victoria airport authority 2000 annual report

Transcription

VICTORIA AIRPORT AUTHORITY
2000 ANNUAL REPORT
THE 2000 BOARD OF DIRECTORS
Keith Jackman
Chair
Alan Peterson
Vice-Chair & Chair
By-Law Committee
Peter Lewis
Chair
Audit & Finance Committee
Andy Little
Chair
Airport Consultative
Committee
Andrew MacGillivray
Chair, Planning &
Development Committee
Chair, Air Terminal Building
Expansion Committee
John Nicas
Chair
Legal Committee
Des Easthom
Robert McLaren
Susan Brice
Linda Petch
Greg Hellyer
Board Secretary
Graham Ross
Bob Skene
Stuart Soward
TABLE OF CONTENTS
Pages
MESSAGE FROM THE CHAIR
1
MESSAGE FROM THE PRESIDENT/CEO
2
1.
AIRPORT AUTHORITY REPORT
1.1
1.2
1.3
1.4
2.
3
3
4
5-6
2000 RESULTS
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
3.
History of Annual Passenger Traffic
Business Plan Cash Flow Forecast – 2001 to 2005
The Board of Directors & Committee Participation
Board Governance Guidelines
Airline Service
Airport Safety
Customer Services Initiatives
Red Coat Volunteers
Terminal Building Project
Capital Initiatives
Environmental Protection
Master Plan
7
7-8
8
9
9
10
11
11
RELATIONSHIPS WITH KEY STAKEHOLDERS
3.1
3.2
3.3
3.4
Airlines
Municipalities
First Nations
Transport Canada
4.
DIRECTORS AND MANAGEMENT COMPENSATION
5.
FINANCIAL STATEMENTS
12
12
12
13
14
15
!" Management Responsibility for Financial Statements
16
!" Auditor's Report
17
!" Balance Sheet
18
!" Statement of Earnings & Equity in Assets
19
!" Statement of Cash Flows
20-23
!" Notes to Financial Statements
2000 ANNUAL REPORT
MESSAGE FROM THE CHAIR
The commencement of the year 2001 brought about a significant change in the
makeup of the Board of Directors with five of the original Board members
completing their terms.
Peter Lewis, a Federal Appointee, was Chair of the Audit and Finance
Committee, Greg Hellyer, a Town of Sidney Appointee, was Board Secretary,
Stuart Soward, the City of Victoria Appointee, was Chair of the Operations
Committee, Andy Little, a Board Appointee,. was Board Vice-Chair and Chair of
the Airport Consultative Committee. Andy passed away in October 2000. He is
greatly missed.
2000 also marked my last year on the Board. From my perspective, I enjoyed the
two terms I served as a nominee of the District of North Saanich. I thank the
current and past councils of North Saanich for the opportunity to be part of a great organization. In my
role of Chair and other roles bestowed on me, I acknowledge the assistance I received from the
Authority’s Management Team, as well as maintenance, fire department and administration employees. I
would also like to thank the Airport’s many tenants, the officials of the Town of Sidney, members of the
Board of Directors and a great many other people who made my experience so rewarding.
By working together, one can look back at our achievements, such as the Accord that was entered into
with the District of North Saanich and the Town of Sidney, the start of the construction of a new exciting
Terminal Building, the improvements to the parking lots and runways, as well as the completion of the
Airport Master Plan, to mention a few.
There will be interesting challenges for the current and future Boards to address as the Authority moves
through the years ahead. There is no doubt that the Airport plays an important role in the economic
growth and prosperity of the Region. In my view, I see a bright future for the Airport and the community.
Thank you for the opportunity.
P. K. (Keith) Jackman
Board of Directors of 2000
1
2000 ANNUAL REPORT
MESSAGE FROM THE PRESIDENT/CEO
The High Technology and Tourism sectors are the foundation of Victoria’s
economic future. Both these key industries need good air transportation. Our
success in developing improved air service is founded on partnerships.
Air Canada and Air Canada Regional are vitally important partners to the Victoria
Airport Authority. They have successfully completed the most significant and
difficult merger in Canadian aviation history. The merger was not undertaken
without controversy or problems. I believe the ultimate conclusion for the
industry as a whole is a strengthened and viable air transportation system that
will offer real choice and value to travelers. The VAA is working with Tourism
Victoria and Air Canada Regional in support of improved air access to our City.
Air Canada’s non-stop flight to Toronto has been a great success, and we
continue to encourage our partner, Air Canada, to establish new non-stop routes from Victoria.
In 2000 we welcomed Pacific Coastal Airlines to Victoria, with their service to Vancouver International’s
South Terminal and convenient connection to other International carriers. WestJet introduced service to
Prince George and beyond to Calgary. Horizon Airlines increased frequency to their Seattle Hub, and
Canada 3000 offered non-stop service to more sunspot destinations then ever before.
Last year the VAA worked with the Town of Sidney and the District of North Saanich to conclude
Agreements on Land Use and Development. These agreements, together with input from a broad range
of stakeholders, were incorporated into our Master Plan which was approved by the VAA Board in
December.
New partnerships have also been established with airport tenants: Scott Plastics, Osler Systems and
Eagle Hangars.
VAA together with the Federal Government have taken initiatives to improve relationships with the
Tseycum First Nation.
