ANNUAL R E P O R T

Transcription

1 2017 ANNUAL REPORT

2 Table of Contents 04 President s Message 05 CEO s Message 06 About AUMA 07 About AMSC 08 Governance Advocacy Services 2017 Highlights Business Services 2017 Highlights 30 AUMA Consolidated Alberta Municipal Insurance Exchange (MUNIX) APEX Supplementary Pension Plan Cover photos (top to bottom): Town of Raymond Strathcona County Photos used throughout the 2017 Annual Report have been generously provided by the noted Alberta municipalities.

3 4 > Annual Report Annual Report > 5 President s Message We knew going into 2017 it was going to be a busy year for us and our members. Along with the municipal elections, and the many new people on municipal councils, there were also changes to the AUMA Board of Directors, and I was honoured to have been acclaimed as Board President at our annual convention in Calgary. The board elections brought new faces to the table, and we are inspired by the energy of the new members, and we are grateful for the commitment and service of those who served previously on our Board and committees. Our members would have to address a number of changes in 2017, including amendments to the Municipal Government Act and the upcoming legalization of cannabis. To help respond to and prepare for these changes, AUMA focused significant time and energy in developing strategies to support our members. This was reflected in various tools and resources, including educational programs, webinars, toolkits, and more, delivered throughout the year. Events like the Mayors Caucus held in March and June, and the convention last November, provided opportunities for us to engage with our members, and also for our members to engage with each other. From my own experience as Mayor for the City of Brooks, I can speak to the importance of networking and creating relationships with colleagues in other municipalities, especially as we all start working through the intermunicipal collaboration framework. Advocacy is a very important part of what we do at the AUMA, and why we formed as an organization representing municipalities way back in Over these past 100 plus years, AUMA has been working to ensure that everyone at every level of government understands that municipal governments are accountable to their citizens and are trusted to act in the best interest of their respective communities. We do this through engaging our members and developing strategic partnerships between all orders of government to meet municipal needs. Moving forward, it also means changing the perspective of urban and rural, how we at a municipal level and at an advocacy level can work together rather than just along parallel streams. To help respond to and prepare for these changes, AUMA focused significant time and energy in developing strategies to support our members. If we are truly going to solidify our relationship with the provincial and federal governments, we have to use solutionbased advocacy work that centres around recognition and respect. We must continue to evolve the relationship with the province, to be partners working together to achieve common goals for the betterment of our communities set the foundation for this time of change in Alberta and I am confident that this will lead to continued success in 2018 and beyond. Barry Morishita President CEO s Message Leading through change was not only the theme for the 2017 AUMA Annual Convention, but a reflection of our organization as well. As we geared up for changes to municipal councils and our own board and committees, we also saw changes within the AUMA administration. I was honoured to have been appointed as interim CEO, and I know firsthand that change in an organization can create challenges, especially at a leadership level. Having been with the AUMA for 14 years as the Chief Financial Officer, I have seen the AUMA grow from an organization with only 10 people to our current state, with over 80 full time employees. Reaction to change is a matter of perception, and we saw this as an opportunity to focus on priorities and seeking ways to be more effective, efficient, and strategic in how we support our members. We are fortunate at the AUMA as there is a strong leadership team and talented, committed and capable employees, and this team continues to grow. In 2017, we welcomed Jamie Hotte, Chief Operating Officer, who oversees the services provided by the AMSC team, and Nicole Martel, Executive Officer, Policy and Advocacy, who officially joined the organization in January Both have extensive experience in their fields of practice and we are fortunate to have them join the AUMA and help to continue to propel us forward. AUMA continues to evaluate our service offerings and how we can strengthen our own organization to meet our members changing needs. In 2017, we saw the launch of some internal initiatives, including exploring Customer Relationship Management (CRM) tools to help us better coordinate the services we provide to our members, and development of a digital strategy to help us make better use of our communication tools, including the AUMA website, newsletters, social media, and more. From the first day of my appointment as interim CEO, I wanted to ensure it would be business as usual, and I believe we have been successful in this regard. I am very proud of how AUMA staff pulled together, working hard to ensure we could continue to deliver the high level of service our members and clients expect. Despite this success, we cannot rest on our laurels. Change is a constant, and 2017 was a representation of the resiliency of the AUMA, and our capacity to grow as individuals and as an organization, now and into the future. Dan Rude Chief Executive Officer (CEO) We are fortunate at the AUMA as there is a strong leadership team and talented, committed and capable employees.

4 6 > Annual Report Annual Report > 7 About AUMA About AMSC The Alberta Urban Municipalities Association (AUMA) along with its whollyowned subsidiary, the Alberta Municipal Services Corporation (AMSC), has a long and proud history of serving members, a history that was built upon a collaborative spirit and a keen insight into the workings of local government. The Alberta Municipal Services Corporation (AMSC) delivers a broad range of service solutions to municipalities, municipally-related organizations, and their employees. These services include: Insurance & Risk Services, Employee Benefits, Retirement Services, Utility Services, Short-term Investment Services, and a Purchasing Program. Vision AUMA is a change agent that enables municipalities to be a fully engaged order of government with the capacity to build thriving communities. Mission AUMA is the voice of urban municipalities and provides visionary leadership, solutionsbased advocacy, and service excellence. Core Values Excellence Member Focus Accountability Collaboration Communication Vision AMSC is the leader in providing innovative business solutions to municipalities and community organizations. Mission AMSC provides competitively priced, quality services for municipalities and community organizations to enhance their stability and capacity. Core Values Excellence Customer Focus Accountability Collaboration Communication 2017/2018 AUMA Board Back Row: Councillor Peter Demong, Mayor Peter Pellatt, Councillor Buck Buchanan, Mayor Barry Morishita, Mayor Bill Given, Councillor Ward Sutherland, Mayor Charlene Smylie, Mayor Ed Sosnowski Front Row: Councillor Tony Caterina, Mayor Bruce McLeod, Councillor Tanya Thorn, Mayor Cathy Heron, Deputy Mayor Trina Jones, Mayor Maryann Chichak 2017 AUMA Convention & AMSC Trade Show 2017 AUMA Convention & AMSC Trade Show

