Agenda Index City of Vancouver

ADMINISTRATIVE REPORT

TO:

Standing Committee on City Services & Budgets

FROM:

Director, Office of Cultural Affairs

SUBJECT:

Major Exhibiting Institutions - Supplemental Grant Requests

 

CONSIDERATION

RECOMMENDATION

GENERAL MANAGER'S COMMENTS

COUNCIL POLICY

Council has approved annual operating grants to the Major Exhibiting Institutions to support their ongoing operations since their formation.
Approval of a grant requires eight affirmative votes.

PURPOSE

This report presents requests for supplemental grants from the Vancouver Art Gallery, H.R. MacMillan Space Centre and Vancouver Museum, and recommends eligibility criteria and guidelines for any future supplemental grant requests from the Major Exhibiting Institutions.

BACKGROUND

The City provides operating grant support to five Major Exhibiting Institutions. Two -A.S.T.C. Science World and the H.R. MacMillan Space Centre have science education mandates. Three - the Vancouver Art Gallery, Vancouver Museum and the Vancouver Maritime Museum exhibit and hold in trust the City's collections of art and artifacts.

The reporting and funding relationship between the Institutions and the City is generally based on historic precedents. Up until 1971, the museums and planetarium were operated as a department of the City. These three institutions then became one independent non-profit society, the Vancouver Museums and Planetarium Association, which received operating support from the City in two forms: an operating grant with increases tied to wage settlements, and the direct provision of maintenance, janitorial services and building costs.

The Vancouver Art Gallery has always been a separate non-profit society, but has had a close relationship to the City. Over the years, the City has provided operating grants as well as a range of services - janitorial, security and maintenance. Today, most of these services have been monetized and are provided by way of an annual operating grant to the Association. Science World has received City funding since 1982, either through the Cultural Grants or Other Grants programs.

In 1995, the relationships and grant processes for all the Major Exhibiting Institutions were transferred from Finance to the Office of Cultural Affairs, and have been managed by OCA staff. At that time, Council also directed that the operating grants to the Institutions no longer be tied to specific items but to general operations.

The long-term lease agreements with the organizations allowed for the Institutions to make additional grant requests, beyond an annual operating grant request, directly to Council. Over the years, in addition to operating grant support, the City has periodically considered and approved supplemental grants to the Vancouver Art Gallery, the Vancouver Museum, the Pacific Space Centre (now the H.R. MacMillan Space Centre) and the Vancouver Maritime Museum. These requests have been for a range of purposes including capital and extraordinary operating costs.

Except for Science World, all of the lease agreements have now expired and the City is in the process of negotiating new agreements. The agreements will clarify how and when the Institutions may make grant requests for annual operating assistance and to the City's capital planning process.

DISCUSSION

In the context of the 2002 annual grant review, three of the Major Exhibiting Institutions have made supplemental grant requests. Staff have reviewed each of these requests in some detail. In summary, staff recommendations are as follows:

Vancouver Art Gallery
Two years ago, the VAG received a $120,000 grant from The J. Paul Getty Foundation to assess and document the state of the collection, which it holds in trust for the City. The resulting Getty Conservation Survey has identified a series of action items to address outstanding issues, and recommends a process for investment in collections care in three areas - conservation, documentation and imaging. The Gallery has made a supplemental grant request to the City for $67,000 per year for three years towards this follow-up project, which is beyond the scope of the institution's current collection care activities and has a total projected cost of $577,000. The VAG has made application to both federal and provincial collections programs, and has also approached the Vancouver Foundation.

Staff have reviewed the VAG's proposal and recommend support for the digitization aspects of this project, which will make the collection more accessible to the public, both on-line and for reproduction purposes. Maintaining collections is a costly undertaking, and recognizing this, the City has in the past provided assistance for upgrading a collections management system through a supplemental grant to the Vancouver Museum. Staff therefore recommend a grant of $50,000 towards this collection care initiative, subject to confirmation of matching funding. Any further support would be the subject of future reports to Council in the context of the VAG's 2003 and 2004 annual grant reviews.

