Vancouver City Council

ADMINISTRATIVE REPORT

• Date: February 4, 2003
  Author/Phone:
   Alice Niwinski/604-871-6007
  Karen Hasselfelt/604-871-6045
  RTS No. 3188
  CC File No. 2051

CS&B: February 27, 2003

TO:	Standing Committee on City Services and Budgets
FROM:	Director, Office of Cultural Affairs
SUBJECT:	2003 Grants Budget Ceiling: Cultural, Major Institutions and Celebration Grants

RECOMMENDATIONS

A. THAT Council approve a 2003 Cultural Grants budget of $3,172,580: $1,503,900 for cash grant programs, as detailed in Table 3, and $1,762,600 for the Theatre Rental Grants program.

B. THAT Council approve a 2003 Major Exhibiting Institutions budget of $3,501,800.

C. THAT Council approve a 2003 Celebration Grants budget ceiling of $75,000.

CITY MANAGER'S COMMENTS

This is one of two reports setting the overall grant budgets for Community Services, Childcare, Cultural, Major Institutional, and Celebration categories.

As Council is aware, the City is in the midst of reviewing its 2003 Operating Budget and Council has not yet had the opportunity to evaluate its overall funding priorities. Unfortunately, staff need to proceed with the review and make recommendation on grant applications prior to the final budget being approved. Asa result, staff feel it is important to provide a provisional budget for the two major grant categories prior to finalizing the budget in April 2003.

The budget set for these grant categories is based on last year's budget plus a base inflation adjustment of 1.75%. I am recommending that Council approve this funding since it does not change the relative funding level for these grant categories and it provides staff with the basis on which to proceed with the grant review process. Should Council decide to adjust the overall funding for these grant categories, Council will have that opportunity when setting the 2003 City Operating Budget, at which time Council will be able to assess funding priorities relative to all City programs and services.

COUNCIL POLICIES

Council established annual Cultural Grants in 1978, and approved its current structure in 1989.

In 1979 and again in 1983 Council affirmed the principle that Theatre Rental Grants are available to cultural organizations that use the Civic Theatres on a regular basis. Council policy provides for an increase in the annual Theatre Rental Grants budget to reflect the impact of increases in the Civic Theatre rental rates.

Council has approved annual grants to major exhibiting institutions for their ongoing operations since 1971. These grants became part of the Other Grants category in 1978. In 1989 Council approved the restructuring of Other Grants to include funding to the major exhibiting institutions as a separate category.

Council approved the establishment of the Celebration Grants program in October 2002.

PURPOSE

The purpose of this report is to establish a 2003 budget ceiling for the following grant categories:

A. Cultural Grants: 1) cash grant programs; 2) theatre rental grants
B. Major Exhibiting Institutions
C. Celebration Grants

SUMMARY

As advised by the Manager of Budgets, staff are submitting a 2003 grants budget ceiling which provides for:
· an inflation increase of 1.75% for the Cultural Grant cash programs and Major Exhibiting Institutions Grants budget
· a 4% increase in the Cultural Grant Theatre Rental program, which is adjusted annually to reflect the Civic Theatre rental rate increases
· a budget of $75,000 for the new Celebration Grants program, as approved by Council last year

Within the proposed budget ceiling, funds are distributed among grant categories as summarized in Table 1.

Table 1
2003 Grants Budget Ceiling Recommendations

Grant Category	2002 Budget	2003 Budget Ceiling	Increase
Cultural Grants - cash programs*	$1,478,000	$1,503,900	$25,900
Cultural Grants - theatre rental uses	$1,694,580	$1,762,600	$68,020
Major Exhibiting Institution Grants	$3,441,537	$3,501,800	$60,263
Celebration Grants	$0	$75,000	$75,000
Total	$6,614,117	$6,843,300	$229,183

Cash grant programs comprise Operating, Project, Organizational Development and Diversity Initiatives grants.*

A. Cultural Grant Programs

BACKGROUND

Cultural Grant programs support the vitality, diversity and accessibility of the arts in Vancouver by funding non-profit arts organizations in the visual, media, literary and performing arts, including arts festivals. Project, Operating and Theatre Rental grants assist with creation, production and dissemination of work by local, national and international artists. Diversity Initiatives grants support the development of art and artists from diverse communities and encourage intercultural activities. Organizational Development grants help build capacity in arts organizations.