5 8 > Annual Report Annual Report > 9 Governance 2017/2018 AUMA Board of Directors (President, then alphabetical) Chair, Mayor Barry Morishita* President City of Brooks Councillor Mohinder Banga Director, Cities over 500,000 City of Edmonton Councillor Buck Buchanan Director, Cities up to 500,000 City of Red Deer Councillor Tony Caterina* Vice-President and Director, Cities over 500,000 City of Edmonton Mayor Maryann Chichak* Vice-President and Director, Towns West Town of Whitecourt Councillor Peter Demong* Vice-President and Director, Cities over 500,000 City of Calgary Mayor Bill Given Director, Cities up to 500,000 City of Grande Prairie Mayor Cathy Heron* Vice-President and Director, Cities up to 500,000 City of St. Albert Deputy Mayor Trina Jones Director, Towns East Town of Legal Mayor Bruce McLeod Director, Villages South Village of Acme Mayor Peter Pellatt Director, Summer Villages Summer Village of Sundance Beach Mayor Charlene Smylie* Vice-President and Director, Villages West Village of Wabamun Mayor Ed Sosnowski Director, Villages East Village of Myrnam Councillor Ward Sutherland Director, Cities over 500,000 City of Calgary Councillor Tanya Thorn Director, Towns South Town of Okotoks *Member of AUMA Executive Committee Governance 2017/2018 AMSC Board Of Governors, AMSCIS Board Of Directors, and MUNIX Advisory Board (Chair, then alphabetical Elected Governor, then External Governor) Mayor Barry Morishita* Mayor Maryann Chichak Mayor Peter Pellatt Mayor Charlene Smylie Mayor Ed Sosnowski Councillor Tanya Thorn Mr. Ron Helmhold Ms. Shelley Miller* Mr. Al Mondor* Ms. Elaine Noel-Bentley Mr. Stanley Wong *Member of AMSC Governance Committee Chair Elected Governor Elected Governor Elected Governor Elected Governor Elected Governor External Governor External Governor External Governor External Governor External Governor 2017/2018 APEX Governance Board (Chair, then alphabetical) Board Organization Structure Mayor Barry Morishita Mr. Robert Kallir Chair Independent Member AUMA Ms. Elaine Noel-Bentley Ms. Ellen Nygaard Independent Member Independent Member Mr. Garth Sherwin Member Municipality Representative Executive Committee Mr. Gregory Yeomans Independent Member Infrastructure and Energy Committee Municipal Governance Committee Safe and Healthy Communities Committee Small Communities Committee Sustainability and Environment Committee Audit and Finance Committee Investment Advisory Committee 2017 AUMA Convention & AMSC Trade Show

6 10 > AUMA Member Profiles 2017 Annual Report > 11 Leading through Change > Communities in Action Approximately 60 high school students from Athabasca Delta Community School took part in a hands on introduction to many health care professions in Fort Chipewyan. The goal is to plant the seed that a future as a rural healthcare professional could be their calling in life. ADVOCACY SERVICES 2017 Highlights Leading through Change > Communities in Action Surrounded by 152 lakes, Lac La Biche County saw the installation and opening of a Lifejacket Loaner Station on the shoreline in McArthur Park. This partnership with the Lifesaving Society of Alberta and Northwest Territories is one of only 23 in Alberta.

7 Municipal Government Act Review 12 > Annual Report Annual Report > 13 MGA Legislative MGA Change Management After over a decade s worth of work, on Thursday, October 26, 2017, the Government of Alberta proclaimed the new Municipal Government Act (MGA). Throughout this time, the MGA review has been one of AUMA s top priorities. AUMA s input resulted in a number of key achievements for municipalities. and Regulatory Amendments Overall, the process has resulted in a reworked Act framed to bring about a new era of collaboration for municipalities and more transparent and accountable governance, key themes raised by members that have framed our work this past decade. Alongside the legislative amendments, the province has also passed a number of associated regulations that set out details as to how policies in the Act will be implemented. AUMA continues to promote the need for further work on the regulations to include more of the input provided by municipalities. As a result of our efforts, the province has agreed to revisit provisions to ensure municipalities are able to fairly and accurately assess and tax cannabis grow operations. As well, the province agreed to delay the implementation of complex changes to the Community Organization Property Tax Exemption Regulation and sections of the Offsite Levies Regulation that pertain to provincial highway connectors until it is certain they are in the best form for municipalities, the development industry, and citizens. AUMA President ( ), Lisa Holmes, answers questions at the MGA Proclamation. AUMA is working hard alongside the Rural Municipalities of Alberta (RMA) and Municipal Affairs to develop tools and resources that support municipalities in adapting to changes. Our work started with Munis 101, a two-day course to help new and returning councillors meet the mandatory training requirements set out in the new Municipal Government Act. Topics covered included municipal legislation, the role of elected officials, municipal finance, planning and development, and effective collaboration. The course was delivered in 14 locations across Alberta between September 2017 and January 2018 by AUMA and RMA s Elected Officials Education Program (EOEP) to approximately 1,125 municipal elected officials and chief administrative officers. The EOEP also started development of supplementary courses on strategic planning, regional collaboration, land use planning, service delivery and public participation to be offered in To further support municipalities in adapting to requirements in the new MGA, AUMA and RMA developed additional tools, including the Intermunicipal Collaboration Framework Workbook, a Councillor Code of Conduct Guide and draft bylaw, and a Public Munis 101 was delivered to: 1,125 participants Participation and Public Notification Guide and templates, which were released in early AUMA continues to collaborate with Municipal Affairs and other partners to develop tools to support municipalities on a wide variety of topics including subdivision and development appeal board training, corporate planning, off-site levies, Indigenous-municipal relations, and more. Municipal Government Act Review

