensated for their contributions. In making its recommendations to the Board, the Screening Panel takes into account the types of compensation and the amounts paid by other comparable companies. The Board is required to incorporate the Screening Panel's determination of compensation into the Articles and set guidelines for the payment of Director compensation and reimbursement of expenses. Orientation and Continuing Education New Directors are provided with a comprehensive orientation after joining the Board. The Governance Committee, with the assistance of Management, ensures that there is an appropriate orientation program for new Directors. The goals of the orientation program are to ensure that each new Director fully understands the formal governance structure, the role of the Board, its supporting Committees, and the expectations with respect to individual performance as set out in the Director's terms of reference. The orientation program also helps each new Director build an understanding of TransLink, its operations and working environment. The Board is committed to ongoing professi onal development for Directors. The Board identifies professional development opportunities for Directors, to be provided throughout the year Board Meetings The Board typically holds six regular business meetings per year. In addition, the Board holds a strategy session at least annually and may hold additional special meetings as required. The Board and Management recognize that there is a regular need for the Board to meet without Management in attendance. Every regular Board and Committee meeting is followed by an in camera meeting of Directors, without Management present. TransLink values public input and participation and the Board believes that there are significant benefits for both the public and the Board through opportunities to receive direct public input. The Board publishes a summary of the items that it anticipates it will be deciding upon at a regularly scheduled Board meeting on the TransLink website five days before each of its meetings, and allocates time at the start of every meeting to receive presentations on items that will be decided during the meeting. The Board will post a summary of any decisions made by the Board to the TransLink website, within two days of the conclusion of a Board meeting. Decisions on matters that are deemed confidential by the Board will not be published. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS APPENDIX (CONTINUED) YEAR ENDED DECEMBER 31, 2007 (all tabular amounts in thousands) Code of Conduct The Board Governance Manual sets out the Directors and Officers Code of Conduct and Conflict of Interest Guidelines, which provides general guidance on the standards of conduct expected of Directors and Officers. The purpose of the Code of Conduct is to promote honest and ethical conduct, focus the Directors and Officers of TransLink on areas of ethical risk, provide guidance to Directors and Officers to help them recognize and deal with conflicts of interest and ethical issues, provide mechanisms to report unethical conduct and help preserve the culture of honesty and accountability at TransLink and its subsidiaries. Directors are required annually to attest to their compliance with the Code of Conduct in writing. In addition to the general provisions regarding conflict of interest outlined in the Board Manual, the Act sets out minimum standards with respect to conflicts of interest. In all cases where Directors have a conflict of interest as defined in the Act, the Director must disclose the conflict immediately upon becoming aware of it. With respect to certain types of conflict, the Director must eliminate the conflict or resign from the Board whereas in other cases, the Director must refrain from participating or voting in a matter where the subject matter is being discussed, not communicate with other Directors on the subject and not attempt to influence others with respect to the subject matter. TransLink has engaged a Conduct Review Advisor who reports through the Board Chair's office. The Conduct Review Advisor is a neutral and independent resource to provide a clear interpretation of the standards of business conduct and guidelines for conflict of interest Board Committees Pursuant to the Act, TransLink may establish such committees as are appropriate to assist the Board in carrying out its work. Board committees analyze in depth, policies and strategies developed by management which are consistent with the Committees' Charter. Committees examine proposals and, subject to limitations under applicable laws, make decisions or make recommendations to the full Board. Committees may not take action or make decisions on behalf of the Board unless specifically mandated to do so. Committee Chairs and members are appointed by the Board at the first Board meeting after January 1st of each year, on the recommendation of the Board Chair. Committee members and Chairs are appointed for one-year terms, may be appointed for consecutive terms, and may belong to more than one Committee at one time. Audit Committee (at January 1, 2008): Chair: Bob Garnett I Members: Robert Tribe, Skip Triplett The Audit Committee assists the Board in fulfilling its obligations and oversight responsibilities relating to financial planning, the audit process, financial reporting, the system of corporate controls and risk management and, when required, to make recommendations to the full Board for approval. On recommendation of the CEO, the Committee reviews and approves the terms of the Chief Financial Officer and Internal Auditor's engagement or termination. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS APPENDIX (CONTINUED) YEAR ENDED DECEMBER 31, 2007 (all tabular amounts in thousands) As well, the Audit Committee annually reviews any conflicts or complaints made by Directors and Officers under the Code of Conduct. TransLink's policy includes the right of any employee or other person to report an incident or matter directly to the Audit Committee Chair. Audit Committee members have a working familiarity with finance and accounting practices, and at least one Committee member will have a professional accounting designation or related financial management expertise to be considered a financial expert. Governance Committee (at January 1, 2008): Chair: James Bruce I Members: Cindy Chan Piper, Sarah Goodman The Governance Committee is appointed by the Board and has the mandate to: develop and recommend to the Board a set of corporate governance principles; make recommendations regarding the size, composition and charters of the committees of the Board; assist the Board and Board committees with the annual self-evaluation process; develop and recommend to the Board the Board Skills and Experience Profile; and assist the Board in identifying potential Board candidates to recommend to the Screening Panel as appropriate. Human Resources and Compensation Committee (at January 1, 2008): Chair: Nancy Olewiler I Members: Sarah Goodman, Skip Triplett The Human Resources and Compensation Committee is appointed by the Board and has the mandate to assist the Board with respect to all matters relating to human resources, including CEO evaluation and compensation, management development, succession planning, executive compensation, and significant human resources policies. Major Capital Projects Committee (at January 1, 2008): Chair: David Unruh I Members: Cindy Chan Piper, Robert Tribe The Major Capital Projects Committee is appointed by the Board and has the mandate to assist the Board in carrying out its oversight responsibilities with respect to the planning, development and construction of TransLink's major capital projects, exposure to potential cost and schedule variations concerning TransLink's major capital projects, and making recommendations to the Board as appropriate. Projects with a capital value in excess of $50 million are considered a major capital project. As well, all projects that involve an alternative to the traditional design / build procurement model will be delegated to the Committee for oversight. CONSOLIDATED FINANCIAL REPORT 34 MANAGEMENT'S RESPONSIBILITY FOR CONSOLIDATED FINANCIAL STATEMENTS 35 AUDITORS' REPORT 36 CONSOLIDATED STATEMENT OF FINANCIAL POSITION 37 CONSOLIDATED STATEMENT OF OPERATIONS AND CHANGES IN FUND BALANCES 38 CONSOLIDATED STATEMENT OF CASH FLOWS 39 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT'S RESPONSIBILITY FOR CONSOLIDATED FINANCIAL STATEMENTS Scope of Responsibility Management prepares the accompanying financial statements and related information and is responsible for their integrity and objectivity. The statements are prepared in accordance with Canadian generally accepted accounting principles. These financial statement include amounts that are based on management's estimates and judgments. We believe that these statements present fairly the South Coast British Columbia Transportation Authority's finan- cial position and results of operations and that the other information contained in the annual report is consistent with the financial statements. Internal Controls We maintain and rely on a system of internal accounting controls designed to provide reasonable assurance that assets are safeguarded and transactions are properly authorized and recorded. The system includes written policies and procedures, an organizational structure that segregates the duties and a comprehensive program of periodic audits by the internal auditors who independently review and evaluate these controls. We continually monitor these internal accounting controls, modifying and improving them as business conditions and operations change. We recognize the inherent limitations in all control systems and believe our systems provide an appropriate balance between costs and benefits desired while providing reasonable assurance that those errors or irregularities that would be material to the financial statements are prevented or detected in the normal course of business. Board of Directors and Audit Committee The Audit committee, composed of members of the board of directors, oversees management's discharge of its financial reporting responsibilities. The committee recommends for approval to the board of directors, the appoint- ment of the external auditors and fee arrangements. The committee meets regularly with management, our inter- nal auditors and representatives of our external auditors to discuss auditing, financial reporting and internal control matters. The Audit Committee receives regular reports on the internal audit results and evaluation of internal con- trol systems, and it reviews and approves major accounting policies, including alternatives and potential key man- agement estimates or judgments. Both internal and external auditors have access to the Audit Committee without management's presence. The Audit Committee has reviewed these financial statements prior to recommending approval to the board of directors. The board of directors has reviewed and approved the financial statements. On behalf of the South Coast British Columbia Transportation Authority: y PAT JACOBSEN I Chief Executive Officer IAN JARVIS j VP Finance & Corporate Services South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) AUDITORS' REPORT To the Members of the Board of the South Coast British Columbia Transportation Authority We have audited the consolidated statement of financial position of the South Coast British Columbia Transpor- tation Authority (the "Authority") as at December 31, 2007 and the consolidated statements of operations and changes in fund balances and cash flows for the year then ended. These financial statements are the responsibility of the Authority's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and signifi- cant estimates made by management, as well as evaluating the overall financial statement presentation. In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Authority as at December 31, 2007 and the results of its operations and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles. CHARTERED ACCOUNTANTS I Vancouver, Canada. February 22, 2008 $ - $ 57,255 $ 113,271 - - 172,354 285 - 56,791 - - 33,832 12 - 5,326 $ 22,064 108,311 55,594 29,998 4,399 South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) CONSOLIDATED STATEMENT OF FINANCIAL POSITION YEAR ENDED DECEMBER 31, 2007, WITH COMPARATIVE FIGURES FOR 2006 (in thousands of dollars) Restricted Funds General Capital Total Total Fund AirCare Fund 2007 2005 ASSETS Current assets: Cash $ 56,016 Short-term investments 172,354 Accounts receivable 56,506 Supplies inventory 33,832 Prepaid expenses 5,314 220,366 324,022 297 57,255 381,574 inter-fund Long-term investments (market value - $71,561; 2006 - $21,671) (note 3) Debt reserve deposits (note 4) Debt sinking funds (note 5) Capital assets (note 6) 267,415 (2,802) (264,613) 22,055 - 49,300 71,355 - - 37,595 37,595 - - 282,245 282,245 - 1,122 3,085,529 3,086,651 $ 613,492 $ (1,383) $ 3,247,311 $3,859,420 21,171 30,336 257,655 1,999,424 $ 2,528,962 LIABILITIES AND FUND BALANCES (DEFICIT) Current liabilities: Cheques issued in excess of funds on deposit $ - $ - $ - Accounts payable and accrued liabilities 167,920 337 - Current portion of long-term debt (note 7) - - 65,319 Current obligation under capital lease - - - 167,920 337 65,319 $ 168,257 65,319 233,576 $ 607 199,617 44,761 11,171 256,156 Employee future benefits (note 8) 37,761 - - 37,761 34,385 Deferred Concessionaire credits (note 9) 264,613 - - 264,613 72,743 Golden Ears Bridge contractor liability (note 13(1)) - - 538,655 538,555 200,014 Long-term debt (note 7) - - 1,609,668 1,609,668 1,182,843 Non-controlling interest in Transportation Property and Casualty Company Inc 1,673 - - 1,673 1,758 471,967 337 2,213,642 2,685,946 1,747,899 Fund balances (deficit): Invested in capital assets (note 12(a)) - 1,122 927,114 928,236 848,636 Externally restricted (note 12(b)) - - 106,555 106,555 44,960 Unrestricted (deficit) 141,525 (2,842) - 138,683 (112,533) 141,525 (1,720) 1,033,669 1,173,474 781,053 $ 613,492 $ (1,383) $ 3,247,311 $3,859,420 $ 2,528,962 Commitments and contingencies (note 13) See accompanying notes to consolidated financial statements. Approved on behalf of the Board: DALE PARKER I Chair BOB GARNETT I Director South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) CONSOLIDATED STATEMENT OF OPERATIONS AND CHANGES IN FUND BALANCES YEAR ENDED DECEMBER 31, 2007. WITH COMPARATIVE FIGURES FOR 2006 (in thousands of dollars) Restricted Funds General Capital Fund AirCare Fund Total Total Total 2007 2007 2007 2007 2007 2006 (schedule 1) (schedule 2) Revenue: Taxation $ 568,784 $ - $ - $ - $ 568,784 $ 554,092 Transit 327,609 - - - 327,609 309,472 AirCare - 15,975 - 15,975 15,975 21,278 Capital contributions (note 10) - - 323,921 323,921 323,921 263,622 Interest Income - - 28,522 28,522 28,522 21,362 896,393 15,975 352,443 368,418 1,264,811 1,169,826 Expenses: Transportation Operations 601,101 - - - 601,101 560,159 Maintenance on Major Road Network 30,024 - - - 30,024 29,553 Major Road Network capital funding - - 29,238 29,238 29,238 51,822 AirCare - contracted and other services - 15,701 - 15,701 15,701 21,578 Administration 28,512 1,464 - 1,464 29,976 28,585 Transit Police and Security 17,901 - - - 17,901 12,849 Other projects 5,974 - - - 5,974 8,565 Interest on debt - 57,605 57,605 57,605 57,817 Amortization of capital and other assets - 195 74,909 75,104 75,104 66,711 683,512 17,360 161,752 179,112 862,624 837,639 Excess (deficiency) of revenue over expenses before other items 212,881 (1,385) 190,691 189,306 402,187 332,187 Other items: Loss in foreign exchange - - (1,774) (1,774) (1,774) (8,858) Fair value adjustment on financial instruments (note 3) - - (7,200) (7,200) (7,200) - Loss on disposal of capital assets - - (888) (888) (888) (129) Non-controlling interest in loss (income) of Transportation Property and Casualty Company Inc. 86 - - - 86 (155) 86 - (9,862) (9,862) (9,776) (9,142) Excess (deficiency) of revenue over expenses 212,967 (1,385) 180,829 179,444 392,411 323,045 Fund balance (deficit), beginning of year (111,929) (335) 893,327 892;992 781,063 458,018 Net transfer between funds 40,487 - (40,487) (40,487) - - Fund balance (deficit), end of year $ 141,525 $ (1,720) $ 1,033,669 $ 1,031,949 $1,173,474 $ 781,063 See accompanying notes to consolidated financial statements South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) CONSOLIDATED STATEMENT OF CASH FLOWS YEAR ENDED DECEMBER 31, 2007, WITH COMPARATIVE FIGURES FOR 2006 (in thousands of dollars) 2007 2006 Cash provided by (used for): Operations: Excess of revenue over expenses $ 392,411 5 323,045 Items not involving cash (note 14) 77,242 68,219 Changes in non-cash working capital (note 14) (33,942) 97,419 435,711 488,683 Investing: Decrease (increase) in short-term investments (64,043) 14,864 Increase in long-term investments (50,184) (1,502) Increase in debt reserve deposits (7,259) (3,488) Net proceeds from disposal of capital assets 781 (5) Purchase of capital assets (633,620) (640,436) (754,325) (630,567) Financing: Principal payments on capital leases (11,171) (6,580) Golden Ears Bridge contractor contribution (note 13(i)) - 50,000 Bonds issued 527,000 150,000 Issue costs on bonds issued (3,952) (1,125) Bonds matured (76,869) (30,848) Increase in debt sinking funds (24,580) (18,263) --------------- 410,428 143,184 Increase in cash 91,814 1,300 Cash, beginning of year -- 21,457 20,157 Cash, end of year $ 113,271 $ 21,457 Supplementaryinformation: Interest paid $ 77,258 $ 70,252 Golden Ears Bridge contractor funding (note 13(i)) 338,64' 150,014 Canada Line concessionaire funding (note 9) 191,870 11,653 See accompanying notes to consolidated financial statements South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2007, WITH COMPARATIVE FIGURES FOR 2006 (in thousands of dollars) 1 OPERATIONS The South Coast British Columbia Transportation Authority, formerly the Greater Vancouver Transportation Authority, (the "Authority") was established in June 1998 as a not-for-profit organization under the Greater Vancouver Transportation Authority Act (the "Act") to provide for the planning, funding, management and operation of an integrated regional transportation system for the greater Vancouver region, effective April 1, 1999. To achieve this, all transportation operations, assets and liabilities in the greater Vancouver region, formerly owned and operated by BC Transit, except those specified in Section 38 (8)(a) of the Act (most notably the SkyTrain Expo Line guideway and West Coast Express infrastructures), together with the shares of British Columbia Rapid Transit Company Ltd. ("BCRTC") and West Coast Express Limited ('WCE'), were transferred from the Province of British Columbia (the "Province") to the Authority. Also assumed by the Authority during 1999 was a 90% interest in Transportation Property and Casualty Company Inc. ("TPCC"), operations of the Albion Ferry, and administration of the AirCare program. The Authority also acquired a 100% interest in Canada Line Rapid Transit Inc. ("Cl in 2003 and Fraser Bridge Project Ltd. in 2004. The Act was renamed in November 2007 by the British Columbia provincial legislature to South Coast British Columbia Transportation Authority Act and the name of the Authority was changed accordingly. The mandate of the Authority was reconfirmed with possible enlargement in the service region and additional funding sources. 2 SIGNIFICANT ACCOUNTING POLICIES (a) Basis of presentation: The consolidated financial statements are prepared in accordance with Canadian generally accepted accounting principles for not-for-profit organizations. The consolidated financial statements follow the restricted fund method for accounting for contributions and reflect a combination of the Authority's General and Restricted Funds. General Fund: This fund includes the operations of the Authority and its subsidiaries, excluding AirCare, which is a restricted fund. Restricted Funds: Restricted funds include the AirCare and Capital funds. (I) AirCare Fund: This fund is used to record the operations of the AirCare Program, which is a self-funded program (note 12b)). South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) YEAR ENDED DECEMBER 31. 2007, WITH COMPARA11VE FIGURES FOR 2006 (in thousands of dollars) 2 SIGNIFICANT ACCOUNTING POLICIES (continued) (a) Basis of presentation (continued): (ii) Capital Fund: - This fund is used to record the acquisition costs of capital assets and any related long-term debt outstanding -. This fund also includes the capital contributions received and the funding paid to the municipalities for the Major Road Network ("MRN"). The consolidated financial statements include the accounts of the Authority and its subsidiaries: (I) Coast Mountain Bus Company Ltd. ("CMBC"), bus, seabus and community shuttle services; BCRTC, SkyTrain service; WCE, commuter rail services; Fraser River Marine Transportation Ltd. (" FRMT"), ferry services between Maple Ridge and Langley (Albion Ferry); Pacific Vehicle Testing Technologies Ltd. ("PVTT"), administration of AirCare program; CLCO, oversees the study, design, construction, implementation and operation of a rapid transit line (the "Canada Line") from Richmond to the Vancouver International Airport and downtown Vancouver; (vu) Fraser Bridge Project Ltd., oversees the construction and implementation of the Golden Ears Bridge, 592040 B.C. Ltd., development of intelligent transportation systems; and TPCC, insurance liability coverage. All subsidiaries are wholly owned except for TPCC, in which the Authority has a 90% interest. All intercompany balances and transactions have been eliminated upon consolidation. (b) Financial instruments: Effective January 1, 2007, the Authority adopted the Canadian Institute of Chartered Accountants ("CICA") Handbook Section 3855, Financial Instruments - Recognition and Measurement and CICA Section 3861, Financial Instruments - Disclosure and Presentation, and CICA Section 3865, Hedges. These new Handbook Sections provide comprehensive requirements for the recognition and measurement of financial instruments, as well as standards on when and how hedge accounting may be applied South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) YEAR ENDED DECEMBER 31, 2007, WITH COMPARATIVE FIGURES FOR 2006 (in thousands of dollars) 2 SIGNIFICANT ACCOUNTING POLICIES (continued) (b) Financial instruments (continued): Under these new standards, all financial assets and liabilities are classified into one of the following five categories: held for trading, held-to-maturity, loans and receivables, available-for-sale financial assets or other financial liabilities. All financial instruments, including derivatives, are included on the balance sheet and initially measured at fair market value. Subsequent measurement and recognition of changes in fair value of financial instruments depends on their initial classification. Held for trading financial investments are measured at fair value and all gains and losses are included in net income in the period in which they arise. Available-for-sale financial instruments are measured at fair value with revaluation gains and losses included in fund balance. Loans and receivables, held-to-maturity financial investment and other financial liabilities are measured at amortized cost using the effective interest rate method. The standards require derivative instruments to be recorded as either assets or liabilities measured at their fair value unless exempted from derivative treatment as normal purchase and sale. Certain derivatives embedded in other contracts must also be measured at fair value. All changes in the fair value of derivatives are recognized as earnings unless specific hedge criteria are met, which require that an entity must formally document, designate and assess the effectiveness of transaction that received hedge accounting. These new standards had no material impact on previously reported results. The categories of the Authority's financial assets and liabilities are as follows: Financial Assets (i) Held for trading: Cash: Cash is classified as held for trading. Long-term investments: Long-term Investments include non-bank sponsored Asset-Backed Commercial Paper (ABCP) designated as held for trading and recorded at their estimated fair values in accordance with CICA Handbook Section 3855. (i) Available-for-sale: Short-term investments: Short-term investments are fixed income investments with a term to maturity of three months or less from the date of purchase and are designated as available-for-sale and recorded at fair value. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) YEAR ENDED DECEMBER 31 2007 WITH COMPARATIVE FIGURES FOR 2006 (in thousands of dollars) 2 SIGNIFICANT ACCOUNTING POLICIES (continued) (b) Financial instruments (continued): Held to maturity: Debt reserve deposits and debt sinking fund: The Authority classifies debt reserve deposits and debt sinking funds as held to maturity recorded at their amortized costs as these assets are due when the related debt matures (note 5). Long-term investments: Long-term investments include bonds classified as held-to-maturity financial assets and recorded at amortized cost, with any premium or discount on purchase being amortized over the term to maturity of each investment using an effective yield method Declines in value of investments are recognized only when the decline is considered to be other than temporary. Loans and receivables: Accounts receivable: Accounts receivable and accrued interest receivable are recorded at amortized cost less any impairment losses recognized. Financial Liabilities - (v) Held for trading The Authority does not currently hold any financial liabilities classified as held for trading. (vi) Other financial liabilities: Long-term debt: The Authority records long-term debt at their amortized costs. Debt transaction costs, financing costs and bond premium discounts are attributed to the debt incurred and amortized at the same effective rate and term as the underlying debt. Accounts payable and accrued liabilities: Accounts payable and accrued liabilities are recorded at cost. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) YEAR ENDED DECEMBER 31, 2007, WITH COMPARATIVE FIGURES FOR 2006 (in thousands of do/Jars) 2 SIGNIFICANT ACCOUNTING POLICIES (continued) Financial instruments (continued): Hedges NO Derivative financial instruments: The Authority is party to forward foreign exchange contracts (used to manage foreign currency exposures on imported purchases). Gains and losses including fair value adjustments on forward foreign exchange contracts are recognized in income. Derivative financial instruments are utilized by the Authority in the management of its foreign currency rate exposures. The Authority does not utilize derivative financial instruments for trading or speculative purposes. Supplies inventory: Supplies inventory is valued at the lower of average cost and net replacement value. Capital assets: Capital assets have been recorded as follows: (i) Capital assets are recorded at cost, including capitalized interest as described in note 2(e). (/) Capital assets, contributed by the Province and BC Transit to the Authority upon inception, were recorded at fair value at the date of contribution. (/i) Amortization is provided on a straight-line basis over a period not exceeding the estimated useful lives as follows: Asset Years Land improvements 30 Buildings 20-30 Revenue vehicles 5-20 Revenue vehicles under capital leases 20 Equipment 3 -20 SkyTrain and WCE vehicles 30 SkyTrain equipment under capital leases 20 SkyTrain system upgrade 30 AirCare equipment 6 Bridges 20 South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) • . YEAR ENDED DECEMBER 31, 2007, WITH COMPARATIVE FIGURES FOR 2006 (in thousands of dollars) 2 SIGNIFICANT ACCOUNTING POLICIES (continued) Capitalization of interest: Interest incurred in connection with capital acquisitions from the date of advance of funds until the assets are placed in service for transportation purposes is capitalized Interest capitalized during the year ended December 31, 2007 amounted to $24,467,000 (2006- $13,910,000) Major Road Network ("MRN"): Part 2 of the Act provides that the Authority must establish a major road network comprising an integrated system of highways throughout the transportation service region and the Authority must contribute funds to the municipality for the purpose of constructing any part of the MRN within that municipality. The related assets created become the property of the appropriate municipalities who assume all the rights and obligations. As such, the funding is expensed in the statement of operations as incurred Pension plans and employee future benefits: The Authority, its subsidiaries and employees make contributions to either the Public Service Pension Plan or defined contribution pension plans. These contributions are expensed as incurred. Post-retirement and post-employment benefits are also available to the majority of the Authority's employees. The cost of post-retirement benefits is actuarially determined, prorated on service and management's best estimate of retirement ages and expected health care costs. The cost of post-employment benefits to disabled employees is actuarially determined based on future projected benefits of currently disabled employees. The obligation under these post-retirement and post-employment benefit plans are accrued as the employees render services necessary to earn the future benefits. The measurement date of the accrued benefit obligation coincides with the Authority's fiscal year. The most recent actuarial valuation of the plans for funding purposes was December 31, 2007. The plans are unfunded and require no contributions from employees. Employer contributions are made based upon expected annual benefit payments. Actuarial gains (losses) on the accrued benefit obligation arise from differences between actual and expected experience and from changes in the actuarial assumptions used to determine the accrued benefit obligation. The net accumulated actuarial gains (losses) over 10% of the greater of the accrued benefit obligation is amortized over the average remaining service period of active employees. The average remaining service period of the active employees covered by the post-employment plan is 5 years (2006 - 5 years). Deferred Concessionaire credits: Concessionaire credits are deferred until the Canada Line is put in service, at which time the credits will be amortized over the life of the asset. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) YEAR ENDED DECEMBER 31, 2007, WITH COMPARATIVE FIGURES FOR 2006 (in thousands of dollars) 2 SIGNIFICANT ACCOUNTING POLICIES (continued) Revenue recognition: The Authority follows the restricted fund method of accounting for contributions. Contributions from third parties for defined purposes are recognized as revenue in the year they are received in restricted funds. Contributions restricted for the purchase of capital assets are recognized as received in the Capital Fund. Unrestricted contributions are recognized as revenue when received or receivable if the amount to be received can be reasonably estimated and collection is reasonably assured. Income and capital taxes: The Authority is exempt from Canadian Federal and British Columbia Provincial income and capital taxes. The Authority's subsidiaries are filing on the basis that they are exempt from Canadian Federal and British Columbia Provincial income and capital taxes. Foreign currency translation: Transactions of the Authority and its subsidiaries originating in foreign currencies are translated at the rates in effect at the time of the transaction. Monetary items denominated in foreign currencies are translated to Canadian dollars at exchange rates in effect at the balance sheet dates. Foreign exchange gains and losses are included in income. (I) Use of estimates: The preparation of financial statements 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 revenue and expenses during the reporting period. Significant areas requiring the use of estimates include determination of useful lives of capital assets, allowance for doubtful accounts receivable, obsolete inventory, determination of employee future benefits and fair value adjustment on financial instruments. Actual results could differ from those estimates. (m) Future accounting changes: Effective January 1, 2008, the Authority will adopt the Canadian Institute of Chartered Accountants ("CICA") Handbook Section 3031 - Inventories CICA Section 3862 Financial Instruments - Disclosures and CICA Section 3863, Financial Instruments - Presentation. Section 3031 requires inventory to be measured at lower of cost and net realizable value. The standard also provides guidance on the costs that can be capitalized. In addition, previous inventory write-downs must be reversed if the economic circumstances have changed to support an increase in inventory value. Section 3862 provides enhanced presentation requirements with regard to the Authority's financial instruments. It places greater emphasis on disclosures about risks related to recognized and unrecognized financial instruments and how those risks are managed. Section 3863 carries forward unchanged the presentation standard already applicable to the Authority in present accounting standards. The impact of the adoption of these standards is not yet known or reasonable to estimate. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) YEAR ENDED DECEMBER 31, 2007, WITH COMPARATIVE FIGURES FOR 2006 (in thousands of dollars) 3 LONG-TERM INVESTMENTS At December 31, 2007, a subsidiary of the Authority held Canadian non-bank sponsored Asset-Backed Commercial Paper ("ABCP") issued by a number of trusts with an original cost of $56500000. These investments matured during the third quarter of 2007 but, as a result of liquidity issues in the ABCP market, did not settle on maturity. As a result, the Authority classified its ABCP as long-term investments after initially classifying them as cash and cash equivalents. The valuation model used by the Authority to estimate the fair value of its investment in ABCP at December 31, 2007 incorporates probability weighted discounted cash flows considering the best available information regarding market conditions and other factors that a market participant would consider for such investments Where there is no observable market data the Authority has used estimates that it believed to be reasonable Continuing uncertainties regarding the value of the assets which underlie the ABCP, the amount and timing of cash flows and the outcome of the restructuring process could give rise to a further change in the value of the Authority's investment in ABCP The estimated fair value of the investment in ABCP is $49,300,000 at December 31, 2007. The reduction in the fair value of $7,200,000, or 12.7% of the original cost of the ABCF, was recorded as a reduction in net income. 4 DEBT RESERVE DEPOSITS The Authority is required to pay into a debt reserve fund, administered by the Municipal Finance Authority of British Columbia ("MFA"), an amount equal to one-half the average annual installment of principal and interest relative to any debt borrowed. This amount may be paid either in full or in an amount equal to 2% of the principal amount borrowed together with a non interest bearing demand note for the balance If, at any time the Authority does not have sufficient funds to meet payments or sinking fund contributions due on its debt obligations, the payments or sinking fund contributions shall be made from the debt reserve fund The demand notes payable to the MFA are callable only if there are additional requirements to be met to maintain the level of the debt reserve fund, and therefore have not been recorded on the balance sheet 5 DEBT SINKING FUNDS Contributions to the sinking fund, administered by the MFA, are made for all long-term debt obligations. Investments held in the sinking fund, including interest earned, are used to repay the related debt at maturity. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) YEAR ENDED DECEMBER 31, 2007, WITH COMPARATIVE FIGURES FOR 2006 (in thousands of dollars) 6 CAPITAL ASSETS Accumulated 2007 2006 - Cost amortization Net Net Land $ 100,837 $ - $ 100,837 $ 80,365 Land improvements 33,756 7,785 25,971 24,919 Buildings 160,762 45,474 115,288 119,607 Revenue vehicles 648,033 199,014 449,019 235,436 Revenue vehicles under capital leases 8,625 8,625 - 1,106 Equipment 200,853 112,218 88,635 94,187 Skylrain vehicles 230,803 81,342 149,461 159,634 Skylrain equipment under capital leases 29,472 29,472 - 10 Skylrain system upgrade 99,635 20,618 79,017 81,116 WCE vehicles 26,861 5,660 21,201 18,506 Bridges 21,146 1,079 20,067 10,742 Capital projects in progress: Canada Line 1,227,787 - 1,227,787 699,229 Golden Ears Bridge 631,023 - 631,023 274,045 Other capital projects in progress 178,345 - 178,345 200,522 $ 3,597,938 $ - 511,287 $ 3,086,651 $ 1,999,424 7 LONG-TERM DEBT 2007 2006 Sinking fund bonds, weighted average interest rate of 5.30% (effective rate 5.41 %), maturing at various dates from 2008 to 2036, amortized from 10 to 30 years $ 1,530,686 $ 1,006,470 Serial debenture, interest rate of 5.10% (effective rate 5.16%), 20-year term, maturing in 2025 42,805 44,977 Sinking fund bonds, under interest rate and currency conversion agreements, effective weighted average interest rate of 6.14% (effective rate 6.16%), maturing at various dates from 2009 to 2010, amortized over 20 years 101,496 176,157 1,674,987 1,227,604 Less current portion 65,319 44,761 $ 1,609,668 $ 1,182,843 Sinking fund payments, due in each of the next five years, are approximately as follows: 2008 $ 65,319 2009 65,368 2010 62,210 2011 61,053 2012 61,053 South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) YEAR ENDED DECEMBER 31. 2007, WITH COMPARATIVE FIGURES FOR 2006 (in thousands of dollars) 8 PENSION PLANS AND EMPLOYEE FUTURE BENEFITS The Authority, CMBC, PVTT and FRMT and their employees contribute to the Public Service Pension Plan (the "Plan"), which is a multi-employer defined benefit plan, together with other public service employers, in accordance with the Pension (Public Service) Act. The British Columbia Pension Corporation administers the Plan, including the payment of pension benefits, on behalf of the employers and the employees to whom the Act applies Details of the Plan are provided in the Public Accounts of British Columbia. The long-term funding of the Plan is based on the level contribution method. Using this method, employer contribution rates are set out so that, in combination with member contributions, they will .: fully pay for benefits earned by the typical new entrants to the Plan and will maintain the Plan's unfunded accrual liability (UAL) for funding purposes, if any, as a constant percentage of employer payroll. The actuary does not attribute portions of the UAL to individual employers. Contributions to the Plan are expensed in the year when payments are made. The total expense recorded in the financial statements in respect of pension contributions amounts to $24,382,000 (2006 - $21,337,000). Every three years, an actuarial valuation is performed to assess the financial position of the Plan and the adequacy of plan funding. The latest full actuarial valuation, which was carried out as at March 31, 2005, resulted in an unfunded liability of $767,000,000 The employees of WCE and BCRTC are members of defined contribution plans administered by Great West Life, Sun Life and Canada Life. The total expense recorded in the financial statements, in respect of pension contributions under these plans, amounts to $3,238,000 (2006 - $3,026,000) Apart from the post-retirement benefits provided by the Plan, the Authority and CMBC continue to provide life insurance benefits to all retired employees BCBTC also sponsors a post retirement benefit (non pension) plan providing continuing healthcare benefits to retired employees. The total expense recorded in the financial statements, in respect of obligations under these plans, amounts to $3,652,000 (2006 - $3,576,000). The Authority and its subsidiaries also provide Provincial health care, extended health, dental care and life insurance benefits to employees on long-term disability from the date they become disabled (post-employment benefits). The total expense recorded in the financial statements for the year, in respect of obligations under these plans, amounts to $2,760,000 (2006 - $4,776,000). i nformation regarding the Authority's post retirement and post employment plans is as follows Post-retirement Post-employment benefits benefits 2007 2006 - -. Accrued benefit obligation $ 29,538 $ 9,635 $ 39,173 $ 41,187 Fair value of plan assets - - - - - - Funded status (29,538) (9,635) (39,173) (41,187) Balance of unamortized amounts 5,264 (3,852) 1,412 6,802 Accrued benefit liability $ (24,274) $ (13,487) $ (37,761) $ (34,385) Accrued benefit obligation as of December 31: Discount rate Benefit costs for years ended December 31: Discount rate Assumed health care cost trend rates at December 31: Increase in health care cost trend rate Employee future benefit costs recognized in the year: Post-employment and retirement benefits 5.4% -5.5% 4.5% -5,25% 4.5% - 5.25% 4.5% -5.0% 3.0% -10.0% 3.0% -10.0% $ 6,412 $ 8,352 South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) YEAR ENDED DECEMBER 31, 2007, WITH COMPARATIVE FIGURES FOR 2006 (in thousands of dollars) 8 PENSION PLANS AND EMPLOYEE FUTURE BENEFITS (continued) The significant assumptions used are as follows: 2007 2006 Other information regarding the Authority's post-retirement and post-employment plan is as follows: 2007 2006 Employer contributions $ 3,035 $ 2,870 The accrued benefit obligation is not presently funded. 9 DEFERRED CONCESSIONAIRE CREDITS Deferred Concessionaire credits represent the funding provided by the Canada Line Concessionaire towards the design and construction Phases of the Canada Line. It is estimated that the funding to be provided by the Concessionaire will amount to $720,000,000. The ultimate funding obligation of the Concessionaire will not be known until completion of the Project. Upon completion and service commencement of the Project, the total deferred Concessionaire credits will be amortized to income over the remaining term of the concession agreement. 10 CAPITAL CONTRIBUTIONS Capital contributions received during the year 2007 2006 Transfer from the Government: Gas Tax Agreement Funds Public Transit Agreement Funds Public Transit Infrastructure Program Funds $ 49,119 $ - 34,035 73,677 40,332 - 83,154 114,009 Canada Line project: Government of Canada 167,439 125,555 The Province 58,400 17,200 City of Vancouver 14,928 6,858 240,767 149,613 $ 323,921 $ 263,622 Contributions from the Vancouver International Airport Authority totaling $98,592,000 (2006 - $101,132,000) are netted against the related project costs when incurred. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) YEAR ENDED DECEMBER 31, 2007. WITH COMPARATIVE FIGURES FOR 2006 (in thousands of dollars) 11 GAS TAX AGREEMENT, PUBLIC TRANSIT AGREEMENT AND PUBLIC TRANSIT INFRASTRUCTURE PROGRAM Gas Tax Agreement and Public Transit Agreement funding is provided by the Government of Canada. Public Transit Infrastructure Program funding is provided by the Province of British Columbia. The use of the funding is established by a funding agreement between the Authority and the Union of British Columbia Municipalities. Gas Tax Agreement funding may be used towards designated public transit as specified in the funding agreements. Public Transit Agreement and Public Transit Infrastructure Program funding may be applied towards the cost of designated public transit projects, as specified in the funding agreements. Receipts and disbursements for the year are as follows: Gas Tax Agreement Funds 2007 2006 Opening balance of unspent funds $ 40,554 $ - Add: Amount received during the year 49,119 73,678 Interest earned 1,594 1,637 Less: Amount spent on projects (57,225) (34,761) Amount spent on administration (20) - Closing balance of unspent funds $ 34,022 $ 40,554 Public Transit Agreement Funds 2007 2006 Opening balance of unspent funds $ 4,405 $ - Add: Amount received during the year - 40,332 Interest earned 148 156 Less: Amount spent on projects (4,537) (36,083) Amount spent on administration (16) - Closing balance of unspent funds . $ - $ 4,405 Public Transit Infrastructure Program Funds 2007 2006 Opening balance of unspent funds $ - $ - Add: Amount received during the year 34,035 - Interest earned 222 - Less: Amount spent on projects (11,021) - Amount spent on administration Closing balance of unspent funds - $ 23,233 $ - South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) YEAR ENDED DECEMBER 31, 2007, WITH COMPARATIVE FIGURES FOR 2006 (in thousands of dollars) 12 FUND BALANCES - RESTRICTED FUNDS Net change in invested in capital assets: Capital fund: 2007 2006 Net additions to capital assets $ 1,163083 $ 801,868 Amortization of capital assets (74,909) (66,702) Amortization of capital asset charged to capital projects in progress (131) (130) Loss on disposal of capital assets (888) (129) Net proceeds from disposal of capital assets (781) 5 Amount funded by long-term debt (447383) (119,121) Amount funded by deferred Concessionaire credits (264,613) - Amount funded by Golden Ears Bridge contractor liability (338,641) (200,014) Increase in debt reserve deposits 7,259 3,488 Increase in debt sinking funds 24,580 18,263 Principal payments on capital lease 11,171 6,580 78,747 444,108 Balance, beginning of year 848,367 404,259 Balance, end of year $ 927,114 $ 848,367 AirCare: 2007 2006 Purchase of capital assets $ 1,048 $ 236 Amortization of capital assets (195) (9) 853 227 Balance, beginning of year 269 42 Balance, end of year $ 1,122 $ 269 Externally restricted: Capital fund: 2007 2006 Contributions received $ 323,921 $ 263,622 Expenditures of restricted funds (262,326) (218,662) 61,595 44,960 Balance, beginning of year 44,960 - Balance, end of year $ 106,555 $ 44,960 AirCare: AirCare is a self-funded program under Section 50 of the Motor Vehicle Act. Any deficits incurred will be covered through future operations, such that any deficits are eliminated by the end of the program. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) YEAR ENDED DECEMBER 31, 2007s WITH COMPARATIVE FIGURES FOR 2006 (in thousands of do/fats) 13 COMMITMENTS AND CONTINGENCIES: Operating lease payments - WCE: Effective December 28, 1995, BC Transit entered into a 20-year operating lease agreement with Pitney Bowes of Canada Ltd. for the WCE vehicles totaling $62,000,000. This lease was transferred from BC Transit to the Authority effective March 31 1999. In connection with operating the Commuter Rail System, WCE has entered into operating commitments for train operations, rolling stock maintenance, land leases, ticket vending and parking management and miscellaneous services. The total future minimum annual operating lease payments, including railcars, for the next five years and thereafter are as follows: 2008 $ 13,379 2009 12,337 2010 7,951 2011 5,735 2012 and thereafter 21,456 Vehicle emission testing contract - PVTT: PVTT has entered into a contract with Envirotest Ltd. to provide vehicle emission testing services until December 2011, at which time the AirCare program is expected to wind up. The minimum annual fee for each of the contract year is as follows 2008 $ 16,070 2009 16,366 2010 16,701 2011 17,015 Diesel fuel purchase: CMBC has entered purchase contract for diesel fuel for the period February 1, 2007 to January 31, 2009. The contract consists of fixed price and floating price components. The variable rate contract is in effect from the period January 1, 2008 to January 31, 2009 unless another fixed price agreement is subsequently negotiated The approximate payments, relating to the minimum purchase volume for the remaining term of the contract, are as follows: 2008 $ 29,160 2009 2,430 South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) YEAR ENDED DECEMBER 31, 2007, WITH COMPARATIVE FIGURES FOR 2006 (in thousands of dollars) 13 COMMITMENTS AND CONTINGENCIES (continued) Major Road Network (MRN) Capital Funding: The Authority has signed several funding agreements with municipalities on major MRN projects. At December 31, 2007, the net amount of MRN capital funding committed is $181,771,000. This amount will be paid to the municipalities upon completion of the projects. Other operating leases: The Authority is committed to annual lease payments in respect of office premises in the following amounts 2008 $ 6,924 2009 5,733 2010 3,765 2011 3,784 2012 3,802 Purchase of 34 SkyTrain vehicles: In November 2006, the Authority has entered into a contract with Bombardier Inc. to purchase 34 SkyTrain vehicles at a total contract price of $113,210,000. The total amount paid to December 31, 2007 was $48,947,000. The approximate future payments are as follows: 2008 $ 27,969 2009 36,294 (g) Other capital commitments: At December 31, 2007, $167,405,000 has been contractually committed for other capital projects in progress (2006 - $82,971,000). This includes $86,806,000 committed for various buses, community shuttles and HandyDART vehicle purchases. Canada Line: The Canada Line project is a rail based rapid transit line that will link central Richmond, the Vancouver International Airport and downtown Vancouver. CLCO is a special-purpose wholly owned subsidiary of the Authority created specifically to oversee the procurement, design, construction and implementation of the project. CLCO and the Authority have entered into various agreements with the Government of Canada, the Province, the Vancouver International Airport Authority (the "Airport Authority") and the City of Vancouver. These agreements provide for the funding of costs related to the procurement and construction phases of the Canada Line. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) YEAR ENDED DECEMBER 31, 2007, WITH COMPARATIVE FIGURES FOR 2006 (in thousands of dollars) 13 COMMITMENTS AND CONTINGENCIES (continued) (h) Canada Line (continued): The commitment and related funding is as follows (nominal dollars except as otherwise noted): Government of Canada The Province Airport Authority * City of Vancouver External funding Total amount of funding $ 450,000 435,025 300,000 28,970 1,213,995 The Authority 334,625 $ 1,548,620 * The Airport Authority contributions are based on the value of the Canadian dollar at April 1, 2003, subject to annual compounding for cumulative inflation. On July 29, 2005, the original Concession Agreement between CLCO, the Authority and the Concessionaire was entered into concurrently with the completion of the Concessionaire's financing and sub-contracting arrangements. 6t Under the Concession Agreement, the Concessionaire agreed to design, construct, and partially finance the Canada Line and then to operate it over a total term (including construction and operating phases) of 35 years. During the construction phase, CLCO will make payments to the Concessionaire upon the achievement of certain milestones. The Concessionaire assumes price and schedule risk, subject to certain Compensation Events, the occurrence of which will require CLCO to make compensatory payments to the Concessionaire. During the operating phase, CLCO will make monthly payments to the Concessionaire based on the Concessionaire's performance. Construction of the Canada Line started in August 2005 and operations will commence in November 2009. (i) Golden Ears Bridge ("GEB"): In 2006, the Authority entered in a fixed-price contract with the Golden Crossing General Partnership (the "GCGP") whereby the partnership will design, construct, finance, operate, maintain and rehabilitate the GEB The contract was executed in March, 2006 and terminates in 2041. The GCGP is responsible for financing the estimated construction cost of the GEB of $938,000,000. In addition, the GCGP has advanced $50,000,000 to the Authority, which is included in the contractor liability on the statement of financial position. The Authority is responsible for financing the costs it incurs directly, incl uding property acquisition, project planning and development and other third-party costs, estimated to total $216,000,000 for the project. Payments to the GCGP commence on substantial completion of the project. The nominal monthly blended capital and interest payments, which will escalate based on a CPI index, are as follows South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) YEAR ENDED DECEMBER 31, 2007, WITH COMPARATIVE FIGURES FOR 2006 (in thousands of dollars) 13 COMMITMENTS AND CONTINGENCIES (continued) (I) Golden Ears Bridge ("GEB") (continued): July 2009 to December 2009 $500 per month January 2010 to June 2010 $1500 per month July 2010 to June 2011 $3000 per month July 2011 to June 2014 $4000 per month July 2014 to June 2041 $4,792 per month The obligation to the GCGP will bear interest at an effective rate to be established on substantial completion of the project. The effective interest rate on the obligation will be the sum of the implicit interest rate, which establishes the net present value of the payment stream as the cost of the bridge, plus the CPI index. The Authority will also pay the GCGP a monthly Operating, Maintenance, Rehabilitation ("OMR") fee of $315,198, which will also escalate based on a CPI index. The GEB contractor liability balance at December 31, 2007 represents the amount of funding received and the cost of construction-in-progress to be repaid by the capital payments described above. (j) Lawsuits: As at December 31, 2007, there are a number of lawsuits pending against the Authority arising in the ordinary course of business. Management is of the opinion that any successful claims against the Authority, which are not recoverable from the Authority's insurance, are not likely to be material and therefore, no provision has been made in the financial statements for any such liability. 14 STATEMENT OF CASH FLOWS 2007 2005 ltens not involving cash: Amortization of capital assets $ 75,104 $ 66,711 Amortization of capital assets charged to capital projects in progress 131 130 Amortization of bond discount 1,205 1,094 Loss on disposal of capital assets 888 129 Non-controlling interest in income of TPCC (86) 155 $ 77,242 $ 68,219 Changes in non-cash working capital: Increase in accounts receivable Increase in supplies inventory Increase in prepaid expenses Increase (decrease) in accounts payable and accrued liabilities Increase in emolovee future benefits $ (1,197) $ (9,379) (3,834) (3,402) (927) (6) (31,360) 104,724 3,376 5,482 $ (33,942) $ 97,419 South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) YEAR ENDED DECEMBER 31. 2007, WITH COMPARATIVE FIGURES FOR 2006 (in thousands of dollars) 15 FINANCIAL INSTRUMENTS Credit risk: The Authority utilizes various financial instruments. Unless otherwise noted, it is managements opinion that the Authority is not exposed to any significant credit or interest rate risk as a result of these financial instruments Interest rates have been fixed for all long-term debt. The Authority's operations are all based in Canada and exposure to foreign exchange fluctuations is not significant. Fair values: The fair value of debt reserve deposits, debt sinking funds and long-term debt at December 31, 2007 is $37,069,000, $278,294,000, and $1702895000 (2006 - $30,245,000, $256,892,000 and $1,263,858,000), respectively. For all other classes of financial instruments shown in these financial statements, management considers that the carrying amounts approximate fair values due to the immediate or short-term maturity of these financial instruments. 16 COMPARATIVE FIGURES Certain of the comparative figures have been reclassified to conform with current year's financial statement presentation. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) AUDITORS' REPORT ON SUPPLEMENTARY INFORMATION To the Members of the Board We have audited and reported separately herein on the consolidated financial statements of the South Coast British Columbia Transportation Authority as at and for the year ended December 31 2007. Our audit was conducted for the purpose of forming an opinion on the consolidated financial statements taken as a whole. The current year's supplementary information included in Schedules 1 and 2 is presented for purposes of additional analysis and is not a required part of the financial statements. Such supplementary information has been subjected to the auditing procedures applied in the audit of the consolidated financial statements and, in our opinion, is fairly stated in all material respects in relation to the consolidated financial statements taken as a whole. LeA' CHARTERED ACCOUNTANTS I Vancouver, Canada. February 22, 2008 South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) GENERAL FUND - STATEMENT OF OPERATIONS AND FUND BALANCES YEAR ENDED DECEMBER 31. 2007, WITH COMPARATIVE FIGURES FOR 2006 (in thousands of dollars) Schedule 1 2007 2006 Revenue Taxation $ 568,784 $ 554,092 Transit 327,609 309,472 896,393 863,564 Expenses: Bus and Seabus 447,817 415,879 SkyTrain 81,207 77,891 Commuter rail 23,217 22,085 Albion Ferry 5,750 5,631 Contracted services 43,110 38,672 Maintenance on Major Road Network 30,024 29,553 Interfund AirCare charge - (2,697) Administration 28,512 26,660 Transit Police and Security 17,901 12,849 Special projects 4,426 6,728 Other transportation demand initiatives 1,548 1,838 683,512 635,089 Excess of revenue over expenses before other item 212,881 228,475 Other item: Non-controlling interest in loss (income) of Transportation Property and Casualty Company Inc 86 (155) Excess of revenue over expenses 212,967 228,320 Fund balance (deficit), beginning of year (111,929) 49,163 Net transfer between funds 40,487 (389,412) Fund balance (deficit), end of year $141,525 $(111,929) South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) RESTRICTED FUND - STATEMENT OF OPERATIONS AND FUND BALANCES YEAR ENDED DECEMBER 31, 2007, WITH COMPARATIVE FIGURES FOR 2006 (in thousands of dollars) Schedule 2 Capital AirCare Fund Total Total 2007 2007 2007 2006 Revenue: AirCare $ 15,975 $ - $ 15,975 $ 21,278 Capital contributions - 323,921 323,921 263,622 Interest Income - 28,522 28,522 21,362 15,975 352,443 368,418 306,262 Expenses Major Road Network capital funding - 29,238 29,238 51,822 AirCare - contracted and other services 15,701 - 15,701 21,578 Interfund AirCare charge - - - 2,697 Administration 1,464 - 1,464 1,925 Interest on debt - 57,605 57,605 57,817 Amortization of capital and other assets 195 74,909 75,104 66,711 17,360 161,752 179,112 202,550 Excess (deficiency) of revenue over expenses before other items (1,385) 190,691 189,306 103,712 Other items: Loss in foreign exchange - (1,774) (1,774) (8,858) Fair value adjustment on financial instruments - (7,200) (7,200) - Loss on disposal of capital assets - (888) (888) (129) - (9,862) (9,862) (8,987) Excess (deficiency) of revenue over expenses (1,385) 180,829 179,444 94,725 Fund balance (deficit), beginning of year (335) 893,327 892,992 408,855 Net transfer between funds - (40,487) (40,487) 389,412 Fund balance (deficit), end of year $ (1,720) $ 1,033,669 $ 1,031,949 $ 892,992 DISTRICT OF Agenda Item: 2.0 MAPLE RIDGE Council Workshop Meeting of: June 23, 2008 That the minutes of the Council Workshop Meeting of June 16, 2008 be adopted as circulated. "Gordon Robson" CA RIED DEFEATED DEFERRED MAYOR ACTION NOTICE TO: Chief Administrative Officer - Executive Director - Mgr - Economic Development - Mgr - Sustainability & Corp Planning - Gen Mgr - Corporate & Financial RCMP Fire Chief - Dir - Finance - Chief Information Officer - Gen Mgr - Public Works & Developmei - Dir - Planning - Dir - Licenses, Permits & By-laws - Municipal Engineer - Mgr - Corporate and Development Er - Dir- Engineering Operations - Dir - Project Engineering - Gen Mgr - Corn. Dev. & Rec. Services - Dir - Parks & Facilities - Dir - Recreation - Dir - Community Services Clerk's Section - Corporate Officer - Property & Risk Manager - Lynn Marchand - Diana Dalton - Amanda Allen - Amanda Gaunt Karen Kaake The above decision was made at a meeting of the Municipal Council held on the date noted above and is sent to you for notation and/or such action as may be required by your Department. June 23, 2008 / Date Corporate'ficer DISTRICT OF Agenda Item: 4.1 MAPLE RIDGE Council Workshop Meeting of: June 23, 2008 That the staff report dated June 16, 2008 titled 'Detached Garden Suites - Second Open House follow-up report" be received as information and that staff be directed to proceed with the development of a garden suite bylaw which will incorporate comments made at the June 23, 2008 Council Workshop meeting. / Gordon Robson" CAR I'ED DEFEATED DEFERRED MAYOR ACTION NOTICE TO: - Chief Administrative Officer Executive Director - Mgr - Economic Development - Mgr - Sustainability & corp Planning - Gen Mgr - Corporate & Financial RCMP Fire Chief - Dir - Finance - Chief Information Officer ,n Mgr - Public Works & Developmei k' Dir - Planning - Dir - Licenses, Permits & By-laws - Municipal Engineer - Mgr - Corporate and Development Er - Dir - Engineering Operations - Dir - Project Engineering - Gen Mgr - Corn. Dev. & Rec. Services - Dir - Parks & Facilities - Dir - Recreation - Dir - Community Services Clerk's Section - Corporate Officer - Property & Risk Manager - Lynn Marchand - Diana Dalton - Amanda Allen - Amanda Gaunt Karen Kaake The above decision was made at a meeting of the Municipal Council held on the date noted above and is sent to you for notation and/or such action as may be required by your Department. June 23, 2008 Date Corporate Officer DISTRICT OF Agenda Item: 4.2 MAPLE RIDGE Council Workshop Meeting of: June 23, 2008 That the staff report dated June 19, 2008 titled 'Regional Growth Strategy - Update" be received for information. "Gordon Robson" CA DEFEATED DEFERRED AYOR ACTION NOTICE TO: chief Administrative Officer Executive Director Mgr - Economic Development - Mgr - Sustainability & corp Planning - Gen Mgr - corporate & Financial RCMP Fire chief Dir - Finance - chief Information Officer Gen Mgr - Public Works & Developmer - Dir - Planning Dir - Licenses, Permits & By-laws - Municipal Engineer - Mgr - corporate and Development En - Dir - Engineering Operations - Dir - Project Engineering - Gen Mgr - com. Dev. & Rec. Services - Dir - Parks & Facilities - Dir - Recreation - Dir - community Services Clerk's Section - corporate Officer - Property & Risk Manager - Lynn Marchand - Diana Dalton - Amanda Allen - Amanda Gaunt Karen Kaake The above decision was made at a meeting of the Municipal Council held on the date noted above and is sent to you for notation and/or such action as may be required by your Department. June 23, 2008 Date Corporate Officer DISTRICT OF Agenda Item: 4.3 MAPLE RIDGE Council Workshop Meeting of: June 23, 2008 That the District of Mission be thanked for the opportunity to comment on its draft Official Community Plan; and That the District of Mission acknowledge opportunities to work in cooperation with the District of Maple in promoting common interests such as, but not limited to transportation and transit improvements; the mitigation of hazards such as forest interface management; shared economic development and tourism opportunities; and the connectivity of the Trans Canada Trail; and further That the staff report dated June 18, 2008 titled "Mission Official Community Plan Bylaw 2352, 2007" be forwarded to the District of Mission. AMENDMENT TO MOTION That the motion be amended to include the additional clause "; and further That discussions be held between the District of Maple Ridge and the District of Mission pertaining to the future West Coast Express station". CARRIED MOTION AS AMENDED That the District of Mission be thanked for the opportunity to comment on its draft Official Community Plan; and That the District of Mission acknowledge opportunities to work in cooperation with the District of Maple in promoting common interests such as, but not limited to transportation and transit improvements; the mitigation of hazards such as forest interface management; shared economic development and tourism opportunities; and the connectivity of the Trans Canada Trail; and further That the staff report dated June 18, 2008 titled "Mission Official Community Plan Bylaw 2352, 2007" be forwarded to the District of Mission; and further That discussions be held between the District of Maple Ridge and the District of Mission pertaining to the future West Coast Express station. CARRIED AS AMENDED "Gordon Robson" CARRIED DEFEATED DEFERRED MAYOR TO: Chief Administrative Officer - Gen Mgr - Corporate & Financial - Chief Information Officer -_Pen Mgr - Public Works & Developme Dir- Planning - Dir - Licenses, Permits & By-laws - Municipal Engineer - Gen Mgr - Corn. Dev. & Rec. Services Clerk's Section - orporate Officer - Diana Dalton - Amanda Allen Amanda Gaunt ACTION NOTICE The above decision was made at a meeting of the Municipal Council held on the date noted above and is sent to you for notation and/or such action as may be required by your Department. June 23, 2008 Date Corporate Officer DISTRICT OF Agenda Item: 4.6 MAPLE RIDGE Council Workshop Meeting of: June 23, 2008 That the resolution attached as Appendix Ito the report dated June 18, 2008 titled "UBCM Resolution" be supported and forwarded to UBCM for presentation at the UBCM Convention in September 2008. Gordon Robson" CARRIED DEFEATED DEFERRED MAYOR ACTION NOTICE TO: - Chief Administrative Officer Executive Director - Mgr - Economic Development Mgr - Sustainability & Corp Planning Gen Mgr - Corporate & Financial RCMP Fire Chief - Dir - Finance - Chief Information Officer - Gen Mgr - Public Works & Developmei Dir - Planning - Dir - Licenses, Permits & By-laws - Municipal Engineer - Mgr - Corporate and Development Er - Dir - Engineering Operations - Dir - Project Engineering - Gen Mgr - Corn. Dev. & Rec. Services - Dir - Parks & Facilities - Dir - Recreation - Dir - Community Services Clerk's Section - Corporate Officer - Property & Risk Manager - Lynn Marchand 'Diana Dalton —./7Amanda Allen 1/ Amanda Gaunt Karen Kaake VA"Mill MINIMIZER. The above decision was made at a meeting of the Municipal Council held on the date noted above and is sent to you for notation and/or such action as may be required by your Department. June 23, 2008 Date Corporate Officer r 9 9 nil L11L1 111i1 11I1 In 2007, TransLink delivered and cleaner buses to amprovJ We worked to keep our new Fraer River crossing, the Golden Ears Bridge, -•. ,-m on schedule to open in 2009. We also cond make the transit system more accessible, and added new electronic customer information services. - - -, 1• •.: r, sj r i i n r r n: L I I CONTENTS 2 PERFO RMANCE WGHHGHTS 6 YEAR IN REVIEW 8 MANAGEMENT DISCUSSION & ANALYSIS 27 MANAGEMENT DISCUSSION & ANALYSIS APPENDIX 33 CONSOLIDATED FINANCIAL REPORT io 1 1!LI(Hk[)1) tI I .Ir(IC)t 1)/i accountable for the contents of the report, including the selection of performance measures and the reported results. Any conflict the material published in this report and the South Coast British Columbia Transportation Authority Act will be resolved by rr'[ ict. All significant decisions, events and tdent,fi! t Y(.7 .m:' t/. . ......... lwi jlf of the Board of Directors I Dale Parket C1 L. r REVENUES 2001 ($000 s)* Parking Sales Tax Parking Site Tax $14,750 $21,789 Hydro Levy Mission/Other $17,566\ 152 STRONG PERFORMANCE FUELS FUTURE GROWTH TOTAL $896,393 EXPENDITURES 2001 ($O0OS)* Debt i'nlice Service Service Costs r $17,901 $126,457 Tr ansLink- Corporate $29,821 TOTAL $808,474 Amount reported is in accordance with the SCSCTA Act and excludes A,rCare operation. The region's economy is booming, pushing up diesel and gas sales !olumec and providing more tax revenue for transit and road improvements. Transit operating costs went up, but the new revenue plus lower debt servicing costs created better-than-expected financial results. Combining those savings with federal tax credits for transit passes and a return to the region of federal fuel taxes in 2007, TransLink was able to buy more buses more quickly and replace older vehicles with clean-burning diesels and zero-emission electric trolleys Saving money for tomorrow's needs We've added $88 million to our savings account - now over $408 million - to help cover the cost of planned transit and road investments in the future. The system became more efficient than ever in 2007 West Coast Express now recovers 90 per cent of its costs - up from 65 percent in 1999; Skylrain covers all of its operating costs with fares, and bus-only lnes and Global Positioning Systems get more service out of buses without addi ng equipment or staff. Transit fares and fuel tax revenue cover the bulk of transit operating cosi TransLink maintains a great credit rating by managing money care fully which keeps borrowing costs down. , -:i • . •1 * . ,. I ..f.bIIJ T t 1 ltI 1 t - Th AK TRANSIT TRIPS PER YEAR (MILLIONS) - 7-N] lion transit trips 173 BIGGER, BETTER, FASTER, GREENER Maintaining a commitment to zero emission transit One of the biggest transit highlights was the purchase of Metro Vancouver's third generation of trolley buses. The old trolleys were not accessible to disabled people, but the new trolleys are low-floor vehicles that can accommodate wheelchairs, scooters and walkers. 2007 trolisit imptoveinents added Transit use rose 4.2 per cent seven million new rides and took People chose transit for more trips last year, taking advantage of the federal tax about 2,900 cars off the road daily, credit and a major increase in bus, Skylrain and West Coast Express service. reventing the release of approximately 1,000 tonnes of carbon dioxide annually. 400 NEW AND REPLACEMENT TRANSIT VEHICLES IN 2001 ; Replacement vehicle Expansion vehicle ce 1999, TransLink has purchased over and diversified the fleet to provide a variety of new and expanded services. JsLinlk delivered more buses than ever before 2017, making good on promises in the 2005 ?007 Strategic Transportation Plan to provide mor transit service and road improvements West Coast Express Community Shuttle HandyDART Standard Bus Trolley Bus Type of vehicle II a ------- 44 a a a aaa 56 142 157 Number of vehicles Total ROADS, BRIDGES TRANSIT PROJECTS MAJOR CAPITAL 2007 Cash Flow ($000s) MAJOR ROADS Coast Meridian Overpass $ 3,972 204 Street Overpass $ 5,241 BRIDGE REHABILITATION Knight Street Bridge Seismic Upgrade $ 92 Pattullo Bridge Rehabilitation $ 2,712 RAPID TRANSIT Canada Line* $ 150,669 Evergreen Line $ 2,467 BUSES Trolley Buses $ 137,330 Diesel /CNGs $ 64,315 Bus Communication $ 14,091 SKYTRAIN MK II VEHICLES Phase 1 -2009 (34) $ 3,713 GOLDEN EARS BRIDGE* $ 17,242 TOTAL $ 401,844 *Contribution from TransLink only On time and on budget Large capital projects like the Golden Ears Bridge and Canad Line are on time and on budget, despite a hot labour marke for construction workers and rising prices for steel, fuel and concrete. Both projects will open in 2009; the Golden Ears Bridge will pay for itself through tolls. TransLink is responsible for the Major Road Network, 2,310 kilometres of regionally-significant roads and thn bridges. We provide funds to municipalities to maintain those roads, and share costs on minor capital improver 2 rp ..' - 4 g 5i'oA$TL i&e'i Iui Pon C 000, E5 • I,t., .'