SONGHEES NATION

2014 Annual Report

SONGHEES NATION

2014 Annual Report

CONTENTS

Introduction

Governance

Administration

Programs and Services

Economic Development

2014 Financial Statements

COUNCIL MESSAGE……

Under the Songhees Nation Financial Administration Law, Songhees Chief and Council have committed

to publishing an Annual Report which includes audited financial statements and a description of

programs and services. The purpose of the report, foremost, is to inform our members. We are also

proud to share the report with our neighbours, tenants, business partners and other interested stake-

holders. It has been a year of dramatic growth and change for Songhees Nation, made possible by the

vision of our leaders, the dedication of our staff members and the commitment of our Community Mem-

bers. Our people have come together to do amazing things. We look forward to a future of continued

success.

Songhees Nation offers local, provincial and federal government ser-

vices to our membership and residents. Local government services include,

property taxation and the provision of local services such as sewer and water,

public works and infrastructure. Provincial services include, emergency services,

education, social development and child and family development. Federal ser-

vices include, lawmaking, elections, citizenship (membership) treaty rights, abo-

riginal title, land claims and intergovernmental affairs.

Songhees Chief and Council serve the membership as Leaders,

Visionaries, Ambassadors and Advocates in the following ways:

• Community Engagement • Exerting Songhees Aboriginal Rights and Treaty Rights • Protecting and Exerting Songhees Jurisdiction over Land and Resources • Intergovernmental Affairs and Political Advocacy • Representation at regional and national First Nation Leadership gatherings • Representation on advisory and governance boards • Economic Development • Lawmaking and Policy Development

Chief and Council share their responsibility to govern the Nation equally. Any

Council decision requires the approval of a quorum of four (4) Council Mem-

bers.

Portfolios allow councilors to gain a

more thorough understanding of a

specialized area and bring this un-

derstanding to the Council and Com-

munity. Council members may also

bring community and council wishes

to gatherings and meetings as an

advocate for Songhees interests.

Council Meeting

Attendance in 2013 Present

# of

mtgs

Chief Ron Sam 20 20

Councillor Garry Albany 16 20

Councillor Nick Albany 13 20

Councillor Frank George Sr 17 20

Councillor Karen Tunkara 15 20

Councillor John Rice Jr 9 13

June 2013 Songhees Council Election Results Chief Ron Sam, Councillor Ron Sam (declined) Councilors Garry Albany, Nicholas Albany, Frank George Sr and Karen Tunkara. Councillor John Rice Jr was elected in a bi-election for the seat vacated by Ron Sam.

GOVERNANCE

Council Portfolios 2013-2015

Chief Ron Sam

Garry Albany

Frank George

Nick Albany

Karen Tunkara

John Rice

Governance Administration Financial Management Longhouse, Language & Culture

Treaty and Land Claims Local Government Services Economic Development Social Development Operations and Maintenance Education Health Archaeology Fisheries Recreation and Youth

FINANCE AND AUDIT COMMITTEE

The Finance and Audit Committee carries out a number of financial activities in respect of the financial admin-istration of the Nation. The Committee reviews the draft annual budget, the quarterly financial statements and monitors the financial performance of the Nation.

The Committee is comprised of Councillors, Nation members and an Accountant with staff as resources. Two Councillors are appointed following Council elections and must sit on the Board until the next election. Karen Dick-Tunkara is Chair and John Rice, Jr is Vice Chair. Currently serving a three-year term as Nation representa-tives are Florence Dick, Perry Dick and Maggie Charlie. Doug Crowder joins the Board as a practicing Accountant in good standing and staff is represented by Christina Clarke, Director of Operations and the Senior Finance Officer. When necessary, the Auditor is invited to attend.

The Financial and Audit Committee is the direct link from Council to Community regarding financial administra-tion with the goal of making financial reporting easy to understand and transparent. Each member proudly serves the community in this capacity.

ADMINISTRATION

We strive to provide programs and services which are meaningful and appropriate and contribute to the well being of the Songhees Community. The operations of the Songhees Nation are governed by Laws, Bylaws and Policies passed by Songhees Chief and Council under the laws and legislation of Canada. The Songhees Nation Financial Administration Law and Financial Policy and Procedures Manual guide our operations with sound financial management and the principals of fairness, accountabil-ity and transparency. Songhees Nation employs 33 staff members grouped into five divi-sions, Administration, Education Services, Health and Social Services, Local Government Services and Convention Services. The Songhees Nation Personnel Policy guides our human resource management. The programs and services we operate are contractually governed by funding agreements. Aboriginal and Northern Affairs Canada (AANDC) is our primary source of revenue for programs and services, particular-ly Education and Social Development. Agreements are also in place with the First Nations Health Authority, Intertribal Health Authority and Coast Salish Employment and Training Society. These agreements include provisions which govern eligibility for service, eligible expendi-tures, limits on funding levels and reporting requirements. Programs and Services are only valuable if they meet the needs and priorities of the Songhees Community. Community involvement is critical to the success of our operations. Through attendance in pro-grams, constructive feedback and requests for service, community members contribute to the evolution of programs and services. This period of exciting and constructive change pushes us to be adap-tive, collaborative and resilient. Songhees Staff are dedicated and pas-sionate about serving the people of the Songhees Nation.

