connectivity

2018 annual report Downtown Business Association Staff

Ian O’Donnell Mary Davies Tracy Hyatt Kayla Shapka Executive Director Office Manager Manager of Marketing Coordinator and Executive Marketing & Assistant Communications

Table of Contents

1 Mission Statement and Association Legal Profile 2 Message from the Chair 3 Message from the Executive Director 4 Board of Directors 5 Executive Committee 6 Business Recruitment Committee 8 Marketing Committee 14 Operations Committee 16 Financials 28 Board of Directors Photos Introduction

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.

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

• Promote Downtown Edmonton’s image and identity through events, promotions and marketing. • Communicate the on-going transformation of Downtown, while maintaining the historical esthetic through preservation and revitalization. • Encourage the highest standards for new developments and promote beautification, safety, mobility, and inclusivity. • Provide leadership and communicate matters of concern to members, government officials, and the public. • Partner with like-minded organizations to work on strategic initiatives affecting the Downtown core.

Association Legal Profile The 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 of 95 Street to 111 Street, and 95 Avenue to 105 Avenue. The City’s official Downtown BIA is Bylaw #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.

1 Message From the Chair It’s no surprise that 2018 proved once again that Downtown Edmonton drives growth in this city. In 2018, the $5-billion transformation of Downtown hit its midway mark with the completion of Royal Alberta Museum. We welcomed Stantec’s 1,500 employees into the downtown core with the completion of Stantec Tower; their presence Downtown is a welcomed boost of energy.

With many of these development projects finishing, our focus in 2018 was to ensure that the momentum in Downtown continues. This was achieved by working collaboratively with our members, stakeholders and residents of this community. While the Downtown Business Association has faced several challenges over the past few years, the remarkable strength and resiliency of the staff, Board of Directors and committee members has been instrumental in overcoming them. As we continue to make great progress in engaging with our members we remain committed to advocating and promoting Downtown as a great place to live, work and play.

In 2018 we delivered on our strategic plan and have increased awareness about what the DBA does. In November, we held a security forum to discuss perceived security challenges Downtown. The forum was attended by business owners, support agencies, the City of Edmonton, politicians and Downtown residents and identified ways for us to collaborate with the community and stay informed about what is happening on our streets.

We worked to raise the profile of Downtown Edmonton’s restaurants with two new dining programs. Fifteen restaurants competed in our inaugural patio contest which invited the public to dine at Downtown patios summer-long and then vote for their favourite ones. Building on the success of Downtown Dining Week, we launched the four-day Harvest Fest in October, which saw a boost in sales for participating restaurants.

As the Downtown community continues to grow, our commitment to helping businesses prosper is even stronger. The journey is ongoing, but the knowledge and hard work of our staff, board and committee members will continue to deliver on the progress we made in 2018.

Robert Bothwell Chair Downtown Business Association

2 Message From the Executive Director The transformation of Downtown is now transitioning towards one of connectivity and community building.

In 2018, we saw millions of dollars invested in Downtown from both the private and public sectors. We celebrated the opening of the tallest tower outside of Toronto with the completion of the 66-storey Stantec Tower, while welcoming the company’s 1500-plus staff members into the core. We saw 182 new business licences issued for Downtown and continue to see optimism on the horizon, as we make Downtown even more desirable as a place to do business or relocate to.

Arts and cultural organizations are also breathing new life into Downtown. We saw the opening of the Royal Alberta Museum, bookending our cultural core, and the announcement of the Winspear Centre for Music’s $55-million expansion plans. The Stanley A. Milner Library continues its renovation and expansion with an opening expected in Q1 of 2020. The Citadel celebrated the inaugural Dickens Fest in December, a winter event that we plan to grow in future years to attract thousands to our Downtown to shop and be entertained in a new and creative way. Our stunning Art Gallery of Alberta hosted an incredible array of collections, openings and events. Collectively, these amazing institutions showcase our Downtown in ways invaluable to us all and we continue to work closely to support and develop new ways to partner and share amazing experiences.

Our Executive, Board, Committees and staff continue to work diligently on key issues for our members including, economic development, safety, beautification, residential infill and cleanliness. Our value proposition to our member businesses is at the heart of what we do and how we deliver our services.

The DBA will continue to work towards increased connectivity with our key stakeholders and find ways to connect with new and emerging partners.

We could not be more excited about what’s on the horizon for Downtown. Let’s continue the momentum!