-Ji.i —--;- __ Al BETTER CHOICES FOR SMARTER TRAVEL Making the transit system more accessible Last year we committed to a comprehensive Access Transit plan to make the entire transit system accessible to everyone. If it works for people with mobility or other impairments, it works better for everyone. Using technology to make your trip better New information tools mean customers can plan their trips on the go. Next Bus text message service lets you check the bus schedule from a mobile phone and Google Transit maps means you can plan your trip wherever there's an internet connection. 2007 DELIVERY CHECK LIST We promised to put transit within walking distance of more people across the region and provide real choices for marter travel. Here's what we did last yeai to meet qrowinq demand for trancit • Quieter, cleaner buses pollute less • More people are within walking distance of transit • Extra service on Vancity U-Pass routes reduces wait times • Longer trips are more attractive with increased highway coach service • Better connections between town centres • New routes do a better job of connecting people with places • Low-floor buses put mobility within reach of more people South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) THE YEAR IN REVIEW YEAR ENDED DECEMBER 31, 2007 (all tabular amounts in thousands) TREND 2007 2006 2005 2004 REVENUES Transit Fares and Advertising A $ 327,609 $ 309,472 $ 292,402 $ 264,448 Fuel Tax A $ 267,636 $ 264,326 $ 254,628 $ 252,294 Other Taxes and Levies A $ 301,148 $ 289,766 $ 245,089 $ 158,792 AirCare V $ 15,975 $ 21,278 $ 26,653 $ 25,148 Total A - $ 912,368 - $ 884,842 $ 818,772 $ 700,682 MAJOR ROAD NETWORK MRN Operating and Maintenance Costs A Albion Ferry Operating Costs A Total A Albion Ferry Boarded Passengers MINOR ROAD CAPITAL AUTHORIZED ALLOCATION (a) U MAJOR ROAD CAPITAL AUTHORIZED ALLOCATION PUBLIC TRANSIT Service Hours A Operating Cost A Revenue Passengers (b) A Boarded Passengers (c) Coast Mountain Bus Bus A Community Shuttle (e) y Total Coast Mountain Bus A West Vancouver Transit A Contracted Community Shuttles (f) A SeaBus A SkyTrain A West Coast Express A HandyDART A Taxi Saver A AIR CAR E Vehicles Tested V Excess Emitting Vehicles Identified (d) V A There has been an upward trend since 2006 V There has been a downward trend since 2006 • The trend is unchanged from 2006 $ 30,024 $ 29,553 $ 28,630 $ 27,384 $ 5.750 - $ 5,631 - $ 5,258 $ 5,218 $35,774 - $ 35,184 $ 33,888 $ 32,602 2.488 2,503 2,522 2,487 $ 20,000 $ 20,000 $ 20,000 $ 20,000 $ 35,000 $ 35,000 $ 35,000 $ 35,000 5,880 5,636 5,392 5,187 $ 585,882 $ 545,125 $ 500,211 $ 467,323 173,377 166,334 160,958 156,840 200,652 192,016 189,887 191,745 4,872 4,954 3,899 2,135 205,524 196,970 193,786 193,880 8,267 7,852 7,615 7,079 1.069 1,010 910 807 5,401 5,193 5,016 4,854 71,213 69,457 •66,292 65,003 2,533 2,286 2,104 2,034 1,219 1,177 1,158 1,160 198 188 184 181 473 604 742 745 82 90 96 122 South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) THE YEAR IN REVIEW YEAR ENDED DECEMBER 31, 2007 (all tabular amounts in thousands) NOTES The MRN Minor Capital Program is a cost sharing partnership between TransLink and the municipalities. TransLink funding covers up to 50 per cent of the eligible costs of approved capital improvements on the MRN. Revenue Passengers' are the number of people who purchased a ticket and traveled to a destination regardless of the number of transfers made to complete the trip. This indicates the level of use of the transit system. "Boarded Passengers" are the total number of passengers using the system, including the initial boardings and transfers along the way. This indicates the capacity the system needs to carry the passengers using all of the different modes (bus, SeaBus, SkyTrain and West Coast Express). In 2001 AirCare implemented a biennial (every two years) testing schedule for 1992 and newer vehicles so fewer vehicles are required to be tested. At the same time, more rigorous testing procedures have led to the identification of more excess emitting vehicles. Also, in 2007, a new seven-model year exemption for the newest model years has been established, resulting in a further reduction in vehicles being tested. CMBC operated two community shuttle routes in 2002, and the number of routes expanded to 12 by the end of 2005. The number of contracted community routes increased from two in 2002 to four in 2005. MAJOR CAPITAL PROJECTS Board Approvals as of Dec 31, 2007 2007 Actual Costs Forecast Approvals 2008+ MAJOR ROADS Robert Bank Rail Corridor Program $ 50,000 $ - $ - Fraser Highway Widening $ 41,000 $ - $ 4,000 Coast Meridian Overpass $ 60,000 $ 3,972 $ - North Fraser Perimeter Road $ - $ - $ 60,000 204 Street Overpass $ 18,000 $ 5,241 $ - Main Street Widening $ - $ - $ 5,000 Murray Clarke Connector $ 46,000 $ - $ - BRIDGE REHABILITATION Knight Street Bridge Seismic U/G $ 16,730 $ 92 $ - Pattullo Bridge Rehabilitation $ 23,870 $ 2,712 $ 38,900 RAPID TRANSIT Canada Line * $391,384 $150,669 $ - Evergreen Line ** $ 57,000 $ 2,467 $ 343,000 BUSES Trolley Bus Purchase $263,000 $137,330 $ 37,055 Diesel/CNGs $275,190 $ 64,315 $ 67,855 Bus Communication $ 47,926 $ 14,091 $ - SKYTRAIN MK II VEHICLES Phase 1 -2009(34) $147,000 $ 3,713 $ - Phase 2 -2010 (14) $ - $ - $ 46,000 GOLDEN EARS BRIDGE* $166,000 $ 17,242 $ - * Contribution from TransLink only * TransLink current funding commitment is S400 million South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS YEAR ENDED DECEMBER 31, 2007 (all tabular amounts in thousands) This Management Discussion and Analysis ("MD&A") provides a discussion and analysis of the financial and operating results of the South Coast British Columbia Transportation Authority ("SCBCTA" or "TransLink") for the 2007 fiscal year and should be read in conjunction with 2007 audited consolidated financial statements and accompanying notes. The statements have been prepared in accordance with Canadian generally accepted accounting principles for not-for-profit organizations. OVERVIEW OF BUSINESS The Greater Vancouver Transportation Authority was established in June 1998 under the Greater Vancouver Transportation Authority Act ("GVTA Act"), to provide for the planning, funding, management and operation of an integrated regional transportation system for the greater Vancouver region, effective April 1, 1999. In November 2007, the provincial legislature passed Bill 43, the Greater Vancouver Transportation Authority Amendment Act, 2007. Bill 43 significantly amends the existing GVTA Act and changes the name of the Act to the South Coast British Columbia Transportation Authority Act ("SCBCTA Act"). An overview of the new governance framework is included in appendix to this analysis. Under the SCBCTA Act, TransLink has the ability to extend its transportation service region north to Pemberton and east to Hope. The extension of the service area is subject to entering into service agreements with municipal jurisdictions. Our current mandate includes the public transit system, custom transit for persons with disabilities, a 2,310 lane-kilometre network of major roads, a vehicle emissions testing program and initiatives to encourage sustainable alternatives to travel by single-occupant vehicles. The purpose of our regional transportation system includes the support of provincial and regional environmental objectives, including greenhouse gas emission reduction and air quality management objectives. We have seven wholly-owned subsidiaries as well as contracts with independent operators for the delivery of transit, road services and travel alternative programs to manage the demand on the transportation system. We fund our operations, capital expenditures, and debt service payments with revenues from transit operations, taxation revenues, capital contributions from senior levels of government, and issuance of long term debt. The SCBCTA Act requires TransLink to produce a long term transportation strategy (30+ years) that is updated every five years, and a rolling 10-year plan that is updated annually. TransLink is required to consult with the public, governments and stakeholders in the service region as these plans are created. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS (CONTINUED) YE/lB ENDED DECEMBER 31, 2007 Transit Operations TransLink operates the public transit system in the greater Vancouver region, which is currently composed of 21 municipalities situated on 2,000 square kilometres of British Columbia's southwestern mainland. Our transit services are delivered primarily through three wholly-owned subsidiaries, utilizing a fleet of 1,407 buses, two passenger ferries, 210 light rail cars, and five commuter rail trains with 37 passenger cars. Coast Mountain Bus Company Ltd., our largest subsidiary, operates 97 per cent of the bus service, which includes 228 electric trolley buses, three B-Line rapid bus services, highway Express Coaches, Community Shuttle minibuses, and two SeaBus passenger ferries across Burrard Inlet. British Columbia Rapid Transit Company Ltd. operates the Expo and Millennium Skylrain lines, the world's longest automated light rapid transit system, connecting downtown Vancouver with the cities of Burnaby, New Westminster and Surrey. West Coast Express Ltd. operates five commuter trains each weekday morning from Mission City in the Fraser Valley to downtown Vancouver with return trips each afternoon. It also contracts out the TrainBus coach bus service, which supplements the commuter train service. TransLink contracts with independent operators for delivery of the following services, and supplies the 369 vehicles utilized by the contractors: HandyDART is a shared-ride custom transit service for people with physical or cognitive disabilities who cannot use conventional services. The service is operated by seven independent contractors utilizing a fleet of 309 HandyDART vehicles provided by TransLink. The supplementary Taxi Saver Program enables eligible users to make trips by taxi with substantial savings. Community Shuttle minibus services in Langley, New Westminster and Bowen Island are operated by independent contractors utilizing a fleet of 21 minibuses. The West Vancouver "Blue Bus" transit service is operated by the District of West Vancouver, utilizing a fleet of 41 buses. Our wholly-owned subsidiary, Canada Line Rapid Transit Inc., was created to oversee the procurement, design, construction and implementation of the Canada Line automated rapid transit line, which will link Vancouver, Richmond and the Vancouver International Airport. Under a private-public partnership agreement, InTransit BC Ltd. was awarded the contract to design, build, construct, operate, maintain and partially finance the Canada Line under a 35 year concession agreement. The Canada Line is scheduled to commence operations in fall 2009, South Coast British Col Li ii bi a Transportation AUthority (forcier p Greater Va ucouver Transportation Authonty) MANAGEMENT DISCUSSION & ANALYSIS (CONTINUED) ENCED DFCFN."lPEP r Security Our South Coast Brihsh C0lLJTh1)H lransporTaton Authority Police Service tSCBC1'A Police Se..'ice" war. established by the Province in 2005 as the first dedicated transit police service in Canada. The SCBCTA police maintain order, safety and security on transit facilities and adjacent areas, and are authorized to enforce laws iiid carry firearms. Roads and Bridges In partnership with the municipalities, we support the Major Road Network ("MRN"), a network of major roads throughout Metro Vancouver. Ownership of, and operational responsibility for, the MRN generally remains with the respective municipalities. We provide funding for the operation, maintenance and rehabilitation of the MRN, and share in the cost of elioihlr' capital imrurnr•'oments Included in the Major Road Network is the Albion Ferry service that connects Langley to Maple Ridge and Pitt Meadows across the Fraser River. Our wholly-owned subsidiary, Fraser River Marine Transportation Company Ltd operates the Albion Ferries service utilizing two 22-vehicle ferries We own and operate the following inter-municipal bridges and structures - Knight Street Bridge system, Pattullo Bridge, Westham Island Bridge, and the Albion Ferry docks. We are currently constructing the Golden Ears Bridge, a new six-lane bridge across the Fraser River in the 200' Street corridor, and associated roadways. Once the bridge is operational in 2009, it will replace the Albion Ferry service. The Golden Crossing General Partnership has been contracted to design, build, finance, operate, maintain and rehabilitate the bridge and its 14-kilometre associated road network TransLink Corporate TransLink Corporate is the organization's head office, responsible for organizational leadership and oversight, and the development of TransLink's strategic transportation and financial plans. Other functions centralized at (lie TransLink Corporate office include major capital project management, legal services, corporate finance, intern. audit, marketinc, public affairs, real estate services, and the transportation demand management program We have also established a wholly-owned subsidiary, 592040 B C. Ltd. dT5 Corporation), to research and rlevewp intelligent transportation systems ('ITS") and technologies The insurance needs of the organization are administered uhi'ough our captive insurance company, Transportatioi Property and Casualty Co., which we co-own with BC Transit (90 per cent owned by TransLink, 10 per cent own( (I by BC Transit). South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS (CONTINUED) YEAR ENDED DECEMBER 31, 2007 (all tabular amounts in thousands) AirCare Under the SCBCTA Act, TransLink must develop and administer programs for certifying motor vehicle compliance with regulations under the Motor Vehicle Act with respect to exhaust emission standards. Our wholly-owned subsidiary, Pacific Vehicle Testing Technologies Ltd., manages the AirCare program which is a mandatory vehicle emissions testing program.in the Metro Vancouver region. The inspection contractor for the AirCare program is Envirotest Canada, which operates the 10 inspection centres. Testing fees are set such that, over the lifetime of the contract, all program costs related to AirCare are recovered through user fees. ACCOUNTING POLICIES Significant accounting policies are disclosed in Note 2 of the Notes to Consolidated Financial Statements Significant Financial Statement Presentation Golden Ears Bridge TransLink has entered into a fixed-price contract with the Golden Crossing General Partnership (DBFO contractor) to design, build, finance, operate, maintain and rehabilitate the Golden Ears Bridge ("GEB"). Even though no capital payment to the DBFO contractor is required until substantial completion is reached, TransLink retains ownership of land and all other assets constructed throughout all phases of the DBFO agreement. Therefore, as the project progresses, TransLink is accruing the cost and related liability of the GEB, based on the estimated fair value of the GEB using the percentage-of-completion method. It is determined that the estimated fair value of the GEB, as at the date of substantial completion using the DBFO contractor's cost and funding models, is the best estimate of the cost of the GEB. Changes in Accounting Policies Financial Instruments Effective January 1, 2007, TransLink adopted the Canadian Institute of Chartered Accountants' new standards on financial instruments. The adoption of these standards has no material impact on opening fund balances or the financial statements for the year ended December 31, 2007. Under these new standards, all financial assets and liabilities are classified into one of the following five categories: held for trading, held-to-maturity, loans and receivables, available-for-sale financial assets or other financial liabilities. All financial instruments, including derivatives, are included on the balance sheet and initially measured at fair market value. Subsequent measurement and recognition of changes in fair value of financial instruments depends on their initial classification. Held for trading financial investments are measured at fair value and all gains and losses are included in net income in the period in which they arise. Available-for-sale financial instruments are measured at fair value with revaluation gains and losses included in fund balance. Loans and receivables, held-to-maturity financial investment and other financial liabilities are measured at amortized cost using the effective interest rate method South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS (CONTINUED) YEAR ENDED DECEMBER 31, 2007 (all tabular amounts in thousands) OPERATING ACTIVITY TransLink evaluates the performance of its operations using key performance measures that are linked to its goals and objectives. Selected operational highlights and performance measures are shown in the table below. (Figures in this table are in actual amounts) Scheduled Transit Service 2007 2006 Change Service hours 5,329,830 5,117,220 212,610 4.2% Revenue passengers 172,070,840 165,073,200 6,997,640 4.2% Revenue passengers per capita 76.49 74.30 2.18 2.9% Service hours per capita 2.37 2.30 0.07 2.9% Average fare per revenue passenger $1.84 $1.82 $0.02 1.1% Operating cost per passenger kilometre $0287 $0286 $0002 0.6% Bus - Average operating cost per service hour $104.59 $101.95 $2.64 2.6% Rail - Average operating cost per train kilometre $8.42 $8.29 $0.13 1.6% Access Transit 2007 2006 Change Service hours 548,860 519,480 29,380 5.7% Revenue passengers 1,308,320 1,260,250 48,070 3.8% Operating cost per revenue passenger $21.11 $20.49 $0.62 3.0% Operating cost per service hour $50.32 $49.70 $0.62 1.2% The primary measures of transit operating activity are service hours and revenue passengers. During 2007, revenue passengers grew in step with our delivered service hours. Transit operations delivered 5.33 million service hours, an increase of 4.2 per cent compared to the same period in 2006. Revenue passengers for the same period were also 4.2 per cent higher than in 2006. J Regional economic and population growth are significant drivers of passenger growth. The employed labour force in the region grew by three per cent in 2007, while the regional population has increased by 1.3 per cent during the year. Given that over 50 per cent of transit trips are commute trips for work, there is a substantive relationship between transit passenger levels and changes in the regional employment levels. Our strong passenger growth also reflects better service levels, our success in attracting new customers, as well as increased usage of transit services by our existing customers. This is supported by the 2.9 per cent increase in revenue passengers per capita in 2007, indicating that transit ridership is growing faster than the regional population. Sources: Statistics Canada Labour Force Survey; and BC Stats Municipal and Regional Population Estimates. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS (CONTINUED) YEAR ENDED DECEMBER 31, 2007 Average fare per revenue passenger grew by 1.1 per cent in 2007 mainly due to an increase in sales of the higher priced two and three-zone transit passes. This change in average fare accounts for 20 per cent of the growth in our fare revenues for the year. The key measures of the cost effectiveness and efficiency of our transit operations are operating cost per passenger kilometre and operating cost per service hour or kilometre. Operating cost per passenger kilometre grew by 0.6 per cent in 2007 as costs grew slightly faster (4.8 per cent) than passenger kilometres (4.2 per cent). The efficiency of bus services is measured by operating cost per service hour while for rail services, the key efficiency driver is cost per train kilometre. In 2007, cost per bus service hour increased by 2.6 per cent and average cost per train kilometre increased by 1.6 per cent, primarily due to increased labour and vehicle maintenance costs. This cost increase is substantially lower than the 4.2 per cent increase in service hours delivered. Access transit services, which is the shared-ride custom transit service we provide under the HandyDART program for customers with physical or cognitive disabilities, is undergoing a major redesign to increase its availability and effectiveness for users. We have increased access transit service hours by 5.7 per cent in 2007. As there is typically a lag between the introduction of new services and ridership growth, and because a larger portion of the new hours were allocated to off-peak service, access transit revenue passengers grew at a slower pace (at 3.8 per cent) than service hours. While the cost of service expansion coupled with lagging ridership levels has resulted in an increase in operating cost per revenue passenger of three per cent in 2007, operating cost per service hour increased by only 1.2 per cent. This increase in cost per service hour is less than the rate of inflation. Consolidated Statement of Operations - Analysis This analysis will review 2007 results compared to 2006 and is organized by fund category. GENERAL FUND The following table summarizes the general fund net operating results for 2007 and 2006. 2007 2006 Change Revenues 896,393 863,564 32,829 Expenses 683,512 635,089 48,423 212,881 228,475 (15,594) Other - 86 (155) 241 Excess of Revenues Over Expenses 212,967 228,320 (15,353) South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS (CONTINUED) YEAR ENDED DECEMBER 3L 2C Revenues Provincial legislation provides TransLink with access to sources of revenues that are used to fund the provision and support of transportation services. In 2007 revenues increased $32.8 million over 2006. Transit revenue grew by $18.1 million and taxation revenues grew by $14.7 million. Revenue growth in 2007 was derived mostly from regional economic and population growth rather than rate increases. The following table provides more detail on the components. Transit Revenue Transit Revenue 2007 2006----- Change Transit Fares 317,649 301,521 16,128 Advertising & Other 9,960 7,951 2,009 327,609 309,472 18,137 Taxation Revenues Motor Fuel Tax 267,637 264,327 3,310 Property Tax 246,891 240,582 6,309 Parking Site Tax 21,789 20,341 1,448 Other 32,467 28,842 3,625 568,784 554,092 14,692 896,393 863,564 32,829 Transit fare revenue increase of $16.1 million (5.3 per cent) is primarily due to the 4.2 per cent increase in the number of passengers carried during the year, with West Coast Express again showing the largest increase at 10.8 per cent. Approximately 20 per cent of the revenue increase is due to average price per ride increasing. The use of prepaid fare media continues to grow as its relative value has increased. Gasoline prices have increased 55 per cent in the last five years while transit cash fares have increased 29 per cent and monthly passes have only increased 10 per cent. In July 2006 the federal government introduced the inclusion of monthly passes as an eligible non-refundable income tax credit further reducing the cost of transit for those who qualify. Sales of monthly and employer passes increased 136,000 or 8.5 per cent during the year. The average purchase price per pass also increased by $0.85 or 1.1 per cent due to faster growth in sales of two and three zone passes Monthly and employer passes account for only 40 per cent of total fare revenue yet They account for $11.6 million or 72 per cent of the $16.1 million increase in fare revenues for 2007. The table below summarizes the rate and volume impact of these passes on the change in fare revenue. