Vancouver City Council |
ADMINISTRATIVE REPORT
Date: March 27, 2003
Author: Karen Hasselfelt
Phone: 604-871-6045
RTS No. 03314
CC File No. 4003
Meeting date: April 24, 2003
TO:
Standing Committee on City Services & Budgets
FROM:
Director, Office of Cultural Affairs, in consultation with the Manager of Budgets
SUBJECT:
H.R. Macmillan Space Centre - Bridge Financing
RECOMMENDATION
THAT Council approve a grant payment of $299,154 to the H.R. MacMillan Space Centre, in advance of consideration of their 2003 annual operating grant to assist the organization with bridge financing a capital project which has received a grant from the Western Economic Diversification fund; source of funds to be the 2003 "Other" Grants budget.
GENERAL MANAGERS' COMMENTS
The General Managers recommend approval.
COUNCIL POLICY
Council has approved annual operating grants to the Major Exhibiting Institutions to support their ongoing operations since their formation as independent non-profit societies in 1971. Council has also approved repayable loans to non-profit organizations to assist in bridge financing capital projects where funding from senior government has been secured but payment is on a reimbursement basis.
PURPOSE
This report presents the H.R. MacMillan Space Centre's request for bridge financing and seeks Council's authorization to approve a lump sum payment of the balance of the H.R. Macmillan Space Centre's annual operating grant up to the approved 2002 grant level to facilitate bridge financing a capital project.
BACKGROUND
In 1967 as part of the City's Centennial celebration, the Vancouver Museums and Planetarium Association was relocated to a new building in Vanier Park. Over the years, the facility has been expanded to include the H.R. MacMillan Planetarium and the Gordon Southam Observatory. In 1987, Council approved the dissolution of the VMPA and the creation of three new societies including the BC Space Centre Society. In 2000, the Society changed its name to the H.R. MacMillan Space Centre Society (MSC).
The MSC shares a City-owned building in Vanier Park with the Vancouver Museum. In addition to occupancy of the facility at a nominal rent, the City provides an annual operating grant as well as janitorial services, utilities, grounds and building maintenance through the City's Building Management department.
DISCUSSION
In 1997, the H.R. MacMillan (then Pacific) Space Centre undertook a major capital expansion project. As part of this capital refurbishment, the MSC purchased a space simulator and over the years has been carrying a loan from the manufacturer. A $250,000 lump sum payment was due in 2002, which the Space Centre paid out of its cash reserves, leaving very little left to manage new capital purchases.
In 2002, the MSC made an application to the Western Economic Diversification (WED) program of the Government of Canada for capital funds in support of equipment purchase for its distance learning and outreach programs, and to upgrade and expand present display systems that enhance the visitor experience. On March 13, 2003 MSC received notice that it had been awarded a grant of up to $456,850. As is standard for these types of federal grants, the funds must be expended before the end of their fiscal year (March 31, 2003) and the grant is allocated on a reimbursement basis. This means that MSC will need to pay for the expenditures up front and within 30 days of the end of the fiscal year and then seek reimbursement from WED which can often take several months. The MSC has requested that the City assist them with bridge financing this federal capital grant.
Staff have reviewed the capital project and believe that this project will enhance visitor services and program offerings. Staff note that the project will also enable the MSC to now support video conferencing activities with students from remote Northern and Aboriginal communities.
FINANCIAL IMPLICATIONS
The City allocates grants to the major exhibiting institutions on a bi-weekly basis. To April 30, 2003 $158,382 will have been advanced to the MSC. Staff are recommending that the balance, $299,154 be advanced to the MSC in a single lump sum payment.
2003 Advance Grant Installments
$ 457,536
Allocated to April 25, 2003
$ 158,382
Balance of 2003 Advance Grant Installments
(prior to 1.75% inflationary increase)$ 299,154
The budget for the major institutions annual operating grants was established in the 2003 ceiling report that was approved on February 27, 2003 and includes a 1.75% increase over 2002 levels. The 2003 operating grant request from the H.R. MacMillan Space Centre will be reported to Council in June, following a review of their 2002 operating performance and financial statements when Council may consider adjustments beyond the 2002 grant level.
CONCLUSION
Staff recommend that Council approve a lump sum allocation of the balance of the organization's annual operating grant up to their 2002 approved grant level to allow them to complete the capital project using their grant and operating resources.
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