Sincerely,

Ian O’Donnell Executive Director Downtown Business Association

3 2018 DBA Board of Directors

The Board of Directors plays a pivotal role in governing the Downtown Business Association’s operations, 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 confirmed by City Council. They represent the diverse needs and interests of the Association’s constitution 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.

Members Robert Bothwell, Chair Casey McClelland Linda Wedman Bennett Jones LLP Colliers International The Works Society

Alyson Hodson, Co-Chair Chris Graham Martin Kennedy Zag Creative Shoppers Drug Mart EPCOR

Gord Rajewski, Past Chair Deborah Saucier Sheldon Magnes Pinchin Ltd. MacEwan University Imperial Parking

Zarina Bhambani, Treasurer Ian Large Wayne Kryzalka KPMG LLP Leger ATB

Patrick Saurette, Executive Garrett Turta Ex Officio: Fairmont Hotel Macdonald Bob Black Scott McKeen Katz Group Paul Ross/Jeff Chase

4 Executive Committee

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.

Members Robert Bothwell, Chair Bennett Jones LLP

Alyson Hodson, Co-Chair Zag Creative

Gord Rajewski, Past Chair Pinchin Ltd.

Zarina Bhambani, Treasurer KPMG LLP

Patrick Saurette, Executive

5 Business Recruitment Committee

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 livable 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.

Members

Casey McClelland, Chair Cameron Haldane Scott Ridell Colliers International Krahn Group ATB

Mark Anderson Jeremy Hayward Glen Scheuerman CBRE SOLUT Morguard Investments

Dustin Bateyko Nick Lilley Jimmy Shewchuk Cushman & Wakefield University of Alberta EEDC

Jonathan Fraser Camille Loreau Brad Smith DLA Piper (Canada) LLP Qualico Developments The Canapen Group

Lance Frazier Denes Nemeth Cushman & Wakefield AIMCO

Kevin Glass David Olson Colliers International Lizottte Real Estate

6 2018 BRC Highlights

The DBA 2018 business report The Future of Retail in Downtown Edmonton was delivered in August, in partnership with the Alberta School of Business. The report highlighted the need for more experiential retail and clothing options.

Parking continued to be the number one complaint of businesses and visitors, highlighting the need for a parking strategy to be developed in 2019 in conjunction with the Marketing Committee.

Improving business permit times and reducing red tape continued to be a focus of the Committee.

The impact of cannabis legalization was a continued topic of discussion, as it related to retail bays/strategies and strategic partnerships.

On the topic of office retention and attraction, tech expansion and a “flight-to-quality” for international firms drove most of the Downtown transactions in 2018.

Concerns around cleanliness levels and specific safety issues persisted from landlords and tenants alike.

72% of Downtown businesses reported that they were growing or stable.

182 new business licenses were issued in 2018.

Building permits totalled 496 with a construction value of $416M.

7 Marketing Committee

A key priority of the Downtown Business Association’s Marketing Committee is to provide input on how to draw visitors to Downtown and showcase all Downtown has to offer. The Marketing Committee helps identify target audiences, marketing channels and events that help meet the objectives identified in the DBA’s Marketing and Communications Plan.

Members

Ian Large, Chair Jon Hall Lisa Heerensperger Leger Marketing 104 Street Committee Grant Thornton LLP

Marvin Babiuk Anastasia Lim Gillian Thomson Edmonton Transit Service University of Alberta DIALOG

Jessica Chan Lorne Miller Nykala Shone CBC ATB Financial EEDC

Krystina Silva Marlene Tasse Melanie Stroh CBC EPCOR The Westin

Moirae Choquette EEDC

8 2018 Highlights

In March, hundreds of food lovers participated in Downtown Dining Week enjoying multi-course meals at 37 participating restaurants. Downtown Dining Week is the DBA’s largest annual event and one with the greatest economic impact for businesses. Downtown Dining Week diners surveyed reported that they shopped at Downtown retailers, attended events, visited attractions and spent money on parking during the 10-day event.

Our annual luncheons profile issues of importance to the Downtown community. At our Spring Luncheon, we presented “The Way We Move,” highlighting the Valley Line LRT project. At our Fall Luncheon, we spotlighted the 106th Grey Cup Festival, Canada’s largest sporting event.

More than 700 participants joined Core Crew during the summer months for free daily walking tours of the Downtown area. The Core Crew also provide helpful visitor information and assist in keeping Downtown streets litter-free.