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS (CONTINUED) YEAR ENDED DECEMBER 31, 2007 (all tabular amounts in thousands) Revenue and purchases in thousands Monthly Passes 2007 2006 Change % change Purchases 1,590 1,467 123 8.4% Revenue $116,215 $106,051 $10,164 9.6% Average price per purchase $73.09 $72.29 $0.81 1.1% Employer Pass 2007 2006 -. Change % change Purchases 150 137 13 9.8% Revenue $15,143 $13,651 $1,492 10.9% Average price per purchase $100.99 $99.97 $1.02 1.0% Both 2007 2006 Change % change Purchases 1,740 1,604 136 8.5% Revenue $131,358 $119,702 $11,656 9.7% Average price per purchase $75.50 $74.64 $0.85 1.1% % of total fare revenue 41.4% 39.7% 72.3% TotalFareRevenue $317,649 $301,521 $16,128 5.3% Advertising & other revenue is contract-based and provides revenue at a guaranteed minimum (which increases annually) plus additional revenue if advertising sales are above the minimum. In 2007 advertising revenue exceeded the minimum by over $1 million and with the increased guaranteed minimum provided a $1.2 million increase to 2006. An additional $800,000 was realized from increased retail and park and ride lot revenue. Taxation Revenues Motor Fuel Tax revenue increased $3.3 million (1.3 per cent) over 2006. Revenues are from a $0.12 tax per litre on gasoline and diesel fuel sales in the Metro Vancouver area. In 2007 the ratio of litres sold was 84 per cent gasoline and 16 per cent diesel. The diesel percentage has increased steadily over the past five years. From 2006 to 2007, gasoline sales grew 0.6 per cent, while diesel sales grew 11.3 per cent. Diesel sales accounted for $2.1 million of the revenue increase. I In 2007 the average gasoline price at the pump was $1.08 per litre compared to $1.04 for 2006. This upward price trend has been constant over the past five years, with prices rising 55 per cent from $0.70 per litre (2002 dollars). Year 2007 was the first year that gasoline exceeded $1.20 per litre in the Metro Vancouver area. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS (CONTINUED) YEAR ENDED DECEMBER 31. 2007 (all tabular amounts in thousands) There is a strong correlation between high fuel prices and reduced gasoline consumption. This is reflected in a growing trend to more fuel-efficient vehicles and a switch to public transit from private vehicle use. These trends are supported by registered vehicles in the Metro Vancouver area averaging newer model years, more alternative technology vehicles being registered and by the increase in public transit ridership. The strong diesel fuel sales are seen to stem from a buoyant regional economy, notably in the construction sector (labour force growth of three per cent), that supports use of vehicles and machinery that primarily use diesel fuel. Property tax increased $6.3 million (2.6 per cent) over 2006- Property tax is collected on properties within Metro Vancouver based on TransLink board approved rates. The tax rates are set to achieve a target revenue amount, which for 2007 was to be three per cent greater than 2006. Actual revenues were slightly below this target as final property assessment rolls included reductions on assessed values due to a large number of successful assessment appeals. Residential class tax revenue formed the majority of revenues at $128.9 million (52 per cent), with the Business class at $98.7 million (40 per cent). Parking Site Tax was a new revenue source in 2006, implemented as part of the 2005-2007 financial strategy to fund transportation service improvements. Non-residential parking sites within Metro Vancouver are taxed at a rate of $0.78 per square metre of deemed taxable parking area. Gross revenue for 2007 was $21.8 million, with collection costs of $0.6 million listed under expenditures. In 2008 under new legislation from Bill 43, this tax will cease. A tax entitled "Replacement Tax" will collect $9 million from non-residential property classes 2, 4, 5 and 6. Other revenues increased by $3.6 million from 2006 and include the Hydro Levy ($17.6 million) and Parking Sales Tax ($14.7 million). Parking Sales Tax accounts for the majority ($3.2 million) of the increase, as a result of a review initiated by TransLink staff. This review resulted in the Ministry of Small Business & Revenue performing an audit of sales growth and thereby increasing the annual revenue remitted to TransLink from $11.5 million to $14.5 million. Revenue for 2007 included adjustments for 2007 and prior years. EXPENSES Total general fund expenses have increased by $48.4 million compared to 2006. The following table presents the components of the increase 2007 2006 Change Transportation Operations 601,101 560,159 40,942 Maintenance on Major Road Network 30,024 29,553 471 Interfund AirCare Charge - (2,697) 2,697 Administration 28,512 26,660 1,852 Transit Police and Security 17,901 12,849 5,052 Other Projects 5,974 - 8,565 (2,591) Total Expenses 683,512 635,089 48,423 South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS (CONTINUED) YEAR ENDED DECEMBER 31. 2007 (all tabular amounts in thousands) Transportation Operations includes the operating costs of transit subsidiaries, transit contractors, and the Albion Ferry service. Costs have increased by $40.9 million over 2006. The primary cost drivers in this category include labour, material, fuel and the impact of service expansion. A variety of other factors also influence costs Labour - TransLink subsidiaries employ a work force of over 5,700 employees, an increase of 12 per cent over 2006. Of these, 94 per cent are covered by five different labour contracts. Labour is the most significant cost to the subsidiaries, comprising 73 per cent of operating expenses. Economic increases for both unionized and exempt employees were three per cent in 2007 with a cost impact of approximately $10.9 million. Overtime costs increased by $3.5 million due to the continued operator and mechanic labour shortage and inclement weather conditions. Materials and Utilities - Costs increased by $4.9 million in 2007. The majority of the increase ($3.1 million) is due to maintaining higher cost older vehicles during the transition to the new trolley fleet and the maintenance requirements of increasingly sophisticated bus technology. Other factors include higher rail system maintenance costs and increased utilities and uniform expenses. Fuel - Fuel costs in 2007 decreased $1 million from 2006. This was achieved with a savings of $2.3 million by implementing seasonal bio-diesel, offset by a $1.3 million increase in natural gas consumption due to additional CNG buses going into service. Early in 2007, CMBC entered into a diesel fuel contract for the year, which covered their anticipated demand, at a price of 94.84 cents per litre. Service Expansion - Bus service increased by 225,000 hours (5.4 per cent) at a cost of approximately $17.5 million. This reflects both the full year impact of 2006 service expansion and the part-year impact of 2007 expansion. Service increased for the HandyDART fleet by 29,000 hours (5.6 per cent) at a cost of $1.1 million Other - Remaining factors to the transportation operations increase include higher fleet insurance costs ($1.6 million), operating costs for the new South of Fraser HandyDART facility ($800,000) and an increase in rolling stock lease charges ($0.6 million). Higher transit contractor maintenance and other costs have been offset by the $1 million reduction to SkyTrain property taxes. Maintenance on Major Road Network represents the funding provided to the municipalities for the operation, maintenance and rehabilitation of their respective portions of the Major Road Network (MRN). It also includes costs incurred by TransLink for MRN condition assessments, and for maintenance of TransLink-owned bridges. The $471,000 increase is due primarily to an agreed increase to the funding rate (from $12,485/lane kilometre to $12,735) and 0.1 per cent growth in lane kilometres, South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS (CONTINUED) YEAR ENDED DECEMBER 31, 2007 (all tabular amounts in thousands) Interfund AirCare Charge is the annual rental charge for AirCare testing equipment that is transferred from the General Fund to the restricted AirCare fund. Administration is the TransLink corporate head office, including the staffing and support costs for transportation planning, capital management, real estate, finance, human resources and corporate affairs functions. The $1.9 million increase represents the net of higher salary costs ($3.7 million) due to economic and merit increases and approved additional positions, and the lower consulting, market research and communications expenditures that resulted from the implementation of the 2007 budget cost reduction initiative. Transit Police increases by $5.1 million over 2006. A $4.5 million increase in salaries reflects a major restructuring of sworn member salaries (up to 20 per cent) as a result of arbitration and the 2007 collective bargaining process. Retro payments back to December 2005 are included in 2007 actuals. The balance of the additional costs in 2007 are the result of the transfer of building maintenance from Coast Mountain Bus Company Ltd., the leasing of additional office space and parking, and the loss of the recruit grant fees for Police Academy training. Other Projects include various programs, one-time studies and projects as well as expenditures for activities that can no longer be capitalized or deferred. The most significant component of the overall $2.6 million decrease is the $2.1 million decrease in Parking Site tax implementation costs. Legislation has removed this form of revenue, resulting in a reduction in the number of appeals initiated. AIRCARE FUND This is a restricted fund used to record the revenues and expenses of the AirCare vehicle emissions testing program. Under legislation, AirCare fees are designed to recover program costs. 2007 2006 Change Revenue 15,975 Expenses 17,360 21,278 26,209 (5,303) (8,849) Deficit of Revenue over Expenditures (1,385) (4,931) 3,546 Revenues have decreased by $5.3 million, due to the increase of seven-model year exemptions for the newest model years and the bi-annual test fee reduction (from $47 to $45). There were 130,717 fewer inspections performed in 2007. Expenses have decreased by $8.9 million reflecting lower contract expenses from the closure of two test centres and a reduction in test lanes ($5.9 million), the cessation of the annualized equipment charge ($2.7 million) and the secondment of two employees to TransLink without replacement. The operating cost per vehicle inspections has decreased by 16 per cent. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS (CONTINUED) YEAR ENDED DECEMBER 31. 2007 (all tabular amounts in thousands) CAPITAL FUND This fund is used to record the acquisition costs of capital assets and any related long-term debt outstanding. This fund also includes capital contributions received and the funding paid to the municipalities for the Major Road Network. Revenue added to this fund includes interest earned on debt sinking funds and debt reserve deposits, as well as interest earned on surplus cash and federal funds held in a segregated investment account. Charges to the fund include interest related to borrowings and amortization of capital assets. The following summarizes Revenue and Expenses: Revenue 2007 2006 Change Capital contributions 323,921 263,622 60,299 Interest income 28,522 21,362 7,160 Revenues 352,443 284,984 67,459 Expenses Major Road Network capital funding 29,238 51,822 (22,584) Interest on debt 57,605 57,817 (212) Amortization of capital and other assets 74,909 66,702 8,207 Expenses 161,752 - 176,341 (14,589) 190,691 108,643 82,048 Other Loss in foreign exchange (1,774) (8,858) 7,084 Fair value adjustment on financial instruments (7,200) - (7,200) Loss on disposal of capital assets (888) (129) (759) Other - - (9,862) (8,987) (875) Excess of revenue over expenses 180,829 99,656 81,173 Capital contributions are funds received from senior government. Note 10 in the consolidated financial statements detail the different sources and how much was received from each source. The $49.1 million received in 2007 out of the federal government's Gas Tax Agreement Funds represents year three's allocation and has been directed towards the capital cost of replacing 109 conventional service diesel buses, which have all reached the end of their service lives, with 109 alternative fuel (hybrid) buses. In 2006 the amount received out of this fund was higher ($73.7 million) as it reflected the receipt of the first two years' allocations. An amount of $34 million was received from the federal government's Public Transit Infrastructure Program Fund. This funding has been directed towards a further contribution to the purchase of 34 additional skyTrain Mark II cars, 85 Community Shuttle expansion and replacement vehicles, and 125 Custom expansion and replacement vehicles. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS (CONTINUED) YEAR ENDED DECEMBER 31, 2307 (all tabular amounts in thousands) Senior government contributions towards the Canada Line project have increased substantially as the project nears completion. In 2007, $240.8 million (2006— $149.6 million) was received from this project's funding partners: Government of Canada $167.4 million (2006- $125.6 million), Province of British Columbia $58.4 million (2006- $17.2 million), and the City of Vancouver $14.9 million (2006- $6.9 million). Interest income in 2007 is $7.2 million higher compared to 2006 as result of the overall increase in senior government funding which has generally been received in advance of when the funds are spent on eligible capital. This interest income has and will be directed towards funding eligible capital projects and also partly to offset the administrative costs incurred by TransLink in managing these programs. Also, the increase in funds invested in sinking and debt reserve funds has contributed to the increase in interest income. Major Road Network capital funding was $22.6 million less compared to 2006. This was partly due to the fact that two major road projects were completed (Dollarton Bridge Replacement and David Avenue Extension) and fairly large progress payments were made on two on-going major road projects (Fraser Highway Widening and 204th Street Overpass). In 2007, progress payments continue to have been made to these latter two major road projects, although at a reduced rate, as well as the Coast Meridian Overpass. Also, the various municipalities have been slower to implement minor road capital projects and request payment of TransLink contributions toward these projects. Interest on debt remained fairly constant despite long-term debt (including the current portion) increasing to $1,675 million at the end of 2007, (2006- $1,227.6 million). The bond interest increase of $8.5 million and $2.2 million in additional short-term borrowing costs (utilization of the MFA short-term borrowing facility) was almost fully offset by the $10.6 million increase in interest capitalized during construction, reflecting the higher annual average level of capital work-in-progress in 2007 compared to 2006. Amortization of capital and other assets increase of $8.2 million over 2006 reflects the significant additions to the in-service capital asset base in both 2006 and 2007, particularly in revenue vehicles which saw a net increase of $239.9 million in 2007 (2006 - $63.6 million). In 2007 this mostly reflects the delivery and acceptance of the 157 replacement New Flyer electric trolley buses and 126 replacement and expansion Nova buses. Loss on foreign exchange of $1.8 million (2006— $8.9 million) relates to the hedging of the foreign currency exposure on the import purchase denominated in Euro dollars. Fair value adjustment on financial instruments of $7.2 million has been fully explained in Note 3 to the consolidated financial statements. It represents the reduction in the fair value of the original cost of the Canadian non-bank sponsored Asset-Backed Commercial Paper held by a subsidiary of the Authority. Loss on disposal of capital assets reflects net book value in excess of proceeds on the disposal of buses. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS (CONTINUED) YEAR ENDED DECEMBER 31, 2007 (all tabular amounts in thomiSan(s) LIQUIDITY AND CAPITAL RESOURCES The sources of funds for operations, capital expenditures and debt service payments are primarily from taxation, transit revenues, capital contributions from senior levels of government and issuance of long-term debt. Operating activities: Cash provided by operations was $435.7 million (2006 - $488.7 million). The decrease of $53 million is summarized as follows: 2007 2006 Change General Fund 212,967 228,320 (15,353) Capital Fund 180,829 99,656 81,173 AirCare - Net (1385) (4,931) 3,546 Fund Contributions 111 392,411 323,045 69,366 Items not involving cash Amortization of capital and other assets 75,104 66,711 8,393 Others 2,138 1,508 630 Changes in non-cash working capital (2) (33,942) 97,419 (131,361) Cash provided by operations 435,711 488,683 (52,972) (l) Reference is made to Consolidated Statement of Operations for analysis of fund contributions. (2) Includes accounts receivables, inventory, prepaid expenses, accounts payable, and employee future benefits. The $69 million change in fund contributions is due to a higher level of senior government funding. The $131 million change in working capital is due to a major reduction in Canada Line payables. Investing activities: Cash invested was $754.3 million compared to $630.6 million for 2006, a net increase of $123.8 million. 2007 2006 Change Purchase of Capital assets 632,839 Financial instrument assets 121,486 640,441 (9,874) (7,602) 131,360 Cash used for investments 754,325 630,567 123,758 The significant investments in capital assets in 2007 were Canada Line $336.7 million (2006 - $322.5 million), Golden Ears Bridge $18.3 million (2006- $74.7 million), trolley buses $137.3 million (2000 - (3 mi13nn1, sub E5i('., ((-U ...1-i(i •'.l jt' '3(3..1 j-.- .lim-m-. ) fl ii - 5:i5 (2006— $14.9 million increase), an increase in long-term investments, $50.2 million (2006— $1.5 million) and an increase in debt reserve deposits, $7.3 million (2006 - $3.5 million). This increase reflects the significant amount of senior government funding that has been received in advance of when the eligible capital spending is mode South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS (CONTINUED) YEAR ENDED DECEMBER 31, 2007 (a/i tabular amounts in thousands) Financing activities: Financing activities resulted in net proceeds of $410.4 million compared to $143.2 million in 2006. 2007 2006 Change Bonds issued 527,000 150,000 377,000 Bond issue costs (3,952) (1,125) (2,827) Bonds matured (76,869) (30,848) (46,021) Increase in debt sinking funds (24,580) (18,263) (6,317) Principal payments on capital leases (11,171) (6,580) (4,591) Golden Ears Bridge contractor funding -. 50,000 (50,000) Cash provided by financing activities 410,428 143,184 267,244 Bonds are issued through the Municipal Finance Authority of British Columbia ("MFA"). MEA is the central borrowing agency responsible for financing capital requirements of municipalities and regional districts in the Province. (MFA has been bond rated by Fitch Ratings, AAA, Standard & Poor's, AAA, and Moody's Investors Service, Aaa). In addition, TransLink has also been rated by Moody's Investors Service, Aa3 Stable and by Dominion Bond Rating Service, AA. Contributions to the debt sinking funds, including interest earned, are used to repay the related debt at maturity. Long-term debt (including the current portion) at 2007 was $1,675 million (2006 -$1,227.6 million). At the end of 2007 there was no longer any obligations under capital leases (2006 - $11.2 million). In 2006 the DBFO contractor for the Golden Ears Bridge project paid TransLink a once off $50 million licensing fee that was used to fund TransLink's contribution to this project. The following summarizes the change in Cash balance during the year: 2007 2006 Change Operations 435,711 488,683 (52,972) Investing (754,325) (630,567) (123,758) Financing 410,428 143,184 267,244 Increase in cash 91,814 1,300 90,514 Cash, beginning of year 21,457 20,157 1,300 Cash, end of year 113,271 21,457 91,814 South Coast British Colu m bia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS (CONTINUED) YEAR ENDED DECEMBER 31, 2007 (all tabular amounts in thousands) INVESTMENT IN CAPITAL ASSETS TransLink requires continued investment in fleet and infrastructure to increase the capacity of the transportation network, and to maintain and improve service reliability safety and environmental performance. Notable activities during 2007 for the two major construction projects and vehicle, facilities and roads capital programs include: Canada Line Project remains on schedule for service commencement on or before November 30, 2009. Over 55 per cent of the construction timeline has been achieved with 29 of the 52 month construction schedule completed. •. The Project remains on budget. All scheduled contributions from funding agencies have been received. Milestone payments applied to date total $980 million, slightly higher than budgeted. Significant advancement on all fronts of the project: o Second tunnel and elevated guide way work ahead of schedule. o Restoration along Cambie Street has begun. o Pre-cast yard completed and station construction underway. Golden Ears Bridge Project remains on schedule with substantial completion on or before June 30, 2009 and 22 of the 40 month construction schedule being completed. • Net costs to date of $93.2 million include a deduction for the up-front $50 million license fee payment received from the Golden Crossing General Partnership. Foundation work in the river, densification piling for the north bridge approach and preloading for the Lougheed Highway interchange has been completed. • Final agreement has been executed with the project tolling operator, V-Flow, to design, build, operate and maintain the GEB electronic toll collection system. Fleet • Bus fleet deliveries: o Diesel - 126 forty-foot vehicles and 16 sixty-foot articulated vehicles. o Trolley - 137 forty-foot vehicles (order complete) and 20 sixty-foot articulated vehicles. o Other - 44 Community Shuttle vehicles and 56 HandyDART vehicles. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS (CONTINUED) YEAR ENDED DECEMBER 31, 2007 (all tabular amounts in thousands) • West Coast Express 6th spare locomotive delivered. • Third SeaBus: Preliminary design completed and REP issued in December. May 2009 completion date. • SkyTrain vehicles: Preliminary and final design reviews completed and construction commenced. Delivery of first vehicles scheduled for early 2009. Facilities Maintenance and Transportation Training Centre: Functional design completed and rezoning application submitted with review now underway by District of Maple Ridge. Approval of rezoning application is expected mid 2008. SkyTrain Operations and Maintenance Centre Expansion: Building construction commenced in November and track expansion detailed design has been completed. SkyTrain Station Upgrades: Commenced preliminary design for Broadway and conceptual design for Main Street stations. Roads & Bridges North Eraser Perimeter Road: This project is currently in the planning stage. • Fraser Highway Widening: Construction is on going. Coast Meridian Overpass: Design-build proposals have been received and contract will be awarded in January 2008, with completion anticipated in 2010. • 204 Street Overpass: Opened Spring 2007 ahead of schedule. • Main Street Widening: This project is currently in the planning stage. • Murray-Clarke Connector: A memorandum of understanding has been signed between the City of Port Moody and TransLink to advance the project. • Roberts Bank Rail Corridor: TransLink committed $50 million to this $307 million program and signed a Memorandum of Understanding with numerous other funding parties. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS (CONTINUED) YEAR ENDED DECEMBER 31, 2007 (all tabular amounts in thousands) LOOKING AHEAD Looking ahead to 2008 and 2009, the focus of organizational effort will be to develop a long-term transportation strategy, develop a 10-year transportation and financial plan and transition to a new governance model TransLink's new legislation provides more options for additional funding and provides greater certainty for funding sources. TransLink is able to access an additional three cents of fuel tax if matched by an equal amount of increases from other sources (including fares, property taxes and other revenues). Flexibility now exists to invest in real estate associated with future transportation development. We have the ability to increase our property tax and fare revenues by two to three per cent without seeking external approvals. Senior government both at the federal and provincial levels are implementing policy and actions to reduce greenhouse gas emissions and increase transit investment. The federal government transfer of a portion of the fuel tax revenues they collect to cities (roughly equivalent to five cents/litre) has been made permanent. The Province of British Columbia announced a transit plan that outlines $10 billion of investment in our service region, and a commitment of $4.2 billion of funding for these projects. Within our region, there is tremendous support for a quantum leap in investment in transportation and the population of our service regions continues to grow. These factors, along with senior government programs that support increased investment in transportation, will drive an acceleration of investment in transportation infrastructure. Senior government assistance will assist greatly, but a significant amount of funding will need to come from local sources. Our challenge will be to attain a consensus on what will be the most appropriate means to fund the required investment. Expansion beyond what is affordable within our current revenues will require an extensive public consultation process with our key stakeholders and the public. The expanded programs and funding sources will require the approval of the Mayors' Council and the continued support of senior governments to move ahead Current funding enables us to maintain existing service levels. There are risks, with the most significant being fuel costs, interest rates, and access to qualified human resources. Fuel costs have an impact on our transit costs, fuel tax revenues, ridership and required capacity. Fuel tax revenues represent 30 per cent of our revenues and fuel costs are seven per cent of our transit operating budget costs. Interest rates impact our cost to borrow and fund infrastructure. Borrowing for the balance of 2008 and through 2009 is estimated to be $800 million. A one per cent increase to the currently projected five per cent long term rate would increase annual costs by $8 million. All industries are facing a labour shortage influenced by the demographics of the baby boomer bubble reaching retirement age in a time of expansion. We are meeting the challenges, the most significant of which is in the area of skilled trades. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS (CONTINUED) YEAR ENDED DECEMBER 31. 2007 (all tabular amounts in thousands) In 2008, TransLink will be supplementing the new governance, planning and funding structure mandated by provincial legislation. The board of directors is now established through a selection process that identifies individuals who have expertise in the disciplines required to govern TransLink. The Mayors' Council appoints the board from those individuals recommended from the selection process and approves additional funding required to expand the system. A new CEO will be appointed by the board in 2008 to take over the reins from Pat Jacobsen, who, after seven years of leadership, has decided to pursue other challenges. TransLink is well positioned to take on the future. We have over $400 million in accumulated funding, which, along with growth in our base revenues, will enable us to fund our current commitments. There is unprecedented support for the need to invest, but we will require time to gain a consensus on what form new revenues should take to enable us to fund the required expansion. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS APPENDIX YEAR ENDED DECEMBER 31, 2001 (all tabular amounts in thousands) GOVERNANCE FRAMEWORK The South Coast British Columbia Transportation Authority Act ("the Act") establishes a multi-tiered governance structure for TransLink that includes the following entities: the Board of Directors, the Mayors' Council on Regional Transportation and the Regional Transportation Commissioner. In addition, a Screening Panel, established annually, is responsible for nominating candidates for appointment to the Board and setting Director compensation. Mayors' Council The Mayors' Council is comprised of all of the mayors in the transportation service region. Currently, it is composed of the 21 mayors of municipalities within Metro Vancouver. The Mayors' Council appoints the Board of Directors, the Regional Transportation Commissioner and up to two Deputy Commissioners, subject to processes stipulated in the Act. It approves or rejects any supplements to TransLink's 10-year strategic plan. Regional Transportation Commissioner The Regional Transportation Commissioner is appointed by the Mayors' Council. The Commissioner advises TransLink and the Mayors' Council of the reasonableness and appropriateness of the projections and parameters included in the base plan submitted by TransLink each year. The Commissioner also approves cash fare increases above inflation, and approves the TransLink's plans for annual customer surveys, its customer complaint process and any proposed disposition of major assets. Screening Panel The Screening Panel is established annually and comprised of one eligible individual appointed by each of the following entities: the Minister of Transportation, the Mayors' Council, the Institute of Chartered Accountants of British Columbia, the Vancouver Board of Trade, and the Greater Vancouver Gateway Society. The Screening Panel nominates candidates for appointment to the Board and sets the level of compensation payable to the Board members. Board of Directors The Board is the legal governing body of TransLink and has responsibility for stewardship of the affairs of TransLink by overseeing the conduct of business, supervising Management (which is responsible for the day-to- day conduct of the business), and endeavoring to ensure that all major issues affecting the business and affairs of TransLink are given proper consideration. The Board engages the Chief Executive Officer (CEO) and delegates responsibility to the CEO for the day-to-day leadership and management of the organization. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS APPENDIX (CONTINUED) YEAR ENDED DECEMBER 31. 2007 (all tabular amounts in thousands) In performing its functions, the Board is responsible for fostering the long-term success of TransLink and considers the legitimate interests held by stakeholders, including the Mayors Council, the Provincial Government, suppliers, customers, the public, and TransLink's employees. The Board has responsibility and the mandate to make decisions in the interest of TransLink within the limits established by the Act. As of January. 1, 2008, the Board is comprised of the following Directors: Chair: Dale Parker Members: James Bruce, Cindy Chan Piper, R.W. (Bob) Garnett, Sarah Goodman, Nancy Olewiler, Robert Tribe, Leslie (Skip) Triplett, David Unruh The Board Governance Manual defines the roles and responsibilities and the processes for accountability of the Board, Board Chair, Committees, Committee Chairs and Directors, and establishes guidelines that outline how the Board will carry out its duties of stewardship and accountability. The Board Manual incorporates the Board's responsibilities as set out in the Act. Nomination of Directors The Board is composed of nine part-time Directors appointed by the Mayors' Council on the recommendation of the Screening Panel. The terms of the first Directors (appointed effective January 1, 2008) are: three Directors appointed for three years, three Directors appointed for two years, and three Directors appointed for one year. Thereafter, each Director is appointed for a three year term. Directors may be re-appointed and may serve for a maximum of six years. The recruitment of Directors is undertaken with the objective of ensuring the Board is composed of members who have the skills and experience to effectively monitor the performance of TransLink, and add value and provide support to Management in establishing strategy, reviewing risks and opportunities, and accountability to the public. Pursuant to the Act, the Board must establish a Board Skills and Experience Profile which is recorded in the Articles, and reflects the personal characteristics and specific competencies viewed as required for the Board. In order to provide guidance on the skills and experience required in new Director candidates, the Governance Committee develops and updates a Director Recruitment Profile that sets out the skills and experience sought in new Director candidates. The Director Recruitment Profile is developed considering the optimal board composition as set out in the Board Skills and Experience Profile, the skills and experience of existing Directors, and the "gaps" to be filled by the appointment of new Directors. The Board Skills and Experience Profile and Director Recruitment Profile are provided to the Mayors' Council and Screening Panel, who use them as the basis for nominating and selecting the Directors. The Screening Panel is South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS APPENDIX (CONTINUED) YEAR ENDED DECEMBER 31, 2007 (all tabular amounts in thousands) required to nominate at least five candidates for appointment by September 15 of each year. The Mayors' Council is to appoint three of the nominees as Directors within 45 days of receiving the Screening Panel's list of nominees Compensation The Screening Panel sets the compensation for the Directors. Pursuant to the Act, the Screening Panel conducts an annual review of Director compensation to ensure Directors are appropriately compensated for their contributions. In making its recommendations to the Board, the Screening Panel takes into account the types of compensation and the amounts paid by other comparable companies. The Board is required to incorporate the Screening Panel's determination of compensation into the Articles and set guidelines for the payment of Director compensation and reimbursement of expenses. Orientation and Continuing Education New Directors are provided with a comprehensive orientation after joining the Board. The Governance Committee, with the assistance of Management, ensures that there is an appropriate orientation program for new Directors. The goals of the orientation program are to ensure that each new Director fully understands the formal governance structure, the role of the Board, its supporting Committees, and the expectations with respect to individual performance as set out in the Director's terms of reference. The orientation program also helps each new Director build an understanding of TransLink, its operations and working environment. The Board is committed to ongoing professional development for Directors. The Board identifies professional development opportunities for Directors, to be provided throughout the year Board Meetings The Board typically holds six regular business meetings per year. In addition, the Board holds a strategy session at least annually and may hold additional special meetings as required. The Board and Management recognize that there is a regular need for the Board to meet without Management in attendance. Every regular Board and Committee meeting is followed by an in camera meeting of Directors, without Management present. TransLink values public input and participation and the Board believes that there are significant benefits for both the public and the Board through opportunities to receive direct public input. The Board publishes a summary of the items that it anticipates it will be deciding upon at a regularly scheduled Board meeting on the TransLink website five days before each of its meetings, and allocates time at the start of every meeting to receive presentations on items that will be decided during the meeting. The Board will post a summary of any decisions made by the Board to the TransLink website, within two days of the conclusion of a Board meeting. Decisions on matters that are deemed confidential by the Board will not be published. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS APPENDIX (CONTINUED) YEAR ENDED DECEMBER 31. 2007 (all tabular amounts in thousands) Code of Conduct The Board Governance Manual sets out the Directors and Officers Code of Conduct and Conflict of Interest Guidelines, which provides general guidance on the standards of conduct expected of Directors and Officers. The purpose of the Code of Conduct is to promote honest and ethical conduct, focus the Directors and Officers of TransLink on areas of ethical risk, provide guidance to Directors and Officers to help them recognize and deal with conflicts of interest and ethical issues, provide mechanisms to report unethical conduct and help preserve the culture of honesty and accountability at TransLink and its subsidiaries. Directors are required annually to attest to their compliance with the Code of Conduct in writing. In addition to the general provisions regarding conflict of interest outlined in the Board Manual, the Act sets out minimum standards with respect to conflicts of interest. In all cases where Directors have a conflict of interest as defined in the Act, the Director must disclose the conflict immediately upon becoming aware of it. With respect to certain types of conflict, the Director must eliminate the conflict or resign from the Board whereas in other cases, the Director must refrain from participating or voting in a matter where the subject matter is being discussed, not communicate with other Directors on the subject and not attempt to influence others with respect to the subject matter. TransLink has engaged a Conduct Review Advisor who reports through the Board Chair's office. The Conduct Review Advisor is a neutral and independent resource to provide a clear interpretation of the standards of business conduct and guidelines for conflict of interest Board Committees Pursuant to the Act, TransLink may establish such committees as are appropriate to assist the Board in carrying out its work. Board committees analyze in depth, policies and strategies developed by management which are consistent with the Committees' Charter. Committees examine proposals and, subject to limitations under applicable laws, make decisions or make recommendations to the full Board. Committees may not take action or make decisions on behalf of the Board unless specifically mandated to do so. Committee Chairs and members are appointed by the Board at the first Board meeting after January 1St of each year, on the recommendation of the Board Chair, Committee members and Chairs are appointed for one-year terms, may be appointed for consecutive terms, and may belong to more than one Committee at one time. Audit Committee (at January 1, 2008): Chair: Bob Garnett I Members: Robert Tribe, Skip Triplett The Audit Committee assists the Board in fulfilling its obligations and oversight responsibilities relating to financial planning, the audit process, financial reporting, the system of corporate controls and risk management and, when required, to make recommendations to the full Board for approval. On recommendation of the CEO, the Committee reviews and approves the terms of the Chief Financial Officer and Internal Auditor's engagement or termination. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT DISCUSSION & ANALYSIS APPENDIX (CONTINUED) YEAR ENDED DECEMBER 31, 2007 (all tabular amounts in thousands) As well, the Audit Committee annually reviews any conflicts or complaints made by Directors and Officers under the Code of Conduct. TransLink's policy includes the right of any employee or other person to report an incident or matter directly to the Audit Committee Chair. Audit Committee members have a working familiarity with finance and accounting practices, and at least one Committee member will have a professional accounting designation or related financial management expertise to be considered a financial expert. Governance Committee (at January 1, 2008): Chair: James Bruce I Members: Cindy Chan Piper, Sarah Goodman The Governance Committee is appointed by the Board and has the mandate to: develop and recommend to the Board a set of corporate governance principles; make recommendations regarding the size, composition and charters of the committees of the Board; assist the Board and Board committees with the annual self-evaluation process; develop and recommend to the Board the Board Skills and Experience Profile; and assist the Board in identifying potential Board candidates to recommend to the Screening Panel as appropriate. Human Resources and Compensation Committee (at January 1, 2008): Chair: Nancy Olewiler I Members: Sarah Goodman, Skip Triplett The Human Resources and Compensation Committee is appointed by the Board and has the mandate to assist the Board with respect to all matters relating to human resources, including CEO evaluation and compensation, management development, succession planning, executive compensation, and significant human resources policies. Major Capita! Projects Committee (at January 1, 2008): Chair: David Unruh I Members: Cindy Chan Piper, Robert Tribe The Major Capital Projects Committee is appointed by the Board and has the mandate to assist the Board in carrying out its oversight responsibilities with respect to the planning, development and construction of TransLink's major capital projects, exposure to potential cost and schedule variations concerning TransLink's major capital projects, and making recommendations to the Board as appropriate. Projects with a capital value in excess of $50 million are considered a major capital project. As well, all projects that involve an alternative to the traditional desigr / build procurement model will be delegated to the Committee for oversight. 4- 44 hi 7- L -- 7 - p. • I , -4 -- Ii: r AM - k ' WiL / ri -. IW L Jiiii :H1 CONSOLIDATED FINANCIAL REPORT 34 MANAGEMENT'S RESPONSIBILITY FOR CONSOLIDATED FINANCIAL STATEMENTS 35 AUDITORS' REPORT 36 CONSOLIDATED STATEMENT OF FINANCIAL POSITION 37 CONSOLIDATED STATEMENT OF OPERATIONS AND CHANGES IN FUND BALANCES 38 CONSOLIDATED STATEMENT OF CASH FLOWS 39 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS On behalf of the South Coast British Columbia Transportation Authority: /t 1,r4~ I! South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) MANAGEMENT'S RESPONSIBILITY FOR CONSOLIDATED FINANCIAL STATEMENTS Scope of Responsibility Management prepares the accompanying financial statements and related information and is responsible for their integrity and objectivity. The statements are prepared in accordance with Canadian generally accepted accounting principles. These financial statement include amounts that are based on management's estimates and judgments. We believe that these statements present fairly the South Coast British Columbia Transportation Authority's finan- cial position and results of operations and that the other information contained in the annual report is consistent with the financial statements. Internal Controls We maintain and rely on a system of internal accounting controls designed to provide reasonable assurance that assets are safeguarded and transactions are properly authorized and recorded. The system includes written policies and procedures, an organizational structure that segregates the duties and a comprehensive program of periodic audits by the internal auditors who independently review and evaluate these controls. We continually monitor these internal accounting controls, modifying and improving them as business conditions and operations change. We recognize the inherent limitations in all control systems and believe our systems provide an appropriate balance between costs and benefits desired while providing reasonable assurance that those errors or irregularities that would be material to the financial statements are prevented or detected in the normal course of business. Board of Directors and Audit Committee The Audit committee, composed of members of the board of directors, oversees management's discharge of its financial reporting responsibilities. The committee recommends for approval to the board of directors, the appoint- ment of the external auditors and fee arrangements. The committee meets regularly with management, our inter- nal auditors and representatives of our external auditors to discuss auditing, financial reporting and internal control matters. The Audit Committee receives regular reports on the internal audit results and evaluation of internal con- trol systems, and it reviews and approves major accounting policies, including alternatives and potential key man- agement estimates or judgments. Both internal and external auditors have access to the Audit Committee without management's presence. The Audit Committee has reviewed these financial statements prior to recommending approval to the board of directors. The board of directors has reviewed and approved the financial statements. PAT JACOBSEN I Chief Executive Officer AN JARVIS I VP Finance & Corporate Services South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) AUDITORS' REPORT To the Members of the Board of the South Coast British Columbia Transportation Authority We have audited the consolidated statement of financial position of the South Coast British Columbia Transpor- tation Authority (the "Authority") as at December 31, 2007 and the consolidated statements of operations and changes in fund balances and cash flows for the year then ended. These financial statements are the responsibility of the Authority's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and signifi- cant estimates made by management, as well as evaluating the overall financial statement presentation. In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Authority as at December 31, 2007 and the results of its operations and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles. CHARTERED ACCOUNTAN IS Vancouver,Canada. February 22, 2008 South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) CONSOLIDATED STATEMENT OF FINANCIAL POSITION YEAR ENDED