Community Futures Development Corp. of Greater Trail Annual Report for 2012 / 2013 Fiscal Year

Transcription

1 Community Futures Development Corp. of Greater Trail Annual Report for 2012 / 2013 Fiscal Year

2 Be a catalyst for sustainable development in the Greater Trail region by assisting entrepreneurs and supporting community economic development initiatives to enhance the region s economic prosperity, social well-being, and environmental integrity. Cover photo by Doell Photography

3 It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change. Charles Darwin

4 Photo by Doell Photography

5 TABLE OF CONTENTS PAGE Chair s Letter...7 General Manager s Report...8 Community Futures Operations...9 Loans Administration...9 Business Services...9 Business Library...9 Technology...10 Finance Committee Report...11 Lending Activity...11 Sector Trends...11 Interest Revenue...11 Loan Loss...12 Self-Employment Program Report...14 Milestones...14 Youth Entrepreneur Initiatives...14 Junior Achievement...14 Junior Dragons Den...14 Community Economic Development Committee Report...15 Economic Development Initiatives...15 Consolidated Financial Statements for the Year ended March 31, Index to Consolidated Financial Statements...19 Independent Auditor s Report...20 Consolidated Statement of Financial Position...21 Consolidated Statement of Operations...23 Consolidated Statement of Changes in Fund Balances...25 Consolidated Statement of Cashflows...26 Notes to the Consolidated Financial Statements...27 Purpose of the Organization...27 Summary of Significant Accounting Policies...27 Adoption of Accounting Standards for Not-For-Profit Organizations...29 Accounts Receivable...29 Tangible Capital Assets...30 Allowance for Credit Losses...31 Investment Loans and Related Loan Loss Allowances...31 Accounts Payable...31 Repayable Loan Funds...32 Loan From Syndicated Partner...32 Restricted Net Assets...33 Interfund Transfers...33 Economic Dependence...33 Investment Loans Receivable...33 Commitments...34 Financial Instruments...34 Related Party Transactions...35 Contingent Liability...35 Comparative Amounts...35 Schedule 1: Externally Restricted Investments Statement of Financial Position...36 Schedule 2: Externally Restricted Investments Statement of Operations... 40

6 Photo by Doell Photography

7 Chair s Letter As we close another challenging fiscal year we, as a Board and as volunteers, are thankful that our region is once again starting to flourish. Our clients and organization were not immune to recession related challenges but faired well over the past year, as economic conditions continued to improve. We continue to work with all our clients to provide support and guidance through these challenging times and find it is often difficult to measure the true success of a program such as this; one that is involved in so many facets of both business and community development. We will ensure that future entrepreneurs and businesses have access to this resourceful program, so that they can expand their business vision within our communities. We will also ensure the program is managed effectively, allowing our organization to inject money into our community, while keeping loan losses to a minimum. We were able to increase our volunteer board to twelve members, which is comprised of individuals from all areas of Greater Trail, showing our commitment to actively refresh our board and ensure we have an equitable area of representation. On the lending front, the corporation s delinquency rate and write-offs remained well within acceptable limits showing that our board policies and procedures are robust. We were also able to dispense another $1.1M into our community this fiscal year, enhancing existing businesses and supporting new business ventures. We will continue to work with all of our clients to provide as much flexibility and support as we possibly can, while recognizing our responsibilities as stewards of a community asset. With regards to community economic development, we continued with the development and delivery of both the South Kootenay Business Centre (SKBC) and the South Kootenay Data Centre (SKDC). The SKBC now has 53% occupancy and our goal is to have this facility at 100% capacity within two years. The SKDC has been commissioned and is being used by the Columbia Basin Broadband Corporation (CBBC) as their data centre. We are dedicated to these projects and will devote significant resources to them in the coming fiscal year. Community Futures is very fortunate to be able work with entrepreneurs, as they exemplify endless enthusiasm for this great region and believe in its potential. On behalf of our Board of Directors, we thank you for providing us with the inspiration to continue as volunteers for this program, to see your business visions come to fruition, and improve the overall quality of life and added prosperity in the Greater Trail region. I would like to acknowledge our partners because without collaboration, co-operation, and support, our achievements would be limited. Also, my sincerest appreciation goes to my fellow volunteer Board and Committee members; thank you once again for your commitment to this worthy organization. Finally, the Board and Committee members would like to recognize the staff of the corporation, whose dedication to both our clients and our organization is greatly appreciated. We would also like to thank Craig Adams, our former General Manager, for his many years of outstanding service and welcome our new General Manager, Don Freschi, to the organization; our future is in good hands. Sincerely, Larry Doell, Chair, Board of Directors Page 7 Page 7