Operating Grants

Operating Grants contribute to the stability that arts organizations need to maintain quality programming and to secure funding from other levels of government. There is considerable pressure on this program, which funded 77 organizations last year. To be considered for an Operating grant an organization must have a track record of artistic achievement, competent management, a diversified revenue base, and an ongoing presence in the community. It must have received civic project funding for at least two consecutive years.

Project Grants

Project grants are intended for new or emerging groups, one-time initiatives, and organizations working on a project basis. To provide greater flexibility for smaller arts groups, the program has two application deadlines (in December and June). Of the 39 Project grant requests, 11 are from first-time applicants. Since Cultural Grant budget levels have not increased significantly in recent years, it has been increasingly difficult to fund new applicants, but the City has continued to support innovative and distinctive projects from new applicants, as well as previously funded ones.

Diversity Initiatives Grants

While Project and Operating grants are available for a wide range of artistic activities, including those based in diverse cultural traditions, the City introduced the Diversity Initiatives program to provide additional support for artistic development in diverse communities. The grants assist with mentorships, residencies, developmental projects, and cross-cultural collaborations. Staff believe that the program, which replaced the Cross-Cultural Initiatives program in 1998, is working well, especially for the performing arts. There are two deadlines: in June and October.

Organizational Development

Organizational development has become increasingly important in Vancouver's cultural sector as it responds to revenue uncertainties and rising costs, increased competition for audiences with less leisure time, and the challenge of finding and keeping skilled administrators in a sector with low wages. These grants help organizations with staff training, financial management, governance, succession planning, audience development and long-range strategic planning. Through the Arts Partners in Organizational Development (ArtsPOD) program, the City's funding in this for the program is matched by support from other funding bodies, including the Department of Canadian Heritage, B.C. Arts Council, and Vancouver Foundation. There are currently two deadlines, in March and October.

Theatre Rental Grants

Theatre Rental grants are a form of operating assistance for arts organizations that perform regularly in the Civic Theatres: the Orpheum, Vancouver Playhouse and Queen Elizabeth theatres. The Theatre Rental Grant budget also includes the annual $100,000 allocation for the Vancouver Symphony's office space rental in the Orpheum.

Groups in this category have a Council-approved "base level" of rental uses, giving them the stability of a predictable annual level of support. While the Theatre Rental Grant budget has grown more than for any other category of civic grants, this growth has been tied to theatre rental rate increases and has not, in effect, provided recipients with additional resources. This year's application deadline is in May, and the ensuing report will cover the Fall 2003 and Spring 2004 performing arts season.

DISCUSSION

Context

Over the past decade the organizations funded by the Cultural Grant programs have collectively managed to maintain steady if modest growth, providing residents and visitors with access to a widening range of artistic experiences. This growth has been accomplished through increased fundraising efforts, energetic marketing, and efficiencies gained through shared resources and artistic partnerships. However, it has required a level of effort and financial constraint that is taking its toll on artists, administrators and board members. Staff turnover in local non-profit arts organizations has been high in recent years, caused by burnout and departures for greener pastures in other provinces.

A factor contributing to staff turnover is the nature of the cultural community's infrastructure. Vancouver's non-profit arts sector emerged in leaner times than its older counterparts in central Canada, and has relatively few mid-and large-size organizations given the city's size. Inadequate organizational resources often affect the sector's ability to address current challenges, which include planning for possible revenue shortfalls due to changes in BC Gaming funding and tobacco sponsorship, building capacity in marketing and administration while maintaining artistic quality, and fully utilizing the potential of new technologies in such areas as marketing and financial management. Cultural Affairs staff will be providing a more complete picture of current issues, trends and needs in the arts community in a report later this year.

2003 Budget

For the main Operating and Project grant deadlines for this year, 119 applications totalling $1,945,400 have been received. As indicated in the "Background" section of this report, a number of Cultural Grant programs, including Theatre Rental grants, have deadlines later in the year. Table 2 summarizes current request numbers compared with those in previous years.

Table 2 - Operating & Project Grant Applications

	2000	2001	2002	2003*
Applications received:
Funded in previous year	100	104	104	95*
Turned down in prev. year	6	5	8	4*
New/didn't apply in prev. year	23	29	23	20*
No. of total requests	129	138	135	119*
Total amount requested	$1,728,000	$1,747,236	$1,865,482	$1,945,400

* Does not represent final total for 2003: requests for Project Grant June deadline not included.

The total 2002 Cultural Grants budget was $3,172,580. This year, the Manager of Budgets advises that the Theatre Rental Grants program should be adjusted by 4% ($68,020) to account for 2002/03 Civic Theatre rental rate increases, and that the four other Cultural Grant programs will require an inflation adjustment of 1.75% ($25,900) to maintain the current monetary value of their budgets. Applying these adjustments results in a recommended 2003 Cultural Grants budget of $3,266,500, allocated to the five grant programs as detailed in Table 3.