DECEMBER 31, 2007, WITH COMPARATIVE FIGURES FOR 2006 (in thousands of dollars) General Fund Restricted Funds Capital - AirCare Fund Total 2007 Total 2006 ASSETS Current assets: Cash $ 56,016 $ - $ 57,255 $ 113,271 $ 22,064 Short-term investments 172,354 - - 172,354 108,311 Accounts receivable 56,506 285 - 56,791 55,594 Supplies inventory 33,832 - - 33,832 29,998 Prepaid expenses -- 5,314 -- 12 - 5,326 4,399 324,022 297 57,255 381,574 220,366 Interfund 267,415 (2,802) (264,613) - - Long-term investments (market value - $71,561; 2006 - $21,67 1) (note 3) 22,055 - 49,300 71,355 21,171 Debt reserve deposits (note 4) - - 37,595 37,595 30,336 Debt sinking funds (note 5) - - 282,245 282,245 257,665 Capital assets (note 6) - 1,122 3,085,529 3,086,651 1,999,424 $ 613,492 $ (1,383) $ 3,247,311 $3,859,420 $ 2,528,962 LIABILITIES AND FUND BALANCES (DEFICIT) Current liabilities: Cheques issued in excess of funds on deposit $ - $ - $ - $ - $ 607 Accounts payable and accrued liabilities 167,920 337 - 168,257 199,617 Current portion of long-term debt (note 7) - - 65,319 65,319 44,761 Currentobligationundercapitallease - - - - 11,171 167,920 337 65,319 233,576 256,156 Employee future benefits (note 8) 37,761 - - 37,761 34,385 Deferred Concessionaire credits (note 9) 264,613 - - 264,613 72,743 Golden Ears Bridge contractor liability (note 13(i)) - - 538,655 538,655 200,014 Long-term debt (note 7) - - 1,609,668 1,609,668 1,182,843 Non-controlling interest in Transportation ! Property and Casualty Company Inc. 1,673 - - 1,673 1,758 471,967 337 2,213,642 2,685,946 1,747,899 Fund balances (deficit): Invested in capital assets (note 12(a)) - 1,122 927,114 928,236 848,636 . Externally restricted (note 12(b)) - - 106,555 106,555 44,960 - - Unrestricted(deficit)141,525 - (2,842)- 138,683 (112,533) 141,525 (1,720) 1,033,669 1,173,474 781,063 $613,492 $ (1,383) $ 3,247,311 $3,859,420 $ 2,528,962 Commitments and contingencies (note 13) See accompanying notes to consolidated financial statements. Approved on behalf of the Board: L:ALL. PAIKLR I Chair flOP (3OPrJL Director South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) CONSOLIDATED STATEMENT OF OPERATIONS AND CHANGES IN FUND BALANCES YEAR ENDED DECEMBER 31, 2007. WITH COMPARATIVE FIGURES FOR 2006 (in thousands of dollars) Restricted Funds General Capital Fund AirCare Fund Total Total Total 2007 2007 2007 2007 2007 2006 (schedule 1) (schedule 2) Revenue: Taxation $ 568,784 $ - $ - $ - $ 568,784 $ 554,092 Transit 327,609 - - - 327,609 309,472 AirCare - 15,975 - 15,975 15,975 21,278 Capital contributions (note 10) - - 323,921 323,921 323,921 263,622 Interest Income - - - - 28,522 28,522 28,522 21,362 896,393 15,975 352,443 368,418 1,264,811 1,169,826 Expenses: Transportation Operations 601,101 - - - 601,101 560,159 Maintenance on Major Road Network 30,024 - - 30,024 29,553 Major Road Network capital funding - - 29,238 29,238 29,238 51,822 AirCare - contracted and other services - 15,701 - 15,701 15,701 21,578 Administration 28,512 1,464 - 1,464 29,976 28,585 Transit Police and Security 17,901 - - - 17,901 12,849 Other projects 5,974 - - - 5,974 8,565 Interest on debt - - 57,605 57,605 57,605 57,817 Amortization of capital and other assets - - 195 74,909 75,104 75,104 66,711 683,512 17,360 161,752 179,112 862,624 837,639 Excess (deficiency) of revenue over expenses before other items 212,881 (1,385) 190,691 189,306 402,187 332,187 Other items: Loss in foreign exchange - - (1,774) (1,774) (1,774) (8,858) Fair value adjustment on financial instruments (note 3) - - (7,200) (7,200) (7,200) - Loss on disposal of capital assets - - (888) (888) (888) (129) Non-controlling interest in loss (income) of Transportation Property and Casualty Company Inc. 86 - - - 86 (155) 86 - -- (9,862) (9,862) (9,776) (9,142) Excess (deficiency) of revenue over expenses 212,967 (1,385) 180,829 179,444 392,411 323,045 Fund balance (deficit), beginning of year (111,929) (335) 893,327 892,992 781,063 458,018 Net transfer between funds 40,487 - (40,487) (40,487) - - Fund balance (deficit), end of year $ 141,525 $ (1,720) $ 1,033,669 $ 1,031,949 $1,173,474 $ 781,063 ird See accompanying notes to consolidated financial statements South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) CONSOLIDATED STATEMENT OF CASH FLOWS YEAR ENDED DECEMBER 31, 2007, WITH COMPARATIVE FIGURES FOR 2006 (in thousands of dollars) 2007 2006 Cash provided by (used for): Operations: Excess of revenue over expenses $ 392,411 $ 323,045 Items not involving cash (note 14) 77,242 68,219 Changes in non-cash working capita/ (note 14) (33,942) 97,419 435,711 488,683 Investing Decrease (increase) in short-term investments (64,043) 14,864 Increase in long-term investments (50,184) (1502) Increase in debt reserve deposits (7,259) (3,488) Net proceeds from disposal of capital assets 781 (5) Purchase of capital assets (633,620) (640,436) (754,325) (630,567) Financing Principal payments on capital leases (11,171) (6,580) Golden Ears Bridge contractor contribution (note 13(i)) - 50,000 Bonds issued 527,000 150,000 Issue costs on bonds issued (3,952) (1,125) Bonds matured (76,869) (30,848) Increase in debt sinking funds (24,580) - (18,263) 410,428 143,184 Increase in cash 91,814 1,300 Cash, beginning of year 21,457 20,157 Cash, end of year $ 113,271 $ 21,457 Supplementary information: Interest paid $ 77,258 $ 70,252 Golden Ears Bridge contractor funding (note 13(i)) 338,641 150,014 Canada Line concessionaire funding (note 9) 191,870 11,653 See accompanying notes to consolidated financial statements. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2007, WITH COMPARATIVE FIGURES FOR 2006 (in thousands of dollars) OPERATIONS The South Coast British Columbia Transportation Authority, formerly the Greater Vancouver Transportation Authority, (the "Authority") was established in June 1998 as a not-for-profit organization under the Greater Vancouver Transportation Authority Act (the "Act") to provide for the planning, funding, management and operation of an integrated regional transportation system for the greater Vancouver region, effective April 1, 1999. To achieve this, all transportation operations, assets and liabilities in the greater Vancouver region, formerly owned and operated by BC Transit, except those specified in Section 38 (8)(a) of the Act (most notably the Sky-Frain Expo Line guideway and West Coast Express infrastructures), together with the shares of British Columbia Rapid Transit Company Ltd. ("BCRTC") and West Coast Express Limited ("WCE"), were transferred from the Province of British Columbia (the "Province") to the Authority. Also assumed by the Authority during 1999 was a 90% interest in Transportation Property and Casualty Company Inc. ("TPCC"), operations of the Albion Ferry, and administration of the AirCare program. The Authority also acquired a 100% interest in Canada Line Rapid Transit Inc. ("CLCO") in 2003 and Fraser Bridge Project Ltd. in 2004. The Act was renamed in November 2007 by the British Columbia provincial legislature to South Coast British Columbia Transportation Authority Act and the name of the Authority was changed accordingly. The mandate of the Authority was reconfirmed with possible enlargement in the service region and additional funding sources. 2 SIGNIFICANT ACCOUNTING POLICIES (a) Basis of presentation: The consolidated financial statements are prepared in accordance with Canadian generally accepted accounting principles for not-for-profit organizations. The consolidated financial statements follow the restricted fund method for accounting for contributions and reflect a combination of the Authority's General and Restricted Funds. General Fund: This fund includes the operations of the Authority and its subsidiaries, excluding AirCare, which is a restricted fund. Restricted Funds: Restricted funds include the AirCare and Capital funds. (i) AirCare Fund: This fund is used to record the operations of the AirCare Program, which is a self-funded program (note 12b)). South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) YEAR ENDED DECEMBER 31, 2007, WITH COMPARATIVE FIGURES FOR 2006 (in thousands of dollars) 2 SIGNIFICANT ACCOUNTING POLICIES (continued) (a) Basis of presentation (continued): (ii) Capital Fund: This fund is used to record the acquisition costs of capital assets and any related long-term debt outstanding. This fund also includes the capital contributions received and the funding paid to the municipalities for the Major Road Network ("MRN"). The consolidated financial statements include the accounts of the Authority and its subsidiaries: Coast Mountain Bus Company Ltd. ("CMBC"), bus, seabus and community shuttle services; BCRTC, Sky-Frain service; WCE, commuter rail services; Fraser River Marine Transportation Ltd. ("FRMT"), ferry services between Maple Ridge and Langley (Albion Ferry); Pacific Vehicle Testing Technologies Ltd. ("PVTf"), administration of AirCare program; CLCO, oversees the study, design, construction, implementation and operation of a rapid transit line (the "Canada Line") from Richmond to the Vancouver International Airport and downtown Vancouver; Fraser Bridge Project Ltd., oversees the construction and implementation of the Golden Ears Bridge; 592040 B.C. Ltd., development of intelligent transportation systems; and TPCC, insurance liability coverage. All subsidiaries are wholly owned except for TPCC, in which the Authority has a 90% interest. All intercompany balances and transactions have been eliminated upon consolidation. (b) Financial instruments: Effective January 1, 2007, the Authority adopted the Canadian Institute of Chartered Accountants ("CICA") Handbook Section 3855, Financial Instruments - Recognition and Measurement and CICA Section 3861, Financial Instruments - Disclosure and Presentation, and CICA Section 3865, Hedges. These new Handbook Sections provide comprehensive requirements for the recognition and measurement of financial instruments, as well as standards on when and how hedge accounting may be applied. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) YEAR ENDED DECEMBER 31, 2007. WITH COMPARATIVE FIGURES FOR 2006 (if: 1housands of c/of/a cs) 2 SIGNIFICANT ACCOUNTING POLICIES (continued) (b) Financial instruments (continued): Under these new standards, all financial assets and liabilities are classified into one of the following five categories: held for trading, held-to-maturity, loans and receivables, available-for-sale financial assets or other financial liabilities. All financial instruments, including derivatives, are included on the balance sheet and initially measured at fair market value. Subsequent measurement and recognition of changes in fair value of financial instruments depends on their initial classification. Held for trading financial investments are measured at fair value and all gains and losses are included in net income in the period in which they arise. Available-for-sale financial instruments are measured at fair value with revaluation gains and losses included in fund balance. Loans and receivables, held-to-maturity financial investment and other financial liabilities are measured at amortized cost using the effective interest rate method. The standards require derivative instruments to be recorded as either assets or liabilities measured at their fair value unless exempted from derivative treatment as normal purchase and sale. Certain derivatives embedded in other contracts must also be measured at fair value. All changes in the fair value of derivatives are recognized as earnings unless specific hedge criteria are met, which require that an entity must formally document, designate and assess the effectiveness of transaction that received hedge accounting. These new standards had no material impact on previously reported results. The categories of the Authority's financial assets and liabilities are as follows: Financial Assets Held for trading: Cash: Cash is classified as held for trading. Long-term investments: Long-term Investments include non-bank sponsored Asset-Backed Commercial Paper (ABCP) designated as held for trading and recorded at their estimated fair values in accordance with CICA Handbook Section 3855. Available-for-sale: Short-term investments: Short-term investments are fixed income investments with a term to maturity of three months or less from the date of purchase and are designated as available-for-sale and recorded at fair value. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) YEAR ENDED DECEMBER 31, 2001, WITH COMPARATIVE FIGURES FOR 20013 (in thousands of dollars) 2 SIGNIFICANT ACCOUNTING POLICIES (continued) (b) Financial instruments (continued): Held to maturity: Debt reserve deposits and debt sinking fund: The Authority classifies debt reserve deposits and debt sinking funds as held to maturity recorded at their amortized costs as these assets are due when the related debt matures (note 5). Long-term investments: Long-term investments include bonds classified as held-to-maturity financial assets and recorded at amortized cost, with any premium or discount on purchase being amortized over the term to maturity of each investment using an effective yield method. Declines in value of investments are recognized only when the decline is considered to be other than temporary. Loans and receivables: Accounts receivable: Accounts receivable and accrued interest receivable are recorded at amortized cost less any impairment losses recognized. Financial Liabilities Held for trading: The Authority does not currently hold any financial liabilities classified as held for trading. Other financial liabilities: Long-term debt: The Authority records long-term debt at their amortized costs. Debt transaction costs, financing costs and bond premium discounts are attributed to the debt incurred and amortized at the same effective rate and term as the underlying debt. Accounts payable and accrued liabilities: Accounts payable and accrued liabilities are recorded at cost. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) YEAR ENDED DECEMBER 31, 2007, 011T111 COMPARATIVE FIGURES FOR 2006 JI L ouSiid9 Of c/OI1,i) 2 SIGNIFICANT ACCOUNTING POLICIES (continued) Financial instruments (continued): Hedges (vii) Derivative financial instruments: The Authority is party to forward foreign exchange contracts (used to manage foreign currency exposures on imported purchases). Gains and losses including fair value adjustments on forward foreign exchange contracts are recognized in income. Derivative financial instruments are utilized by the Authority in the management of its foreign currency rate exposures. The Authority does not utilize derivative financial instruments for trading or speculative purposes. Supplies inventory: Supplies inventory is valued at the lower of average cost and net replacement value. Capital assets: Capital assets have been recorded as follows: Capital assets are recorded at cost, including capitalized interest as described in note 2(e). Capital assets, contributed by the Province and BC Transit to the Authority upon inception, were recorded at fair value at the date of contribution. (ti) Amortization is provided on a straight-line basis over a period not exceeding the estimated useful lives as follows: Asset Years Land improvements 30 Buildings 20-30 Revenue vehicles 5-20 Revenue vehicles under capital leases 20 Equipment 3 -20 SkyTrain and WCE vehicles 30 SkyTrain equipment under capital leases 20 SkyTrain system upgrade 30 AirCare equipment 6 Bridges 20 South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) YEAR ENDED DECEMBER 31. 2007, WITH C0MPARATVE FIGURES FOR 2006 (in thous inds of dollars) 2 SIGNIFICANT ACCOUNTING POLICIES (continued) Capitalization of interest: Interest incurred in connection with capital acquisitions from the date of advance of funds until the assets are placed in service for transportation purposes is capitalized. Interest capitalized during the year ended December 31, 2007 amounted to $24,467,000 (2006 -$13,910,000). Major Road Network ("MRN"): Part 2 of the Act provides that the Authority must establish a major road network comprising an integrated system of highways throughout the transportation service region and the Authority must contribute funds to the municipality for the purpose of constructing any part of the MRN within that municipality. The related assets created become the property of the appropriate municipalities who assume all the rights and obligations. As such, the funding is expensed in the statement of operations as incurred. Pension plans and employee future benefits: The Authority, its subsidiaries and employees make contributions to either the Public Service Pension Plan or defined contribution pension plans. These contributions are expensed as incurred. Post-retirement and post-employment benefits are also available to the majority of the Authority's employees. The cost of post-retirement benefits is actuarially determined, prorated on service and management's best estimate of retirement ages and expected health care costs. The cost of post-employment benefits to disabled employees is actuarially determined based on future projected benefits of currently disabled employees. The obligation under these post-retirement and post-employment benefit plans are accrued as the employees render services necessary to earn the future benefits. The measurement date of the accrued benefit obligation coincides with the Authority's fiscal year. The most recent actuarial valuation of the plans for funding purposes was December 31, 2007. The plans are unfunded and require no contributions from employees. Employer contributions are made based upon expected annual benefit payments. , Actuarial gains (losses) on the accrued benefit obligation arise from differences between actual and expected experience and from changes in the actuarial assumptions used to determine the accrued benefit obligation. The net accumulated actuarial gains (losses) over 10% of the greater of the accrued benefit obligation is amortized over the - average remaining service period of active employees. The average remaining service period of the active employees covered by the post-employment plan is 5 years (2006 - 5 years). Deferred Concessionaire credits: Concessionaire credits are deferred until the Canada Line is put in service, at which time the credits will be amortized over the life of the asset. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) YEAR ENDED DECEMBER 31, 2007, WITH COMPARATIVE FIGURES FOR 2006 (in thousands of dollars) - 2 SIGNIFICANT ACCOUNTING POLICIES (continued) (I) Revenue recognition: The Authority follows the restricted fund method of accounting for contributions. Contributions from third parties for defined purposes are recognized as revenue in the year they are received in restricted funds. Contributions restricted for the purchase of capital assets are recognized as received in the Capital Fund. Unrestricted contributions are recognized as revenue when received or receivable if the amount to be received can be reasonably estimated and collection is reasonably assured. Income and capital taxes: The Authority is exempt from Canadian Federal and British Columbia Provincial income and capital taxes. The Authority's subsidiaries are filing on the basis that they are exempt from Canadian Federal and British Columbia Provincial income and capital taxes. Foreign currency translation: Transactions of the Authority and its subsidiaries originating in foreign currencies are translated at the rates in effect at the time of the transaction. Monetary items denominated in foreign currencies are translated to Canadian dollars at exchange rates in effect at the balance sheet dates. Foreign exchange gains and losses are included in income. (I) Use of estimates: The preparation of financial statements 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 revenue and expenses during the reporting period. Significant areas requiring the use of estimates include determination of useful lives of capital assets, allowance for doubtful accounts receivable, obsolete inventory, determination of employee future benefits and fair value adjustment on financial instruments. Actual results could differ from those estimates. (m) Future accounting changes: Effective January 1, 2008, the Authority will adopt the Canadian Institute of Chartered Accountants ("CICA") Handbook Section 3031 - Inventories, CICA Section 3862, Financial Instruments - Disclosures and CICA Section 3863, Financial Instruments - Presentation. Section 3031 requires inventory to be measured at lower of cost and net realizable value. The standard also provides guidance on the costs that can be capitalized. In addition, previous inventory write-downs must be reversed if the economic circumstances have changed to support an increase in inventory value. Section 3862 provides enhanced presentation requirements with regard to the Authority's financial instruments. It places greater emphasis on disclosures about risks related to recognized and unrecognized financial instruments and how those risks are managed. Section 3863 carries forward unchanged the presentation standard already applicable to the Authority in present accounting standards. The impact of the adoption of these standards is not yet known or reasonable to estimate. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) YEAR ENDED DECEMBER 31, 2007, WITH COMPARATIVE FIGURES FOR 2006 (in thousands of dollars) 3 LONG-TERM INVESTMENTS At December 31, 2007, a subsidiary of the Authority held Canadian non-bank sponsored Asset-Backed Commercial Paper (ABCP') issued by a number of trusts with an original cost of $56,500,000. These investments matured during the third quarter of 2007 but, as a result of liquidity issues in the ABCP market, did not settle on maturity. As a result, the Authority classified its ABCP as long-term investments after initially classifying them as cash and cash equivalents. The valuation model used by the Authority to estimate the fair value of its investment in ABCP, at December 31, 2007, incorporates probability weighted discounted cash flows considering the best available information regarding market conditions and other factors that a market participant would consider for such investments. Where there is no observable market data, the Authority has used estimates that it believed to be reasonable. Continuing uncertainties regarding the value of the assets which underlie the ABCP,the amount and timing of cash flows and the outcome of the restructuring process could give rise to a further change in the value of the Authority's investment in ABCP. The estimated fair value of the investment in ABCP is $49,300,000 at December 31, 2007. The reduction in the fair value of $7,200,000, or 12.7% of the original cost of the ABCP, was recorded as a reduction in net income. 4 DEBT RESERVE DEPOSITS The Authority is required to pay into a debt reserve fund, administered by the Municipal Finance Authority of British Columbia ("MFA"), an amount equal to one-half the average annual installment of principal and interest relative to any debt borrowed. This amount may be paid either in full or in an amount equal to 2% of the principal amount borrowed together with a non-interest bearing demand note for the balance. If, at any time, the Authority does not have sufficient funds to meet payments or sinking fund contributions due on its debt obligations, the payments or sinking fund contributions shall be made from the debt reserve fund. The demand notes payable to the MFA are callable only if there are additional requirements to be met to maintain the level of the debt reserve fund, and therefore have not been recorded on the balance sheet. 