8 14 > Annual Report Annual Report > 15 Infrastructure Funding Asset Management Working with the Federation of Canadian Municipalities (FCM), AUMA has long advocated for a long-term and sustainable federal for a single interface for applying for grant money under phase two, with the province committing to create a single portal for all grant funding under In response to feedback from our members, in 2017, AUMA and RMA jointly managed funding under the Municipal Asset Management Program day course for municipal staff who are in AUMA secured funding to deliver capacitybuilding courses infrastructure funding. The first phase of the Investing in Canada Plan wrapped up in 2017 with $196.7 million invested in clean water and wastewater projects, $347 million in public transit infrastructure across Canada, as well as grant opportunities through Municipal Asset Management Program, Climate Innovation Fund, and others. The federal government also began negotiations with the provinces on phase two of the Investing in Canada Plan. the Investing in Canada Plan. In 2017, the federal government also finalized the details of the Canada Infrastructure Bank, which was created to assist in the financing of infrastructure in communities across Canada. The initial commitment from the federal government to the Bank was $35 billion. The federal government appointed the Board in November 2017, including former Calgary Mayor David Bronconnier. The Bank plans to spend most of (MAMP) to deliver capacity-building courses designed for municipal elected officials and chief administrative officers. Urban Systems was retained to develop full-day and half-day courses on asset management, including courses for elected officials that focused on the basics of asset management, the role of elected officials and CAOs, and asset management policy. Five half-day courses focused on specific areas of asset management, including asset the process of implementing asset management in their municipality. This course focused on the operational and technical details of asset management, focused on how to engage multiple departments, individual roles and an organizational approach. designed for municipal elected officials and chief administrative officers. AUMA continued its advocacy for a 40/40/20 the coming year setting up and expects the first management policy writing, the intersection AUMA had a successful year supporting our federal/provincial/municipal cost-sharing formula. projects to be approved by the end of AUMA with climate change, levels of service and members in implementing asset management We have continued to push for more timely flow of will continue to monitor developments with the communication. and plans to continue working with our partners funding and greater transparency in how projects are selected. We have had success in advocating Bank as they become available. AUMA also partnered with Infrastructure Asset Management Alberta (IAMA) to deliver a two- to find more training opportunities and funding through MAMP AUMA Convention & AMSC Trade Show The Honourable Amarjeet Sohi, Member of Parliament for Edmonton Mill Woods and Minister of Infrastructure and Communities participated in a fireside chat with Tony Caterina, Councillor for the City of Edmonton and AUMA Director for Cities over 500,000, as part of the 2017 AUMA Convention. Minister Sohi provided an update on federal infrastructure funding including Phase 2 of the Investing in Canada Plan, disaster mitigation, and the future of Canada s energy sector. Asset Management: Fighting Fiction and Fad with Facts 2017 AUMA Convention & AMSC Trade Show

9 16 > Annual Report Annual Report > 17 Cannabis Legalization In early 2017, the federal government tabled legislation to legalize cannabis by summer AUMA responded by identifying gaps relating to municipal engagement, property protection, taxation, and resources to support municipalities in their new roles when cannabis is legalized. We brought these gaps to the attention of the both the provincial and federal governments, and reminded them of the complex health and safety issues that need to be resolved. We also highlighted challenges with the proposed timeline for legalization, given the need to develop federal and provincial regulations, as well as associated municipal bylaws. The provincial government initiated consultations to develop their own legislative framework in June In preparation for this consultation, AUMA issued a member survey and held a working session at our June Mayors Caucus. We then used the feedback shared by members to develop a response to consultation. We also participated in a number of roundtable discussions on implementation matters such as managing access and public health, regulation and supply chain, and municipal concerns. The draft Alberta Cannabis Framework was released on October 4, 2017, and AUMA was pleased to see many of our recommendations reflected in the proposed legislation. We struck an Administrative Cannabis Working Group to review the draft framework, validate AUMA s previous policy positions, and develop further recommendations, which we shared with the provincial government. The finalized cannabis framework was released on November 16, 2017, and an education session was held at AUMA s 2017 Convention. While AUMA achieved a number of advocacy successes related to cannabis legalization in 2017, there remain outstanding issues that we will work towards resolving in These include resources to support municipalities in implementing legalization, such as a municipal share of cannabis excise revenue tax, and the appropriate classification of cannabis production facilities for property tax assessment. Municipal Sustainability Initiative 2017 represented the end of the original 10-year commitment by the Government of Alberta to deliver Municipal Sustainability Initiative (MSI) funding to municipalities. Based on AUMA s advocacy, the Minister of Municipal Affairs has committed to working with municipalities to determine an appropriate replacement for MSI. To start the year, AUMA completed a Based on AUMA s advocacy, the Minister of comprehensive review to understand the shortfalls Municipal Affairs has committed to working of the MSI program and developed a series of with municipalities to determine an appropriate recommendations on how a new program could replacement for MSI. It is AUMA s top priority better serve the needs of both municipalities and moving into 2018 to follow up on our the province. The recommendations involved a commitment and make concrete steps vision and principles for a new funding framework, towards obtaining a replacement for MSI including a proposal on how a new funding model that continues to deliver the funding could be structured. that municipalities need, while offering more stability and AUMA shared its proposal with AUMA members predictability for effective through a working session at the March Mayors long-term financial Caucus. The feedback from the working session planning. confirmed AUMA s recommendations aligned with members needs. At the same time, the province extended the MSI administrative agreements until March AUMA Convention & AMSC Trade Show

