ADMINISTRATIVE REPORT

Date: August 12, 1998
Author/Local: Jennifer Beresford / 7789
CC File No. 2201

TO: Standing Committee on City Services and Budgets

FROM: Director of Finance

SUBJECT: Gymnasium Operating Agreement - Collingwood Neighbourhood House Society

RECOMMENDATION

A. THAT Council authorize staff to renew the three year operating agreement with Collingwood Neighbourhood House Society for the operation of the Collingwood Village gymnasium for 1998, 1999 and 2000.

B. THAT Council approve a 2.5% increase in the base annual grant funding under the contract to $200,134 (1998 rates), with annual payments beyond 1998 being subject to a satisfactory annual review of the operation: source of funds for the 1998 grant to be the allocation for the Collingwood gymnasium included in the 1998 Operating Budget ($195,200) and Contingency Reserve ($4,934).

GENERAL MANAGER'S COMMENT

The General Manager of Corporate Services RECOMMENDS approval of the foregoing.

COUNCIL POLICY

City Council, on December 15, 1994 approved a three-year operating agreement with the Collingwood Neighbourhood House Society for the operation of the gymnasium, with an annual operating grant of $191,700 (1994 rates).

City Council, on April 16, 1996 approved a 1996 grant of $195,171 to the Collingwood Neighbourhood House Society for the operation of the gymnasium.

Approval of a grant requires eight affirmative votes of Council.

BACKGROUND

The Collingwood Neighbourhood House Society has been operating in its building in the Joyce-Vaness area since late 1995. The City has leased the land and building to Collingwood Neighbourhood House Society for a five-year term expiring on November 25, 2000.

The operation of the gymnasium and the on-site child care facility are the subject of separate arrangements. On December 14, 1994, Council approved a three-year operating agreement with the Society to operate the City-owned gymnasium and the child care centre for a three year period expiring in December 1997. The City is responsible for the cost of providing the basic level of service for the gymnasium, comparable to other Park Board facilities, with Collingwood Neighbourhood House Society responsible for providing services above the basic level.

The Director of Finance is responsible for the annual review of the operating budget with the Gymnasium Steering Committee for report back to Council.

DISCUSSION

A. 1997 Operating Results

The annual review of the operating results with members of the Gymnasium Steering Committee was satisfactorily conducted on August 12, 1998, for the fiscal year ended on March 31, 1998.

The Steering Committee comprises eight voting members: 4 members, one each from the Park Board, School Board, Joyce Street Area Planning Committee and Collingwood House, and four members from the community. The Steering committee is responsible for the operating and financial decisions of the gymnasium in addition to other aspects of the facility's overall operation and programming. Involvement of a Park Board representative on the Steering Committee provides additional assurance that the facility is operated within the intent of the lease and operating agreements on an ongoing basis.
Under the operating agreement for the gymnasium, the City provided $195,171 to the Collingwood Neighbourhood House Society to operate the gymnasium in 1997. The funds have been fully expended and accounted for in accordance with the approved budget. Collingwood Neighbourhood House Society's 1997/1998 Annual Report and financial statements are attached as Appendix "A" (Limited Distribution - on file in City Clerk's Office).

Major highlights of 1997 for the Society include significant progress in community development issues. Collingwood Neighbourhood House Society provided support to Synala Housing Coop, enabling strengthened aboriginal culture and connections in the community through summer programs including National Aboriginal Day and the Totem Pole Project. Collingwood staff continued in 1997 to work with local residents to improve cultural development, strengthened participation in the community through such programs as Families Branching Out and recruit residents to become involved in community issues forums and leadership activities.

Operational and program highlights include a successful first annual fund raising dinner that raised close to $8,000 for the Society. Development of new and expanded programs such as the expansion of the Family Place Program to Saturdays and development of a community anti-racism project, continues to respond to an ever-increasing demand for services and facility usage.

B. Renewal of the Operating Agreement for 1998 - 2000

Collingwood Neighbourhood House is operated by the Society according to the terms and conditions of a five-year lease that commenced in 1995 and expires on November 25, 2000. Delivery of programs and services by the Society are laid out in Section 1.7 of the lease.

The existing three-year operating agreement for the gymnasium expired at the end of 1997. Recommendation A proposes that Council authorize staff to renew the operating agreement for an additional three years to mirror the remaining term of the building lease. With the exception of the level of City funding proposed, all terms and conditions of the operating agreement for the gymnasium remain unchanged.

C. 1998 Funding Request

The City has funded Collingwood gymnasium operations by a fixed amount of $195,171 for the term of the last three year agreement without increase.

Collingwood Neighbourhood House Society has submitted a request for $200,134 to fund the gymnasium during the 1998/99 fiscal year. This represents an increase of 2.5% over the 1997/98 funding level. Staff has reviewed the details supporting the request and are satisfied that they are reasonable, and comply with the original budget prepared in 1994 and agreed level of service.

There are two contributing factors to support a funding increase at this time. The primary factor is to support the substantial growth that the Collingwood area is undergoing, including the phased construction of a large multi-family housing development in the immediate vicinity. Since the operation of the gymnasium began in 1995, program participation andfacility usage have continued to grow at a rapid rate, creating the need for additional facility resources. Actual program demand has grown from 15 to 37 programs during this period, and is expected to exceed 40 programs in 1998. In addition to area growth, gymnasium expenses have increased, including wage increases for program staff that amounted to 1.9% for 1998.

Staff support the proposed increase in City funding of 2.5% for a total 1998 operating grant of $200,134, which will form the funding base in the new three-year agreement. This increase is sufficient to provide for salary increases, demand growth and inflation on general facility supplies and expenses. The funding is also in keeping with the City responsibility for basic programming and Collingwood Society agreement to fund additional programs and expenditures.

In establishing the 1998 Operating Budget, Council included funding of $197,200 for the operation of the Collingwood gymnasium. This allocation, plus $4,934 from Contingency Reserve, is the recommended source of funding.

D. Collingwood Amenities Endowment Fund

The Collingwood Amenities Endowment Fund is managed by the Vancouver Foundation and currently has a principal balance of $2.075 million. It consists of a $2 million contribution from the City through the recovery from the Canada-British Columbia Infrastructure Program, $50,000 in capital funds raised by the Society, and an additional $25,000 in donations added to the Endowment Fund in 1997. The current market value of the contributed principle is $2.522 million.

It is estimated that the Endowment fund will earn a interest income of $92,400 for fiscal 1998/99 (as provided by the Vancouver Foundation). The revenue has been included in consolidated operating budget of the Society to support their activities.

CONCLUSION

Collingwood Neighbourhood House Society provides an important service to a demographically diverse community in the Collingwood area. The Collingwood Neighbourhood House supports more than one hundred employees and more than 250 volunteers who operate in excess of sixty programs and services. In addition to City funding which support the gymnasium and child care operations, funding for other services is provided from both the Federal and Provincial governments, other grant funding and fund raising activities. Continued financial support for the gymnasium operation, will ensure that service can continue to be provided at a level equivalent to other Park Board facilities.

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(c) 1998 City of Vancouver