Last year, our stakeholder partnerships resulted in continued environmental improvement. The Federal
Government played a key role investing $650,000 to clean up the contaminated Fuel Depot, the WarTime Rifle Range, and sponsored major improvements to Ten Ten Creek.
The Victoria Airport Authority and indeed the entire Airport is fortunate to have the strong leadership and
commitment from a very capable Board of Directors dedicated to our Airport and our Community.
Co-operation and respect are fundamental to the Labour Management Partnership at VAA, which is also
key to our success. I take this opportunity to thank the staff of VAA for their dedication and
professionalism.
Richard Paquette
2
2000 ANNUAL REPORT
1.
VICTORIA AIRPORT AUTHORITY ORGANIZATION
1.1
History of Annual Passenger Traffic
H istory ofAnnualPassenger Traffic
1500000
1250000
1000000
750000
500000
250000
0
19
77
19
87
19
89
19
91
19
93
19
95
19
97
19
99
20
1.2
ec
a
Business Plan Cash Flow Forecast – 2001 to 2005
Thousands of
dollars
3
01
r
Fo
2001
2002
2003
2004
2005
Revenue
$ 10,433.70
$ 11,070.00
$ 11,708.80
$ 12,396.60
$ 13,138.40
Expenses
$ 6,274.00
$ 7,030.00
$ 7,240.90
$ 7,508.80
$ 7,734.10
Capital
$ 14,715.50
$ 10,139.00
$ 4,607.00
$ 2,786.80
$ 8,343.60
2000 ANNUAL REPORT
1.3
2000 Board of Directors and Committee Participation
NOMINATOR
NOMINEE
COMMITTEE
District of
North Saanich
Keith Jackman
Government of
Canada
Alan Peterson
Town of Sidney
Greg Hellyer
Board Nominee
Andy Little
Government of
Canada
Peter Lewis
Board Nominee
Andrew MacGillivray
District of Saanich
John A. Nicas
City of Victoria
Stuart Soward
Capital
Regional District
Town of Sidney
District of
Central Saanich
Board Nominee
Susan Brice
Board Chair
Chair of the Steering Committee
Member of the Audit & Finance Committee
Member of the Airport Consultative Committee
Board Vice-Chair
Chair of the By-Law Committee
Member of the Steering Committee
Member of the Legal Committee
Member of the Planning & Development Committee
Member of the Air Terminal Building Expansion Committee
Board Secretary
Chair of the Airport Consultative Committee
Chair of the Audit & Finance Committee
Chair of the Planning & Development Committee
Chair of the Air Terminal Building Expansion Committee
Chair of the Legal Committee
Member At Large of the Steering Committee
Member of the By-Law Committee
District of
North Saanich
Victoria Chamber
of Commerce
Des Easthom
Robert McLaren
Linda Petch
Graham Ross
Bob Skene
Member At Large of the Airport Consultative Committee
Member of the Legal Committee
Member of the By-Law Committee
4
2000 ANNUAL REPORT
1.4
Board Governance Guidelines
The Board of Directors of the Victoria Airport Authority have established the following
Corporate Governance Guidelines:
Corporate Governance
Guidelines
1. The Board should explicitly
assume responsibility for
stewardship of the corporation
including:
a. A strategic planning
process;
b. Identification of principal
risks;
c. Succession planning
including appointing,
training and monitoring
senior management;
d. Communications policy;
and,
e. Integrity of internal control
and management
information systems.
2. A majority of Directors should
be independent of management
and free from any conflict of
interest.
3. The Board should appoint a
Committee responsible for the
appointment and assessment of
Directors.
4. The Board should provide
orientation and education
programs for new Directors.
5. The Board should examine its
size and, where appropriate,
undertake a program to reduce
the number of Directors.
5
Comments
The Board oversees the management of the Authority’s
business to ensure its purposes are realized.
The Board has approved the Airport’s Master Plan.
The Authority has a number of systems in place to identify,
manage and mitigate various risks.
The Board appoints the President & CEO and maintains a
succession plan.
The Board monitors the CEO’s
performance through a formal annual review.
The Authority has a well-developed communications
program.
The Authority has a comprehensive management
information and reporting system in place which includes
monthly reporting to the Board on key financial and
operational results.
The Board is composed exclusively of non-management
Directors. VAA has established a Directors and Officers
Code of Conduct which requires the disclosure of any
potential conflict of interest.
The Authority has a Nominating Committee which meets
with nominating entities to ensure that necessary
disciplines are represented. The Board conducts annual
self-evaluations.
Each new Director receives a comprehensive orientation
on an on-going basis. The Board meets with industry
leaders regularly.
The Authority’s fourteen Directors have been appointed by
eight appointing organizations.
The Provincial
Government has declined the opportunity to appoint a
Director. The Board has the authority to appoint up to
three Directors. The Board has concluded that a reduction
in Board size will be pursued over the longer term
providing that the necessary disciplines are represented
and it continues to represent the best interests of the
Authority and the community at large.
2000 ANNUAL REPORT
1.4
Board Governance Guidelines (Continue):
Corporate Governance
Guidelines
6. The Board should review
compensation of Directors in
light of risks and
responsibilities.
7. Committees should generally
be composed of outside
Directors, a majority of whom
are unrelated.
8. The Board should appoint a
Committee responsible for
corporate governance.