10 18 > Annual Report Annual Report > 19 Welcoming and Inclusive Communities Women in Government AUMA s Welcoming and Inclusive Communities (WIC) initiative offers tools, education and guidance to support municipal governments to be inclusive employers and better leaders in the effort to overcome issues of social exclusion in Alberta s communities. The year started off with WIC hosting a workshop and webinar to create awareness of the issues facing refugees and how municipalities can support the integration process. In March, AUMA partnered with the Alberta Human Rights Commission to co-host a Municipal Inclusion Symposium. The two-day event brought over 50 delegates together to discuss challenges and promising practices, and take part in a half-day education session on gender identity and gender expression. Following feedback from members, WIC updated its Measuring Inclusion Tool and profiled it at the June Mayors Caucus, where delegates evaluated how inclusive their municipality was in engaging its citizens. Similar sessions were also presented at the Alberta Recreation and Parks Association conference and the Family and Community Support Services Association of Alberta conference. In October, WIC recorded a webinar featuring the City of Red Deer on the topic of supporting transgender employees. Possibly most important, WIC supported municipal staff in their efforts to advance inclusion projects and engaged with other sectorial partners to advance awareness of tools and resources. Looking forward to 2018, WIC is excited to be hosting the Come Together Alberta Conference and continuing to advance education and awareness about an issue that impacts all our communities. Over the past number of years, AUMA has been working with its partners to help increase the number of women in municipal government with the goal of reaching the United Nations target of 30 per cent participation rates. Municipal leaders across the province see value in this initiative and agree a council that takes steps to increase gender parity and make participating on council more welcoming for women is beneficial for all people. In 2017, AUMA produced videos that featured female AUMA board members discussing their experiences campaigning as a way to help encourage, support, and increase the amount of women running in the municipal election. AUMA was pleased to see that the number of women elected rose from 26 per cent in 2013 to almost 30 per cent in Additionally, AUMA provided funding to municipalities and related organizations to host local events for women on campaigning and the municipal election. As part of the 2017 Summer Mayor s Caucus, the Municipality of Jasper gave a presentation outlining its strategies in its efforts to become a Welcoming and Inclusive Community.

11 20 > Annual Report Annual Report > 21 Police Funding We look forward Municipal Climate Change In fall 2016, AUMA members passed a resolution calling to more work on for a new, more equitable funding model for policing this important costs that included the everyone pays model. advocacy priority AUMA advocacy on this issue intensified in 2017, and as a result of our persistence, at the March 2017 Mayors Caucus, Minister of Justice and Solicitor General Kathleen Ganley committed verbally to begin the review of police funding models in the fall. However, the Minister s written response to the resolution did not reiterate the commitment to review funding models, and in meetings with senior Justice and Solicitor General staff, AUMA learned that, although the Ministry had researched options for a new, more equitable funding model, any consultations on police funding were not likely to take place until after the 2019 provincial election. The AUMA Board felt municipalities have already waited too long for in the province to resolve the inequities in police funding, and an issue this urgent in nature could not be put off any longer. Accordingly, the Board approved a letter-writing campaign to signal the importance of this issue to the Minister. The goal of the campaign was to get the province to commit to developing a new funding model, in partnership with municipalities, which enables better policing outcomes. The letter writing campaign kicked off in early 2018, and we look forward to more work on this important advocacy priority in Action Centre (MCCAC) In 2017, MCCAC allocated $6 million in funding through the following programs to support energy efficiency, renewable energy, and climate adaptation projects in Alberta municipalities. These projects will help communities reduce their greenhouse gas emissions by 200,000 tonnes over the life of the projects. This is equivalent to taking 43,000 cars off the road for one year. Program highlights: TAME Express: TAME Express provides funding to Alberta municipalities for high-efficiency AMSP: The Alberta Municipal Solar Program lighting retrofits. As of December 2017, 56 provides capital cost rebates for solar lighting retrofits were completed or underway photovoltaic (PV) installations in Alberta across 29 municipalities. municipalities. As of December 2017, 36 projects totaling 4 megawatts (MW) had Climate Resilience Express: As of December been completed or underway across , MCCAC helped 13 municipalities municipalities. complete climate adaptation plans to help them plan for and manage the local impacts of NEET: The Non-Profit Energy Efficiency climate change. Transition program provides funding to Alberta community non-profit organizations for conducting energy efficiency audits and creating three-to-five year energy management plans (EMPs). As of December 2017, 80 projects were completed or underway across 79 nonprofit organizations. TAME+: The Taking Action to Manage Energy Plus (TAME+) program provides tools and funding to help municipalities understand how energy is used in their buildings, identify key savings opportunities, and implement retrofit projects. As of December 2017, 45 projects were completed or underway across 25 municipalities. Town of Pincher Creek 2017 AUMA Convention & AMSC Trade Show

12 22 > AUMA Member Profiles 2017 Annual Report > 23 Leading through Change > Communities in Action Drayton Valley s newly constructed Discovery Park was opened in September 2017, providing new community green space and accessible recreation opportunities, including walkways, benches with chess tables, outdoor fitness equipment, an outdoor skating rink, and a water feature. It promotes healthy lifestyle that is accessible for everyone and revitalizes the neighbourhood. BUSINESS SERVICES 2017 Highlights Leading through Change > Communities in Action Village of Delburne in partnership with Dr. Muti Kauchali and Red Deer County break ground for a new medical center in Delburne. In the picture from L to R - Mr. Soni Rudresh (pharmacist), Dr. Muti Kauchali, Delburne Councillor Darlene Dushanek, Red Deer County Councillor Philip Massier, Delburne Councillor Jeff Bourne, Delburne Councillor Daphne Warner, Delburne Councillor Tim Wilson, CAO Karen Fegan, Mayor Bill Chandler, and Andrew Anderson (project coordinator).