8 General Manager s Report The 2012/2013 fiscal year mirrored that of the previous year, as we saw stable local economic fundamentals but continued to be impacted by the slow recovery of both national and global economies. Income and employment levels in the region remained relatively stable; however, property values and investment portfolios remained stagnant. While this resulted in net zero impact on disposable income for residents, there has been a noticeable decline in the average individual s net worth across the region. As an organization, we strive to grow and diversify our regional economy by assisting small- and medium-sized enterprises (SMEs) via our suite of services. We also work diligently to support and, where appropriate, lead regional economic development initiatives. The organization continues to devote resources to the Lower Columbia Community Development Team Society. As an example of this partnership, we currently have one staff member fully involved in preparing an RFP, helping to select the successful proponent, and providing continued support for a regional recruitment package project. The South Kootenay Business Centre (SKBC) remains at 53% occupancy; a new marketing and promotion campaign will begin in the 2013/2014 fiscal year. After two full years of operation, this new 15 office business incubator, located in downtown Trail, is starting to be known within the community and we hope to have it fully occupied within the next two years. The South Kootenay Data Centre is a complimentary initiative to the SKBC and was completed and operational this fiscal year. In 2013/2014, the Columbia Basin Broadband Corporation (CBBC) will be operational from our Data Centre and plans to operate its fibre network as the communication hub for the Columbia basin. Our loan funds remained stable this past fiscal year; however, there was a noticeable decrease in demand. Neither our clients nor our organization were immune to recessionary effects that remain locally, regionally, and globally. While some of our clients indeed struggled financially, delinquency and loan loss rates were within acceptable limits (<2%). Although the signs of an economic recovery are more promising than at this time last year, the local, national, and global economies still face significant challenges going forward. In February of 2013, we saw the exit of our existing General Manager, Craig Adams. I would like to thank Craig for his many years of service with our CF and wish him the best of luck in his future endeavors. I would like to thank our Board and volunteers, whose commitment to regional economic development inspires me. I would also like to thank our staff for their hard work, commitment, and support to the organization and its mandate. To our funders and partners, I would like to extend our gratitude for your contributions to another successful year of operations. Most importantly, I would like to thank our clients and our communities who provide us with the motivation to play a part in moving this region forward. Sincerely, Don Freschi, General Manager Page 8

9 Community Futures Development Corporation of Greater Trail Operations 2012/2013 proved to be another busy year in terms of assisting both existing and new clients to start up and/or expand their operations. Loans Administration The loans portfolio is tracked using The Exceptional Assistant software. This program allows Community Futures staff to accurately track loan performance and delinquency. It also has reporting features that can generate a variety of information on the overall loan portfolio. It is a particularly useful tool in the preparation of quarterly performance reports required by Western Economic Diversification (WD). Performance reports contain information on the administration and management, community economic development short- and long-range projects and programs, business services, loan funds, marketing and visibility, and financial losses. WD requires these reports and uses the information to communicate the performance of Community Futures organizations to the citizens of Canada. Business Services In 2012/2013, Community Futures of Greater Trail provided the following business services to current and potential residents: Service Type Clients Served Information Services 541 Technical & Advisory Services 119 Training & Skills Development 66 Business Library Community Futures' business library was well used in the 2012/2013 fiscal year and membership increased by 12 members. There are currently 1,099 members of the business library. The library implements a database system that allows efficient tracking of borrowed publications and patrons. There are 625 publications available to choose from and they may be borrowed in two, three, or four week intervals at no cost to users. This year, the Trail & District Chamber of Commerce donated 15 books to the library. Community Futures maintains a yearly subscription to the Trail Daily Times as well as various business magazine subscriptions such as Maclean s, BC Business, and Canadian Business. These publications are also available to patrons at no cost. Page 9 Page 9

10 Technology CommunityFutures.com Since 1998 the Community Futures website, CommunityFutures.com, has played an increasingly important role in daily operations. It allows staff to broadcast information about programs, services, and training opportunities. It also provides visitors a wealth of information pertaining to starting and running a business. Visitors can browse the business library titles, view business idea lists, register for Self Employment Program orientations, sign up for training seminars, and even apply for business loans. All content was renewed in 2012 and the enterprise class content management system was updated to the most recent version. Earlier in the year, a new Facebook page and Twitter feed were also added. Between April 1, 2012 and March 31, 2013, a daily average of 435 visitors browsed the Community Futures website. Community Futures also tracks monthly unique visitors to estimate repeat visitors. During the 2012/2013 fiscal year, only 43,120 of the 158,654 visitors were one time visitors; in other words, 73% of visitors to CommunityFutures.com return later in the month as a repeat visitor. Page 10