Table 3 - 2003 Cultural Grants Budget by Program

The allocation of funds among the five categories of the Cultural Grants budget is based on current and anticipated request levels and on current priorities for supporting artistic development, organizational infrastructure, and community access. As in previous years, staff may recommend adjustments in the distribution among the five categories following an assessment of grant requests.

B. Major Exhibiting Institutions Grants

BACKGROUND

The Major Exhibiting Institutions category provides funding to five organizations: the Vancouver Art Gallery, the Vancouver Museum, the Vancouver Maritime Museum, the H.R. MacMillan Space Centre and A.S.T.C. Science World. Three of these institutions - the Vancouver Art Gallery, Vancouver Museum and the Vancouver Maritime Museum - exhibit and hold in trust for the citizens of Vancouver the City's collections of art and artifacts. A.S.T.C. Science World and the H.R. MacMillan Space Centre do not have collections and are governed by science education mandates.

The reporting and funding relationships between the institutions and the City are mostly based on historic precedents. Until 1971, the Vancouver Maritime Museum, the Vancouver Museum and the H.R. MacMillan Planetarium were operated as a department of the City. These institutions have subsequently become three separate, independent, non-profit societies. The Vancouver Art Gallery has always been a separate non-profit society.

The City's relationship with Science World dates to 1982, when the A.S.T.C. Science World Society first received civic support. In 1989, Science World moved into the renovated EXPO Centre which is owned by the provincial government, leased to the City (which owns the land) and subleased to Science World.

Over the years, the City has provided operating grants to all five institutions. In the case of the three Vanier Park area institutions, the City also provides additional support through janitorial, utilities, security and maintenance services. In 1995, responsibilities for civic relationships with all the Major Exhibiting Institutions were transferred from Finance to the Office of Cultural Affairs, and have since 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 City's relationship to these organizations has been defined according to the lease agreements. All of the lease agreements, except for Science World, have now expired and the City is in the process of negotiating new operating/lease agreements which will clarify and formalize the relationship between the City and the institutions.

DISCUSSION

Currently, the institutions are all at different places in their organizational or business cycles. While they all have their operational challenges, the Vanier Park institutions are facing issues and opportunities that are unique to their particular situation.

The City owns the land and the buildings occupied by the Vancouver Maritime Museum, the Vancouver Museum, and the H. R. MacMillan Space Centre, with the latter two organizations co-tenants in the same building. Co-tenancy has presented particular challenges for these two institutions. All three organizations continue to struggle with growing their attendance. Strategic partnerships among the institutions may provide opportunities for developing critical mass, and consequently, audiences.

The City's collections are valuable assets and City staff are currently working with each of these institutions to ensure that their collections policies meet or exceed the B.C. Museums Association standards. Collections, by their nature, are resource intensive, and therefore, implementation and compliance with these standards requires careful management within available resources.

Consistent with the Council policy regarding the development of Civic Grant budget ceilings, the Manager of Budgets sets the adjustment level for each year's budget and has recommended an increase of 1.75% for inflation above the 2002 funding levels. Based on the 2002 funding level of $3,441,537 and including the inflationary adjustment, the proposed 2003 Major Exhibiting Institutions budget ceiling is $3,501,800.

The reports on the allocations of the 2003 annual operating grants to each of these institutions will be submitted to Council later in the Spring.

C. Celebration Grants

In October 2002 Council approved this new assistance program for community-based celebrations and festivals, including large-scale parades and distinctive neighbourhood events, in recognition of the entertainment and sense of community they provide. The program offers support for festive events that do not qualify for the Cultural Grants program, given its arts mandate.

The budget level for the new program was set at $75,000, with funds to be targeted to city-wide publicity, program enhancement and strengthening operational expertise. In this phase-in year, deadlines for the program have been set for the end of March and early September to allow for start up activities and adequate promotion, but staff anticipate that these deadlines may be adjusted to allow for earlier applications next year.

CONCLUSION

The budget ceiling recommendations in this report reflect the ongoing importance of City grant programs in developing and sustaining organizations that are well equipped to produce quality programs and services for this community. The establishment of a budget ceiling early in the year ensures the timely provision of this support, both to operating applicants that rely on ongoing civic funding and to project applicants, whose initiatives benefit from longer-term planning.

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© 2002 City of Vancouver