13 24 > Annual Report Annual Report > 25 AMSC Business Services 2017 Highlights AMSC Insurance & Risk Services provides As a wholly-owned subsidiary of the AUMA, the Alberta Municipal Services Corporation (AMSC) offers business services specifically designed to meet the unique needs of municipalities and community-related organizations. AMSC Business Services reflect competitive prices and superior customer service that are tailored to fit AUMA members needs. The broad range of service solutions provided include: Human Resource Services Employee Benefits Retirement Services Insurance & Risk Services General Insurance Program Risk Management Claims Support Energy Retail Program Short-term Investment Services Purchasing Program $ AMSC Procurement Card spend increased by more than 25%. The client base of each Retirement Services offering, APEX Supplementary Pension Plan, Alberta Communities Pension Plan, MuniSERP, Group RRSPs and TFSAs, grew in MuniFunds return continues to outperform benchmark. Over 275 Over 700 Over 275 Alberta municipalities and over 700 not-for-profit organizations participate in AMSC Business Services stability and support In 2017, the insurance industry experienced some of the highest insured losses on record globally, paying over $136 billion in claims. In Canada, insurers paid $1.3 billion in property claims. Facing a difficult market, AMSC Insurance & Risk Services was nevertheless able to hold the general insurance program rates stable. Our significant buying power stems from the large group of Alberta municipalities that entrust us with their insurance needs year after year. Additionally, MUNIX, the insurance reciprocal, used a portion of its surplus to absorb premium volatility from the property insurance marketplace. In addition to providing stability in rates, AMSC Insurance & Risk Services provides AUMA members access to the coverages they need, with tailored risk management resources and expertise in the claim support division unique to municipalities and community-related organizations. As such, recent improvements and opportunities provided to its clients include the following: AMSC enhanced the basic liability insurance for all members to ($10 million) at no additional charge. Efforts to enhance the wordings/product offerings continued in 2017, with special emphasis on some of the unique challenges members face such as increased property resiliency against changing weather patterns, and rebuilding environmentally-friendly buildings. A new Owner Controlled Insurance Program (OCIP) allows AUMA members to access competitive rates for project-specific construction insurance on a wide range of construction and renovation projects. Designed by Alberta Infrastructure, the program has an an emphasis on taxpayer savings with a wide capital project capacity. Refined member-service teams for comprehensive insurance program support, risk management resources, and advocacy throughout the claims process. AMSC Insurance & Risk Services held a two day AUMA Public Risk Conference in June In a year that saw significant insured loss in the industry, AMSC Insurance & Risk Services held program rates stable along with making improvements to coverages, policy wordings and product offerings.

14 26 > Annual Report Annual Report > 27 Educating employee benefits clients to better serve their needs Along with providing comprehensive employee benefits plans, the AMSC Employee Benefits program offered a number of educational opportunities to its clients and provided timely updates on employment standards changes in The Employee Benefits team worked with vendor partners to ensure municipalities were kept informed of significant changes impacting employment standards regulations in a timely manner. An informative summary of Bill 17: the Fair and Family-friendly Workplaces Act was distributed directly to clients to aid in their preparation for the upcoming changes. Over the course of the year, the Employee Benefits team delivered education sessions to 35 clients. These sessions allow for engaging discussions with employees who are members of the AMSC Employee Benefits program. Employees receive tailored information regarding what benefits they have access to, how to submit claims for reimbursement, and tips on being smart consumers of dental care and prescriptions. These sessions also support the employer/employee relationship by communicating the investment being made to the overall health and wellness of their employees. Moving into 2018, the Employee Benefits program will continue to offer educational opportunities and is undertaking the implementation of a benefits administrative support system to enhance the program and better serve clients. The AMSC Employee Benefits team delivered 35 tailored education sessions to clients in Economies of scale result in savings for members The AMSC Energy Retail Program successfully completed RFPs for aggregate wholesale energy, resulting in approximately a 20 per cent savings for electricity customers and a 40 per cent savings for natural gas customers. The AMSC Energy Retail Program offers energy aggregation as a valueadded service to its members. AMSC manages the aggregation process by actively monitoring current and future markets for energy price optimization, conducting in-depth analyses of a customer s individual load requirements to ensure a customized customer profile, and carrying out a transparent, fair, and highly competitive procurement process. Participating in the energy aggregation process saves municipalities money: Eliminates the need for members to pay for external energy consultants to coordinate their procurement processes. In addition to the aggregation offering, AMSC Energy Retail Program members receive industry-leading service and complimentary benefits including timely and accurate billing, including an online web portal for all historical data needs, a municipally-focused and personable call centre that offers customized solutions to member inquiries, and expert energy advice on a wide variety of energy-related topics including annual budgets, distribution and transmission charge analysis, and energy management best practices. The recent aggregation process offered by the AMSC Energy Retail Program resulted in a savings of approximately: 20% on electricity 40% Provides members access to wholesale markets where there is increased competition and lower pricing. on natural gas 2017 AUMA Convention & AMSC Trade Show

15 28 > AUMA Member Profiles 2017 Annual Report > 29 Leading through Change > Communities in Action The Village of Edgerton s 100th Homecoming celebration included a parade of over 100 entries. FINANCIALS Leading through Change > Communities in Action In the town of Redwater, Mayor Mel Smith and Hong De Cultural - Lion Dance come together at Redwater s Canada 150 event. This event centred around multiculturalism with many free performances.

