Annual Reporting Requirement (Due before June 30th, 2006)
Circular No. 06:15
ARCS File#: 195-20
May 4, 2006
To: All Municipal Financial Administrators and Chief Administrative Officers
Re: Annual Reporting Requirement (Due before June 30th, 2006)
This Circular deals with the requirements for the Annual Report due
before June 30th, 2006 in accordance with Section 98 of the
Community Charter. This is the third year of the annual
reporting requirement and the first year of the full reporting
requirements under Section 98 of the Charter.
The principal difference between this year’s Annual Report and the
report from 2005 is the addition of a comprehensive progress report.
The progress report will state the performance of the municipality
with respect to established objectives and measures from the
previous year (2005).
For the Annual Report due before June 30, 2006, Council must report
the following under Section 98 of the Community Charter:
- audited financial statements,
- report on permissive tax exemptions,
- report on municipal services and operations for the previous year,
- declaration of disqualifications under Section 111 of the Community Charter,
- statement of objectives and measures for the current year (2006)
and next year (2007),
- progress report for the previous year’s objectives (2005), and
- other information Council considers advisable.
Since the annual municipal report considers previous, current,
and future year activities; municipalities may choose to integrate
their annual reporting process with other municipal planning and
management processes (e.g. Official Community Plan and the Five-Year
A. Audited Financial Statements
The Annual Report must include the audited financial statements for
the previous year in accordance with Section 167 of the Community
Charter. The audited financial statements must be submitted to the
Inspector of Municipalities by May 15th of each year, which is well
in advance of the due date for presenting the Annual Report at a
public meeting (before June 30th).
The audited financial statements may be integrated directly into the
Annual Report document or presented as a separate attachment to the
document. They must be presented in accordance with Public Sector
Accounting Board standards (PSAB) and include, at a minimum, an
audit opinion letter, statement of financial position, statement of
financial activities, statement of changes in financial position,
and accompanying notes to the financial statements.
If you have any questions regarding PSAB standards, please first
consult your auditor. If your auditor cannot appropriately address
the question, please contact either the Ministry at
email@example.com or the
Canadian Institute of Chartered Accountants (CICA). The CICA’s
central website for PSAB is located at
B. Report on Permissive Tax Exemptions
For each permissive tax exemption granted by bylaw under Division 7
of Part 7 of the Community Charter, Council must include in
the Annual Report the amount of taxes that would have been imposed
on the property if it were not exempt for that year. This reporting
requirement refers to permissive exemptions granted for the previous
taxation year (not the current year of the Annual Report). That is,
the report due before June 30th, 2006, will include a report on the
2005 permissive tax exemptions.
Calculating foregone tax revenue may be performed by applying the
appropriate municipal tax rate (set by bylaw under Section 197(1)(a)
of the Community Charter) to the value of the property (or
the portion of the property) that was permissively exempted. The
municipality is not required to report taxes collected for other
taxing authorities (school, regional district, hospital district,
etc). If the municipality elects to include all the taxes, it should
segregate municipal taxes from taxes for other taxing authorities.
C. Report on Municipal Services and Operations (for the previous year)
The Annual Report will contain a section on the municipality's
services and operations for the previous year. Council may wish to
include an inventory of municipal services and operations, which
could serve as a checklist to ensure that all areas have been addressed.
This report provides a forum for Council to describe major changes
and developments during the year, for example:
- the opening of a new recreation facility;
- changes to bus service;
- the contracting-out of garbage pick-up and recycling;
- a change in water treatment processes;
- changes in water rates;
- the development of a new trail system;
- the purchase of a new fire truck; or
- the total value of building permits processed by the
The operations section of the report allows Council to discuss
developments that help meet the service needs of the community,
- the purchase of a new employees' benefit plan; or
- the acquisition of financial systems software.
D. Declaration of Disqualifications
In certain cases, a member of Council may be disqualified from
holding office. Either a group of 10 or more electors (from the
municipality) or a municipal Council (by resolution approved by a
vote of at least two-thirds of all Council members), may apply to
the British Columbia Supreme Court for an order to disqualify a
member of Council under Section 111 of the Community Charter.
In accordance with Section 114(1) of the Community Charter, a member
of Council includes the Mayor and Councilors.