9. The Board should define limits
to management’s
responsibilities by developing
position descriptions for:
i) the Board
ii) Board Chair
iii) the CEO
10. The Board should establish
structures and procedures to
ensure the Board can function
independently of management.
11. The Board should establish an
Audit Committee composed
only of outside Directors to
communicate directly with
external auditors and oversee
management reporting and
internal control
Comments
The Authority’s Steering Committee periodically reviews
the remuneration of Directors to ensure they are
appropriate.
Board Committees are composed entirely of outside
Directors who are all unrelated.
The Authority’s Steering Committee is responsible for
Corporate Governance issues. This issue is regularly
discussed by the Board as a whole.
Role statements have been prepared for the Board, the
Board Chair, and CEO. The CEO’s corporate objectives
are approved by the Board on an annual basis.
The Board has three Standing Committees which meet on
a regular basis and are chaired by members of the Board.
Each Committee Chair reports directly to the Board. The
Board meets in-camera as required.
The Authority’s Audit and Finance Committee
responsibilities include:
!" Corporate financial issues which affect the
financial integrity of the Authority.
!" Review of financial management policies and
issues including annual budgets, banking
arrangements,
accounting
systems
and
procedures, fees and charges, significant changes
to relevant legislation, insurance policies, statutory
remittances,
pension
plan
policies
and
performance and regular financial status reports.
!" Monitoring the external audit program and
preparation of the annual financial statements.
!" Monitoring
the
Authority’s
environmental
management programs.
All Finance and Audit Committee members are outside
Directors.
6
2000 ANNUAL REPORT
2.
2000 RESULTS
2.1
Airline Service
Airline service improved during 2000. In May, Pacific Coastal Airlines commenced service
between Victoria and Vancouver’s south Terminal, with six daily departures using a 33 seat
Shorts 360 aircraft. Canadian Airlines made a major commitment to Victoria through the
introduction of their daily A320 non-stop service between Victoria and Toronto. This service
continues with Air Canada. In the fall and winter, Canada 3000 Airlines added seasonal
flights to Las Vegas, Honolulu, and Mexico.
Pacific Coastal Airlines Shorts 360
The following is a summary of scheduled flights departing from Victoria International in the
summer of 2000.
Daily
Carrier
airBC
Airspeed Aviation
Canadian Airlines
Canadian Regional
Horizon Air
Pacific Coastal
WestJet Airlines
2.2
Departures
15
2
1
12
8
6
1
1
1
1
Aircraft
Destination
Dash 8
Cessna 414
A320
Dash 8
Dash 8
Shorts 360
B737
B737
B737
B737
Vancouver
Abbotsford
Toronto
Vancouver
Seattle
Vancouver
Calgary
Edmonton
Kelowna
Prince George
Safety
Maintaining a safe environment for aircraft operations remains VAA’s highest priority. During
2000, the Authority received an excellent rating from Transport Canada’s Aerodrome
Certification and Security Audit Inspection Teams.
Last year, our operational staff demonstrated their usual high level of commitment to airport
safety in the management of the Airside Electrical Systems Project. This project was
scheduled during both the day and night time to ensure our main instrument Runway
remained operational. The completion of this complex project highlighted the solid working
relationship that our Airside Operations Staff and NAV Canada’s Air Traffic Control staff
enjoy here in Victoria.
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2000 ANNUAL REPORT
An integral part of airport safety is the training and testing of staff for emergency
circumstances. VAA routinely conducts monthly Table Top Exercises to ensure that VAA, the
Airlines and our many tenant employees are prepared for emergencies. At the Table Top a
number of operational scenarios are developed and tested, including aircraft crashes,
hijackings, bomb threats, earthquakes, and environmental disasters.
During 2000, VAA planned and conducted a Major Aircraft Crash on-Site Exercise. The
Exercise included the simulation of an aircraft crash scene with injured passengers, fire hall,
ambulance, police, and media response. Major exercises of this magnitude required
commitment from a significant
number of community support
services and agencies.
VAA
wishes to thank the RCMP, BC
Ambulance
Services,
the
Coroners Office, B.C. Transit,
DND, North Saanich, and Sidney
Volunteer Fire Departments, the
Provincial Emergency Measures
Organization, NAV Canada, the
local media and all the
community volunteers for their
Firefighter at Mock Accident Scene
assistance and co-operation in
the conduct of this exercise.
2.3
Customer Service Initiatives
The Authority is always looking to provide a positive travelling experience to all our
customers. The long term economy parking lot was expanded by 90 spaces this past
summer. We also updated our web site with new features such as an interactive parking
map, detailed tenant location maps, up-to-date weather information and web cam facilities.
In the food services area, VAA worked with Select Service Partners to improve the quality
and delivery of the food service offerings in the Terminal. In addition to the food service
upgrades the restaurant itself was totally renovated. The new and improved look of the
restaurant area has become a welcoming place for our passengers and visitors.
The professional services of the
Corps
of
Commissionaires
continue to play an integral part in
the travel experience at Victoria
International. The 21 dedicated
men and women of the Airport
Detachment can be found directing
vehicle traffic, assisting passengers, returning baggage carts,
monitoring safety and security
issues throughout the Airport,
including the Terminal, Main Apron
and our construction projects.
Commissionaire, Bob Fowler,
assists passengers with their precious cargo
8
2000 ANNUAL REPORT
2.4
Red Coat Volunteers
Our
Dedicated
Volunteers
2.5
Every year we are pleased to
recognize the efforts of our Red Coat
volunteers, especially during this
year, “The Year of the Volunteers”.