16 30 > Annual Report Annual Report > AUMA Consolidated Financial Summary Administration s Discussion and Analysis for the year ended December 31, 2017 The consolidated financial statements consist of Alberta Urban Municipalities Association ( AUMA ) and its wholly-owned subsidiary Alberta Municipal Services Corporation ( AMSC ), and AMSC Insurance Services Ltd. ( AMSCIS ), a wholly-owned subsidiary of AMSC. AUMA is a non-taxable association. AUMA generates revenue primarily from membership fees. AUMA also utilizes grants to fund research and program development. AMSC and AMSCIS generate revenue from core business services. AMSC offers a broad range of products and services including energy retail program, retirement services and purchasing program services. AMSC also operates two commercial real estate properties. AMSCIS provides general insurance, employee group benefits and related coverage. The core business services are based on an aggregate business model, allowing AUMA s members to benefit from cost advantages and negotiation power. Hereafter in the financial analysis, AUMA represents the consolidated entity, which consists of AUMA, AMSC, and AMSCIS. Operating Environment AUMA operates in a marketplace where the majority of members/customers of AUMA are municipalities in Alberta. The customer base of AUMA is growing across not-for-profits organizations. AUMA s market position is strong, with municipal market shares ranging from 50% to 63% in major lines of business. Financial Performance Excess of Revenue over Expenses The excess of revenue over expenses amounted to $1.6 million in 2017, down from $4.4 million in The decrease is mainly driven by the following factors: Increase in the excess of revenue over expenses from operations in 2017 to $3.2 million, from $2.2 million in 2016, primarily due to the decline in salaries and benefits of $0.8 million Benefits deficit. The deficit from the underwriter is related to the coverage of group life and disability insurance. The deficit due from AUMA was $1.6 million in 2017, compared with a surplus refunded of $2.5 million in In 2016, there was a write-off of capital assets for $0.3 million, which did not occur in Revenue and Expenses Benefit program (Health & Dental underwriting) AUMA assumes the underwriting risk with extended health and dental policies. In 2017, the health and dental underwriting benefit program collected premiums of $34.4 million and incurred the claim and administration costs of $35.1 million, resulting in a loss of $0.7 million. The premiums received and the claim and administration costs incurred in 2016 were $35.3 million and $36.3 million, respectively. The large losses are primarily driven by the increasing trends in claim utilization experience. Insurance agency commissions The insurance agency commissions are reported on a net basis on consolidated statement of operations. The premiums from the general insurance program and employee group benefit plan were $91.2 million in 2017 and $94.0 million in 2016, respectively. The net commissions were $9.2 million in 2017 after subtracting the underwriter premiums and administrator costs, $0.1 million lower than 2016, reflecting the pressure on margins from market competition. Energy retailing fees Revenue of energy retail program are reported on a net basis as energy retailing fees on the consolidated statement of operations. The energy retail program provides custom electricity, natural gas, and green power solutions. In 2017, energy sales were $94 million. After subtracting the cost of sales, the energy retailing fees were $2.7 million in 2017, ( $2.6 million) remaining stable year over year. Customer loyalty program To reward client loyalty, administration planned to reward clients by issuing rebates of $500,000 every year for three consecutive years. The rebates for fiscal 2016 and 2017 were issued. The three year commitment will end in Financial Position Assets and Liabilities Total assets were $96.8 million as at December 31, 2017, compared with $94.2 million as at December 31, The increase in assets is mainly driven by AUMA s investments. The fair value of AUMA s investments increased by $2.0 million as at December 31, 2017, which is mainly attributed to receipt of $3.0 million for the Non-Profit Energy Efficiency Transition ( NEET ) grant, less payment of grant program expenses. Total liabilities were $30.9 million as at December 31, 2017, compared with $29.9 million as at December 31, The increase is mainly due to the unspent portion of the grants in deferred contributions. Net Assets Net assets were $65.8 million as at December 31, 2017, up by $1.6 million due to the excess of revenue over expenses earned for the 2017 fiscal year. One major change within net assets was the release of $2.7 million from internally restricted assets to fund the employee group benefits deficit. Independent Auditors Report To the Members of Alberta Urban Municipalities Association We have audited the accompanying consolidated financial statements of Alberta Municipalities Association ( the Association ), which comprise the consolidated statement of financial position as at December 31, 2017, the consolidated statements of operations, changes in net assets and cash flows for the year then ended, and notes, comprising a summary of significant accounting policies and other explanatory information. Management s Responsibility for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of these consolidated 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 consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditors Responsibility Our responsibility is to express an opinion on these consolidated 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 consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity s preparation and fair presentation of the consolidated financial statements 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 entity s internal 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 consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of Alberta Urban Municipalities Association as at December 31, 2017, and its consolidated results of operations and its consolidated cash flows for the year then ended in accordance with Canadian accounting standards for not-for-profit organizations. Chartered Professional Accountants May 24, 2018 Edmonton, Canada

