N E W H O R I Z O N S

2017a n n u a l r e p o r t

Downtown Business Association Staff

Left to right

Katherine HoyManager of Marketing, Communications, and Special Events

Terri St. ClairInformation Coordinator

Ian O’DonnellExecutive Director

Kayla ShapkaMarketing Coordinator

Mary DaviesOffice Manager and Executive Assistant

Staff photo by Fred Katz taken at KPMG Edmonton

1 Mission Statement and Association Legal Profile2 Message from the Chair3 Message from the Executive Director4 Board of Directors5 Executive Committee6 Business Recruitment Committee8 Marketing Committee12 2017 Infographic14 Operations Committee16 2017 Photo Collage18 Financials28 Board of Directors Photo

Table of Contents

1

Mission Statement Through its leadership in advocacy and promotion, the intent of the Downtown Business Association is to support, connect, and enrich Edmonton’s Downtown community.

GoalsAs a non-profit organization funded by its members, the goals of the Downtown Business Association are to:

• PromoteDowntownEdmonton’simageandidentitythroughevents,promotionsandmarketing. • Communicatetheon-goingtransformationofDowntown,whilemaintainingthehistorical

esthetic through preservation and revitalization. • Encouragethehigheststandardsfornewdevelopmentsandpromotebeautification,safety,

mobility, and inclusivity. • Provideleadershipandcommunicatemattersofconcerntomembers,governmentofficials,

and the public. • Partnerwithlike-mindedorganizationstoworkonstrategicinitiativesaffectingtheDowntown

core.

Association Legal ProfileThe Downtown Business Association of Edmonton Business Improvement Area (BIA) was established by a City of Edmonton bylaw on November 26, 1985.

The Association represents and services for-profit businesses located within the geographical boundaries of95Streetto111Street,and95Avenueto105Avenue.TheCity’sofficialDowntownBIAisBylaw#7968(as amended).

The members of the Board of Directors are elected by DBA members, and subsequently approved by City Council. Board members represent large and small businesses and other important institutions within the BIA. The City Councillor who represents Downtown is an ex-officio member of the Board.

The Board of Directors oversees all Association affairs, including the preparation of the annual budget. Upon budget approval by the members and City Council, a uniform rate is established for the levy to all businesses within the BIA. Subject to minimum and maximum charge, the levy appears on the tax notice.

Introduction

2

OnbehalfofourBoardofDirectors,ExecutiveDirectorIanO’Donnell,ourstaff,andour standing committees, I am pleased to present the 2017 Annual Report for the Downtown Business Association.

As the rest of our city was slowly recovering from the recession, major construction projects continued to drive the Downtown economy in 2017. Work continued on both the JW Marriott Hotel and the Stantec Tower, which celebrated a milestone last year – the completion of the commercial half of the 66 storey structure. Construction began on another major project, the Valley Line LRT, which will connect Downtown to Mill Woods when the first stage is completed in 2020.

Downtown welcomed its first new park in 30 years. Alex Decoteau Park is proudly namedafterCanada’sfirstaboriginalpoliceofficer.Afewblockseastofthatournewfunicular opened, giving people greater access to our beautiful river valley.

2017wasanotherbusyyearfortheDBA.InMarcheveryone’sfavouritefoodevent,Downtown Dining Week drew tens of thousands of food lovers to the core. The following month we awarded $80,000 in grants to 14 Downtown festivals. And with the support of local businesses we paintedDowntownredandwhite-incelebrationofCanada150-throughourBloomin’Boulevardsflower pot program.

Our Core Crew Ambassadors returned for another summer. Dressed in their familiar red jackets and caps they provided helpful info to Downtown visitors, and led nearly 800 people on our free, historical walking tours.

We hosted two seminars, giving our members the opportunity to engage with experts in the areas of security and business fundamentals.

And we introduced two new seasonal events to the core: The DBA Holiday Window Decorating Contest, and a partnership with the City Market called Santa at the Market.