These 22 men and women volunteer
their time once a week assisting the
travelling public and visitors to the
Airport by answering questions,
offering advice, and generally
providing assistance wherever they
can. Their know-ledge of the Airport
and surrounding com-munities is
invaluable to a newly arrived visitor.
The Authority and all Airport tenants
wish to recognize the dedication and
commitment of all the volunteers in
the Red Coat program.
Terminal Building Project
The year 2000 was a busy year for the Airport with the commencement of construction of the
$21 million Air Terminal Building Expansion Project. This project is led by our project
managers Durwest Construction Management, and architects Moore Paterson Ltd.
Planning for the Air Terminal Building Expansion Project began in January and included the
design of a 13,000 square-meter expansion of the Terminal Apron, a new Baggage Arrivals
Area, and an extensive expansion to our
Terminal Building under Construction
Passenger Holdrooms.
The engineering firms of Graeme and
Murray, EBA Consulting, and Knappet
Construction were engaged to plan,
design and construct the Terminal Apron
Expansion. Work on this Project began in
July and was completed in November, on
time and on budget.
Construction of the new Baggage Arrivals
area will provide a significant improvement in the baggage delivery systems and arrival space for our passengers and well wishers.
Work on this area will be completed in July 2001.
The construction of a 1,000 square meter new Holdroom addition will include seating for 200
passengers and an airside café . A new covered walkway will also be included in this work.
Construction of this Holdroom began in November and will be completed in July 2001.
9
2000 ANNUAL REPORT
2.6
Capital Initiatives
For the year 2000, the Victoria Airport Authority implemented 10 major capital projects and 26
minor capital projects with a cost totalling approximately $1,150,000. These projects are in
addition to the Air Terminal Building Expansion Project. Listed below is a Project summary
for 2000:
Projects
Expenditures
!" Interlace Runway 09-27 Edge Lighting Circuits
$ 287,000
!" New Stormwater Infrastructure in the North East Corner
$ 229,000
!" Replace collapsed stormwater pipe and failing sanitary
sewer pipe in the East Camp Area
!" Pavement Restoration at various locations including the
north end of Apron 3
$
67,500
$
82,000
!" New Runway Sweeper
$ 170,000
!" New Vacuum Street Sweeper
$ 105,000
!" Fire Truck Improvements
$
46,500
!" Replace the Rotating Beacon on the Control Tower
$
5,400
!" Airfield Signs for Taxiway Alpha & Bravo
$
16,800
!" Replace the Salt & Sand Spreader
$
7,800
!" Replace the Oil Furnaces in Maintenance Garage
$
20,200
!" Firehall Renovations
$
12,800
!" Replacement of the Accounting Server and related
computers networking and software
$
35,400
!" Other minor capital items
$
64,100
$1,149,400
TOTAL
Pavement Restoration Project
10
2000 ANNUAL REPORT
2.7
Environmental Protection
A key element in the operation and development of the Airport is the Authority’s strong
commitment to environmental protection. Improvements in noise abatement, reductions in
contaminate releases, the clean up of contaminated sites, the surveillance and monitoring of
VAA’s projects and tenant developments, habitat protection and restoration initiatives are all
at the forefront of the Authority’s Environmental Management Program.
The Authority has an Environmental Management Plan that ensures the Airport’s
environmental policies, practices and operations are managed with the utmost attention to
environmental protection. VAA has an active community-based Environmental Advisory
Committee that meets quarterly to renew and assess the Authority’s environmental
performance.
During 2000, Transport Canada Headquarter staff undertook an Environmental Audit of the
VAA facilities, operations and environmental programs. The results of this Audit were
extremely favourable for the Authority.
Many environmental accomplishments were made during 2000, with the help of the Federal
Government. Some of those successes include the construction of an engineered wetland to
improve water quality
entering Ten Ten Creek;
Victoria Airport’s
the clean-up of the
Garry Oak Meadow
Airport’s decommissioned Fuel Depot; the
removal of lead contaminated soil at the
Airport’s wartime rifle
range; the removal of
asbestos at the Firehall;
and, the development of
Noise Exposure Contours that reflect a
sizable
reduction
of
commercial jet noise
levels in the community.
2.8
Master Plan
During 2000, the Authority completed a Master Plan which will guide the development of
Victoria International Airport for the next 20 years.
The Master Plan was completed through a consultative process with significant input from all
segments of the community and stakeholders at the Airport. The key elements of the Master
Plan include a comprehensive assessment of the Airport’s Airfield System, Terminal Building
Complex, Ground Transportation Network, Land Use Plan and Environmental Management
Program.
11
2000 ANNUAL REPORT
3.
RELATIONSHIPS WITH KEY STAKEHOLDERS
3.1
Airlines
Victoria Airport Authority values its relationship with its airline partners. Their input and
support is actively solicited, informally and formally through the Airline Operating Committee,
Airline Consultative Committee, Airport Safety and Security Committee and the Airport
Consultative Committee. Added to these structured committee meetings, the Authority meets
regularly with individual carriers on Air Terminal Building development issues, as well as,
regular meetings between senior airline executives and VAA's Board of Directors.
