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CITY OF VANCOUVER ADMINISTRATIVE REPORT |
Date: |
May 4, 2004 | |
Author: |
Karen Hasselfelt | |
Phone No.: |
604-871-6045 | |
RTS No.: |
04141 | |
CC File No.: |
4006 | |
Meeting Date: |
May 20, 2004 |
TO: |
Standing Committee on City Services and Budgets |
FROM: |
Directors, Office of Cultural Affairs and Finance |
SUBJECT: |
Vancouver Art Gallery - Annual Review & 2004 Operating Grant Request |
RECOMMENDATION
THAT Council approve a 2004 operating grant of $1,963,100 to The Vancouver Art Gallery Association; source of funds to be the 2004 "Other" Grants budget.
GENERAL MANAGER'S COMMENTS
The General Managers of Community and Corporate Services RECOMMEND approval.
COUNCIL POLICY
The City has provided funding to the Vancouver Art Gallery since its inception, and since 1992, Council has approved annual operating grants to the Vancouver Art Gallery Association to support ongoing operations.
Approval of grants requires eight affirmative votes of Council.
PURPOSE & SUMMARY
This report provides a review of the Vancouver Art Gallery's 2003 activities and recommends Council's approval of the organization's 2004 Operating grant.
The Vancouver Art Gallery Association ("the Gallery") is an independent not-for-profit organization that exhibits, maintains and holds in trust the City's collection of fine art in a provincially-owned building which is leased through the City. The Gallery received critical acclaim for a number of its exhibitions during 2003, and works from the collection were featured in several shows. The Gallery also made significant additions to the permanent collection and began a digitization project to create and store digital images of BC artworks in the collections database.
Artistic and collection successes aside, the Gallery faced some operational challenges, including a significant decrease in summer admissions and gift shop revenues largely due to a decline in attendance. Through careful management and impressive fund raising efforts, revenue challenges were met and the Gallery posted its 18th consecutive year with a balanced budget. The Gallery reviewed and updated its three-year Strategic Plan, and key priorities include the development of a master plan which will define the Gallery's projected program and facility needs over the next 25 years.
The Gallery has an ambitious year planned in 2004 and the major exhibition and related events planned around the Massive Change project will be an artistic highlight. Operationally, the Gallery has set aggressive revenue targets and acknowledges the challenges of achieving another year with a balanced budget. The Gallery will also focus on completing the Master Plan and a comprehensive Collections Policy. Staff are recommending a 2004 operating grant of $1,963,100, which is a 2% general inflationary increase over 2003 as provided for in the approved 2004 Operating Budget.
BACKGROUND
Founded in 1931, the Vancouver Art Gallery Association is an independent not-for-profit cultural organization which operates Canada's fifth largest public art museum, and collects, exhibits, preserves and holds in trust the City of Vancouver's collection of fine art. The collection comprises over 8,000 works with an estimated value of $100 million. The Vancouver Art Gallery Association occupies a provincially-owned building which is leased to the City of Vancouver for a 99-year term at a nominal rent. The Vancouver Art Gallery is governed by a volunteer Board of Directors and has 48 full time staff and 83 permanent part-time staff. Approximately 380 volunteers contribute 19,000 hours to the Gallery's programming and activities. The association currently has a membership of 10,950.
The Vancouver Art Gallery's relationship with the City is generally outlined in lease terms approved by Council on June 27, 2002. In addition to an annual operating grant, the City currently provides additional in-kind support in the form of occupancy of the facility at a nominal rent, property tax exemption and some exterior maintenance. Table 1 reflects a breakdown of the Gallery's total sources of revenue, including total support from the City (31% of all sources).
2003 Year in Review
Large survey exhibitions of well-known artists such as BC's E.J. Hughes and Liz Magor began the year and both exhibitions went on tour in 2003, giving profile to both Vancouver and BC artists nationally. A series of five exhibitions, both historical and contemporary, explored the drawings of many cultural traditions in Drawing the World: Masters to Hipsters over the summer months. In the fall, Home and Away: Crossing Cultures on the Pacific Rim presented the work of seven internationally acclaimed artists whose work addresses themes of globalization and changing concepts of home and nation.
As part of the Gallery's responsibilities in preserving and making accessible the City's collection of fine art, the Gallery began a digitization project of the permanent collection. With financial assistance from the City ($50,000), the federal Museums Assistance program ($12,400) and the BC Arts Council and BC Museums Association ($36,960), the Gallery created over 800 new digital images of BC art works and upgraded another 500 digital images. These images have been linked to the Gallery's website and incorporated into the collections database for use by staff and the visiting public. These higher quality images are now also available for use in the Gallery's publications, marketing and educational materials.