11 Finance Committee Report Lending Activity Due to recent economic uncertainty, local entrepreneurs and businesses were faced with tightening of credit practices and elevated levels of risk. This resulted in $1,101,794 disbursed directly from the loan portfolio at year end, which was up slightly from the 2011/2012 fiscal year of $825,065. Unfortunately, as there was les demand for financing, there were no opportunities to partner with our sister Community Futures offices. Some clients were successful in transitioning into mainstream banking which resulted in Community Futures seeing a higher turnover in the loan portfolio over recent years. Dollars Disbursed Per Fiscal Year 4,000, ,500, ,000, ,500, Fiscal Year 2,000, ,500, ,000, , Amount Di sbur sed Loan Syndicate f unds CFDC Inter nal Funds Sector Trends In 2012/2013, Community Futures focused a significant amount of lending to the tourism and retail sector. It is important to note that while these sectors fell out of favour with conventional lenders, they play a vital role in our regional economy and access to capital was required by many entrepreneurs for start-up, maintenance, and expansionrelated activities. Interest Revenue The Bank of Canada maintained a consistent prime lending rate of 3.00% throughout the 2012/2013 fiscal year. Even though there was no fluctuation in the interest rate, Community Futures experienced a $56,157 decrease in interest revenue over the previous fiscal year. While we received a total of $319,502 in interest this past fiscal year, we have yet to recover to the pre-recessionary levels of income. Interest Revenue Amount in Dollars Page 11 Page 11

12 Loan Loss Community Futures loan portfolio goal is to balance risk with community development. As a community based lender, our loan funds serve a dual purpose: * To invest and support sound business ventures within our communities; and * To assist in the overall scope of long-term community development goals and activities in the area. The 2012/2013 fiscal year did not experience any loan write-offs; loan delinquency numbers decreased year over year; and the overall loan portfolio is in good health. The trend for the 2013/2014 fiscal year will have Community Futures continue to work with businesses and entrepreneurs to resolve recession-related issues. Regards, Ian McAlpine Finance Committee Loan Receivable Balance Per Fiscal Year 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 Syndicat e Funds Part ner Funds CFDC Int ernal Funds 1,000, Fiscal Year Page 12

13 Photo by Doell Photography Page 13 Page 13

14 Self-Employment Program Community Futures goal for the 2012/2013 fiscal year was to assist a minimum of 18 insured participants in the Greater Trail area (comprised of the following communities: Trail, Warfield, Rossland, Montrose, Fruitvale, and Electoral Areas A and B) to become self-employed through the provision of business counselling and income support. Milestones: Up to March 31, 2013, the following had taken place: 15 total SEP clients attended the orientation sessions (83% of goal); 10 of those clients enrolled in the SEP after attending the orientation sessions (66% uptake); All 10 clients received support to develop their business plans (Stage I); 8 clients received support to implement their business plans (Stage II); 6 carryover clients completed their contracts. The SE Program continues to be advertised via posters displayed at the local Service Canada office and The Greater Trail Community Skills Centre, as well as utilization of the Community Futures website. The Greater Trail Community Skills Centre continues to administer the SE Program and partner with Community Futures for the continued delivery of the Program. The Guaranteed Maximum Service Fees have been approved until March 31, 2014 at which time it will switch to a Fee for Service program. This means Community Futures will have to see an increase of our SE client intake by 400% to justify the cost to deliver the program, which may not be realistic; therefore, we are looking at other ways to cover costs so that the SE Program can continue to be delivered in our area. Youth Entrepreneur Initiatives Junior Achievement Program The Junior Achievement Program is scheduled for a May 2013 start date, which will consist of 5-one hour sessions in which grade 7 students work together in teams of 4 5 people to develop an enterprise/business. We expect this to be a popular program and plan to continue to deliver the program in local schools. Junior Dragons Den Junior Dragons Den (JDD) is another program that will be launched during the 2013/2014 fiscal year. Modelled after CBC s Dragons Den, qualifying young entrepreneurs will pitch their business idea to a group of potential investors with the hope of attracting one or more to invest in their business idea. JDD will be a West Kootenay-wide initiative and call to action for young entrepreneurs, ages 13 to 17, to create their own summer job/business. Closing Remarks Finally, I would like to thank all the committee volunteers and Community Futures staff for taking time out of their busy schedules to attend the meetings and business plan reviews. Regards, Don Freschi, General Manager Page 14