3.2
Municipalities
The Authority places a major emphasis on maintaining positive working relationships with the
two municipalities in which the airport resides. To that end, the Authority works closely with
the staff and Councils of North Saanich and the Town of Sidney on operational, planning,
development and environmental issues that concern the community.
In 2000, the Authority successfully concluded agreements on “Land Use and Development”
with both municipalities. The Airport Land Use Plan designates specific land use zones that
include Aviation Services, Commercial, Industrial, Business Park, Runway System, Air
Terminal Reserve and Environmental Protection.
3.3
First Nations
During 2000, the Authority worked closely with the Tseycum First Nation to promote mutual
respect, to improve employment opportunities, and to plan the development of airport lands in
a manner that recognizes and
respects First Nations concerns.
To that end, the Authority
undertook five Archaeological
Site Assessments on land that
was targeted for development.
The Archaeological Assessments
were undertaken to ensure that
potential artifacts and burial sites
are protected. No historical archaeological resources were
found during these reviews.
Chief Vern Jacks (centre),
In addition to the archaeological
with VAA’s Archaeological Site Assessment Team
assessments, preliminary research was undertaken by the Authority for the design of a First Nation’s cultural display to be
located in the expanded Terminal Building. Work continues on the display which will focus on
the Tseycum cultural and traditional use of the Airport lands.
On the employment front, five Tseycum youth were employed through our Summer Works
Program. As well, the Authority assisted the Tseycum Employment Resource Centre setting
up interviews with many of the Airport’s employers to identify training needs and potential
career opportunities.
12
2000 ANNUAL REPORT
3.4
Transport Canada
Transport Canada is VAA's landlord and the regulator of all aviation activities in Canada. A
positive relationship with Transport Canada is very important. VAA manages Victoria
International Airport in strict compliance with the terms of our lease with the Federal
Government. In addition, VAA complies with all of the various federal regulations pertaining
to the safe operation of this Airport.
Victoria Airport Authority is a member of the Canadian Airports Council (CAC) which
represents the collective interests of Canada's major airports and the communities in which
they are located. Over the last year, VAA has presented its position on a number of issues
of concern to the Federal Government either directly or through the CAC. These issues
include: Airport Security Classification, the level of rent payable to the Federal Crown in
Victoria vs. other comparable Canadian airports, aboriginal land claims, environmental cleanup, and proposed increased regulation of Canadian airports.
Tower Air’s 747 enroute to Honolulu
13
2000 ANNUAL REPORT
4.
DIRECTORS AND MANAGEMENT COMPENSATION
The annual remuneration for the Board during 2000 was as follows:
Chair
$ 16,500
Vice Chair
$ 10,000
Secretary
$ 10,000
Standing Committee Chairs
$ 10,000
Remaining Directors
$ 7,000
Compensation during 2000 for each Director was as follows:
Susan Brice
$ 7,000
Des Easthom
$ 7,000
Greg Hellyer
$ 10,000
Keith Jackman
$ 16,500
Peter Lewis
$ 10,000
Andrew Little
$ 8,333
Andrew MacGillivray
$ 10,000
Robert McLaren
$ 7,000
John Nicas
$ 7,000
Linda Petch
$ 7,000
Alan Peterson
$ 10,000
Graham Ross
$ 7,000
Bob Skene
$ 7,000
Stuart Soward
$ 7,000
The remuneration for the position of President/Chief Executive Officer in 1999 was
$104,787
14
2000 ANNUAL REPORT
5. FINANCIAL STATEMENTS
MANAGEMENT RESPONSIBILITY FOR FINANCIAL STATEMENTS
The accompanying financial statements have been prepared by management in accordance with
Canadian generally accepted accounting principles. The most significant of these are set out in Note 1 to
the statements.
The Authority’s accounting procedures and related systems of internal control are designed to provide
reasonable assurance that its assets are safeguarded and its financial records are reliable. These
financial statements include some amounts based upon management’s best estimates and judgements.
Recognizing that the Authority is responsible for both the integrity and objectivity of the financial
statements, management is satisfied that these financial statements have been prepared within
reasonable limits of materiality.
The Board of Directors has appointed an Audit and Finance Committee consisting of seven Board
Directors. The committee meets periodically during the year to review with management and the auditors
any significant accounting, internal control, and auditing matters. They also review and finalize the annual
financial statements of the Authority together with the independent auditor’s report before their
submission to the Board of Directors for final approval.
The financial information throughout the text of the annual report is consistent with the information
presented in the financial statements.
On behalf of the Authority:
Richard Paquette
President and Chief Executive Officer
15
2000 ANNUAL REPORT
.
KPMG LLP
Chartered Accountants
St. Andrew’s Square II
800 – 730 View Street
Victoria BC V8W 3Y7
Telephone (250) 480-3500
Telefax (250) 480-3539
www.kpmg.ca
AUDITORS’ REPORT TO THE MEMBERS OF THE
We have audited the balance sheet of the Victoria Airport Authority as at December 31, 2000 and the
statements of earnings and equity in assets 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 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 significant estimates made by management, as well as evaluating the
overall financial statement presentation.
In our opinion, these financial statements present fairly, in all material respects, the financial position of
the Authority as at December 31, 2000 and the results of its operations and its cash flows for the year
then ended in accordance with Canadian generally accepted accounting principles. In accordance with
the Canada Corporations Act, we report that, in our opinion, these principles have been applied on a
basis consistent with that of the preceding year.
