ADMINISTRATIVE REPORT

Date: June 4, 2002
Author/Local: K. Hasselfelt/6045

RTS No. 02619

CC File No. 2051/4008

CS&B: June 27, 2002

TO:	Standing Committee on City Services & Budgets
FROM:	Directors, Office of Cultural Affairs and Finance
SUBJECT:	Vancouver Museum - Annual Review and 2001 Operating Grant Request - Supplementary Grant Request

RECOMMENDATION

A. THAT an operating grant of $651,499 be approved to the Vancouver Museum Commission; source of funds to be the 2002 "Other" Grants budget; and

B. THAT Council defer consideration of a supplemental grant request of $150,000 to the Vancouver Museum Commission pending a review of all supplemental grant requests received from the Major Exhibiting Institutions.

CITY MANAGER'S COMMENTS

The City Manager RECOMMENDS approval of A and B.

COUNCIL POLICY

Council has approved annual operating grants to the major exhibiting institutions to support ongoing operations since their formation as independent non-profit societies in 1971. Approval of a grant requires eight affirmative votes.

In October 1996, Council approved lease terms for the Vancouver Museum. A comprehensive operating/lease agreement is in the process of being negotiated. In the intervening period, the relationship is being continued on generally the same terms and conditions as contained in the Council-approved lease terms.

PURPOSE

This report provides a review of the Vancouver Museum's year 2001 activities and recommends a 2002 Operating Grant.

BACKGROUND

The Vancouver Museum has been the keeper and interpreter of the City's history since 1894. Occupying a City-owned building in Vanier Park, the Museum is operated by an independent non-profit society, the Vancouver Museum Commission. In addition to safeguarding the City's valuable collection of archeology, ethnology, human and natural history artifacts, the Museum provides a range of exhibitions and public programs focussed on the past, present and future of Vancouver.

In 1996, Council approved a series of actions to revitalize the Vancouver Museum including the creation of a new governing society, the Vancouver Museum Commission (VMC), as well as capital investment in the City-owned building. Phases 1 and 2 of the capital project are complete - improvements to the public areas of the museum, a new orientation gallery and upgrades to "A" wing. Phase 3 construction has begun and will add a new learning centre. It is scheduled to open in November 2002.

The City currently provides capital and operating support through grants to the Vancouver Museum Commission as well as janitorial services, utilities, grounds and building maintenance through the City's Building Management Department.

2001 Year In Review
The Vancouver Museum Commission initiated a restructuring of the Museum's management early in 2001. A new President and CEO was recruited from within the existing staff complement. In addition, the Commission has created a series of committees to oversee programming, marketing, fund raising and building projects.

In addition to the permanent galleries which focus on the history of Vancouver, several temporary exhibitions were featured in 2001:
· Jade: The Ultimate Treasure of Ancient China;
· Sherlock Holmes and the Clock tower Mystery;
· Women Build Africa;
· Heritage Fair; and
· Backyard Biodiversity: Our Connections to Life
Partnerships with various communities are a vital component of the Museum's operations, and ten affiliate organizations work with the Museum to enrich public programming through Secrets of the City tours, neighbourhood walks and lecture series. In partnership with book publishers, the Museum helped launch ten new books by local authors in 2001 and hosted the Vancouver International Storytelling Festival. In addition, the Vancouver Museum and the H.R.MacMillan Space Centre partnered with the Vancouver International Children's Festival to offer complementary programs.

The Museum has completed the first two phases of its capital revitalization project and has secured a $1.65 million bequest towards Phase 3: the Joyce Walley Learning Centre (JWLC). Architectural planning was completed in 2001 and a ground-breaking ceremony took place in December with the assistance of the Friends of the Vancouver Museum (formerly the Vancouver Museum Association).

The Museum's 2001 Annual Report which will be circulated to Council under separate cover and is available through the City Clerk's office.

2002 Plans
In addition to the permanent exhibition galleries, the following new temporary exhibits are currently on exhibit or planned for 2002:

· Yuquot-The Centre of Our World, an exhibition featuring the culture, customs and history of the Mowachaht/Muchalaht First Nations from Vancouver Island;
· Full Circle: First Contact, which examines the historic encounter between the Vikings and the aboriginal peoples of Newfoundland and Labrador in 1000 AD;
· Through the Eye of a Needle: Stories from an Indian Desert, features an extensive collection of embroidery pieces, photos, stories and video from the tribal women of the Kutch desert; and
· Honouring the Basketmakers, a collaboration between the Museum and three local First Nations groups.