SONGHEES ADMINISTRATION ORGANIZATIONAL CHART

HEALTH AND SOCIAL

SERVICES

Director of Health and Social Services Administrative Assistant Social Development Coordinator Community Support Worker Youth Worker Recreation Coordinator Personal Care Attendant Homemaker Elders Program

EDUCATION SERVICES

Director of Education Services Early Childhood Ed. Centre Manager Infant Toddler Caregiver ECE Workers School Liaison Student Facilitators Kwum Kwum Lelum Coordinator Employment Training Coordinator Employment Training Assistant Post Secondary Coordinator

LOCAL GOVERNMENT SERVICES

Director of Local Government Services Lands Management Housing Coordinator Infrastructure and Public Works Lands and Real Estate Clerk Tax Administrator Tax Clerk Bylaw Enforcement Officer Bylaw/Security Assistant Security Workers Building Service Technician

Administrative Assistant Treaty Clerk Membership/Registry Clerk Receptionist Finance Clerks

DIRECTOR OF OPERATIONS

CONVENTION SERVICES Convention Services Manager Food and Beverage Set Up/Take Down Crew Parking Attendants Cooks and Servers Artists and Dance Groups Garden Worker

FINANCE AND AUDIT

COMMITTEE

SENIOR FINANCE OFFICER

CHIEF AND COUNCIL

EDUCATION SERVICES

DAYCARE PROGRAM To support families with caregivers working or attending school, Songhees Daycare offers full daycare services from 8 am to 5pm. This year, 15 children were registered in the program. The Daycare is funded by AANDC and Provincial subsidy payments from the Ministry for Children and Families.

SONGHEES PRESCHOOL Songhees Preschool offers a safe and supportive environment for children to begin their educational journey. The curriculum in the preschool is designed to prepare the children for entry into public school as well as grounding them with community and family support for their education. There were 8 children in the half day preschool program.

KINDERGARTEN TO GRADE 12 Under Songhees Nation’s Local Education Agreement, AANDC funding provides public and private school tuition payments to the school districts and private schools. In 2013 there were 134 students enrolled in public school and 11 in private school. AANDC education funding provides financial support for books, school supplies, student allowance, student fees, bus passes and graduation allowance. The Greater Victoria School District provides funding to employ a Student Liaison and Student Facilitators at Craigflower Elementary, Shoreline Middle School and Esquimalt High. Student Facilitators offer tutoring and mentoring to students. Congratulations to this year’s grade 12 graduates: Jeffrey Holand, Issac Joe, Braden Sam, Jenna Lancaster and Allen Dick Jr. KWUM KWUM LELUM The afterschool homework club provides assistance to ele-mentary and middle school students Mondays to Thursdays from 3-5pm. University of Victoria students volunteer as tu-tors for the program. Kwum Kwum Lelum is very popular with students and is having a positive impact on academic success for Songhees Nation.

POST-SECONDARY AANDC provides funding for tuition, books, supplies and living allowance for eligible students. In 2013 there were 10 full-time students funded. We celebrated 3 Graduates this year. We are very proud of Margaret Charlie for earning her Bachelor of Social Work from UVic, Brianna Dick for her diploma in Indigenous Studies and Lorne Sam for his diploma in Sports Management at Camosun College.

EMPLOYMENT TRAINING The Songhees Employment and Learning Centre (SELC) is funded through the Coast Salish Employment and Train-ing Society (CSETS). The program offered training in workplace certificates, upgrading in Math and English, “Ready to Rent” program, and Building Service Worker training this year. The Job Readiness program, in collabo-ration with IMTARC provided training in work readiness, offering guest employer speakers, field trips to local work places (shipyard, graving dock, Ralmax, Greater Victoria Harbour Authority) and workshops on driver li-cense training, resumes, cover letters and interview skills. 6 out of 15 participants went on to full-time employ-ment.