5 DEBT SINKING FUNDS Contributions to the sinking fund, administered by the MFA, are made for all long-term debt obligations. Investments held in the sinking fund, including interest earned, are used to repay the related debt at maturity. JA South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) YEAR ENDED DECEMBER 31, 2007, WITH COMPARATIVE FIGURES FOR 2006 (in thousands of dollars) 6 CAPITAL ASSETS Accumulated 2007 2006 Cost amortization Net Net Land $ 100,837 $ - $ 100,837 $ 80,365 Land improvements 33,756 7,785 25,971 24,919 Buildings 160,762 45,474 115,288 119,607 Revenue vehicles 648,033 199,014 449,019 235,436 Revenue vehicles under capital leases 8,625 . 8,625 - 1,106 Equipment 200,853 112,218 88,635 94,187 SkyTrain vehicles 230,803 81,342 149,461 159,634 SkyTrain equipment under capital leases 29,472 29,472 - 10 SkyTrain system upgrade 99,635 20,618 79,017 81,116 WCE vehicles 26,861 5,660 21,201 18,506 Bridges 21,146 1,079 20,067 10,742 Capital projects in progress: Canada Line 1,227,787 - 1,227,787 699,229 Golden Ears Bridge 631,023 - 631,023 274,045 Other capital projects in progress 178,345 - 178,345 200,522 $ 3,597,938 $ 511,287 $ 3,086,651 $ 1,999,424 7 LONG-TERM DEBT Sinking fund bonds, weighted average interest rate of 5.30% (effective rate 5.41 %), maturing at various dates from 2008 to 2036, amortized from 10 to 30 years $ 1,530,686 $ 1,006,470 Serial debenture, interest rate of 5.10% (effective rate 5.16%), 20-year term, maturing in 2025 42,805 44,977 Sinking fund bonds, under interest rate and currency conversion agreements, effective weighted average interest rate of 6.14% (effective rate 6.16%), maturing at various dates from 2009 to 2010, amortized over 20 years 101,496 176,157 1,674,987 1,227,604 Less current portion 65,319 44,761 $ 1,609,668 $ 1,182,843 Sinking fund payments, due in each of the next five years, are approximately as follows: 2008 $ 65,319 2009 65,368 2010 62,210 2011 61,053 2012 61,053 South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) YEAR ENDED DECEMBER 3, 2007, WITH COMPARATIVE FIGURES FOR 2006 (in thousands of dollars) 8 PENSION PLANS AND EMPLOYEE FUTURE BENEFITS The Authority, CMBC, PVTF and FRMT and their employees contribute to the Public Service Pension Plan (the "Plan"), which is a multi-employer defined benefit plan, together with other public service employers, in accordance with the Pension (Public Service) Act. The British Columbia Pension Corporation administers the Plan, including the payment of pension benefits, on behalf of the employers and the employees to whom the Act applies. Details of the Plan are provided in the Public Accounts of British Columbia. The long-term funding of the Plan is based on the level contribution method. Using this method, employer contribution rates are set out so that, in combination with member contributions, they will fully pay for benefits earned by the typical new entrants to the Plan and will maintain the Plan's unfunded accrual liability (UAL) for funding purposes, if any, as a constant percentage of employer payroll. The actuary does not attribute portions of the UAL to individual employers. Contributions to the Plan are expensed in the year when payments are made. The total expense recorded in the financial statements in respect of pension contributions amounts to $24,382,000 (2006 - $21,337,000). Every three years, an actuarial valuation is performed to assess the financial position of the Plan and the adequacy of plan funding. The latest full actuarial valuation, which was carried out as at March 31, 2005, resulted in an unfunded liability of $767,000,000. The employees of WCE and BCRTC are members of defined contribution plans administered by Great West Life, Sun Life and Canada Life. The total expense recorded in the financial statements, in respect of pension contributions under these plans, amounts to $3,238,000 (2006 - $3,026,000). Apart from the post-retirement benefits provided by the Plan, the Authority and CMBC continue to provide life insurance benefits to all retired employees. BCRTC also sponsors a post-retirement benefit (non-pension) plan providing continuing healthcare benefits to retired employees. The total expense recorded in the financial statements, in respect of obligations under these plans, amounts to $3,652,000 (2006 - $3,576,000). The Authority and its subsidiaries also provide Provincial health care, extended health, dental care and life insurance benefits to employees on long-term disability from the date they become disabled (post-employment benefits). The total expense recorded in the financial statements for the year, in respect of obligations under these plans, amounts to $2,760,000 (2006 - $4,776,000). Information regarding the Authority's post-retirement and post-employment plans is as follows: Post-retirement Post-employment benefits benefits 2007 - 2006 Accrued benefit obligation $ 29,538 $ 9,635 $ 39,173 $ 41,187 Fair value of plan assets - - - - Funded status Balance of unamortized amounts - (29,538) 5,264 (9,635) (3,852) (39,173) 1,412 (41,187) 6,802 Accrued benefit liability $ (24,274) $ (13,487) $ (37,761) $ (34,385) South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) YEAR ENDED DECEMBER 31, 2007, WITH COMPARATIVE FIGURES FOR 2006 (in thousands of do/fats) 8 PENSION PLANS AND EMPLOYEE FUTURE BENEFITS (continued) The significant assumptions used are as follows: 2007 2006 Accrued benefit obligation as of December 31: Discount rate Benefit costs for years ended December 31: Discount rate Assumed health care cost trend rates at December 31: Increase in health care cost trend rate Employee future benefit costs recognized in the year: Post-employment and retirement benefits 5.4%-5.5% 4.5%- 5.25% 4.5% - 5.25% 4.5% - 5.0% 3.0%-10.0% 3.0% -10.0% $ 6,412 $ 8,352 Other information regarding the Authority's post-retirement and post-employment plan is as follows: 2007 2006 Employer contributions $ 3,035 $ 2,870 The accrued benefit obligation is not presently funded. 9 DEFERRED CONCESSIONAIRE CREDITS Deferred Concessionaire credits represent the funding provided by the Canada Line Concessionaire towards the design and construction Phases of the Canada Line. It is estimated that the funding to be provided by the Concessionaire will amount to $720,000,000. The ultimate funding obligation of the Concessionaire will not be known until completion of the Project. Upon completion and service commencement of the Project, the total deferred Concessionaire credits will be amortized to income over the remaining term of the concession agreement. 10 CAPITAL CONTRIBUTIONS Capital contributions received during the year: 2007 2006 Transfer from the Government: Gas Tax Agreement Funds Public Transit Agreement Funds Public Transit Infrastructure Program Funds $ 49,119 $ - 34,035 73,677 40,332 - 83,154 114,009 Canada Line project: Government of Canada 167,439 125,555 The Province 58,400 17,200 City of Vancouver - - 14,928 6,858 240,767 149,613 $ 323,921 $ 263,622 Contributions from the Vancouver International Airport Authority totaling $98,592,000 (2006- $101,132,000) are netted against the related project costs when incurred. Public Transit Infrastructure Program Funds 2007 In Opening balance of unspent funds $ - $ - Add: Amount received during the year 34,035 - Interest earned 222 - Less: Amount spent on projects (11,021) - Amount spent on administration (3) - - Closing balance of unspent funds $ 23,233 $ - South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Y000 ENDED DECEMBER 2 f 2007, WITH COMPARATIVE FIGURES FOR 2006 of doI/ar) 11 GAS TAX AGREEMENT, PUBLIC TRANSIT AGREEMENT AND PUBLIC TRANSIT INFRASTRUCTURE PROGRAM Gas Tax Agreement and Public Transit Agreement funding is provided by the Government of Canada. Public Transit Infrastructure Program funding is provided by the Province of British Columbia. The use of the funding is established by a funding agreement between the Authority and the Union of British Columbia Municipalities. Gas Tax Agreement funding may be used towards designated public transit as specified in the funding agreements. Public Transit Agreement and Public Transit Infrastructure Program funding may be applied towards the cost of designated public transit projects, as specified in the funding agreements. Receipts and disbursements for the year are as follows: Gas Tax Agreement Funds - 2007 2006 Opening balance of unspent funds $ 40,554 $ - Add: Amount received during the year 49,119 73,678 Interest earned 1,594 1,637 Less: Amount spent on projects (57,225) (34,761) Amount spent on administration - (20) - Closing balance of unspent funds $ 34,022 $ 40,554 Public Transit Aereement Funds Opening balance of unspent funds Add: Amount received during the year Interest earned Less: Amount spent on projects Amount spent on administration Closing balance of unspent funds 2007 2006 $ 4,405 $ - - 40,332 148 156 (4,537) (36,083) (16) - $ - $ 4,405 South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) YEAR ENDED DECEMBER 31, 2007. WITH COMPADATIVE FIGURES FOR 2006 (in thousands of do//aid 12 FUND BALANCES - RESTRICTED FUNDS (a) Net change in invested in capital assets: Capital fund: 2007 2006 Net additions to capital assets Amortization of capital assets Amortization of capital asset charged to capital projects in progress Loss on disposal of capital assets Net proceeds from disposal of capital assets Amount funded by long-term debt Amount funded by deferred Concessionaire credits Amount funded by Golden Ears Bridge contractor liability Increase in debt reserve deposits Increase in debt sinking funds Principal payments on capital lease $ 1,163,083 $ 801,868 (74,909) (66,702) (131) (130) (888) (129) (781) 5 (447,383) (119,121) (264,613) - (338,641) (200,014) 7,259 3,488 24,580 18,263 11,171 6,580 78,747 444,108 Balance, beginning of year 848,367 404,259 Balance, end of year $ 927,114 $ 848,367 AirCare: 2007 2006 Purchase of capital assets $ 1,048 $ 236 Amortization of_ capital _assets (195) (9) 853 227 Balance, beginning of year 269 42 Balance, end of year $ 1,122 $ 269 (b) Externally restricted: Capital fund: 2007 2006 Contributions received $ 323,921 $ 263,622 Expenditures of restricted funds (262,326) (218,662) 61,595 44,960 Balance, beginning of year - - 44,960 - - - Balance, end of year $ 106,555 $ 44,960 AirCare: AirCare is a self-funded program under Section 50 of the Motor Vehicle Act. Any deficits incurred will be covered through future operations, such that any deficits are eliminated by the end of the program. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) YEAR ENDED DECEMBER 31, 2007, WITH COMPARATIVE FIGURES FOR 2006 (in thousands of dollars) 13 COMMITMENTS AND CONTINGENCIES: Operating lease payments - WCE: Effective December 28, 1995, BC Transit entered into a 20-year operating lease agreement with Pitney Bowes of Canada Ltd. for the WCE vehicles totaling $62,000,000. This lease was transferred from BC Transit to the Authority effective March 31, 1999. In connection with operating the Commuter Rail System, WCE has entered into operating commitments for train operations, roiling stock maintenance, land leases, ticket vending and parking management and miscellaneous services. The total future minimum annual operating lease payments, including railcars, for the next five years and thereafter are as follows: 2008 $ 13,379 2009 12,337 2010 7,951 2011 5,735 2012 and thereafter 21,456 Vehicle emission testing contract - PVTT: PV11 has entered into a contract with Envirotest Ltd. to provide vehicle emission testing services until December 2011, at which time the AirCare program is expected to wind up. The minimum annual fee for each of the contract year is as follows: 2008 $ 16,070 2009 16,366 2010 16,701 2011 - 17,015 Diesel fuel purchase: CMBC has entered purchase contract for diesel fuel for the period February 1, 2007 to January 31, 2009. The contract consists of fixed price and floating price components. The variable rate contract is in effect from the period January 1, 2008 to January 31, 2009 unless another fixed price agreement is subsequently negotiated. The approximate payments, relating to the minimum purchase volume for the remaining term of the contract, are as follows: 2008 $ 29,160 2009 2,430 I South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) YEAR ENDED DECEMBER 31, 2007, WITH COMPARATIVE FIGURES FOR 2006 (in thousands of dollars) 13 COMMITMENTS AND CONTINGENCIES (continued) Major Road Network (MRN) Capital Funding: The Authority has signed several funding agreements with municipalities on major MRN projects. At December 31, 2007, the net amount of MRN capital funding committed is $181,771,000. This amount will be paid to the municipalities upon completion of the projects. Other operating leases: The Authority is committed to annual lease payments in respect of office premises in the following amounts 2008 2009 2010 2011 2012 $ 6,924 5,733 3,765 3,784 . 3,802 Purchase of 34 SkyTrain vehicles: In November 2006, the Authority has entered into a contract with Bombardier Inc. to purchase 34 SkyTrain vehicles at a total contract price of $113,210,000. The total amount paid to December 31, 2007 was $48,947,000. The approximate future payments are as follows: 2008 $ 27,969 2009 36,294 Other capital commitments: At December 31, 2007, $167,405,000 has been contractually committed for other capital projects in progress (2006 - $82,971,000). This includes $86,806,000 committed for various buses, community shuttles and HandyDART vehicle purchases. Canada Line: 7 - The Canada Line project is a rail based rapid transit line that will link central Richmond, the Vancouver International . Airport and downtown Vancouver. CLCO is a special-urpose wholly owned subsidiary of the Authority created specifically to oversee the procurement, design, construction and implementation of the project. CLCO and the Authority have entered into various agreements with the Government of Canada, the Province, the Vancouver International Airport Authority (the "Airport Authority") and the City of Vancouver. These agreements provide for the funding of costs related to the procurement and construction phases of the Canada Line South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) YEAR ENDED DECEMBER 31. 2001, WiTH COMPARATIVE FIGURES 10 2006 (in thousands of dollars) 13 COMMITMENTS AND CONTINGENCIES (continued) (h) Canada Line (continued): The commitment and related funding is as follows (nominal dollars except as otherwise noted): Agency Total amount of funding Government of Canada $ 450,000 The Province 435,025 Airport Authority * 300,000 City of Vancouver 28,970 External funding 1,2 13,995 The Authority 334,625 $ 1548,620 * The Airport Authority contributions are based on the value of the Canadian dollar at April 1, 2003, subject to annual compounding for cumulative inflation. On July 29, 2005, the original Concession Agreement between CLCO, the Authority and the Concessionaire was entered into concurrently with the completion of the Concessionaire's financing and sub-contracting arrangements. Under the Concession Agreement, the Concessionaire agreed to design, construct, and partially finance the Canada Line and then to operate it over a total term (including construction and operating phases) of 35 years. During the construction phase, CLCO will make payments to the Concessionaire upon the achievement of certain milestones. The Concessionaire assumes price and schedule risk, subject to certain Compensation Events, the occurrence of which will require CLCO to make compensatory payments to the Concessionaire. During the operating phase, CLCO will make monthly payments to the Concessionaire based on the Concessionaire's performance. Construction of the Canada Line started in August 2005 and operations will commence in November 2009. (i) Golden Ears Bridge ('GEB"): In 2006, the Authority entered in a fixed-price contract with the Golden Crossing General Partnership (the "GCGP") whereby the partnership will design, construct, finance, operate, maintain and rehabilitate the GEB. The contract was executed in March, 2006 and terminates in 2041. The GCGP is responsible for financing the estimated construction cost of the GEB of $938,000,000. In addition, the GCGP has advanced $50,000,000 to the Authority, which is included in the contractor liability on the statement of financial position. The Authority is responsible for financing the costs it incurs directly, including property acquisition, project planning and development and other third-party costs, estimated to total $216,000,000 for the project. Payments to the GCGP commence on substantial completion of the project. The nominal monthly blended capital and interest payments, which will escalate based on a CPI index, are as follows: South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) YEAR ENDED DECEMBER 31, 2007, WITH COMPARATiVE FIGURES FOR 2006 (in thousands of dollars) 13 COMMITMENTS AND CONTINGENCIES (continued) Golden Ears Bridge ("GEB") (continued): July 2009 to December 2009 January 2010 to June 2010 July 2010 to June 2011 July 2011 to June 2014 July 2014 to June 2041 $500 per month $1,500 per month $3,000 per month $4,000 per month $4,792 per month The obligation to the GCGP will bear interest at an effective rate to be established on substantial completion of the project. The effective interest rate on the obligation will be the sum of the implicit interest rate, which establishes the net present value of the payment stream as the cost of the bridge, plus the CPI index. The Authority will also pay the GCGP a monthly Operating, Maintenance, Rehabilitation ("OMR") fee of $316,198, which will also escalate based on a CPI index. The GEB contractor liability balance at December 31, 2007 represents the amount of funding received and the cost of construction-in-progress to be repaid by the capital payments described above. Lawsuits: As at December 31, 2007, there are a number of lawsuits pending against the Authority arising in the ordinary course of business. Management is of the opinion that any successful claims against the Authority, which are not recoverable from the Authority's insurance, are not likely to be material and therefore, no provision has been made in the financial statements for any such liability. 14 STATEMENT OF CASH FLOWS 2007 2006 Items not involving cash: Amortization of capital assets Amortization of capital assets charged to capital projects in progress Amortization of bond discount Loss on disposal of capital assets Non-controllinci interest in income of TPCC $ 75,104 $ 66,711 131 130 1,205 1,094 888 129 (86) 155 $ 77,242 $ 68,219 Changes in non-cash working capital: Increase in accounts receivable $ (1,197) $ (9,379) Increase in supplies inventory (3,834) (3,402) Increase in prepaid expenses (927) (6) Increase (decrease) in accounts payable and accrued liabilities (31,360) 104,724 Increase in employee future benefits 3,376 5,482 $ (33,942) $ 97,419 South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) YEAR ENDED DECEMBER 31, 2007, WITH COMPARATIVE FIGURES FOR 2006 (in thousands of dollars) 15 FINANCIAL INSTRUMENTS Credit risk The Authority utilizes various financial instruments. Unless otherwise noted, it is management's opinion that the Authority is not exposed to any significant credit or interest rate risk as a result of these financial instruments. Interest rates have been fixed for all long-term debt. The Authority's operations are all based in Canada and exposure to foreign exchange fluctuations is not significant. Fair values: The fair value of debt reserve deposits, debt sinking funds and long-term debt at December 31, 2007 is $37,069,000, $278,294,000, and $1,702,895,000 (2006 - $30,245,000, $256,892,000 and $1,263,858,000), respectively. For all other classes of financial instruments shown in these financial statements, management considers that the carrying amounts approximate fair values due to the immediate or short-term maturity of these financial instruments. 16 COMPARATIVE FIGURES Certain of the comparative figures have been reclassified to conform with current year's financial statement presentation. South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) AUDITORS' REPORT ON SUPPLEMENTARY INFORMATION To the Members of the Board We have audited and reported separately herein on the consolidated financial statements of the South Coast British Columbia Transportation Authority as at and for the year ended December 31, 2007. Our audit was conducted for the purpose of forming an opinion on the consolidated financial statements taken as a whole. The current year's supplementary information included in Schedules 1 and 2 is presented for purposes of additional analysis and is not a required part of the financial statements. Such supplementary information has been subjected to the auditing procedures applied in the audit of the consolidated financial statements and, in our opinion, is fairly stated in all material respects in relation to the consolidated financial statements taken as a whole. CHARTERED ACCOUNTANTS I Vancouver,Canada. February 22, 2008 South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) GENERAL FUND - STATEMENT OF OPERATIONS AND FUND BALANCES YEAR ENDED DJLBLR 3 A {iO/ flAil COMPARATIVE [ILJRLS FOR 2006 (ii :1 md of do//ats Schedule 1 2007 2006 Revenue: Taxation Transit - Expenses Bus and Seabus Skylrain Commuter rail Albion Ferry Contracted services Maintenance on Major Road Network Interfund AirCare charge Administration Transit Police and Security Special projects Other transportation demand initiatives $ 568,784 $ 554,092 327,609 309,472 896,393 863,564 447,817 415,879 81,207 77,891 23,217 22,085 5,750 5,631 43,110 38,672 30,024 29,553 - (2697) 28,512 26,660 17,901 12,849 4,426 6,728 1,548 1,838 683,512 635,089 Excess of revenue over expenses before other item Other item: Non-controlling interest in loss (income) of Transportation Property and Casualty Company Inc. Excess of revenue over expenses Fund balance (deficit), beginning of year Net transfer between funds Fund balance (deficit), end of year 212,881 228,475 86 (155) 212,967 228,320 (111,929) 49,163 40,487 (389,412) $141,525 $(111,929) South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) RESTRICTED FUND - STATEMENT OF OPERATIONS AND FUND BALANCES YEAR ENDED DECEMBER 31. 2007 WITH COMPARATIVE FIGURES FOR 2006 (1177(111017 of (Io/lois) Schedule 2 Capital AirCare Fund Total Total 2007 2007 2007 2006 Revenue: AirCare $ 15,975 $ - $ 15,975 $ 21,278 Capital contributions - 323,921 323,921 263,622 Interest Income - 28,522 - 28,522 21,362 15,975 352,443 368,418 306,262 Expenses Major Road Network capital funding AirCare - contracted and other services Interfund AirCare charge Administration Interest on debt Amortization ofcapital and other assets - 15,701 - 1,464 - 195 17,360 29,238 - - - 57,605 74,909 161,752 29,238 15,701 - 1,464 57,605 75,104 179,112 51,822 21,578 2,697 1,925 57,817 66,711 202,550 Excess (deficiency) of revenue over expenses before other items (1,385) 190,691 189,306 103,712 Other items: Loss in foreign exchange - (1,774) (1,774) (8,858) Fair value adjustment on financial instruments - (7,200) (7,200) - Loss on disposal of capital assets - (888) (888) (129) - (9,862) (9,862) (8,987) Excess (deficiency) of revenue over expenses (1,385) 180,829 179,444 94,725 Fund balance (deficit), beginning of year (335) 893,327 892,992 408,855 Net transfer between funds - (40,487) - (40,487) 389,412 Fund balance (deficit), end of year $ (1,720) $ 1,033,669 $ 1,031,949 $ 892,992 TRANSf( South Coast British Columbia Transportation Authority 600 - 4720 Kingsway, Burnaby, BC Canada V5H 4N2 Tel: 604-453-4500 Fax: 604-453-4624 www.translink.bc.ca