And as always, we worked tirelessly to Support, Connect, and Enrich Edmonton’s Downtown Community.

Iinviteyoutoreviewthefollowingreports.Ihopeyou’llagreethatourstaffandcommitteesdoagreatjob of helping businesses prosper.

Thank you for your continued support. We welcome your input and encourage your participation in the events, initiatives, and activities of our Association.

Message From the Chair

Alyson Hodson

3

So many changes on the new horizon!

In 2017 we saw new openings, additions, and commencements in the core. The doors at Allard Hall and the Singhmar Centre for Learning both opened, welcoming thousands of new students to our Downtown.

Livability and the shift to a more urban core was noted by the opening of Alex Decoteau Park and the Downtown bike lanes, something we will continue to see as people are choosing a more walkable, urban lifestyle.

Downtownisnowanin-demandplacetolive,oneoftheCity’sfastestgrowing communities. New condominium and apartment towers are dotting the skyline, with over a dozen new residential towers in planning. This is essential to the future success of the Downtown and its businesses, as it creates a critical mass throughout the day and evening.

We continue to work with our partners to ensure that marginalized individuals will not be left behind. TheCity’sRECOVERinitiativeworkswithvariousgroupstocreateanurbanwellnessstrategytomakethe City and our Downtown more supportive, inclusive, welcoming, and safer for all.

2018 will continue the trend we left off in 2017 with even more openings including the new and highly anticipated Royal Alberta Museum. This new cultural icon will bring a few hundred thousand visitors from the City, region and around the world to explore the history and heritage of this great Province. We will see the first tenants moving into the new Stantec tower, bringing a couple thousand more employees to the centre of Downtown.

Our growing tech industry continues to expand its Downtown presence, with the most notable new addition being the future move of BIOWARE to EPCOR Tower. This trend will continue and reinforce Downtown as the premier technology neighbourhood.

As we continue to see projects build off one another, the momentum will only continue. We must ensure that we continue to support all of these private and public investments in the core, as we see the blossoming of our new Downtown.

It’sanexcitingtime.JoinusinDowntown

Message From the Executive Director

Ian O’Donnell

4

TheBoardofDirectorsplaysapivotalroleingoverningtheDowntownBusinessAssociation’soperations,including management, economic development and finance, planning, marketing and events, and member service functions. The members of the Board are elected at the Annual General Meeting and confirmedbyCityCouncil.TheyrepresentthediverseneedsandinterestsoftheAssociation’sconstitution and Downtown Edmonton. The Board of Directors meets monthly to review committee actions and approve the priorities for future Association endeavours, as well as approve and implement strategies and tactics with regard to the Strategic Plan.

Alyson Hodson, Chair zag creative

Gord Rajewski, Vice Chair Williams Engineering

Rick Mussenden, Treasurer KPMG LLP

Robert Bothwell, Executive Bennett Jones LLP

Patrick Saurette, ExecutiveThe Marc

Bob BlackKatz Group

Teresa CloustonATB Financial

Joumana GhandourThe Westin Edmonton

Chris GrahamShoppers Drug Mart

Ian LargeLeger

2017 DBA Board of Directors

Michael MacBeathEPCOR

Sheldon MagnesImperial Parking

Casey McClellandColliers International

Linda WedmanThe Works Society

Ex Officio:Scott McKeenWalter Trocenko

Members

5

Alyson Hodson, Chair zag creative

Gord Rajewski, Vice Chair Williams Engineering

Rick Mussenden, Treasurer KPMG LLP

Robert Bothwell, ExecutiveBennett Jones LLP

Patrick Saurette, ExecutiveThe Marc

The Executive Committee governs the management function of the Association. Its purpose is to recommend policy, monitor the implementation of the Strategic Plan, review committee reports, make recommendations to the Board of Directors, and provide input on overall staff operations. The Executive Committee is also responsible for the finances and financial procedures of the Association.