HEALTH & SOCIAL SERVICES

COMMUNITY HEALTH & WELLNESS The goal of the Songhees Health and Social Services division is to provide a safe and welcoming environment, encouraging participa-tion in programs intended to improve the wellbeing of the Songhees Community. Wellness programs include primary health clinics, pre and post natal care, vaccination clinics, injury prevention training, chronic disease prevention and management, oral health, and facilitated fitness and recreation programs. Primary health clinics held this year include chiropractic care, foot care and massage clinics. A Wellness fair served 120 participants. 80 Youth were involved with Youth Pro D days and Summer camps.

Family wellness events included community meals, pumpkin carving, back to school carnival , mothers and fa-thers day bbqs, and Elders Easter Dinner, cultural nights for sharing skills in arts and crafts and food preservation.

YOUTH PROGRAMS Songhees Youth programs strive to provide equal opportunities to engage in academic, social and recreational activities for youth of the Songhees Community. This year a United Way Grant provided generous sponsorship for an amazing Science & Literacy camp.

RECREATION PROGRAMS In the summer of 2013, Maplebank Canoe Races were held for the first time in 20 years. 2013 also saw the 1st annual Songhees Health Challenge. Community members participated in Saturday Swim Nights and Drop in Sports at the Songhees Wellness Centre. Members have been exercising in the new Fitness Studio at the Wellness Centre.

SOCIAL DEVELOPMENT

Income assistance clients have had opportunities to participate in first aid, food safe and basic security training this year. Income assistance clients have also been included in the Songhees Labor Pool. In partnership with Im-tarc, GVHA and Wilson Transportation, Songhees hosted a summer employment project to increase work experi-ence, and work place readiness.

Health and Education Staff work collaboratively to provide holistic programs and services,

adapting to the evolving needs of the Songhees Community.

LOCAL GOVERNMENT SERVICES

LANDS MANAGEMENT Songhees Nation exercises jurisdiction over disposition and use of Songhees Reserve Lands under the authority of the First Nations Lands Management Act. With the implementation of the Songhees Land Code in 2011, Indi-an Act provisions relating to land management no longer apply. Songhees First Nation Land Code Laws include:

• Matrimonial Real Property Law, 2012 addresses the division of assets if a marriage breaks down • Community Input Procedures Law, 2012 addresses the requirements when a community vote is required to adopt a land law. • Lands Instrument Law, 2012 covers procedures for registering land interests in the First Nations Land

Registry System • Interest and Consent Requirements Law, 2014 outlines the requirements of a lease, permit, license or

easement before the Council may give consent to non-members seeking access to the Nation’s Lands In addition to law development, the Lands department handled 25 external land referrals, 32 land transfer files (FNLRS issues) 339 BC One Call reports with 15 requiring follow up and 2 Rezoning requests.

PROPERTY TAXATION Under the provisions of the First Nations Fiscal Management Act the nation has the authority to collect property tax from taxable interests on Songhees Reserve Lands. We have 662 taxable interests, 653 Residential units (mobile homes, manufactured homes and strata townhomes) 5 Utilities and 6 Businesses. Property Taxes (local revenue) totaled 1,052,000 in 2013.

BYLAW ENFORCEMENT Songhees has nine bylaws under the Indian Act including Traffic and Parking and Animal Control. In 2013, Chat-

ham Island trespass enforcement was a priority. Under the Causeway First Nations Artists Program there were

36 Aboriginal Trading Permits. Under the Animal Control Bylaw 44 Dog Licenses were issued. The Bylaw depart-

ment works on Emergency Response Planning and liaisons with emergency services.

HOUSING There are approximately 90 community member homes on New Songhees IR 1A including 38 homes owned by

Songhees Nation under the Canada Mortgage and Housing Program and rented to Songhees members. Five

Members have completed their CMHC mortgages and own their homes fully. The Songhees Housing Policy is

intended to guide management of the Housing Program for the benefit of the membership.

PUBLIC AND CAPITAL WORKS Local Government Services also includes public works, infrastructure and capital projects. This Includes sewer,

water, roads and buildings. Capital Works this year included Cooper Road Paving and the Songhees Wellness

Centre project.

.

CONVENTION SERVICES

The Songhees Wellness Centre is a focal point for community activities and an opportunity to

engage with the region. The facility is the realization of a long held dream for a community gathering place

with space for sports and recreation programs. The multipurpose building brings together Songhees Govern-

ment, Administration, Health and Social Services, Education Services and Local Government Services.

The Conference Centre facilities are complimented with traditional

dancing and foods, a Gift Gallery and cultural interpretation displays.

Visitors enjoy experiencing Lekwungen culture while new and ex-

citing opportunities emerge for local cooks, singers, dancers, artists

and entrepreneurs.