Following the success of Downtown Dining Week, October 2018 saw the pilot of Harvest Fest, a smaller version of Downtown Dining Week. Eighteen restaurants participated in the four-day fall event.

To coincide with the holidays, the Park in the Heart campaign informed visitors to Downtown of the ease and abundance of Downtown parking and dispelled myths.

The DBA continued its work with the City of Edmonton on the Winter Lights program. From October to March, 50 DBA multi-coloured bulbs illuminated Churchill Square.

After a one-year hiatus, the DBA Christmas Tree was back in Churchill Square. Due to LRT construction, the November event was scaled back significantly. The kickoff event in November included the official lighting of the giant Christmas tree, carollers and free hot chocolate for attendees.

In December, the Holiday Window Decorating Contest encouraged business to dress up their windows to add to the festive feel of Downtown. In December, more than 800 shoppers voted online for their favourite Downtown windows.

In December, we partnered with City Market to present Santa at the Market, the only public Santa event held Downtown.

9 Festival Grants

Events are a critical part of the DBA’s marketing mix and a key way to support vibrancy across Downtown. DBA-hosted events, such as Downtown Dining Week, Harvest Fest, Core Crew Walking Tours and The Christmas Tree, attracted thousands of visitors to the area and provided positive, authentic and engaging Downtown experiences.

Aside from our own hosted events, the DBA also provides $80,000 in grants to festivals taking place in the Downtown core. Festivals that demonstrate exciting and innovative programming, a positive economic impact on the Downtown community and businesses are eligible for up to $10,000 in financial support. In 2018, 10 festivals received financial support from the DBA.

Animethon Cariwest Edmonton International Film Festival Edmonton International Jazz Festival Jewish Film Festival LitFest Edmonton Poetry Festival Taste of Edmonton Up + Downtown The Works Art & Design Festival

10 Non-Grant Event & Sponsorships

Throughout the year, the DBA also provides $15,000 in financial support to smaller events that do not meet festival grant criteria. These events must also increase the vibrancy downtown and provide economic benefits for Downtown businesses. Some of the events that the DBA funded included the following.

Servus Edmonton Marathon Fruit Loop Block Party MacEwan University Block Party Chinese Lantern Festival Quarters Pop-Up Party BOMA Awards Gala

11 Apr 16, 2018 Do your part to help make our #yegdt cleaner this spring. Let’s all get The Year in Review a broom out and sweep that first 2” of snowbank/ With more than 5,000 active followers and an average of gravel/debris back into 70,000 monthly impression, the @DBAYEG Twitter account the gutter before the has been an increasingly important tool to communicate street-sweepers arrive. and engage with our members, public and stakeholders. A look at some of our top tweets of the year. May 17, 2018 Mar 12, 2018 Congrats to Downtown Dining @danielscosta (+team) Week is a great for being the 2018 excuse to get together with recipient of our Business friends and family over some Recognition Awards. You delicious food. #yegfood continue to put #yegdt #DTDWyeg #Edmonton on the #culinary map

Jun 6, 2018 2018 DBA Retail Survey Tell us what you think about shopping in the Downtown #Edmonton & let us know how we can make it great! #yegdt

June 9 2018 Our beautiful Bloomin’ Blvd barrels and baskets are being delivered as we speak to over 120 locations in and around the Feb 12 2018 #Downtown. Learn more about the program. A successful, vibrant #Downtown is one that is inviting to all. Please consider helping us reach June 25 2018 our 150K goal Looking forward to the opening of The Quarters #Skatepark pilot project this Wednesday June 27th. Come out and see what all the excitement is about. Jan 31 2018 Need help finding a convenient parking option Downtown? Let us July 16 2018 help #yegdt #yegparking June 15 2018 Don’t forget that Round up your friends this Friday is the Feb 5 2018 or colleagues for a annual @Northlands Are you non-profit with a multi-day festival in #yegdt? Learn more FREE guided tour! Book #KdaysYEG parade about how you can receive up to $10,000 in grants. your tour at the link below! #yegdt on Japser Avenue. #ExploreEdmonton July 19 2018 March 5, 2018 Is there a more Our popular Boomin’ Boulevards program is back for another year. delicious festival? Brighten up the front of your business or street by planning your The @TasteofEdm order before March 12. runs July 18-29th at the Capital Plaza March 27, 2018 on the Legislature The Downtown Business Association is proud to announce its Grounds. Come charity of choice for 2018 & 2019 is @iHumanYouth. Learn more, and explore your donate, volunteer. #Downtown.