Executive Committee

2017 Executive Members

6

The Business Recruitment Committee (BRC) focuses on ways to improve the business environment in the Downtown core. Additional projects in the summer and throughout the year are aimed at building an increasingly liveable and walkable Downtown core with a business-friendly environment.

BRC Members are experienced real estate and property management executives who have an interest in making Downtown Edmonton the best place to do business.

Business Recruitment Committee

Casey McClelland, Chair Colliers International

Dustin Bateyko Cushman Wakefield

Gino Bit Krahn Group

Robert BothwellBennett Jones LLP

Laura BradleyManulife Real Estate

Lance Frazier Cushman Wakefield Edmonton

Nick Lilley University of Alberta

Denes NemethAIMCO

David OlsenLizotte

Glen ScheuermanMorguard Investments

Jimmy ShewchukEEDC

Eric SlatterOmada Commercial

Brad SmithCanapen Investments

Sidney WaskiewichQualico Commercial

Members

7

2017 BRC Highlights

TheBusinessRecruitmentCommittee’s2017communication plan presented a report entitled Mapping Growth - A Comparative Look at Downtown’s Transformation 2010 – 2017.

The first part of the report highlighted some of the important findings from an online survey conducted during the summer of 2017 which included results from 1,499 Downtown residents, employees and non-Downtown respondents. The purpose was to compare people’sopinionsandbehavioursrelativetothechanges in Downtown since the last survey done in 2010. The second part of the report consisted of all probable, proposed, and rumoured developments taking place in Downtown, based on the 36 projects that were identified by the DBA in 2012.

The report was presented to members of the business community and is available on the DBA website.

The DBA also hosted a seminar entitled Small Business 101. Geared toward up and coming entrepreneurs, this panel discussion focussed onthecurrentstateofsmallbusiness,whereit’sgoing, shifts in demand, and needs in terms of physical space.

8

The Downtown Business Association’s Marketing Committee provides the DBA Marketing Department with input on Marketing and Communications projects like The Guide to Downtown and special events like DowntownDiningWeek.TheseinitiativeshelpmeettheobjectivesidentifiedintheDBA’sMarketingandCommunications Plan.

Marketing Committee members are talented professionals from the areas of advertising, communications, media, marketing, and business. They are an invaluable resource to the Downtown Business Association.

MembersPatrick Saurette, ChairThe Marc

Marvin BabiukEdmonton Transit Service

Jessica ChanCBC

Moirae ChoquetteEEDC

Kate GibsonEdmonton Public Library

Jon Hall104 Street Committee

Lisa HeerenspergerGrant Thornton LLP

Ian LargeLeger

Anastasia Lim University of Alberta

Loren MillerATB Financial

Marlene Tasse EPCOR

Gillian ThompsonDIALOG

Marketing Committee

9

2017 Highlights

• InMarch,ourfinestrestaurantstookcentrestageatDowntownDiningWeek.Tensofthousands of food lovers came Downtown to enjoy delicious multi-course meals at special pricesby33restaurants.Sinceitsinceptionin2004DiningWeekhasbecometheDBA’spremiere public event. With many diners doing some pre-dinner shopping or taking in a show, using taxis, or paying for parking, Dining Week has become an event with financial benefits for all of Downtown!

• OurannualluncheonscontinuetoprofileissuesofimportancetotheDowntowncommunity.At our Spring Luncheon we presented A New Path: Cycling in the City, profiling the new bike paths connecting Downtown to nearby neighbourhoods. At our Fall Luncheon we put the spotlight on the Royal Alberta Museum, which will open in 2018.

• WithLRTconstructionunderwayinChurchillSquarewereplacedourannualHoliday Light Up with two smaller seasonal events. Our first annual Holiday Window Decorating Contest encouraged businesses to dress up their windows for holidays to attract more shoppers to the core. In December we partnered with the City Market to present Santa at the Market, marking in the first time in years that families could visit Santa in Downtown.

