SUPPORTS ITEM NO. 1 CS&B COMMITTEE AGENDA JULY 10, 1997 POLICY REPORT FINANCE Date: July 3, 1997 Dept. File No. 04.11.97SH CC File: 4002 TO: Standing Committee on City Services and Budgets FROM: General Managers of Community and Corporate Services SUBJECT: "St. Roch" - Vancouver Maritime Museum RECOMMENDATION A. THAT Council provide a supplementary grant of $41,000 to the Vancouver Maritime Museum for the period July through December, 1997 to provide a six-month extension to federal transitional funding to enable the Vancouver Maritime Museum to conclude plans for a private sector fund raising campaign to secure sufficient funds to assume full responsibility for the ongoing operations of the "St. Roch", source of funds to be 1997 Contingency Reserve; and B. THAT staff report back within six months with a review of the Vancouver Maritime Museum's private sector fund raising plan and options for the future disposition of the "St. Roch". COUNCIL POLICY In February 1995 Council directed staff to secure interim operating funds from the Federal Government necessary to maintain public access to the "St. Roch" and report back with the Vancouver Maritime Museum on a proposal regarding alternative sources of funds from private sector and/or sponsorships for the ongoing operations of the "St. Roch". All remaining civic agreements with respect to the "St Roch" expire on June 30, 1997. Approval of a grant requires eight affirmative votes. PURPOSE This report presents a proposal from the Vancouver Maritime Museum (VMM) for a six-month extension of transition funding for the "St. Roch" to enable the VMM Society to complete plans for a major fund raising campaign. BACKGROUND The "St. Roch" was built in North Vancouver in 1928 and was active in the 1930s as a supply ship and floating RCMP detachment in the Arctic. Between 1940 and 1944, the "St. Roch" navigated the Northwest Passage affirming Canada' sovereignty over the Arctic during the war. On its retirement from active service, the "St. Roch" was returned to Vancouver and a community group formed to seek a "home" to honour the ship's achievements. As part of a B.C. Centennial project, the City bought the "St. Roch" (for $5,000) from the RCMP and moved the ship to an outdoor site at the new Maritime Museum. However, the ship began to deteriorate and in 1965 the City entered into an agreement with the Government of Canada through the Department of Northern Affairs wherein the Federal Government undertook to restore the vessel in exchange for the City agreeing to build and maintain a shelter for the "St. Roch" open to the public for a period of 50 years. This agreement was replaced in 1990 with a Lease and License Agreement which expired in January 1996, and with a subsequent agreement which expires on June 30, 1997. The City retains ownership of the "St. Roch" and currently provides capital and operating support through grants to the Vancouver Maritime Museum and through the City's Building Management Department of janitorial services, grounds and building maintenance. Support through the City to the Vancouver Maritime Museum in 1996 for its operations including the "St. Roch" were: Operating Grant $276,000. "St. Roch" Supplementary Grant (source of funds Fed. Govt.) $75,000. Additional "St. Roch" Supplementary Grant $7,200. Building Maintenance $158,300. Total: $516,500. In addition, the City provided $80,000 in Capital Funds in 1995 for the physical integration of the "St. Roch" and VMM operations. DISCUSSION In 1995, when the Department of Canadian Heritage (DCH) through Parks Canada withdrew from operation of the "St. Roch", the City entered into an agreement with the Vancouver Maritime Museum to operate self-guided tours for the public as part of their public programs and exhibitions. Transitional funds from the Federal Government of $150,000 were provided to the VMM to offset the additional staff costs of providing these tours. Actual costs have exceeded the Federal contribution, and the City has provided these supplementary funds to the VMM. The transition funds have provided a two-year opportunity for the VMM to assimilate the St. Roch into their operations. It is now an integral component of their operations and is both an important attraction and income generator for the VMM. Since assuming operations of the St. Roch, the VMM have enjoyed a significant increase in admission revenues. Expenses however, continue to run higher than the earned ticket revenue. As with other aspects of the operations, the gap between earned revenues and expenses are made up of a combination of grant and private sector donations. Staff believe that the City's annual operating grant provides an appropriate level of support for the full operations of the VMM including the St. Roch, and it is now time for the Museum to assume the responsibility for fund raising to close the gap between the operating expenses and earned revenues and civic support. When Council considered the St. Roch in 1995 staff were directed to report back with the Vancouver Maritime Museum on a proposal regarding alternative sources of funds from private sector and/or sponsorships for the ongoing operations of the "St. Roch". The VMM are currently working with the RCMP to develop a national fund raising campaign based on the recreation of the "St. Roch's" voyage through the Northwest Passage, in celebration of the RCMP s 125th anniversary and the creation of Nunavut in 1999. While no formal plan has been submitted to the City, the VMM have indicated that they are close to finalizing an agreement with the RCMP and staff will report back to Council with the details of the fund raising plan in the fall. If the Vancouver Maritime Museum is unable to commit to a plan to secure alternative sources of funds through fund raising or sponsorship within the six-month extension provided through this recommendation, staff will report back with options for Council s consideration for the future disposition of the "St. Roch" including: closing the St. Roch to the public but maintain it for public viewing through glass walls; issuing a public tender call to determine if an alternative organization, business or agency would be interested in operating the St. Roch on site; or continued funding to the Vancouver Maritime Museum. Deaccessioning does not seem to be a viable option. Moving the "St. Roch" would almost certainly be prohibitively expensive and to date, no recipient/buyer has been identified with funds to purchase and move the ship. Even if a buyer were to be identified, the Executive Director of the VMM advises that the ship would probably not survive a move. CONCLUSION Staff recommend that the Vancouver Maritime Museum be given a six-month opportunity to put in place a plan to secure alternative sources of funds through fund raising or sponsorship. If the Vancouver Maritime Museum is unable to commit to such a plan, staff will report back to Council with options for the future disposition of the "St. Roch". * * * * *