12 The Downtown Business Associa�on Presents

9 Nov 2018 Thank you to all our amazing partners! We Harvest Fest could not be happier October 11-14, 2018 to bring a tree back to Churchill Square for the entire city to enjoy Downtown’s finest restaurants this holiday season. serve seasonally inspired dishes #YEG #Edmonton #YEGDT

Allegro Italian Kitchen The Marc Restaurant 20 Nov 2018 Black Pearl Seafood Bar Pampa Brazilian Steakhouse Welcome to the 30 Sep 2018 Blue Plate Diner River City Revival House neighbourhood Thank you to Bo�ega 104 Rocky Mountain Icehouse @Stantec! Our @NuitBlanceEd, its District Café and Bakery Ruth's Chris Steak House team dropped partners, sponsors, and volunteers Hardware Grill Select Restaurant 1,200 Downtown for transforming #yegdt last night. The Harvest Room Share Guides and about It was great to see many taking in La Ronde Sorren�no's Downtown 1,000 maps off the wonder and beauty. #NBE2018 Madison's Grill TZiN Wine & Tapas today to ensure that #nuitblanche2018 #NuitBlancheYEG everyone can find #Edmonton #YEG #yegarts their way and explore 10 Oct 2018 our transforming Which restaurants are you going to try? #yegdt Downtown. If your 12 December 2018 #DBAHarvestFest #yeg #yegevents #yegfood th organization would Our ED @IanOyeg sat down with Join us at#ExploreEdmonton the City Market on Saturday, October 13 @BoyleStreet’s ED Julian Daly earlier for vendor specials, draw prizes, free face painting like to do the same, this week to discuss new strategies to & balloon art (from 9am - 1pm), and free Market just us know. #YEG engage, educate and find a better way 9 Aug 2018Bucks to the first 200 people! #yegbiz #yegdt Did you know that the DBA is a founding (& very proud) partner forward for all. of #DowntownProud? This is but one of the @BoyleStreet @Boyle_Venture; not only does it help make our #yegdt clean, but it provides employment/skills to wonderful people like Denise. Be sure to say hi to her! edmontondowntown.com

4 Sep 2018 How #yegdt is becoming a #techhub: @Bioware @DeepMindAI part of a surge in #Downtown #Edmonton’s office market.

24 Sept 2018 The DBA is incredibly proud to support the #RustMagic festival, along with our newest & largest mural. They still need your support! Consider donating. 18 Nov 2018 #YEGDT #YEG #Edmonton Excitement is building in Downtown #Edmonton #Alberta #yegbiz #BringTheHeat #GreyCup #CFL #YEG #Alberta #Canada #ExploreEdmonton #TravelAlberta #yegdt #yegevets #yegbiz

13 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.

Members

Gord Rajewski, Chair David Holdsworth Nicole Nunes Williams Engineering City of Edmonton, City of Edmonton, Sustainable Development Neighhourhood Empowerment Langford Bawn Edmonton Transit Service Flemming Kristensen Jenna Pilot EPCOR City of Edmonton, Grant Blaine Citizen Services City of Edmonton, Sheldon Magnes Security Coordinator Impark Superintendent Terry Rocchio Edmonton Police Service Candis Bohn Stacey Mitchell Capital Power Corporation City of Edmonton, Karey Steil Horticulture/Infrastructure City of Edmonton, Paul BuckBoroug Operations Community Standards City of Edmonton, City Community Standards & Shannon Murray Stacey Switzer Neighbourhoods City of Edmonton, City of Edmonton, Community Services Parks & Roads Services Tammy Francis City of Edmonton, Darrell Nordell Lonny Vanderheide City Services City of Edmonton, Oxford Properties Group Citizen Services Sandy Gosselin Sergeant Becky Wright Capital Power Corporation Edmonton Police Service

14 2018 Highlights

Our annual Security Seminar took place in June, where we had presentations on supervised injection sites from the YEG Ambassador program and the Edmonton Police Service.

We invited more than 60 stakeholders to a safety forum in November to share stories and discuss the top issues facing Downtown.

The DBA and the Operations Committee thanked outgoing Edmonton Police Service Chief Rod Knecht for his commitment to the Downtown.

Our sponsorship of Downtown Proud and partnership with the City of Edmonton’s Capital City Clean Up continued to work towards a cleaner and more beautiful Downtown core.