Chartered Accountants
Victoria, Canada
February 8, 2001
16
2000 ANNUAL REPORT
BALANCE SHEET
December 31, 2000, with comparative figures for 1999
2000
1999
ASSETS
Current assets:
Cash
Accounts receivable
Inventory
Prepaid expenses
$
1,319,007
173,605
173,423
$ 995,729
829,428
165,322
62,089
1,666,035
2,052,568
9,272,469
3,657,379
$10,938,504
$5,709,947
$
$
Capital assets (Note 3)
Liabilities and Equity in Assets
Current liabilities:
Bank indebtedness (Note 4)
Accounts payable and accrued liabilities
Deferred revenue
915,644
1,921,202
125,342
2,962,188
692,592
128,023
820,615
Tenants’ security deposits held
Retirement allowance liability (Note 5)
Long-term debt (Note 6)
Long-term deferred revenue
16,200
301,890
88,894
3,369,172
16,200
266,890
375,775
116,032
1,595,512
Equity in assets
7,569,332
4,114,435
$10,938,504
$5,709,947
Commitments (Note 7)
Contingent pension liability (Note 8)
17
2000 ANNUAL REPORT
Statement of Earnings and Equity in Assets
December 31, 2000, with comparative figures for 1999
2000
1999
$ 1,585,768
1,641,482
3,106,726
1,114,254
235,987
7,684,217
$ 1,549,618
1,552,225
3,188,492
1,031,547
255,942
7,577,824
2,338,971
1,947,371
1,032,002
605,178
443,956
251,564
6,619,042
2,233,904
1,946,617
1,015,350
576,122
391,300
228,729
6,392,022
Earnings from operations
1,065,175
1,185,802
Airport Improvement Fee (Note 9)
Net earnings
2,389,722
3,454,897
479,386
1,665,188
Equity in assets, beginning of year
4,114,435
2,449,247
$ 7,569,332
$ 4,114,435
Revenue
Landing fees
General terminal charges
Concessions
Rentals
Others
Expenses
Salaries and employee benefits
Services supplies and administration
Transport Canada lease (Note 7(a))
Property taxes
Amortization
Utilities
Equity in assets, end of year
See accompanying notes to financial statements.
18
2000 ANNUAL REPORT
Statement of Cash Flows
Year ended December 31, 2000, with comparative figures for 1999
2000
1999
Cash provided by (used in):
Operations:
Net earnings
Amortization, which does not involve cash
Changes in non-cash operating working capital:
Accounts receivable
Consumable inventory
Prepaid expenses
Accounts payable and accrued liabilities
Deferred revenue
$
Investing:
Capital expenditures
Financing:
Repayment of long-term debt
Increase in retirement allowance liability
Decrease in tenants’ security deposits held
Increase (decrease) in cash position
Cash position, beginning of year
Cash position, end of year
3,454,897
443,956
$ 1,665,188
391,300
(489,579)
(8,283)
(111,332)
1,228,609
(29,819)
4,488,449
1,140,890
(7,334)
53,865
(761,812)
(33,954)
2,448,143
(6,059,047)
(696,293)
(373,775)
35,000
-
(380,139)
35,000
(92,600)
(340,775)
(437,739)
(1,911,373)
995,729
1,314,111
(318,383)
$
(915,644)
$
995,728
$
70,441
70,360
$
47,205
Cash position is defined as cash less bank indebtedness.
Supplementary disclosure of cash flow information:
Cash paid during the year for interest
Cash received during the year for interest
See accompanying notes to financial statements.
19
2000 ANNUAL REPORT
Notes to Financial Statements
Year ended December 31, 2000
1. Nature of operations:
The Victoria Airport Authority (the "VAA") is incorporated under Part II of the Canada Corporations
Act as a non-share capital, not-for-profit corporation and all earnings from operations are reinvested
in airport development. The VAA has operated the Victoria International Airport since April 1, 1997
under a lease from the Government of Canada (the "Canada Lease"). The Canada Lease has an
initial term of sixty years with an option to extend the term for a further twenty years.
2. Significant accounting policies:
(a) Basis of accounting:
The financial statements of the VAA are prepared in accordance with accounting principles
generally accepted in Canada.
(b) Consumable inventory:
The inventory of consumable supplies is recorded at the lower of cost, determined on a first-in
first-out basis, and estimated net realizable value.
(c) Canada Lease:
The Canada Lease (see note 1) is accounted for as an operating lease.
(d) Capital Assets
Capital assets are recorded at cost less accumulated amortization. Amortization is provided using
the straight-line method at the following rates:
Asset
Rate
Leaseholds
Office furniture and equipment
Computer hardware and software
Vehicles
Other equipment
1.66% - 33%
20%
33%
5% - 50%
10% - 20%
Capital work-in-progress is not amortized until the project is substantially complete.
20
2000 ANNUAL REPORT
2. Significant accounting policies (continued):
(e) Revenue recognition:
Revenues are recorded when the services are performed, the facilities are utilized or the amounts
are earned pursuant to the related agreements. Airport Improvement Fee revenue (Note 9) is
recognized when passengers depart the terminal building.
(f)
Use of estimates:
The preparation of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and expenses during the
period. Actual results could differ from these estimates.
2.
Capital assets
Cost
Leasehold improvements
Office furniture and equipment
Computer hardware
Computer software
Vehicles
Other equipment
Capital work in progress
4.
