LATE DISTRIBUTION
FOR COUNCIL, MARCH 25, 1997
A15
ADMINISTRATIVE REPORT
Date: March 18, 1997 C.C. File
No.: 1755
TO: Vancouver City Council
FROM: Executive Director, Heritage Conservation Foundation
in consultation with the Director of Finance
SUBJECT: Transfer of Residual Funds from Demolition Fee Reserve
RECOMMENDATION
THAT a portion of the Demolition Fee Reserve residual funds in the
amount of $250,000 be transferred to City Reserves to be available
for grant to the Heritage Conservation Foundation over a three-year
period for operating costs, on receipt of an operating plan
satisfactory to Council and achievements of that plan over time.
CITY MANAGER'S COMMENTS
The City Manager RECOMMENDS approval of the foregoing.
COUNCIL POLICY
The creation of the Heritage Conservation Foundation was approved by
Council in June, 1992. Despite Council s long-term support for the
creation of a Heritage Foundation in the form of several small,
short-term grants (including funding for the current Executive
Director), a substantial and ongoing source of operating funds has yet
to be allocated.
PURPOSE
This report seeks Council s approval for transfer of a portion of the
residual funds from the Demolition Fee Reserve to City Reserves, to be
available for grant to the Heritage Conservation Foundation. Given an
operating plan and achievement of the plan satisfactory to Council, the
funds would be used by the Heritage Conservation Foundation for
operating costs over a three-year period, at which point it is expected
that the Foundation will be self-sustaining.
BACKGROUND
On March 13, 1997, Council attended a briefing on the history of the
Foundation, along with recommendations for the strategic direction of
the organization. (The briefing document is available from the City
Clerk for those Council members who were unable to attend.) One of the
recommendations included the intention to build an endowment from
private funding sources to provide for ongoing granting, program and
operating costs.
A full briefing on funding needs as well as possible funding sources is
being prepared for a future meeting of the Board (Mayor and Council).
However, as the residual amount of the Demolition Fee Reserve is
currently targeted for transfer to the City s operating budget within
the next two weeks, this report proposes that $250,000 of the residual
should instead be transferred to City Reserves for possible future
grants to the Foundation.
DISCUSSION
Six existing Heritage Foundations in B.C. are funded wholly by their
municipal governments in the form of yearly grants. Despite strong
evidence from other cities that the operation of heritage foundations
result in substantial contributions to their City and the public, it is
also evident that complete reliance on government grants in perpetuity
is unrealistic given today s difficult financial environment.
The background briefing of March 13, 1997 proposed that partnerships
within the larger renovation industry (a $1 billion industry in
Vancouver alone in 1995) could be the key to private funding sources for
programs and operating expenses. Partnership activities, along with
targeted marketing strategies, should significantly increase the amount
and the likelihood of successful private fundraising efforts.
However, startup funds are required at the outset, before substantial
fundraising can begin. Public profile is built by the operation of
successful programs run by qualified individuals, and these activities
cannot operate without sufficient cash.
The use of Demolition Funds to support the operation of the Foundation
has been discussed previously by Council, in connection with the
financial benefit the City obtains from the demolition of its built
fabric; it is proposed that part of this financial benefit should be
utilized to support programs promoting the retention of remaining
buildings, especially ones of heritage value.
It is estimated that it will take a minimum of three years before the
Foundation is completely self-sustaining. The existing $250,000 held
for the Foundation in City Reserves was obtained from a private donation
connected to the sale of the old public library; this sum will form the
basis of the Foundation s endowment for ongoing grant programs, and will
not be used for operating costs.
The Executive Director recommends the allocation of $250,000 from the
Demolition Fee Reserve residual. At this time, anticipated requests for
grant funding would be based on declining support, as follows:
1997/98: $125,000
1998/99: 75,000
1999/2000: 50,000
TOTAL $250,000
COMMENTS OF THE DIRECTOR OF FINANCE
In the past, the Demolition Fee Reserve has been funded from the
proceeds of demolition fees, and the activities of the Housing Centre
have been funded out of the Reserve. In 1993, Council passed a
resolution directing staff to report back on the creation of a Heritage
Conservation Reserve and to investigate use of surplus funds in the
Demolition Fee Reserve for heritage purposes. These suggestions were
not pursued further, pending resolution of other issues related to the
Demolition Fee reserve. In recent years, the proceeds of the demolition
fees were outstripped by the expenditures of the Housing Centre, and the
balance in the Reserve was diminishing.
As part of the 1997 Operating Budget process, Council terminated the use
of the Demolition Fee Reserve, with the result that the proceeds of the
fees go directly to the Operating Budget, and the Housing Centre is
funded from the Operating Budget. At present, there is a balance of
$550,000 in the Reserve, which will be recommended to be folded into the
1997 Operating Budget to provide for transitional funding for those new
revenues and expenditure reductions which could not be implemented for
the full calendar year in 1997.
If Council now allocates some of the funds in the Reserve for the
operating costs of the Heritage Foundation, the aforementioned
transitional funding requirements will likely be achieved through
reductions in Capital from Revenue.
CONCLUSION
The operation of the City of Vancouver Heritage Conservation Foundation
has been a long-time goal of Vancouver City Council. Bringing this goal
to reality requires seed funding. Council is therefore requested to
approve transfer of a portion of the Demolition Fee Reserve Fund
residual in the amount of $250,000 to City Reserves, to be made
available for grants to the Foundation over a three-year period to
support the operating costs of the Foundation.
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