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Community Involvement and Partnerships

• DowntownBusinessAssociationcontinuestosupportvibrancy through its Festival Grants Program. In 2017 the DBA disbursed nearly $80,000 in grants to 14 festivals that create excitement and draw hundreds of thousands of people to Downtown Edmonton.

• TheCoreCrewreturnedintheirroleasfriendlyDowntown Ambassadors. Throughout the summer these post-secondary students provided helpful information to businesses, residents, and tourists; assisted at festivals and special events; and led nearly 800 people on our free, historical walking tours of Downtown.

• TheDBAworkswiththeCityofEdmontonontheWinter Lights program. From October to March these beautiful lights illuminate Downtown during our dark northern winters. New in 2017, we added colour and fun to the core with our multi-coloured hanging bulbs on City Hall Plaza.

• TheEdmontonFoodBankwastheDBA’scharity of choice for 2016 and 2017. It distributes twenty thousand food hampers monthly through 200 agencies, many of them based Downtown.

Marketing Committee (continued)

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765 Core Crew tour attendees

450 Peopleattended our luncheons

Jun Jul Aug

500300100

35,000 Guides to Downtown20,000 Downtown Maps

were produced and handed out

$100,000in Downtown festival grants &

event sponsorship

1,499 Peopletook our MBA report survey

1,000 Meetingsattended by Executive Director, Ian

EPS/DBA Community Walkabouts

7 x

153 Bloomin’ BoulevardsPlanters Downtown

$5,300donated to our charity, the Edmonton Food Bank

40 x the DBA was mentioned in TV & Print

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Committee Mixer Feb 2

Downtown Dining WeekMar 10 - 19

Holiday Window Contest

Santa at the Market

Spring Luncheon May 18

Fall Luncheon Oct 12

Security Seminar Jun 13

Free Historical Walking Tourswith the Core CrewJune 22 - Aug 18

EVENTS

3,620 1,480 500

58 Board and Committee Meetings

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765 Core Crew tour attendees

450 Peopleattended our luncheons

Jun Jul Aug

500300100

35,000 Guides to Downtown20,000 Downtown Maps

were produced and handed out

$100,000in Downtown festival grants &

event sponsorship

1,499 Peopletook our MBA report survey

1,000 Meetingsattended by Executive Director, Ian

EPS/DBA Community Walkabouts

7 x

153 Bloomin’ BoulevardsPlanters Downtown

$5,300donated to our charity, the Edmonton Food Bank

40 x the DBA was mentioned in TV & Print

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Committee Mixer Feb 2

Downtown Dining WeekMar 10 - 19

Holiday Window Contest

Santa at the Market

Spring Luncheon May 18

Fall Luncheon Oct 12

Security Seminar Jun 13

Free Historical Walking Tourswith the Core CrewJune 22 - Aug 18

EVENTS

3,620 1,480 500

58 Board and Committee Meetings

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Operations Committee

The Operations Committee works extensively with various departments of the City of Edmonton and members of the business community regarding infrastructure, safety, and security issues. The objectives of the Committee include proactive projects and monitoring in the areas of Downtown beautification, maintenance, safety, security, and operational matters in both public and private sectors.

The Committee is supported by a wide range of security personnel, civic employees, parking and property management executives who are responsible for the planning and development, daily operations, and management of various Downtown buildings, businesses, transportation, and security.