The Songhees Wellness Centre offers unique event spaces with full amenities. Community members welcome visitors for banquets, business meetings, training sessions, workshops, weddings, dances and receptions. Visitors are welcomed with Lekwungen hospitali-ty, enjoying the language, art and history featured throughout the building.

The Gift Gallery Features Authentic Aboriginal Fairly Traded Art rep-resenting the talent of local artists. The Gallery offers one of a kind carvings, silver jewelry, knitwear and paintings, Songhees Nation Logo Gear, First Nations Books, and Art Cards.

ECONOMIC DEVELOPMENT

Songhees implementation of the First Nations Fiscal Management Act and the First Nations Lands Management Act is intended to improve our investment climate, create economic

opportunities for our members, attract quality development and encourage business partnerships. The development of laws regulating land use and development, property taxation and financing for infra-structure are tools for Songhees Nation and our members to protect and optimize the value of Songhees land for generations to come.

Lands Management Act Laws Fiscal Management Act Laws

Interest and Consent Requirements Law, 2014 Borrowing Laws, 2013

Lands Instrument Law, 2012 Taxpayer Representation Law, 2010

Community Input Procedures Law, 2012 Financial Administration Law, 2009

Matrimonial Real Property Law, 2012 Property Tax Law, 2008

Songhees Land Code, 2010 Assessment Law, 2008

SONGHEES NATION COMPANIES

SALISH SEA INDUSTRIAL SERVICES LTD provides marine industrial services on Vancouver Island including: dredging, pile driving, water and land based construction, mainte-nance, restoration and deconstruction, marine safety and marine support. Salish Sea is a Registered Aboriginal Business under the Pro-curement Strategy for Aboriginal Business. The company is majority aboriginal owned by Songhees Nation and Esquimalt Nation in part-nership with Ralmax Contracting Ltd. Salish Sea provides skilled trades and general labour employment training and placement ser-vices for the Victoria BC industrial market area. Salish Sea Industrial Services has been awarded the 2014 Joint Venture Award from the BC Aboriginal Business Association.

SONGHEES NATION INVESTMENT CORPORATION holds fee simple title to two lots totaling 1.028 hectares acquired through the Incremental Treaty Agreement. 1310 Esquimalt Road is currently available for leasing and 424 Powell Street is leased to Robbins Parking.

SKWIN'ANG'ETH SE'LAS DEVELOPMENT COMPANY is a partnership between Songhees Nation and Esqui-malt Nation and the Greater Victoria Harbour Authority for the purpose of incubating First Nation Business Entities and building business development capacity for Songhees and Esquimalt Nations.

LEKWUNGEN DEVELOPMENT CORPORATION is in partnership with Kosampson Development Corporation, owned by Esquimalt Nation, for the purpose of holding lands acquired through the Transport Canada Harbour Divestiture Process. Xhamasung Holdings LLP, Skungeenes Holdings LLP and Mutulia Holdings LLP are the Hold-ing Companies created to acquire divested properties.

XHAMASUNG HOLDINGS LLP is a limited liability partnership between Songhees and Esquimalt Nations for the purpose of owning a property in Westbay. The lot is currently leased to Westbay Investments for an RV park and parking area.

SKUNGEENES HOLDINGS LLP is a limited liability partnership between Songhees and Esquimalt Nations for the purpose of owning the Plumper Bay Waterlot 20 year lease with Transport Canada. A portion of the water-lot is the subject of a short term lease with Salish Sea Industrial Services Ltd for a barge facility.

MUTULLIA HOLDINGS LLP is a limited liability partnership between Songhees and Esquimalt Nations for the first right of purchase of the Rock Bay property once federal remediation of the adjacent harbour waters is complete.

SONGHEES LABOUR POOL During the 24 month construction phase of the Songhees Wellness Centre, the Songhees Labour Pool matched community members to labour positions on the construction and finishing crews. Durwest Construction Management ensured that Trades sourced labour from our labour pool. As a result 13 community members received employment. Several positions have become full time per-manent jobs with apprenticeship opportunities.

SONGHEES NATION CONSOLIDATED STATEMENT OF FINANCIAL POSITION

March 31, 2014

Financial assets 2014 2013

Cash 2,272,874 1,905,796

Cash – Restricted, Note 7 160,819 140,688

Accounts receivable 1,069,342 2,319,008

Investment in mutual funds (Cost = FMV) 5,286,102 2,324,642

Investment in shares 25 25

Ottawa Trust funds 1,563 1,566

Other Trust funds 11,001,582 10,113,110

Hwy Burns funds 13,433 13,242

19,805,740 16,818,077

Liabilities

Accounts payable 2,054,967 2,940,629

Deferred revenue - 235

Deferred capital contributions, Note 8 - 920,000

Reserves 866,382 208,125

Debt, Note 5 19,934,018 13,835,746

22,855,367 17,904,735

Net financial assets (net debt) (3,049,627) (1,086,658)

