A.S.T.C. Science World Society-Annual Report & Operating Grant Request

ADMINISTRATIVE REPORT

Date: October 16, 1998
Author: J. Beresford/ S. Harvey
RTS No. 00237
CC File: 2202

TO: Standing Committee on City Services and Budgets

FROM: Directors of Finance and the Director of the Office of Cultural Affairs

SUBJECT: A.S.T.C. Science World Society - Annual Report and Operating Grant Request

RECOMMENDATION

That an operating grant of $80,000 be approved to the A.S.T.C. Science World Society, with the source of funds to be the 1998 `Other' Grants budget.

GENERAL MANGER'S COMMENTS

The General Managers of Community and Corporate Services RECOMMEND approval.

COUNCIL POLICY

Council has approved annual grants to A.S.T.C. Science World to support their ongoing operations since 1982 through either the "Other Grants" or "Cultural Grants" budgets. In 1997 Council directed that this grant be considered in the context of the "Other Grants" category.

On February 17, 1998 Council approved an advance payment of $31,000 to Science World Society representing 40% of the 1997 Grant amount, as an interim payment of the 1998 grant.

Approval of grants requires eight affirmative votes of Council.

PURPOSE

This report provides a review of Science World's 1997 activities, and presents for Council's consideration their 1998 Grant request.

BACKGROUND

The A.S.T.C. Science World has received civic support since its inception in 1982. In 1989 the Society moved into the renovated EXPO Centre which is leased to the City by the Province, and subleased to the Society.

Science World provides hands-on, educational and entertaining programming and exhibits founded in science and technology. Current and upcoming exhibits include:
· Matter and Forces - explores basic principles of physics, the origins of the universe and the nature of matter and energy;
· Mine Games - an award-winning exhibition which uses "games" to assess the environmental, scientific, social and economic impact that a mine would have on a fictitious community;
· Arithmetricks: Perfectly Perplexing Puzzles - baffling and perplexing math puzzles

DISCUSSION

1997 Year in Review

The past 18 months have been a time of considerable change and renewal for Science World. A major restructuring, led by the Board, has resulted in several significant changes, most notable being new management, and a new Strategic Plan.

The Strategic Plan focuses on improving the Society's programs and exhibits in the context of a financially secure environment. Staff have reviewed the Plan and results for the 1997 year as well as the first and second quarters of 1998 and note the considerable progress that the Society has made in increasing attendance (15% over the previous year), increasing earned revenues, achieving efficiencies in operations and reducing their accumulated deficit.

Much of accumulated deficit can be attributed to a long-standing structural financing deficiency. When Science World opened in 1989, they did not meet their target goal for a $5 million endowment fund which was to provide sufficient revenue to maintain the building and renew exhibitry. In the intervening years, they have tried to fund major maintenance through their operating budgets or have deferred maintenance. Consequently by 1997, they had developed a financial, physical and programmatic deficit. A pattern of annual operating deficits had been established, the building looked worn and many of the exhibits had become dated and were in need of replacement or renewal. In addition interest revenues from the Science World Foundation of approximately $250,000 per year are used to offset operating expenses. The decline in interest rates has caused further erosion of available operating revenues.

The endowment was held by a separate society, the Science World Foundation. As part of the process of renewal, the Foundation and Society boards jointly developed a proposal, applied to the Province of British Columbia and to the courts to have part of the endowment allocated to a series of strategic initiatives. Permissions have been granted to allocate $2 million of the endowmenttowards initiatives which address the physical state of the building, provide for supplementary funds for developing exhibits and funds to launch a capital campaign to re-build the necessary endowment to fulfill the original purposes. The balance of the endowment ($1 million) remains in trust with the Vancouver Foundation.

Normally, staff do not support the erosion of endowment capital, however, in this instance, the society was in need of immediate action, had the resources within their control and put in place a plan for replacement. As the endowment previously existed, the interest was neither enough to pay the actual operating costs nor was it enough to maintain a level of programs necessary to attract an audience. Re-investment in the physical and programmatic environment was necessary and the society has used a portion of the endowment for this purpose. Staff will monitor the society's fund planing plan to replace and increase the endowment.

Operating Grant

Science World has made significant changes to operations through implementation of a Facility and Event Management Strategy. Attendance has shown a marked increase translating directly into additional revenues and an improved bottom line. Short term debt is systematically being reduced contributing to an overall healthier financial picture. Not withstanding these improvements, Science World is still dependant on the City contribution. Staff are recommending a grant of $80,000 for 1998. The overall financial situation of Science World will continue to be monitored and the need for City funding will be reassessed as part of the 1999 annual grant program review.

FINANCIAL IMPLICATIONS

The source of funds for the operating grant is the 1998 `Other' Grants allocation.

ATTACHMENTS TO THIS DOCUMENT THAT DO NOT HAVE ELECTRONIC COPY ARE AVAILABLE ON FILE IN THE CITY CLERK'S OFFICE

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