Gord Rajewski, ChairWilliams Engineering

Don BelangerCity of Edmonton, Community Standards

Candis BohnCapital Power Corporation

Constable Nicole DavieEdmonton Police Service

James EwatskiETS Security

Mark FoersterCity of Edmonton, Transportation, Roadways

Constable Celia FrattinEdmonton Police Service

David HoldsworthCity of Edmonton, Sustainable Development

Sergeant David JonesEdmonton Police Service

Sheldon MagnesImperial Parking Canada

Bohdan MasloCity of Edmonton, Transportation

Shannon MurrayCity of Edmonton, Citizen Services

Darrell NordellCity of Edmonton, Community Recreation Coordinator

Jenna PilotCity of Edmonton, NET

Karey SteilCity of Edmonton, Community Standards

Raylene TewsEPCOR

Lonny VanderheideOxford Properties Group

Bob Watson City of Edmonton, Parks Branch, Community Services

Kari ZralCity of Edmonton, Civic Events

Members

15

2017 Highlights

• TheDBAcontinuestoworkcloselywiththeCityregardinghistoricchangestoouron-streetparkingsystem. EPark meters have been successfully installed throughout Edmonton and offer several payment options. We continue to work closely with the City and stakeholders to ensure competitive and reasonable parking solutions are available to Edmontonians and visitors alike.

• TheOperationsCommitteeheldaSecuritySeminarinJuneof2017,whichbroughttogetherstakeholders in the Downtown Business Association. A number of representatives from the City, social agencies and security partners presented valuable information to close to 50 participants.

• DBAandseveralDowntownbusinessessponsored153Bloomin’Boulevardsflowerplanters,addingcheerfulpopsofredandwhitetocelebrateCanada’s150thbirthdaytothesidewalksfromJune through September.

• After22years,thedecisionwasmadetobringtheDowntownDollarProgramtoanend.Thissuccessful program offered participants the opportunity to provide tokens to businesses to offset the cost of parking and transit while doing business Downtown.

• TheDBAcontinuestoworkwithCapitalCityCleanUpandCityofEdmontonanti-graffitipartnerstoensure that the job of keeping our Downtown clean and beautiful is shared by all parties and private business owners.

• WecontinuetoworkwithEdmontonTransitServicetoidentifyissuesofsafetyatLRTstationsandbus stops.

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Downtown Business Association Events

17

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December 31, 2017Independent Auditors’ Report

To the Members of the Downtown Business Association of Edmonton

We have audited the accompanying financial statements of the Downtown Business Association of Edmonton, which comprise the statement of financial position as at December 31, 2017, and the statements of changes in net assets, revenue and expenses, and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s responsibility for the financial statementsManagement is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian accounting standards for not-for-profit organizations, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ responsibilityOur 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 comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures inthefinancialstatements.Theproceduresselecteddependontheauditors’judgment,includingtheassessment of the risks of material misstatement of the financial statements, whether due to fraud or error. Inmakingthoseriskassessments,theauditorsconsiderinternalcontrolrelevanttotheentity’spreparationand fair presentation of the financial statements in order to design audit procedures that are appropriate inthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheentity’sinternal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the financial statements present fairly, in all material respects, the financial position of the Downtown Business Association of Edmonton as at December 31, 2017, and the results of its operations and its cash flows for the year then ended, in accordance with Canadian accounting standards for not-for-profit organizations.

Edmonton, CanadaMarch 22, 2018

Chartered Professional Accountants

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December 31, 2017Statement of Financial Position

On behalf of the Board:

Chair Executive Director

As at December 31

2017 2016

$ $

ASSETS

Current

Cash and cash equivalents 281,574 378,854

Short-term investments 205,345 205,436

Accounts receivable 10,353 11,818

Prepaid expenses and deposits 15,727 8,474

512,999 604,582

Capital assets [note 3] 37,991 32,905

550,990 637,487

LIABILITIES AND NET ASSETS

Current

Accounts payable and accrued liabilities 38,280 173,587

Provision for redemption of parking tokens [note 4] 127,539 130,538

Current portion of deferred lease inducement 4,575 —

170,394 304,125

Deferred lease inducement 13,724 —

184,118 304,125

Commitments [note 5]

Net assets

Internally funded capital assets 37,991 32,905

Internally restricted for specific initiatives 308,881 280,457

Unrestricted 20,000 20,000

366,872 333,362

550,990 637,487

See accompanying notes

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December 31, 2017Statement of Changes in Net Assets