Non-Financial assets

Tangible capital assets - Note 3 33,625,620 5,372,524

Building under construction - 16,119,530

Totem poles - 363,881

Prepaid expenses 224,611 98,460

33,850,231 21,954,395

Accumulated surplus, Note 10 30,800,604 20,867,737

SONGHEES NATION CONSOLIDATED STATEMENT OF OPERATIONS

For the Year Ended March 31, 2014

REVENUES 2014 2013

Aboriginal Affairs and Northern Development Canada 3,693,031 3,682,484

First Nations Health Authority 265,682 274,680

Local Revenue (Property Taxation) 1,127,385 1,301,994

Local revenue - Draw from Capital Projects Reserve 1,475,000

Other, Lease Revenue etc 1,654,997 3,560,071

Province of British Columbia (Land Disposition) 3,500,000 -

Coast Salish Employment and Training Society 105,542 110,461

Canada Mortgage and Housing Corporation 42,235 53,830

11,863,872 8,983,520

EXPENDITURES

Governance and Administration 849,074 727,229

Lands Management 315,014 402,684

Public Works 257,606 181,914

Education Services and Tuition Payments 2,034,078 2,013,485

Health Services 316,947 381,726

Songhees Nation Projects 1,229,778 315,530

James Bay Trust Funded Activities - legal and other 100,135 853,805

Social Development (Income Assistance) 859,588 1,328,278

Local Revenue Expenditures (Services to taxpayers) 1,167,450 1,071,072

Local Revenue Capital Expenditures 1,434,935 317,908

Social Housing Operations (CMHC) 150,611 173,068

Ottawa Trust Fund 1,347 1,343

8,716,563 7,768,042

ANNUAL SURPLUS/(DEFICIT) BEFORE OTHER 3,147,309 1,215,478

OTHER

Contributed surplus (building construction) 10,665,331 -

Transfers (to) Trusts/Reserves (3,879,773) (561,669)

ANNUAL SURPLUS/(DEFICIT) 9,932,867 653,809

ACCUMULATED SURPLUS, BEGINNING OF YEAR 20,867,737 20,213,928

ACCUMULATED SURPLUS, END OF YEAR 30,800,604 20,867,737

SONGHEES NATION CONSOLIDATED STATEMENT OF CHANGE IN NET DEBT

For the year ended March 31, 2014

2014 2013

Excess (shortfall) of revenue over expenditures 3,147,309 1,215,478

Adjustment – deficit from capital project 111,316 -

Transfer to operating reserve - (4,357)

Net transfers from (to) local revenue funds (1,287,645) (88,512)

Transfer/increase (decrease) trust funds 888,732 (509,522)

Transfer to/from restricted funds (757,000) 40,017

Contributed surplus capital project 10,665,331 -

Acquisition of tangible capital assets (11,929,691) (10,939,255)

Amortization of tangible capital assets charged against

Capital Fund and Social Housing Fund 160,006 135,074

Decrease in capital surplus fund (2,835,411) -

Amortization of federal government grants 235 705

(1,836,818) 10,150,372)

Use (purchase) of prepaid expenses (126,151) 36,163

Change in Net Financial Assets/Net Debt (1,962,969) (10,114,209)

Net Debt, at beginning of year (1,086,658) 9,027,551

Net debt, end of year (3,049,627) (1,086,658)

SONGHEES NATION CONSOLIDATED STATEMENT OF CASH FLOW

For the Year Ended March 31, 2014

OPERATING ACTIVITIES 2014 2013

Excess (deficiency) of revenues over expenditures 3,147,309 1,215,478

Adjustment – deficit from capital project capitalized 111,323 -

Items not requiring a current outlay of cash:

- Amortization 160,006 135,074

- Deferred capital contributions - 920,000

- Transfer from capital projects fund - (175,000)

- Miscellaneous non-cash items - (35,731)

Change in non-cash items:

- (Increase) decrease in restricted cash (20,131) 65,681

- (Increase) decrease in accounts receivable 1,249,666 (1,130,801)

- (Increase) decrease in prepaid expenses (126,151) 36,163

- Increase (decrease) in accounts payable (885,662) 918,810

- Increase (decrease) in replacement reserves 658,257 16,273

- Increase (decrease) in deferred revenue (920,235) 919,294

3,374,382 2,885,241

FINANCING ACTIVITIES

Increase (decrease) in contributed surplus 7,072,921 705

(Increase) decrease of investments (2,961,460) 361,942

Increase (repayment) of long-term debt 6,098,272 8,564,145

10,209,733 8,926,792

INVESTING ACTIVITIES

Increase (decrease) in trust funds - (626,644)