Accumulated
Amortization
2000
Net book
Value
1999
Net book
Value
$ 3,631,355
56,419
221,437
176,298
1,537,693
371,690
4,613,701
$
253,994
29,394
166,202
154,969
570,560
161,005
-
$ 3,377,361
27,025
55,235
21,329
967,133
210,685
4,613,701
$ 2,103,496
30,617
87,122
60,061
783,980
233,212
358,891
$ 10,608,593
$ 1,336,124
$ 9,272,469
$ 3,657,379
Bank indebtedness:
The VAA has a $2,000,000 operating line of credit incurring interest at the prime lending rate. The
operating line of credit is secured by a demand collateral first mortgage of the VAA's leasehold
interest and assignment of rents for an unlimited amount. At December 31, 2000, the operating line
of credit was temporarily used to fund capital expenditures for the airport terminal building (ATB)
expansion project.
21
Cash in operating account
Funds borrowed for ATB project
$
810,096
(1,725,740)
Net bank indebtedness
$
(915,644)
2000 ANNUAL REPORT
5.
Retirement allowance liability:
Under the terms of the transfer agreement with Transport Canada, the VAA assumed the
Government of Canada's obligation to pay its former employees compensation upon retirement or
termination in accordance with the collective agreements. The VAA received from the Government
of Canada an amount equivalent to the actuarially adjusted liability. The VAA has recorded
additional liabilities in accordance with the agreements.
6.
Long-term debt:
Under the terms of the transfer agreement with Transport Canada, the VAA purchased certain capital
assets and inventories from the Government of Canada. This purchase was financed by an
interest-free loan of $1,520,554 repayable in installments for the years 1998 and 2001 inclusive. The
principal due on January 1, 2001 was repaid in December 2000.
7.
Commitments:
(a) Transport Canada lease:
The VAA pays lease payments to Transport Canada which are calculated under a formula which
includes annual airport revenue, passenger volumes and operating costs. The maximum annual
lease payment obligation is $1,015,300 for each of the next five years subject to a Consumer
Price Index Adjustment.
(b) Airport Terminal Building Expansion:
The VAA has embarked on an airport terminal building expansion project with a budgeted cost of
$20,981,000. As of December 31, 2000, contracts issued totaled $11,158,618. It is anticipated
that the remaining contracts amounting to $9,822,382 will be issued in 2001.
(c) Financing of Airport Terminal Building Expansion:
The project will be funded by an Airport Improvement Fee and a loan of up to $20,000,000
provided by the Canadian Imperial Bank of Commerce secured by way of a mortgage of the
VAA's leasehold interest and assignment of the Airport Improvement Fee (Note 9).
(d) Hedge Contracts:
The VAA has entered into an interest rate protection agreement that hedges a total of $12 million
in borrowing under the terms of the Credit Facility Agreement with the CIBC.
An interest rate swap agreement fixes the rate on $5 million of floating rate loans at 6.28% for 8
years commencing January 2, 2001. An interest rate collar sets an interest rate between 5.98%
and 6.80%, on $7 million of floating rate loans for 5 years commencing January 2, 2002.
22
2000 ANNUAL REPORT
8.
Contingent pension liability:
The VAA and its employees contribute to the Municipal Pension Plan in accordance with the
Pension (Municipal) Act of British Columbia. The Superannuation Commission of the Province of
British Columbia administers the plan, including the payment of pension benefits. The plan currently
has more than 100,000 active contributors.
Every three years an actuarial valuation is performed to assess the financial position of the plan and
the adequacy of plan funding.
The latest published valuation was at December 31, 1997 and disclosed a $548 million unfunded
actuarial liability (UAL) for funding purposes ($1.31 billion as at the previous valuation). This
represented an improved financial position, with a decrease in the UAL as a percentage of covered
payroll from approximately 36% to 14%. Plan legislation provides that the unfunded liability will not
cause increases in the employment group statutory contribution rates, upon which employer specific
rates are based as long as the financial health of the pension plan improves from one valuation to
the next. The actuary does not attribute portions of the UAL to individual employers. Contributions
to the plan by the VAA are expensed in the year when payments are made.
9.
Airport Improvement Fee ("AIF"):
On May 31, 1999 the VAA entered into an agreement with the Air Transport Association of Canada
and major air carriers serving the Victoria International Airport (the "AIF Agreement"). The AIF
Agreement provides for a consultation process with the air carriers on airport development as well as
the collection of an AIF by air carriers. AIF revenues can only be used to pay for airport passenger
service facilities development and related financing costs. Effective October 1, 1999, the VAA
introduced an AIF in the amount of $5 per local boarded passenger.
2000
1999
AIF revenue
Eligible capital expenses
$
2,389,722
(4,897,913)
$
479,386
(148,101)
Net surplus (deficit)
$ (2,508,191)
$
331,285
10. Income and B.C. Capital taxes:
The VAA income generated form airport-related operations is exempt from federal and provincial
income taxes. However, the VAA is required to pay the B.C. Capital Tax.
11. Related party transactions:
During the year ended December 31, 2000, the fees paid to the Board of the VAA for their services as directors
amounted to $120,833 (1999 - $119,011).