Year ended December 31 Internally restricted Internally funded Specific capital assets initiatives Unrestricted Total2017 $ $ $ $

Balance, beginning of the year 32,905 280,457 20,000 333,362

Excess of revenue over expenses — — 33,509 33,509

Purchases of capital assets 13,885 — (13,885) —

Amortization of capital assets (8,799) — 8,799 —

Transfers from specific initiatives [note 6] — (27,819) 27,819 —

Transfers to specific initiatives [note 6] — 56,242 (56,242) —

Balance, end of the year 37,991 308,880 20,000 366,871

Internally restricted Internally funded Specific capital assets initiatives Unrestricted Total2016 $ $ $ $

Balance, beginning of the year 1,377 457,303 20,000 478,680

Deficiency of revenue over expenses — — (145,318) (145,318)

Purchases of capital assets 34,984 — (34,984) —

Amortization of capital assets (3,456) — 3,456 —

Transfers from specific initiatives [note 6] — (189,000) 189,000 —

Transfers to specific initiatives [note 6] — 12,154 (12,154) —

Balance, end of the year 32,905 280,457 20,000 333,362

See accompanying notes

21

December 31, 2017Statement of Revenue and Expenses

Year ended December 31

2017 2016 $ $

Revenue

Business Improvement Area levy 1,224,586 1,169,527

Sponsorships [note 7] 347,184 337,435

Downtown Dollar token sales 5,325 15,730

Advertising and other 16,650 20,300

Interest 2,154 2,235

1,595,899 1,545,227

Expenses [note 7]

Special events and programs 548,176 662,057

Public relations and marketing communications 279,271 278,546

Winter Lights program 169,207 173,420

Downtown Dollar program 4,793 17,979

Administration

Wages and employee benefits 365,469 368,146

Rent and occupancy costs 101,927 113,774

Office 32,130 30,161

Professional fees 18,676 18,676

Travel, training and recruitment 9,668 2,101

Amortization of capital assets 8,799 3,456

Meetings 8,508 6,076

Postage and courier 5,491 5,346

Telephone and utilities 3,697 3,901

Insurance 3,526 3,527

Bank charges 3,052 3,379

1,562,390 1,690,545

Excess (deficiency) of revenue over expenses 33,509 (145,318)

See accompanying notes

22

December 31, 2017Statement of Cash Flows

Year ended December 31

2017 2016 $ $

Operating activities

Received from Business Improvement Area levy 1,224,586 1,169,527

Received from sales, special events and programs 53,140 62,564

Amounts paid to vendors and employees (1,363,366) (1,384,514)

Interest received 2,245 2,470

Cash provided by (used in) operating activities (83,395) (149,953)

Investing activities

Purchases of capital assets (13,885) (34,984)

Cash used in investing activities (13,885) (34,984)

Increase (decrease) in cash and cash equivalents (97,280) (184,937)

Cash and cash equivalents, beginning of the year 378,854 563,791

Cash and cash equivalents, end of the year 281,574 378,854

See accompanying notes

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December 31, 2017

1. Nature of the Organization

On November 26, 1985, the City of Edmonton Municipal Council passed a Bylaw establishing the Downtown Edmonton Business Revitalization Zone (renamed Business Improvement Area effective January 1, 2017) and incorporating the Downtown Business Association of Edmonton [the “Association”] under the Municipal Government Act.

The mandate of the Association is to “promote Downtown Edmonton as the preferred place to work, shop, live,playandlearn.”ItsgoalsaretopromoteDowntownEdmonton’simageandidentitythroughevents,attractions and marketing; to encourage planning and environmental standards for new developments and to promote beautification, safety and mobility; to provide leadership and to communicate matters of concern to members, government officials and the public.

The Association is a not-for-profit organization within the meaning of the Income Tax Act (Canada) and is exempt from income taxes.