(Increase) decrease in local revenue funds (1,287,346) (135,655)

(Increase) decrease in capital assets (11,929,691) (10,939,255)

(13,217,037) (11,701,554)

INCREASE (DECREASE) IN CASH DURING YEAR 367,078 110,479

CASH – Beginning of year 1,905,796 1,795,317

CASH – End of year 2,272,874 1,905,796

SONGHEES NATION NOTES TO THE FINANCIAL STATEMENTS

March 31, 2014

1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

These Summary Financial Statements have been prepared in accordance with generally accepted accounting principles for the public sector as recommended by the Public Sector Accounting Board of the Canadian Institute of Chartered Ac-countants.

The Songhees First Nation reporting entity includes the Songhees First Nation government and all related entities that are controlled by the First Nation.

a) Fund Accounting

Songhees First Nation uses fund accounting procedures which result in a self-balancing set of accounts for each fund established by legal, contractual or voluntary actions. The various funds have been amalgamated for the purpose of presentation in the Summary Financial Statements.

b) Reporting Entity and Principles of Financial Reporting

The reporting entity includes the Songhees First Nation government and all related entities which are accountable to the First Nation and are either owned or controlled by the First Nation.

These financial statements consolidate the assets, liabilities and results of operations for the following entities which use accounting principles which lend themselves to consolidation:

- Songhees First Nation Government Administration and Capital - Songhees First Nation Trust Funds - Songhees First Nation Social Housing Program - Songhees First Nation Controlled Entities All inter-entity balances have been eliminated on consolidation, but in order to present the results of operations for each specific fund, transactions amongst funds have not necessary been eliminated on the individual schedules.

c) Asset Classification

Assets are classified as either financial or non-financial. Financial assets are assets that could be used to discharge existing liabilities or finance future operations. Non-financial assets are acquired, constructed or developed assets that do not provide resources to discharge existing liabilities but are employed to deliver government services, may be consumed in normal operations and are not for resale. Non-financial assets include tangible capital assets, pre-paid expenses and inventories of supplies.

d) Cash

Cash includes cash on hand and balances with banks net of bank overdraft.

e) Tangible Capital Assets

Tangible capital assets include acquired, built, developed and improved tangible capital assets, whose useful life extends beyond one year and which are intended to be used on an on-going basis for producing goods or delivering services. Tangible capital assets are reported at net book value. Contributions received specifically to assist in the acquisition of tangible capital assets are reported as deferred revenue and amortized to income at the same rate as the related asset. Certain assets which have historical or cultural value, including works of art, historical documents and historical and cultural artefacts, are not recognized as tangible capital assets. Assets under construction are not amortized until the asset is available to be put into service; Interest on debt during construction is capitalized.

f) Amortization

Tangible capital assets are amortized over their expected useful life using the diminishing balance method at the following rates:

General Housing 5% Buildings and improvements 4%/5% General equipment 20% Infrastructure 4% Docks 5% Boats 15% Automotive 30% In the year of acquisition, 50% of the normal amortization is recorded.

Social Housing assets acquired under CMHC sponsored housing programs are amortized at a rate equivalent to annual principal reduction in related long term debt, as required for CMHC reporting purposes.

g) Net Debt

The First Nation’s financial statements are presented so as to highlight net debt as the measurement of financial position. The net debt of the First Nation is determined by its liabilities less its financial assets. Net debt is com-prised of two components, non-financial and accumulated surplus.

h) Revenue Recognition

All revenue is recorded on the accrual basis whereby amounts received or recorded as receivable but not earned by the end of the fiscal year are recorded as deferred revenue. Funding received under the terms of contribution agreements with the federal government is recognized as revenue once eligibility criteria have been met. Fund-ing is recorded as deferred revenue if it has been restricted by the federal government for a stated purpose, such as a specific program or the purchase of tangible capital assets. Deferred revenue is recognized in revenue over time as the recognition criteria are met.

i) Measurement Uncertainty

In preparing financial statements for the government of Songhees First Nation, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contin-gent assets and liabilities at the date of the financial statements and reported amounts of revenue and expenses during the year. Significant areas of estimation include allowance for doubtful accounts, estimated useful lives of tangible capital assets, impairment of long-lived assets, accrued liabilities, and disclosure of contingencies. Actual results could differ from those estimates.

j) Financial Instruments

Songhees First Nation’s financial instrument consists of cash, accounts receivable, accounts payable and accrued liabilities. Unless otherwise noted, it is management’s opinion that Songhees First Nation is not exposed to sig-nificant interest or credit risks arising from these financial instruments. The fair value of these financial instru-ments approximates their carrying values, unless otherwise noted.