The Supreme Court may declare a member of Council disqualified from
holding office, in accordance with Section 111(6)(b) or (c) of the
Community Charter, because of any of the following:
- failure to take an oath/affirmation of office (Section 120
of the Community Charter),
- unexcused absence (Section 110(1)(b) of the Community
- internal or external conflict (Sections 101 to 103 and 105
to 108 of the Community Charter)
- unauthorized use of money (Section 191 of the Community
- election disqualification (Part 3 of the Local Government
Act or Part I of the Vancouver Charter).
If, in the previous year, the Supreme Court ordered a member of
Council (or former member) disqualified from holding office, the
Annual Report must include the following:
- identification of disqualified Council member or former
Council member and
- the nature of the disqualification.
E. Statement of Objectives and Measures
For the Annual Report, Council is required to state both objectives
and measures for the current year and next year (2006 & 2007).
Setting Objectives - an effective progress reporting system gives a local
government the opportunity to set expectations, targets and objectives for its operations and
services. Objectives are a statement of results or outcomes that a municipality hopes
to achieve. Objectives and targets should convey a clear sense of the purpose and
direction of the municipality and enable those inside the community to assess its
progress. Regardless of how objectives are set or the format chosen, it is useful to set objectives that are
SMART (Specific, Measurable, Achievable, Relevant and
Establishing objectives will vary among municipalities and depend on the size of
jurisdiction, availability of staff resources and the degree to which the citizens of
the community will wish to be involved in the process.
Reporting on measures is critical step in developing a progress
reporting system, and perhaps one of the most difficult. Measures
are quantifiable tools that are used to assess whether an objective
was achieved. Please see the following examples:
Revision and updating of Official Community Plan (OCP)
Undertake public consultation and draft amendments to the plan.
||OCP completed by year-end.
Reduce flooding of businesses along main street
Installation of storm drain along main street
||Percentage of businesses with no flooding
Improve appearance of grass in park areas.
Purchase new lawn mowers and hire a new landscaper.
||Percentage of parks landscaped and maintained.
Eliminate claims from “pot hole” incidents
Make all public works employees “risk managers” for reporting pot holes.
||Percentage of pot hole related claims.
|Solid Waste Management
Efficient garbage collection services
Monitor adherence to collection schedule
||Operating costs for garbage collection per tonne per household
Ensure all fire hydrants are in good working condition.
Develop annual schedule for servicing fire hydrants.
||Percentage of hydrants serviced per year.
Reduction in violent crime rate
Work with interested organizations to promote safer communities.
||Violent crime rate per 1,000 persons.
The goal of these measures is to attempt to best gauge the
efficiency and/or effectiveness of service delivery in the
Efficiency measures refer to the amount of resources (inputs)
used to produce a service (output). Efficiency measures are usually
expressed as input per unit output or vice versa (e.g., installation
cost per new water meter, average response time per emergency
Effectiveness measures are used to determine to what extent a
service (output) is achieving its intended community result
(outcome). An output is an activity or effort that can be expressed
in a quantitative or qualitative manner (e.g., installing new water
meters). An outcome is an assessment of the results of the activity
(e.g., increased water conservation). Thus, an effectiveness measure
of a water metering program may be reduced water consumption per
average residential dwelling.
Municipalities should concentrate on collecting a limited but
essential number of measures from different program areas. Avoid too
many measures or concentrating on too few program areas. A good
measure should be:
- easy to monitor,
- support the decision-making process, and
- reported in the same manner over time (consistent)
A municipality should attempt to avoid using measures that may
sacrifice quality of service delivery for efficiency, unless it can
develop an appropriate quality protection measure.
It is also important to note that numeric measures alone may be
misleading. Therefore, a municipality should include some concise
comments to explain the measures.
Source information – For municipalities unfamiliar with measures,
an excellent first source of data is the information already
maintained by the municipality (financial data, complaint records,
response time data, etc.).
For more information on municipal objectives and measures, including
examples, please see A Guide to Municipal Progress Reporting at:
Because of the difficulty associated with setting objectives and
choosing the appropriate measures, the Ministry encourages all
municipalities to begin this process as soon as possible (well
before the June 30th, 2006 deadline for the Annual Report).
Municipalities may wish to integrate the setting of objectives and
measures into Council’s strategic planning and budgeting process,
rather than having a stand alone process.
F. Progress Report
For example, an objective may be to improve major
transportation routes over the next year and come within budget. A
strategy applied to meet this objective may be to repave a
specific road. An efficiency measure may be the operating
cost and time to repave the road. An effectiveness measure
may be the number of pothole complaints per year. Based on this
information, the progress report will report on actual outputs
and outcomes. Thus, an output may be that Main Street was
repaved on time and at 97% of budget. An outcome may be that pothole
complaints were reduced by 20%.