2. Summary of Significant Accounting Policies

Basis of presentation These financial statements were prepared in accordance with Part Ill of the Chartered Professional

Accountants of Canada Handbook - Accounting Standards for Not-for-Profit Organizations, which sets out generally accepted accounting principles for not-for-profit organizations in Canada, and include the significant accounting policies described hereafter.

Cash and cash equivalents Cash and cash equivalents consist of cash on hand and term deposits with initial maturity dates of less

than 90 days.

Short-term investments Short-term investments consist of term deposits with initial maturity dates of between 90 and 365 days.

Notes to Financial Statements

24

December 31, 2017

2. Summary of Significant Accounting Policies (continued)

Capital assetsPurchased tangible and intangible capital assets are recorded at acquisition cost. Contributed tangible and intangible capital assets are recorded at fair value at the date of contribution. Amortization is determined using the straight-line method over the estimated useful lives of the assets as follows:

Tangible Tokens 3 years Office equipment and furniture 5 years Computer equipment 3 years Tenant improvements Over the lease term Intangible Website 3 years

Revenue recognitionThe Association follows the deferral method of accounting for contributions, which include grants and donations. Externally restricted contributions are deferred when initially recorded in the accounts and recognized as revenue in the year in which the related expenses are recognized. Grants are recognized in the accounts when received or receivable if the amount to be received can be reasonably estimated and collection is reasonably assured. Other donations are recorded when received, since pledges are not legally enforceable claims. Unrestricted contributions are recognized as revenue when initially recorded in the accounts.

Contributions for the acquisition of capital assets are presented as “deferred contributions - capital” and are amortized to revenue on the same basis as the acquired capital assets are amortized.

Sponsorships and sales are recognized when the services have been provided.

Contributed materials, services and facilitiesThe Association records contributed materials, services and facilities in those cases where:

[a] the Association controls the way they are used; [b] there is a measurable basis for determining fair value; and [c] the services are essential services which would normally be purchased and paid for if not contributed.

Otherwise, contributed materials and services are not recorded in the financial statements.

Notes to Financial Statements (continued)

25

December 31, 2017

Financial instruments Short-term investments are recorded at fair value. Other financial instruments, including accounts receivable

and accounts payable and accrued liabilities, are initially recorded at fair value and subsequently measured at amortized cost.

Use of estimates The preparation of the financial statements requires management to make estimates and assumptions that

affect the reported amounts of assets and liabilities, related amounts of revenue and expenses, and the disclosure of contingent assets and liabilities. Significant items subject to such estimates and assumptions include the carrying amount of capital assets. Actual results could differ from those estimates.

3. Capital Assets

Year ended December 31

2017 2016

Accumulated Accumulated Cost amortization Cost amortization $ $ $ $TangibleTokens 16,150 16,150 16,150 16,150Office equipment and furniture 113,367 90,634 100,983 86,873Computer equipment 24,816 21,927 23,966 20,027Tenant improvements 80,504 68,135 79,853 64,997 234,837 196,846 220,952 188,047IntangibleWebsite 19,650 19,650 19,650 19,650 254,487 216,496 240,602 207,697Net book value 37,991 32,905

4. Provision for Redemption of Parking Tokens

The provision for redemption of parking tokens represents the Downtown Dollar parking tokens sold but not redeemed at year end. The provision is based on 100% of the tokens sold being redeemed. The actual redemption expense may be lower if some of the tokens sold are not ultimately redeemed.

Due to changes in parking technology throughout the City of Edmonton, the parking tokens have become obsolete. Sales of the tokens ended on June 30, 2017; however, redemption of tokens in

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December 31, 2017

5. Commitments

The Association is committed to future minimum annual lease payments required under operating leases for office equipment and premises as follows:

$

2018 312,7032019 238,2492020 238,2492021 237,0572022 125,000 1,151,258

The annual commitments include estimated operating costs and property taxes based on current year amounts.

