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".


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