The annual report due before June 30th, 2006, will be the first
annual report requiring a comprehensive progress report. The
progress report enables council and the public to monitor the
progress of the municipality against a set of specific objectives,
strategies and measures (see Section E of this circular)
established by the municipality in the previous year (2005).
Essentially, the progress report answers the question, how did the
municipality perform in meeting its objectives and strategies based
on established measures.
The above example of a progress report for transportation includes
both an efficiency and effectiveness measure. However, you are not
required to do both. Depending on the objectives and strategies
used, you may concentrate on either an efficiency or effectiveness
measure (not necessarily both).
A municipality may include some concise comments to explain the
outputs/outcomes from the progress report; including any material
deviations between the objectives and the outputs/outcomes. The
comments may also include any lessons learned through the process of
preparing the progress report.
Sources for the actual information on which to base the service
report may be found through financial and administrative records,
public works reports, surveys, open houses, discussion groups and
G. Other Information
Under Section 98(1)(g) of the Community Charter, Council may
include other information it considers important in the Annual
Report, examples include:
- information on partnerships with community groups, other
governments, or the private sector;
- an overview of external events and challenges faced by the
municipality and their potential impact on municipal operations;
- comparative data with other local governments;
- past or future community events
- municipal awards or other recognition; and
- some or all of the reporting requirements under the
Financial Information Act
Under Section 98 of the Community Charter, a council must
prepare an Annual Report and present it at a public meeting before
June 30th of each year. Thus, the deadline for presenting the report
at a council meeting (or other public meeting) is June 29th (the
last day before June 30). Should the June 29 deadline fall on a
weekend or statutory holiday, the deadline is extended to the next
day that office is open during regular business hours. For example,
if the June 29th deadline falls on a Saturday and Canada Day is
Monday, the deadline may be extended to Tuesday, July 2nd.
At the public meeting Council must present the report and accept
submissions and questions from the public. Prior to this meeting
Council must take the following steps:
- Make the Annual Report available for public inspection at
least 14 days prior to the date of the public meeting.
- Give notice of the date, time and place of the public
meeting in accordance with section 94 of the Community
It is important to note that points one and two may be run concurrently.
Regarding the first point, in accordance with section 25(4)
of the Interpretation Act, if the calculation of time is expressed
as "at least" a number of days, the first and last days must be
excluded from the count. For example, if the public meeting is
scheduled for Thursday, June 29th, you would first exclude the date
of the meeting (June 29th) and count back 14 days from June 28th to
June 15th. You then count back a further day to June 14th (because
you must also exclude the first day in the time cycle). Or,
simply count back 16 days from the June 29th public meeting deadline
to determine the deadline for making the report available for public
Regarding the second point, notice of the public meeting to
present the Annual Report (deadline on June 29th) must be posted in
the public notice place and published in a newspaper once each week
for two consecutive weeks. For the purposes of this requirement a
newspaper is defined as a publication or local periodical that
contains items of news and advertising and is distributed at least
weekly in the municipality.
If publication in a newspaper is not practical, because there is no
local publication, notice may be given by alternate means providing
- is given within the same time period as required for
- is given with the same frequency as required for
- provides notice that the council considers is reasonably
equivalent to that which would be provided by newspaper
publication if it were practicable.
A council may provide any additional notice it considers
appropriate, including by the Internet or other electronic means.
Example Annual Reports
Copies of the Annual Report for other municipalities may be found
on the Civic Info
homepage. Please do a document search for "annual reports".
Should you have any questions regarding the Annual Report, please
contact your financial analyst. The financial analysts responsible
for specific regional districts (including all municipalities within
those regional districts) are as follows:
Phone: (250) 356-1430
Vancouver Island and North Coast (Powell River, Central Coast,
Kitimat-Stikine, and Skeena-Queen Charlotte)
Phone: (250) 387-4026
Thompson, Okanagan, and Kootenays
Phone: (250) 387-4075
Lower Mainland (Greater Vancouver, Fraser Valley, Squamish-Lillooet
and Sunshine Coast), Cariboo, and North (Fraser-Fort George,
Bulkley-Nechako, Peace River, Northern Rockies
A/ Director of Financial Policy
Local Government Infrastructure and Finance Division
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