The Association, acting as agent for the Art and Design in Public Places Program, is committed to provide to The Works Visual Arts Society various services and support with a cash and in-kind value of up to $25,500 per annum ending December 31, 2018. Services and support expected to be provided include meeting facilities, access to office equipment, clerical support, volunteer support and general support.

In 2009, the Association entered into an agreement with the City of Edmonton to fund the replacement of old Christmas lights with a new Winter Lights program, designed to enhance the look of Downtown Edmonton throughout the winter months. The Association is committed to paying the City of Edmonton approximately $175,000 per year until 2018 and approximately $125,000 per year thereafter for an indeterminate period.

6. Internally Restricted Net Assets

TheBoardofDirectorshasformallyimposedrestrictionsoncertainoftheAssociation’snetassets.InternallyrestrictednetassetsusedtofundspecificspendinginitiativesinsupportoftheAssociation’smandate are approved by the Board of Directors from time to time

For the year ended December 31, 2017, $27,819 [2016 - $189,000] was approved by the Board of Directors to be used for specific initiatives, as below:

Notes to Financial Statements (continued)

circulation will be accepted until December 31, 2018. Any remaining provision for the redemption of parking tokens not redeemed at that time will be extinguished with the resulting balance being included in revenues in the statement of revenue and expenses for the year ending December 31, 2018.

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Year ended December 31 2017 2016 $ $

Contribution to the 108th Street Boulevard lighting project — 120,000

Business Improvement Area levy subsidy — 28,050

Boyle Street Community (Downtown Proud) sponsorship 6,000 6,000

Other Board of Directors initiatives 21,819 34,950

27,819 189,000

The Board of Directors also approved the transfer of $56,242 [2016 - $12,154] to internally restricted net assets to fund future initiatives.

7. Contributed Materials, Services and Facilities

Sponsorships revenue includes contributed materials, services and facilities of $317,484 [2016 - $308,635], which are equally offset by amounts recorded in a number of expense categories.

8. Financial Instruments

The Association is exposed to various financial risks through transactions in financial instruments.

Credit riskThe Association is exposed to credit risk in connection with its short-term investments and accounts receivable because of the risk that one party to the financial instrument may cause a financial loss for the other party by failing to discharge an obligation. The Association monitors outstanding accounts receivable balances regularly and allows for uncollectible amounts when determined. Short-term investments are invested with a large financial institution. There has been no change to credit risk from the prior year.

Interest rate riskThe Association is exposed to interest rate risk with respect to its fixed rate investments because the fair value will fluctuate due to changes in market interest rates. There has been no change to interest rate risk from the prior year.

Liquidity riskThe Association is exposed to the risk that it will encounter difficulty in meeting obligations associated with its financial liabilities. The Association manages liquidity risk by monitoring its operating requirements, and prepares a budget and cash forecasts to ensure it has sufficient funds to fulfill its obligations. There has been no change to liquidity risk from the prior year.

9. Comparative Figures

Certain comparatives figures have been reclassified to conform to the presentation adopted for the current year.

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Alyson Hodson Chair zag creative

Casey McClelland Colliers International

Ian O’Donnell Executive Director

Gord Rajewski Vice Chair Williams Engineering

Ian Large Leger

Bob Black Katz Group

Joumana Ghandour The Westin Edmonton

Chris Graham Shoppers Drug Mart

Patrick Saurette Executive The Marc

Rick Mussenden Treasurer KPMG LLP

Sheldon Magnes Imperial Parking Canada

Teresa Clouston ATB Financial

Linda Wedman The Works Society

Robert Bothwell Executive Bennett Jones LLP

Mike MacBeath EPCOR

Ex-Officio Councillor Scott McKeen City of Edmonton

Ex-Officio Walter Trocenko City of Edmonton

2017 Executive Committee

2017 Board of Directors

10121 Jasper Ave Edmonton, AB, Canada T5J 4X6phone: 780.424.4085

fax: 780.425.7805

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