H.R. MacMillan Space Centre
In 1997, the H.R. MacMillan (then Pacific) Space Centre purchased a space simulator as part of its major capital expansion project. The Space Centre continues to carry a $631,500 loan from the manufacturer, SimEx, and is committed to ongoing monthly loan payments, including a $250,000 lump sum payment due in September of 2002. The Space Centre has not met its projected attendance targets and ticket revenues, which were the basis for the expansion and the loan repayment schedule. MSC has cash reserves, but these are insufficient to cover the full loan payment without going into deficit. As noted in last year's report, staff have been concerned about MSC's ability to absorb the payment within its current level of operation. Last year, MSC indicated that it planned to renegotiate the loanwith SimEx. MSC is now seeking Council's support in order to make its loan payment and has asked the City to provide a supplemental grant equal to the full amount of the outstanding loan payment ($250,000).

Staff note that Council has, by policy, not provided funding to address debt or deficits. In addition, MSC has not secured any new funding sources to address the loan repayment, nor have they explored other budget management options. Staff are therefore not recommending a supplemental grant, but rather encourage the Space Centre to renegotiate its loan with SimEx to provide a payment schedule which is manageable within its existing resources.

Vancouver Museum
In 1996, when Council approved a series of recommendations for the revitalization of the Museum, it granted supplemental funds of up to $200,000 per year for three years. This was in recognition of the challenge in rebuilding the Museum's revenue generating capacity. The funds were targeted to marketing, education, collection registry and fund raising.

Revitalization has taken longer than anticipated. Recognizing this challenge, Council approved a fourth supplemental grant in the amount of $160,000 in 2001 but noted that the Museum's 2002 operating grant submission was to include a sustainable 5-year plan which did not rely on ongoing supplemental funding from the City.

While significant progress has been made in recent months, the Museum has not yet achieved a financially viable operating position. The Museum has made good progress on many of the cultural objectives - re-engaging with the community and funders, presenting professional exhibits and programs, and managing a very complex phased capital project - all with limited staffing and resources. However, they have not yet achieved the revenues projected in the areas of earned income or fund raising. The Commission has approved a deficit budget in the amount of ($199,214) for 2002 and ($109,743) in 2003 and noted that this budget makes no assumption for continued supplementary support from the City. However, the Museum is now seeking the amount of these deficits from the City as supplemental grants.

Staff have reviewed this request and note that the Museum's request is for the City to fund its ongoing deficit, without any new or matching funding sources. The Museum has already received four supplemental grants in the last five years, and is requesting two more. This appears to be an ongoing increase to annual operating funding which is beyond the scope of the City's "Other" Grants budget. Staff do not recommend a further supplemental grant to the Vancouver Museum Commission, but rather recommend that the Museum revise its 2002 and 2003 budgets to achieve a sustainable operating model within the existing City support.

Future Criteria
In light of these three large supplemental grant requests and the formalization of the relationships between the institutions and the City through new operating/lease agreements, staff believe that it is now necessary to articulate criteria and guidelines for future supplemental grants. The purpose is to be clear, consistent and fair to all of the Institutions, as well as to provide a framework that is consistent with other cultural and community grant programs where supplemental requests are limited to very specific circumstances.

Staff have therefore reviewed comparable and relevant grant policies and guidelines and recommend that the following criteria for Major Exhibiting Institutions supplemental grants be adopted by Council. To be eligible for consideration, future supplemental grants must:

· be used for activities, programs or projects which are outside of, or in addition to, regular activities or programs, and which contribute to achieving the goals outlined in the Institution's strategic plan;
· leverage significant new funds from other sources;
· be one-time only initiatives, except under extraordinary circumstances;
· be for initiatives that, if continue in future years, are sustainable by the Institution within its existing operational resources;
· not be used to fund operating or accumulated deficits; and
· not be used for capital projects.

FINANCIAL IMPLICATIONS

The 2002 "Other" Grants budget designated for the Major Exhibiting Institutions is fully allocated. Should Council support a supplemental grant to any of the Institutions, the source of funds would be Contingency Reserve.

CONCLUSION

Staff have reviewed the supplemental requests from the three Major Exhibiting Institutions and present for Council's consideration, a supplemental grant of $50,000 to the Vancouver Art Gallery Association. Staff do not recommend supplemental funding to the H.R. MacMillan Space Centre or the Vancouver Museum Commission.

Further, it is evident from the increase in the number and nature of the supplemental grant requests received, that eligibility criteria and guidelines need to be established to address future requests in a consistent and equitable manner. These have been outlined in this report and recommended for adoption by Council.

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