Member businesses and organizations funded 123 beautiful barrels and hanging flower baskets available through the Bloomin’ Boulevard program.

Continued valuable work with various City of Edmonton departments ensured that streets were being cleaned, cleared of snow and that infrastructure was well kept and maintained, as we work towards a higher standard of care for the key areas of our capital city.

Initiated by Detective Nicole Davie of Edmonton Police Service, the DBA and various partners raised more than $150,000 towards a new playground for McKay Avenue to ensure that our Downtown is inviting, inclusive and improves the amount of normalized activities in strategic areas.

Working with City Administration, EPCOR, Millar Western and the Edmonton Police Service, we brought our beloved giant Christmas tree to Churchill Square, along with 50 glowing balls to the east garden of the square to create a beautiful holiday display.

15 Independent Auditors’ Report December 31, 2018

To the Board of Directors

Opinion We have audited the financial statements of Downtown Business Association of Edmonton (the Association), which comprise the statement of financial position as at December 31, 2018, and the statements of changes in net assets, revenue and expenses, and cash flows for the years then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects the financial position of the association as at December 31, 2018, and its financial performance and its cash flows for the years then ended in accordance with Canadian accounting standards for not-for-profit organizations.

Basis for Opinion We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the association in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of the 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.

In preparing the financial statements, management is responsible for assessing the association’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the association or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the association ’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material

16 December 31, 2018 misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the association’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the association’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the association to cease to continue as a going concern.

• Evaluate the overall presentation, structure, and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Edmonton, Canada March 21, 2019 Chartered Professional Accountants 17 Statement of Financial Position December 31, 2018

As at December 31 2018 2017 $ $ Assets Current Cash and cash equivalents 439,198 281,574 Short-term investments 205,787 205,345 Accounts receivable 7,217 10,353 Prepaid expenses and deposits 7,739 15,727 659,941 512,999 Capital assets [note 3] 52,986 37,991 712,927 550,990

Liabilities and net assets Current Accounts payable and accrued liabilities 209,853 38,280 Provision for redemption of parking tokens [note 4] — 127,539 Current portion of deferred lease inducement 4,575 4,575 214,428 170,394 Deferred lease inducement 9,149 13,724 223,577 184,118 Commitments [note 5]

Net assets Internally funded capital assets 52,986 37,991 Internally restricted for specific initiatives 436,364 308,881 Unrestricted — 20,000 489,350 366,872 712,927 550,990

See accompanying notes

On behalf of the Board:

Chair Executive Director 18 Statement of Changes in Net Assets December 31, 2018

Year ended December 31

Internally restricted

Internally funded Specific capital assets initiatives Unrestricted Total 2018 $ $ $ $

Balance, beginning of the year 37,991 308,881 20,000 366,872 Excess of revenue over expenses — — 122,478 122,478 Purchases of capital assets 32,440 (32,440) — Amortization of capital assets (17,445) — 17,445 — Transfers from specific initiatives [note 6] — (39,784) 39,784 Transfers to specific initiatives [note 6] — 167,267 (167,267) — Balance, end of the year 52,986 436,364 — 489,350

Internally restricted

Internally funded Specific capital assets initiatives Unrestricted Total 2017 $ $ $ $

Balance, beginning of the year 32,905 280,458 20,000 333,363 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 37,991 308,881 20,000 366,872

See accompanying notes

19 Statement of Revenue and Expenses December 31, 2018

Year ended December 31 2018 2017 $ $ Revenue Business Improvement Area levy 1,224,586 1,224,586 Sponsorships [note 7] 334,275 347,184 Downtown Dollar program closed [note 4] 125,777 5,325 Advertising and other 18,930 16,650 Interest 3,501 2,154 1,707,069 1,595,899

Expenses [note 7] Special events and programs 522,583 548,176 Public relations and marketing communications 273,457 279,271 Winter Lights program 162,990 169,207 Downtown Dollar program 670 4,793

Administration Wages and employee benefits 427,036 365,469 Rent and occupancy costs 106,217 101,927 Office 29,362 32,130 Professional fees 20,976 18,676 Travel, training and recruitment 2,361 9,668 Amortization of capital assets 17,445 8,799 Meetings 5,792 8,508 Postage and courier 5,375 5,491 Telephone and utilities 4,168 3,697 Insurance 3,408 3,526 Bank charges 2,751 3,052 1,584,591 1,562,390 Excess of revenue over expenses 122,478 33,509