2. ECONOMIC DEPENDENCE

The government of Songhees First Nation receives a major portion of its revenue from Aboriginal Affairs and Northern Development Canada. The nature and extent of this revenue is of such significance that the First Nation is economically dependent on this source of revenue.

3. TANGIBLE CAPITAL ASSETS

*Wellness Centre was completed at the end of fiscal 2014. No amortization was taken for fiscal 2014.

4. TRUST FUNDS

The Ottawa Trust Accounts arise from monies derived from capital or revenue sources as outlined in Section 62 of the Indian Act. These funds are held in trust in the Consolidated Revenue Fund of the Government of Canada. The man-agement of these funds is primarily governed by Section 63 to 69 of the Indian Act.

The Highway Burning Trust Fund is a fund being jointly held by Songhees Nation and Esquimalt Nation. Only Songhees Nation’s portion is reflected on the financial statements. Funds Held in Trust (Other) consist of funds received for the James Bay Settlement which are being held in an aborigi-nal trust account administered by BMO Trust Company.

Cost Accumulated

Amortization

Net Book

Value 2014

Net Book

Value 2013

Properties 3,245,422 - 3,245,422 3,245,422

Buildings 816,403 401,984 414,419 456,012

CMHC Social Housing Units 1,465,690 450,199 1,006,491 1,174,027

Social Housing Units 148,049 47,938 100,111 -

Office equipment 88,798 88,798 - -

Infrastructure (Roads and Waterlines) 583,766 211,613 372,153 408,638

Playground 97,600 45,140 52,460 58,560

Vehicles (backhoe, tractor, truck) 118,717 116,392 2,325 2700

Oceangoing canoes/Zodiac Boat 35,405 28,430 6,975 8,100

Float 58,638 42,505 16,133 19,065

General equipment 39,535 39,535 - -

WELLNESS CENTRE*

Building Construction 24,781,726 - 24,781,726 -

Architect, Engineer 1,457,162 - 1,457,162 -

Community Engagement, Project management 232,735 - 232,735 -

Equipment , Furniture and fixtures 1,029,527 - 1,029,527 -

Houseposts, Carvings, Historic Photos, Interior Design 907,981 - 907,981 -

TOTAL 35,107,154 1,472,534 33,625,620 5,372,524

Opening

Balance

Additions Withdrawals

2014 2013

Revenue 1,347 1,344 1,347 1,344 1,347

Capital 219 - - 219 219

Fund Total 1,566 1,344 1,347 1,563 1,563

5. LONG-TERM DEBT

2014 2013

James Bay Village Trust Bank of Montreal loan, repayable at $30,000 per quarter, interest paid monthly at Prime, secured by a general security agreement providing a first charge on the investments held by Songhees James Bay Village Trust and promissory notes for all loan facilities. - 2,820,000

Less: portion due within one year - (120,000)

*This debt has been removed from the Long Term Debt balance in 2014 because the debt is reported in the JBVT Financial Statements and consolidated on the Songhees Nation Statement of Financial Position as a contribution for the construction of the Wellness Cen-tre - 2,700,000

Songhees Wellness Centre Fixed rate business mortgage, from Van City Credit Union, $13,500,000, repayable monthly $70,278 blended at 3.9%, secured by own source reve-nue (currently FN GST) 13,500,000 9,945,311

Less: portion due within one year 322,561 -

13,177,439 9,945,311

Songhees Wellness Centre Promissory Note payable to First Nations Finance Authority, repayable yearly at $93,857 principal, plus interest at 3.79%, payments commencing June 26, 2015, amortized over 30 years; the promissory note has a term of ten (10) years, expir-ing June 26, 2024. 5,264,000 -

Less: portion due within one year - -

5,264,000 -

Songhees Member Housing Construction Loan payable to All Nations Trust, on the housing unit located at #5 Maple Bank Songhees Nation, secured by ministerial guarantee from AANDC, repayable @ $983 per month, interest at 5.25 % 163,527 -

Less: portion due within one year 3,289 -

160,238 -

Social Housing Canada Mortgage and Housing Corporation Mortgages, secured by ministe-rial guarantees from AANDC and first mortgages on twenty-four housing units.