23
VAA SUPPLIERS
Alan G. Clark
Durwest Construction Management
Philpott Machine Works
Acklands – Grainger
Earth Tech-Reid Crowther
Posscan Systems
Acme Suppliers
EECOL Electric
P&R Western Star Trucks
Action Door Service
Emerson Highway Consulting
Praxair
Action Pacific Investigative
F.A.S. Fuels
Pacific Coast Credit Union
Agrico Sales
FEDEX
.The Print & Copy Place
Air Gas Canada
G & E Equipment Rentals
Plus Computer Solutions
Air Liquide Canada
GCL Energy Electrical Contractor
Profire Emergency Equipment
Albrite Lighting
Gateway Landscaping Supplies
Radio Works
Andec Agencies
GMK Transportation Planning
Ramsay Machine Works
Aon Reed Stenhouse
Genisis Lamp
Reboot Consulting Corporation
Aqua Water Services
Grand & Toys
Robert Freundlich & Associates
Auto Marine Electric
Heritage Office Furnishings
Saanich Peninsula Gravel Mart
B & T Line Equipment Testers
Hirschfield Williams Consultants
Select Service Partners
Bastion Heritage Groups
Houston Sign
Spitfire Grill
BCAA Travel Agency
Insurance Corporation of B.C.
Shamrock Metal
BC Hydro & Power Authority
Intertrek Testing Services NA
Shanahan’s
Beacon Auto Parts
Interstate Batteries
Sidney Flooring
Blohm, Peterson, Vollan, Galloway
Island Asphalt Company
Sidney Tire
Brewis Electric Company
Island Blue Print Co
Siemens Canada
Skyline Surveys
Buckerfields
Island Internet
C-1 Contractors
Island Pipeline Inspections
Slegg Lumber
CAMAAC Systems
Island Saw
Supreme Building Maintenance
Canadian Waste Services
J. Grieve Motors
T & C Cabinets
Canada Post Corporation
Janitor’s Warehouse
Telus
Cavedendish Analytical Lab
Jordans Carpets
Temperature Control Systems
CIBC
Kleen Island Spill Supplies
Thomcat Equipment
CIBC VISA Centre
Knappett Construction
Times Colonist
Coast Powerline
L&C Canada Coastal Aviation
Tradewind Scientific
Coast Tractor & Equipment
Lalani’s Appliance Centre
Tran Sign (1999)
Columbia Fire and Safety
The Lock Doctor
UMA Engineering
The Corps of Commissionaires
Mary's Bleue Moon Café
VP Systems
CompuSmart
Metro Lexus Toyota - Victoria
Van Isle Industries
Cooper Crouse-Hinds
Milou Holdings
Victoria Mobile Radio
Crease Rentals
Minister of National Defence
Crocker Equipment
National Car Rental
DHL International Express
MVP Crest & Trophy Products
Westburne Industries
Western Association For Community
Living
Western Canada Fire Protections
Dan Foss Couriers
Maritime Life Insurance
Western Oil Services
Dave Turner Plumbing & Heating
Men in White Painting
Western Supplies
Delcan Corporation
Montgomery-Kone Elevator
Wholesale Fire & Rescue
Dell Computer Corporation
Moore Platerson Architects
Wilson & Proctor
Dish-Link Communications
Old Country Equipment
Works World Sidney
Dover Elevators Corporation
Omega Agencies
THE VAA TEAM
Name
Tom Bilodeau
Position
Firehall Special Projects Officer
John Birchall
Manager, Airside Operations
Mike Booton
Marc Bourassa
Dave Bremner
Manager,
Project Development
and Technical Data Centre
Firefighter
Firefighter
Paul Connolly
Administrative Assistant
Scott Cunningham
Trudy Dafoe
Electrical Supervisor
Finance Assistant
Larry Donaldson
Crew Chief
Steve Donaldson
Firefighter
Bob Guido
Equipment Operator
Cliff Howlett
Mechanic
Dan Jack
Firefighter
Margi Johnson
Sharon Johnston
Anita Kardos
Ken Keck
Stacey Lee
Lana Martin
Revenue Administrator
Lease Management Officer
Airport Marketing
& Development Officer
Field Supervisor
Firefighter
Bruce McRae
Len Morris
Maintenance
Administration Assistant
Duty Officer
Carpenter Handyman
Bob Nalleweg
Electrician
Richard Paquette
President and CEO
Ralf Peper
Data Technician
Jeff Peters
Senior Mechanic
Danita Radford
Rick Robertson
Stan Sam
Dave Savage
Manager,
Finance and Human Resources
Crew Chief
Equipment Operator
Firefighter
Mike Smith
Technical Support Officer
Scott Snow
Crew Chief
Terry Stewart
Ian West
Gary Wilson
Lorraine Wilson
Jim Wood
Ken Keck and Anita Kardos
at VAA Equipment Rodeo
Manager,
Planning, Environment
and Community Relations
Manager,
Terminal
and Commercial Operations
Firefighter, trainee
Human Resources Administrator
Firefighter
CORPORATE OFFICE
The Corporate Offices are located at:
Victoria International Airport
201- 1640 Electra Boulevard
Sidney BC V8L 5V4
250-953-7500 (telephone)
250-953-7509 (fax)
Web site – www.victoriaairport.com
Auditors:
KPMG Victoria
Bankers:
CIBC
Legal Firm:
Cox, Taylor Barristers
Photographs by:
Bill Cann, Corps of Commissionaires

victoria airport authority 2000 annual report

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