17 32 > Annual Report Annual Report > 33 ALBERTA URBAN MUNICIPALITIES ASSOCIATION (AUMA) Consolidated Statement of Financial Position As at December 31, 2017, with comparative information for 2016 ALBERTA URBAN MUNICIPALITIES ASSOCIATION (AUMA) Consolidated Statement of Operations Year ended December 31, 2017, with comparative information for 2016 Note Assets Current assets: Cash 2 $ 6,196,037 $ 4,957,089 Deposits with property manager 142,949 80,368 Investments 4 57,127,428 55,119,519 Accounts receivable 5, 23 11,207,543 10,241,663 74,673,957 70,398,639 ASO funds held on deposit 3 750, ,000 Investment in and advances to AEOEPC 6 10,964 10,621 Other assets 7 604, ,360 Capital assets 8 20,751,466 22,404,181 $ 96,790,969 $ 94,318,801 Liabilities and Net Assets Current liabilities: Accounts payable and accrued liabilities 11, 13, 23 $ 14,581,539 $ 13,583,529 ASO funds payable 3 272, ,749 Deferred revenue 151,506 - Provision for claims incurred but not reported 12 1,419,100 1,830,300 Deferred contributions 13 12,710,843 12,051,749 Current portion of mortgage loan 14 1,815,987 2,056,969 30,951,385 29,916,296 Retirement plan obligation 15 59, ,301 Net assets: Invested in capital assets 16 18,935,479 20,347,212 Internally restricted 17 23,134,326 25,922,074 Unrestricted 23,710,245 17,893,918 Commitments 24 Letters of credit 25 See accompanying notes to consolidated financial statements. On behalf of the Board of Directors: Director Director 65,780,050 64,163,204 $ 96,790,969 $ 94,318,801 Note Revenue: ASO benefit premiums $ 34,353,969 $ 35,311,036 Insurance agency commissions 18,23 9,228,397 9,296,842 Agency and administration fees 23 3,108,084 3,461,510 Energy retailing fees 22 2,717,299 2,631,127 Grants and energy management 13 2,431, ,383 Membership fees and services 1,954,000 1,908,690 Rental properties 1,622,558 1,574,225 Investment earnings 4 1,386,254 1,579,066 Convention and workshops 1,217,824 1,391,061 Retirement services revenue , ,805 Grant administration recoveries 85,637 65,744 MuniFunds management fee 23 50,281 58,039 Purchasing program 28,774 93,031 Water and wastewater 4,114 8,143 58,423,126 58,350,702 Expenses: ASO claim costs and administration expenses 3 35,064,916 36,306,671 Salaries and benefits 15 8,380,924 9,195,102 Grants 19 2,431, ,332 Amortization of capital assets 8 1,752,466 1,747,078 Convention and workshops 1,357,160 1,257,031 Computer equipment and software licensing 1,274,113 1,220,507 Rental properties 24 1,038,392 1,173,170 Consultants 904,971 1,032,073 Office administration 746, ,469 Board and committees 593, ,414 Customer loyalty program , ,000 Broker fees , ,000 Legal and accounting 234, ,172 Travel 208, ,372 Building valuation and risk management programs 98,467 87,514 Insurance 91,037 81,698 Electronic communication and promotions 78, ,056 Member services casual legal & HR 72,495 70,222 Interest on mortgage loan 43,444 68,164 MuniFunds portfolio management 23 27,566 93,093 Other 6 7,383 51,804 Program development 2,758 85,083 Energy management and development - 34,051 55,209,724 56,124,076 Excess of revenue over expenses from operations 3,213,402 2,226,626 Other: Add: Benefits (deficit) surplus 21 (1,596,899) 2,457,594 Share of excess of revenue over expenses of AEOEPC ,852 Less: Write off of capital asset 9-266,848 Excess of revenue over expenses $ 1,616,846 $ 4,447,224 See accompanying notes to consolidated financial statements.

18 34 > Annual Report Annual Report > 35 ALBERTA URBAN MUNICIPALITIES ASSOCIATION (AUMA) Consolidated Statement of Changes in Net Assets Year ended December 31, 2017, with comparative information for 2016 ALBERTA URBAN MUNICIPALITIES ASSOCIATION (AUMA) Consolidated Statement of Cash Flows Year ended December 31, 2017, with comparative information for 2016 Note Invested in capital assets Internally restricted Unrestricted Net assets, beginning of year $ 20,347,212 $ 25,922,074 $ 17,893,918 $ 64,163,204 $ 59,715,980 Excess of revenue over expenses 16 (1,752,466) - 3,369,312 1,616,846 4,447,224 Investment in capital assets ,733 - (340,733) - - Transfers 17 - (2,787,748) 2,787, Net assets, end of year $ 18,935,479 $ 23,134,326 $ 23,710,245 $ 65,780,050 $ 64,163,204 See accompanying notes to consolidated financial statements. Cash provided by (used in): Note Operating activities: Excess of revenue over expenses $ 1,616,846 $ 4,447,224 Adjustments for: Interest and dividend income (1,229,849) (1,154,337) Unrealized loss (gain) on investments 94,908 (435,591) Realized gain on sale of investments (432,964) (158,614) Interest on mortgage loan 43,444 68,164 Amortization of capital assets 8 1,752,466 1,747,078 Write off of capital asset 9-266,848 Gain on disposal of capital assets (314) - Amortization of other assets 7 115, ,994 Change in step up lease deferred rent (63,092) 16,906 Share of excess of revenue over expenses of AEOEPC (343) 47,852 Change in non cash operating working capital: (Increase) decrease in deposits with property manager (62,581) 84,179 Increase in accounts receivable (960,548) (422,205) Increase (decrease) in accounts payable and accrued liabilities 997,894 (164,618) Increase (decrease) in deferred revenue 151,506 (383,578) (Decrease) increase in provision for claims incurred but not reported (411,200) 168,000 Increase in deferred contributions 659,094 5,354,170 (Decrease) increase in retirement plan obligation (179,767) 4,909 Loan forgiveness 6 - (45,500) Interest received in cash, net 71,637 6,014 Cash flow provided by operating activities 2,162,575 9,640,895 Investing activities: Purchase of investments (7,954,747) (19,878,658) Proceeds from sale of investments 7,394,446 8,128,262 Decrease in ASO funds held on deposit 28, ,540 Increase in investment in AEOEPC - 13,296 Purchase of other assets (51,568) (136,220) Proceeds from disposal of capital assets Purchase of capital assets (99,837) (647,439) Cash flow used in investing activities (682,645) (12,028,219) Financing activities: Repayment of operating line of credit - (80,000) Drawdown of operating line of credit - 80,000 Repayment of mortgage loan (240,982) (1,214,474) Cash flow used in financing activities (240,982) (1,214,474) Increase (decrease) in cash 1,238,948 (3,601,798) Cash, beginning of year 4,957,089 8,558,887 Cash, end of year $ 6,196,037 $ 4,957,089 See accompanying notes to consolidated financial statements.