Loan #08-400-483 repayable @ $688 per month, including interest at 9,625% - 3,924

Loan #153-52495002, repayable @ $1,489 per month, including interest at 3.9% 93,352 108,415

Loan #193-62409001, repayable @ $1,621 per month, including interest at 2.61% 246,925 260,359

Loan #193-62409001 repayable @ $4,548 per month, including interest at 4.73% 666,214 697,737

1,006,491 1,070,435

Less: portion due within one year (59,376) (55,424)

947,115 1,015,011

TOTAL LONG TERM DEBT 19,934,018 13,835,746

6. SOCIAL HOUSING RESERVES a) Replacement Reserve

Under the terms of the agreement with CMHC, a replacement reserve is maintained to provide for future asset replacement. These funds, along with accumulated interest, must be held in a separate bank account. Use of these funds is restricted to expenditures approved by CMHC.

b) Subsidy Surplus Reserve

Under the terms of the agreement with CMHC, express federal assistance payments received may be retained in a subsidy surplus reserve up to a maximum of $500 per unit. These funds, along with accumulated interest, must be held in a separate bank account. The funds in this account may only be used to meet future subsidy requirements.

c) Operating Reserve

Under the terms of the agreement with CMHC (Section 95, Post 1997 on Reserve Program), any surplus reve-nue will be retained within an Operating Reserve. These funds, along with accumulated interest, must be held in a separate bank account. Use of these funds is restricted to ongoing operating costs of housing projects committed under the Post 1997 On Reserve Program.

7. RESTRICTED CASH

8. DEFERRED CAPITAL ASSET CONTRIBUTIONS

Deferred capital asset contributions represent government contributions provided to assist in the purchase or con-struction of tangible capital assets. Changes in deferred contributions balance for the year are as follows:

9. CONTINGENT LIABILITIES

a) Restricted (set) unexpended surpluses can be recovered by the funding agency.

b) The First Nation has Ministerial Guarantees for loan balances outstanding. The contingent liability as at year-end amounts to $1,485,082, as per confirmation provided by Aboriginal Affairs and Northern Development Canada.

Comprised of the following 2014 2013

Social Housing reserve funds 9,575 -

CMHC Social Housing reserve funds 151,244 140,688

160,819 140,688

2014 2013

Balance, beginning of year 990,000 -

Additions - 990,000

Capital project allocation (990,000) -

Amounts amortized to revenue - -

Balance, end of year - 990,000

10. ACCUMULATED SURPLUS / (DEFICIT)

11. WEST BAY MARINA ACQUISITION

On May 9, 2005, Songhees First Nation entered into a purchase agreement with Her Majesty the Queen in the Right of Canada to purchase certain lands in Esquimalt for $1,880,000. The purchase was facilitated by the use of Xhamasung Holdings LLP which has two partners, Kosapsum Development Corporation (Esquimalt First Nation shareholder) and Lekwungen Development Corporation (Songhees First Nation shareholder). The purchase was financed by a down payment of $42,720 and annual payments of $42,720 for 15 years and a balloon payment at the end of term for $1,937,699. Interest is charged at 4.94% per year.

12. INVESTMENT IN LEKWUNGEN DEVELOPMENT CORP

13. COMPARATIVE FIGURES

Prior year’s comparative amounts have been reclassified where necessary to conform to the current year’s presentation.

14. SEGMENTED DISCLOSURE STATEMENT

See table on next page.

2014 2013

Represented by:

Operations 4,074,928 816,296

Trust Funds 11,015,015 10,126,352

Local Revenue 2,102,219 3,389,565

Contributed surplus 13,608,444 6,535,524

30,800,606 20,867,737

Lekwungen Development Corp Balance Sheet (unaudited) 2014 2013

Assets

Investment in Xhamasung Holdings LLP 81,748 60,710

Incorporation costs 1,481 1,481

Total Assets 83,229 62,191

Liabilities

Due to Songhees First Nation 85,583 64,545

Equity:

Surplus/(Deficit)

(2,354)

(2,354)

Total Liabilities and Equity 83,229 62,191

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9

ANNEX A

SONGHEES NATION SCHEDULE OF REMUNERATION AND EXPENSES

PAID TO ELECTED OFFICIALS FOR THE YEAR ENDED MARCH 31, 2014

1. The number of months during the fiscal year that the individual was on staff.

2. Remuneration means any salaries, wages, commissions, bonuses, fees, honoraria, dividends,

and any other monetary benefits other than the reimbursement of expenses and non-monetary

benefits.

3. Expenses includes the costs of transportation, accommodation, meals, hospitality and

incidental expenses.

Name of individual Position/Title Number

of Months

Remuneration

Expenses

Total

Ron Sam Chief 12 45,224 2,518 47,742

Garry Albany Councillor 12 30,704 6,134 36,838

Nick Albany Councillor 12 25,512 5,648 31,160

Frank George Councillor 12 27,820 2,014 29,834

John Rice Jr. Councillor 7 19,850 11,907 31,757

Karen Tunkara Councillor 12 24,016 2,221 26,237

SONGHEES NATIN