The Joyce Walley Learning Centre (JWLC) , currently under construction, will add a two-level, 5,200 sq.ft. education centre to the facility, including an Archeology Discovery Lab and a Local History Lab on the lower level. These labs will open onto a Natural History garden, and adjacent to the JWLC upstairs, will be a new 50's Gallery that will be the first in the refurbishment of the history galleries that tell The Vancouver Story.

DISCUSSION

Operating Grant Request
The VMC had an operating surplus of $6,623 on a budget of $1.77 million. Paid attendance in 2001 was 57,647, which is a 62% increase over the previous year, and a 12 % increase over 1999, the highest year to date since 1995. Admission revenues were up 50% over last year and 17% over 1999. School program attendance has tripled over 2000. This is a significant accomplishment given the impact that September 11^th and the teacher's labour dispute have had on attendance at other cultural institutions. The VMC's 2001 financial statements are attached to this report as Appendix "A".

The projected operating budget approved by the Commission in their Business Plan for 2002-2005 is of concern. It projects significant deficits in each of 2002 and 2003. While the Business Plan for 2002-2005 has set the first priority to be achieving financial stability, and states that the Museum must continue to build attendance, earned income and fund development to accomplish this, it also states that the Museum needs to request additional supplemental funding from the City to assist in stabilizing operations during the construction phase. As noted in last year's report to Council, the City Manager supported approval of the 2001 supplemental grant, on the understanding that the VMC was to develop a sustainable 5-year plan.

Museum staff, Commissioners and volunteers have worked hard to secure capital funding to complete the capital revitalization project. In addition to the $3 million approved by Council in the 1997-99 Capital Plan, they have secured funds from the Vancouver Foundation and the Walley bequest. The Museum has made an application to the Canada/B.C. Infrastructure works program and to Cultural Space Canada program. Notwithstanding this, the project will need to attract considerable private sector support. The Museum has completed a capital fund raising feasibility study, a campaign plan and formed a Steering Committee. Museum staff have been successful in several recent funding proposals to the private sector. However, these capital funds are project related and not available to offset the considerable operating overhead anticipated in the next few years.

Staff note that the Museum's progress has been more tangible over the past year and that the institution is currently on a positive and productive path with the construction of the Joyce Walley Learning Centre and expanding education program. It is essential however, that the Museum develop a sustainable operating plan which attracts ongoing support from the private sector. This will require the active engagement of Museum staff and Commissioners in annual, sponsorship and capital fund raising campaigns.

Supplemental Grant Request
The Vancouver Museum has submitted a supplemental grant request for $150,000 for 2002 and 2003 to assist it in covering the operating shortfall it will experience due to continued earned revenue suppression resulting from the extended and ongoing construction.

Staff propose to defer consideration of the current request for a $150,000 supplemental grant. Rather, to ensure an equitable process, staff recommend that all supplemental grant requests received from the Major Exhibiting Institutions are reviewed concurrently, with a single report back to Council. Pending the outcome of the supplemental grant review, the Museum will need to revise its 2002 and 2003 budget projections to reflect Council's decision.

Collection Issues
The Museum holds the City's Collection of historic artifacts and collection management issues are detailed in a Collection Policy which sets out policies and procedure for the care, management, acquisition and disposal of the City's assets. This comprehensive policy was developed using the B.C. Museums and Canadian Museums Associations guidelines, and has been formally approved by the Vancouver Museum Commission. Subject to a staff review, the Collection Policy will form a part of the operating/lease agreement between the Vancouver Museum Commission and the City. Until such time as the operating/lease agreement is executed, staff will continue to report to Council any significant issues with respect to the Collection.

FINANCIAL IMPLICATIONS

Staff recommend a 2002 operating grant in the amount of $651,499, an increase of 1.75% over the 2001 grant to cover inflation based on Council policy. Source of funds is the "Other" Grants allocation in the 2002 Budget.

CONCLUSION

Staff recommend continued support to the Vancouver Museum Commission through an operating grant in the amount of $651,499. Staff recommend that the Museum's supplemental grant request be reviewed concurrently with supplemental grant requests that have been received from other Major Exhibiting Institutions.

* * * * *

(c) 1998 City of Vancouver