19 36 > Annual Report Annual Report > 37 ALBERTA URBAN MUNICIPALITIES ASSOCIATION (AUMA) Notes to the Consolidated Financial Statements Year ended December 31, 2017, with comparative information for 2016 ALBERTA URBAN MUNICIPALITIES ASSOCIATION (AUMA) Notes to the Consolidated Financial Statements Year ended December 31, 2017, with comparative information for 2016 These consolidated financial statements consist of the assets, liabilities, net assets and operations of Alberta Urban Municipalities Association ( AUMA ), its wholly owned subsidiary Alberta Municipal Services Corporation ( AMSC ), and AMSC Insurance Services Ltd. ( AMSCIS ), a wholly owned subsidiary of AMSC. AUMA also provides administration and agency services to Alberta Municipal Insurance Exchange ( MUNIX ), APEX Supplementary Pension Plan ( APEX ), and MuniFunds Investment Funds ( MuniFunds ), whose results are not included in these consolidated financial statements. AUMA is a provincial organization aimed to provide leadership in advocating local government interests to the provincial government and other organizations. AMSC and AMSCIS operate as business service delivery providers of shared corporate and networked products and services for municipalities and other local government entities. AMSC offers an energy retail program, casual legal services, an aggregated investment program, retirement services, and purchasing program services. As of 2017, annual convention operations, which were previously part of AMSC, are now administered by AUMA. AMSC also operates two commercial real estate properties. AMSCIS provides general insurance, employee group benefits and related coverage for the members of AUMA. AUMA is a non taxable association by virtue of section 149(1)(d.5) of the Income Tax Act. 1. Significant accounting policies: 1. Significant accounting policies (continued): (d) Capital assets: Capital assets are recorded at cost. Repairs and maintenance costs are charged to expense. Betterments which extend the estimated life of an asset are capitalized. The cost of a capital asset comprises its purchase price and any directly attributable cost of preparing the asset for its intended use. When a capital asset no longer contributes to AUMA s ability to provide services, the remaining carrying amount is written down to its residual value. Capital assets are comprised of the following: i) Tangible assets Tangible assets consisting of buildings, furniture and fixtures, computer equipment, alternative energy equipment, parking lot and landscaping are measured at cost less accumulated amortization. These consolidated financial statements have been prepared in accordance with Canadian accounting standards for not for profit organizations in Part III of the CPA Canada Handbook ( Part III ). These statements present AUMA s investments in its subsidiaries subject to significant influence using the cost method. AUMA has prepared general purpose consolidated financial statements, and include the following significant accounting polices: (a) (b) (c) Cash: AUMA considers deposits in the bank and deposits in the investment account as cash. Banker s acceptances and short term investments with original maturities of three months or less are included within investments as it is not AUMA s intention to use the funds to meet short term obligations but rather for investing activities. Deposits with property manager: Deposits with property manager is cash with a property management company for the purposes of managing Alberta Municipal Place ( AMP ) and Saskatchewan Drive properties. Other assets: Other assets include payments for tenant improvements, leasing commissions, as well as deferred costs associated with the step up features of the lease agreements signed with tenants of the AMP and Saskatchewan Drive properties. The tenant improvements and leasing commissions are amortized using the straight line method over the applicable non cancelable lease term and are recorded at the lower of cost less accumulated amortization and net realizable value. The step up leases stipulate that the rental rate will increase by predetermined amounts at various points in the future. Rental revenue is recognized on a straight line basis over the lease term in accordance with Canadian generally accepted accounting principles; as such a deferred rent asset equal to the difference between the actual rent received and the average rent over the lease term will build up in the first half of the lease term and then will be amortized into income over the latter part of the lease term, eventually being reduced to nil. (e) ii) iii) Intangible assets Intangible assets consist of computer software, which are measured at cost less accumulated amortization. Computer software includes acquired application software for the general insurance business line and acquired computer application software for the energy retailing business line. Amortization is provided for on a straight line basis over its estimated useful life, or the term of the license agreement. Amortization of capital assets Amortization is provided using the straight line method at the following annual rates: Asset Buildings 4% Furniture and fixtures 10 20% Computer equipment 25% Computer software 10 33% Alternative energy equipment 20% Parking lot and landscape 7 10% Interest charges incurred to fund capital projects under construction are expensed as incurred and are recorded as interest on mortgage loan expense on the statement of operations. Capital projects under construction or development are not amortized until they are put into use. Revenue recognition: AUMA follows the deferral method of accounting for contributions. Restricted contributions are recognized as revenue in the year in which the related expenses are incurred. Unrestricted contributions are recognized as revenue when received or receivable if the amount to be received can be reasonably estimated and collection is assured. Insurance agency commissions are recognized as revenue over the term of the related policy period. Deferred revenue relates to premiums received in the current year for the policy period commencing January 1 of the following year. Rate