See accompanying notes

20 Statement of Cash Flows December 31, 2018

Year ended December 31

2018 2017 $ $ Operating activities Received from Business Improvement Area levy 1,224,586 1,224,586 Received from sales, special events and programs 45,333 53,140 Gain from write-off of redemption balance 125,190 — Amounts paid to vendors and employees (1,208,104) (1,363,366) Interest received 3,059 2,245 Cash provided by (used in) operating activities 190,064 (83,395)

Investing activities Purchases of capital assets (32,440) (13,885) Cash used in investing activities (32,440) (13,885)

Increase (decrease) in cash and cash equivalents 157,624 (97,280) Cash and cash equivalents, beginning of the year 281,574 378,854 Cash and cash equivalents, end of the year 439,198 281,574

See accompanying notes

21 Notes to Financial Statements December 31, 2018

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 “support, connect, and enrich Edmonton’s Downtown Community.” Its goals are to promote Downtown Edmonton’s image and identity through events, 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 III 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.

22 December 31, 2018

Capital Assets Purchased 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 Recognition The 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.

23 December 31, 2018 Notes to Financial Statements (continued) 2. Summary of Significant Accounting Policies (continued)

Contributed Materials, Services and Facilities The 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.

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.

24 December 31, 2018

3. Capital Assets

Year ended December 31

2018 2017

Accumulated Accumulated Cost amortization Cost amortization $ $ $ $ Tangible Tokens 16,150 16,150 16,150 16,150 Office equipment and furniture 114,181 96,282 113,367 90,634 Computer equipment 31,343 25,056 24,816 21,927 Tenant improvements 91,754 72,464 80,504 68,135 253,428 209,952 234,837 196,846 Intangible Website 33,500 23,989 19,650 19,650 286,928 233,941 254,487 216,496 Net book value 52,986 37,991

4. Provision for Redemption of Parking Tokens

The provision for redemption of parking tokens represents the redeemable amount of Downtown Dollar parking tokens sold but not redeemed at year end.

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 and the redemption of tokens in circulation ended December 31, 2018.

The number of tokens returned during 2018 was minimal and future returns are not expected. As a result, the redemption liability was reduced to nil. If any tokens are returned for redemption or refund in the future, the Association will record these expenses in the future periods.

25 December 31, 2018 Notes to Financial Statements (continued)

5. Commitments

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

2019 237,014 2020 237,014 2021 235,821 2022 125,000 2023 125,000 959,849

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

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

The Board of Directors has formally imposed restrictions on certain of the Association’s net assets. Internally restricted net assets used to fund specific spending initiatives in support of the Association’s mandate are approved by the Board of Directors from time to time.

For the year ended December 31, 2018, $39,784 [2017 – $27,819] was approved by the Board of Directors to be used for specific initiatives. For the year ended December 31, 2018, $167,267 [2017 – $56,242] was transferred to internally restricted net assets to fund future initiatives.

26 December 31, 2018

7. Contributed Materials, Services and Facilities

Sponsorships revenue includes contributed materials, services and facilities of $311,595 [2017 – $317,484], 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 Risk The 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 Risk The 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 Risk The 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. Related Parties

Certain entities who employ members of the Board of Directors provide services to the Association. These legal and banking services are provided in the regular course of business and are recorded at their exchange amounts, being the amounts agreed to by both parties. During the year, the Association incurred $2,300 of legal and $1,331 of banking fees with these entities.

27 2018 Executive Committee

Robert Bothwell Alyson Hodson Gord Rajewski Zarina Bhambani Patrick Saurette Chair Co-Chair Past Chair Treasurer Executive Bennett Jones LLP Zag Creative Pinchin Ltd. KPMG LLP 2018 Board of Directors

Bob Black Casey McClelland Chris Graham Deborah Saucier Ian Large Katz Group Colliers International Shoppers Drug Mart MacEwan University Leger

Martin Kennedy EPCOR Photo (opposite): Sam Mak, photographylead.ca Photo unavailable Garrett Turta Linda Wedman Sheldon Magnes Wayne Kryzalka The Fairmont The Works Society Imperial Parking ATB Hotel Edmonton

Ian O’Donnell Executive Director

28

10121 Jasper Ave Edmonton, AB, Canada T5J 4X6 phone: 780.424.4085 fax: 780.425.7805 edmontondowntown.com