15 Community Economic Development Community Futures CED Committee Community economic development (CED) is one of the core functions of Community Futures of Greater Trail. As CED practitioners, we actively engage the community, the private sector, as well as local, federal, and provincial governments to encourage sustainable economic prosperity in balance with social well-being and environmental integrity. A six member CED Committee meets regularly to identify and prioritize short and long term community economic development goals and objectives. This committee is responsible for vetting, evaluating, and reporting to the Board of Directors on all activities that are not related to the loans program or the Self Employment Program. The CED Coordinator and General Manager also attend these meetings in order to report back to the committee on initiative progress and to share knowledge on other local initiatives and external influences that impact the economic health of Greater Trail. Economic Development Partnerships Staff and Directors support and participate in a wide range of community initiatives and working groups including: the Trail Downtown Opportunities and Action Committee; Rossland Winter Carnival; Waneta Expansion Project Community Impact Management Committee; the Trail Regional Airport; as well as a variety of others. Community Futures CED goals are closely aligned with those of the Lower Columbia Community Development Team (LCCDT) Society and its wholly owned subsidiary the Lower Columbia Initiatives Corporation (LCIC). The purpose of the LCCDT is to advance the economic strength of the region by overseeing the development and cooperative implementation of initiatives that are important to the area, while the LCIC is tasked with providing economic development services and, where appropriate, taking the lead on programs and projects that are designed to grow and diversify the economy of the region. The LCIC maintains its offices on the same floor as Community Futures, facilitating easy inter-agency collaboration. Both the LCIC and the LCCDT utilize Community Futures facilities for Board meetings and various working committee meetings. Our Board and staff members are active on various committees of the LCCDT along with local politicians, business leaders, and representatives from various agencies that share an interest in social and economic development in the Greater Trail area. Economic Development Initiatives South Kootenay Business Centre The end of the fiscal year marked the second full year of operation of the South Kootenay Business Centre (SKBC). The SKBC is a full amenity business centre and professional office complex for new and expanding firms. The primary goal of the facility is to increase the likelihood of success for a business by allowing the entrepreneur to focus time and resources on business development rather than business establishment. At the end of the fiscal year nine units were occupied. Expanding firms from Montreal and Penticton utilize four suites, home-based businesses three suites, and two suites are occupied by local expanding technology startups. The SKBC currently offers the region s only commercial access to fibre optic broadband. Before construction of the new facility began high importance was placed on the SKBC s potential to act as a catalyst for future commercial fibre deployment and to nurture the formation of a high tech sector. In the second year of the program three firms doing business in the SKBC were technology firms. Page 15 Page 15

16 Fibre Commercialization Advanced communications capabilities are often a prerequisite for firms that provide electronic deliverables such as software developers, multimedia professionals, and digital service providers. Without a robust network in place these types of employment opportunities are rare as doing business in the region is simply not feasible. To attract and retain technology firms and professionals rural communities must make a significant investment in communications infrastructure. To strengthen the business case for fibre commercialization construction of the South Kootenay Data Centre (SKDC) began shortly after the grand opening of the SKBC. Housed in the same building, the SKDC compliments the Business Centre by offering secure, climate controlled server space in addition to the fibre broadband included in each business ready office suite. The 308 rack unit South Kootenay Data Centre was completed in 2012 and is expected to play an important role in fibre commercialization. Near completion of the data centre Community Futures began discussions with the City of Trail and Columbia Basin Broadband Corporation (CBBC) to provide fibre to the merchants of downtown Trail and to enhance utilization of the fibre network. An upgraded 15kVA UPS was installed in a data centre and a suspended slab parking stall was reinforced to support a future backup generator. By the end of the fourth quarter the CBBC was preparing to initiate a new run of 576 strands of fibre into the SKDC. As the new fibre is laid the City of Trail will run spurs lines off the main CBBC run to service downtown merchants. In 2014 the SKDC is expected to operate as the communications centre of the expanded CBBC fibre network. The basin-wide CBBC broadband vision is to accommodate the 26 municipalities, two post-secondary institutions, Ktunaxa Nation, and three regional districts they serve. As community economic development practitioners we are delighted to be part of this initiative. Community Futures has made significant investments to nurture the formation of a high tech sector to provide diversity in our rural economy. We firmly believe fibre commercialization is a major step toward the vision of a robust, multi-regional network that can help forge new inter-municipal partnerships, create new jobs and provide many new business opportunities. Closing Remarks Since inception, Community Futures of Greater Trail has worked to build and strengthen relationships within the communities we serve. Community is a key component of community economic development. True community economic development begins with an entrepreneurial mindset which considers all facets that make our communities livable, desirable, and a place we are proud to call home. Sustainable CED practices help build community capacity while ensuring a balanced triple bottom line for People, Planet, and Profit. Community Futures looks forward to continuing relationships with its existing partners, as well as building new partnerships in the coming year. Regards, Kim Deane Chair, CED Committee Page 16

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