The Gallery made significant additions to the permanent collection during 2003 and the collection was on view in several exhibitions. The Big Picture: Recent Acquisition from the Collection of Alison & Alan Schwartz featured 75 works by twenty of the world's leading contemporary photo-based artists such as Jeff Wall. The Robert Smithson in Vancouver exhibition focused on the activities of this influential American artist during his visits to Vancouver in 1969-70. The family of J. Ron Longstaffe, a long-time friend and supporter of the Gallery who passed away in 2003, donated 75 works by major Canadian and international contemporary artists to the collection.
The Gallery reviewed and updated its three-year Strategic Plan which outlines key priorities for 2003-2006, including:
· Expanding the Gallery's international role as a contemporary art institution
· Growing and further diversifying the Gallery's sources of income, with particular emphasis on giving by individuals
· Developing and diversifying the Gallery's audiences with a particular focus on tourists, local contemporary art and downtown audiences, Asian communities and seniors
· Continuing to improve the visitor experience through balanced and diverse programming, programs beyond the Gallery walls and upgraded amenities; and
· Addressing the limitations of the Gallery's facility through a comprehensive facility master planning process
With the completion of its Strategic Plan, the Gallery qualified for the final grant instalment and successfully exited from the Vancouver Arts Stabilization Team (VAST) program, providing the Gallery with a working capital reserve of $898,985.
Master Planning
In addition to the Strategic Plan, undertaking a master planning process has been a priority for several years, given the burgeoning program and facility needs of the Gallery. Deficiencies in space for public programming, exhibiting contemporary art and art storage, as well revenue generation spaces have been identified. The development of a master plan is also a requirement of the Memorandum of Understanding (MOU) among BC Buildings Corp. (BCBC)(head landlord), the City (sub-landlord) and the Gallery (City's tenant) if the Gallery wishes to expand towards Robson Square. The Gallery needs to signal any interest in expansion by December 31, 2004.
With funding assistance from the City of Vancouver ($50,000 capital grant) and Cultural Spaces Canada ($200,000), the Gallery has embarked on a visioning and master planning process to define the Gallery's projected program and facility requirements over the next 25 years. An essential part of this process is to define the Gallery's role and involve various communities and stakeholders in consultations about the Gallery's future development. Master Plan deliverables include a Conceptual Planning document with a recommended option, including site layout, and a Case Statement which can support a capital fund raising campaign. A Master Planning Committee, composed of board members, staff, artists and other museum professionals, has been established to oversee the master planning process. The Gallery has engaged Michael Maltzan Architecture, Inc. (MMA) of Los Angeles who will be working with Vancouver-based Henriquez Partners Architects to develop the Master Plan and it is expected that this plan will be presented to the Board by the end of 2004. At this stage, the MMA will not be proposing a detailed architectural design. The Gallery will be advertising in a separate call for proposals once the Master Plan has been completed.
2004 Plans
Scheduled temporary exhibitions in 2004 range from Highlights from the Longstaffe Collection, to design exhibitions such as A Modern Life: Art & Design in BC 1945-1960 to international exhibitions such as Andy Warhol: Prints and Drawings from the Warhol Museum and Baja to Vancouver: the West Coast and Contemporary Art, which brings together four institutions and five curators to present 33 artists working on the West Coast of North America.
Later in the year, the Gallery will launch one of its most ambitious projects ever: Massive Change: The Future of Global Design. Guest-curated by Bruce Mau, this major multi-disciplinary exhibition of 13 modules will describe the key realms of design and its changing role within contemporary culture. This project will also be the focus of a book, a 13-part television series and an international speakers' series. Once opened in Vancouver, this exhibition will tour internationally, as will Baja to Vancouver and survey exhibitions featuring the work of Rodney Graham and E.J. Hughes.
Collection activity in 2004 will focus upon developing a comprehensive collections policy, building the collection primarily through donations, securing off-site storage, improving collection documentation and increasing public access to the collection. There are also plans to implement a new conservation initiative to preserve aging video media within the collection, which is dependent upon securing additional funding from the Museums Assistance Program and other sources.
DISCUSSION
The Gallery achieved many of its goals in 2003, particularly artistically. Operationally, the Gallery faced several challenges and experienced a notable shift in sources of revenue from the previous year. In 2002, the Gallery's earned revenues were 38% compared with the City's operational support of 27%. However in 2003, this position was reversed, and as indicated in Table 1, City operating support of 29.5% was just slightly more than the Gallery's earned revenues of 28.6%. Gallery fund raising also shifted from 15% in 2002 to 20.5% in 2003. The Gallery has stated in its 2003-2006 Strategic Plan that while it still wishes to maximize earned income, it will be focusing more on fund raising revenues from the private sector as the Gallery believes this area has more potential for long-term growth.
While public attendance peaked in 1999 as illustrated in Table 2, the trend since then reflects the Gallery's vulnerability to external events and public interest in specific exhibition programs. In earned revenues, the Gallery was tracking well ahead of its attendance projections in the first half of 2003, but faced a sizeable potential deficit in the third quarter, in part due to significantly lower than expected attendance over the summer months. Some of this decline has been attributed to the effect of world events on tourism and demonstrates the Gallery's reliance on tourism attendance.
Another reason for the drop in attendance may have been due to the lack of name recognition in the summer exhibition series Drawing the World. While receiving critical acclaim, these summer exhibitions did not attract the same numbers as in previous years. For 2004, the Gallery has revised its exhibition schedule and plans to bring in an Andy Warhol show to attract higher attendance.
Attendance performance also affected other earned revenues, as the decline in public admissions impacted gift shop revenues. Net gift shop revenues declined by 50% over 2002. However, public attendance is only one indicator of public interest and support; decreases in admissions revenues were mitigated by membership revenues which increased by 38% in 2003.
The Gallery was also behind in some of its sponsorship and special event revenue targets. The Gallery addressed its potential deficit by focusing fund raising efforts on individual donors. With careful management and impressive fund raising, the Gallery successfully concluded its 18th consecutive year with a balanced budget. The Vancouver Art Gallery Association's 2003 financial statements are attached to this report as Appendix "A".
In 2004, the Vancouver Art Gallery has once again projected targets that are quite aggressive in order to maintain a balanced budget. Artistically, the Massive Change project is ambitious in its scope and higher risk, both in term of resources required and its targeting of new audiences. Increased projections in both admission (38%) and gift shop (40%) revenues are less than the levels achieved in 2002, but substantially more than what was achieved in 2003. Sponsorship revenues are projected to be 175% higher than 2003, with overall private sector revenues increased by 42%, ambitious targets given the challenges faced in 2003. However, the Gallery has already raised $350,000 in sponsorships, with an additional $200,000 pending on a projected budget of $825,000.
Despite fluctuating revenues in admissions and fund raising, the Gallery has been successful in maintaining a balanced budget. Staff note that the Gallery's aggressive growth plan may not be sustainable over the long term, as ambitious programs and targets strain many aspects of operations. Staff and donor burnout are two potential risks that have been identified in the Gallery's Strategic Plan. To mitigate the risks, the Gallery has completed a risk assessment as part of its Strategic Plan, and has access to an operating reserve which it accrued through VAST to address any short term cash flow problems. The institution is also gradually building an operating endowment through its foundation.
Over the past few years, the Gallery has identified new collection projects which require additional resources. Collections care expenditures have been relatively consistent over the past few years, ranging between 4.5% and 5.0% of the Gallery's total operating budget not including collection costs related to exhibitions and outgoing loans. However, the resources do not reflect the growing needs of the collection as collection and exhibition activity increases, and expenditures related to hard costs are declining as salaries and insurance costs increase. These projects have highlighted the need for the Gallery to focus more resources on the care and conservation of the City's collection, and staff would encourage the Gallery to dedicate a larger portion of the City's operating grant to address these collection needs.
While the Gallery has Acquisitions and related collection policies, the institution is currently in the process of developing a consolidated Collections policy that incorporates these existing policies with new policy sections. While the Gallery is estimating that this work will take a few years in its Strategic Plan, this work is considered to be a priority by City staff and necessary for the execution of the new operating/lease agreement. Therefore, staff will be working with the Gallery to conclude this policy development prior to the organization's report to Council in 2005, so that the care and maintenance of the City's valuable fine art collection is guided by a Council-approved Collections policy.
FINANCIAL IMPLICATIONS
Staff are recommending to Council a 2004 operating grant of $1,963,100 based on a general inflationary increase of 2.0% over the 2003 grant as approved by Council in the 2004 Operating Budget. The source of funds is the "Other" Grants allocation in the 2004 Operating Budget.
CONCLUSION
The Vancouver Art Gallery has successfully maintained a balanced budget for 18 years and has offered a range of noteworthy exhibitions and public programs in 2003. It has charted an ambitious year again in 2004, both in terms of programming and revenue targets which will push the Gallery to new levels of performance. The risks have been identified and assessed as part of the Gallery's 2003-2006 Strategic Plan, and while aggressive, it is hoped that the strategies and master planning employed now will strengthen the Gallery's sustainability in future years. Staff are therefore recommending a 2004 operating grant of $1,963,100.
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