M E M O /
N O T E D E S E R V I C E
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14. CANADIAN TULIP FESTIVAL REQUEST FOR EMERGENCY FUNDING
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That
Council:
1.
Approve a one-time emergency grant in the amount of $75,000 for the
Canadian Tulip Festival, allocated from the City-wide Capital Reserve Fund, to
help finance programming and immediate cashflow requirements for 2006;
2.
Forgive the existing arrears, in the amount of $32,613, owed to the
City by the Canadian Tulip Festival for OC Transpo shuttle bus service in 2005;
3.
Direct OC Transpo to cover the net cost, expected to be
approximately $23,000, for the 2006 Canadian Tulip Festival weekend shuttle bus
service;
4.
Direct OC Transpo and the Canadian Tulip Festival to jointly develop
a long-term partnership agreement and report back to Council by December 2006;
5.
Direct the Canadian Tulip Festival to develop and provide to the
City of Ottawa a long-term financial sustainability plan by December 2006 for
staff review and approval; and
6.
Direct staff to monitor the implementation of this long-term
financial sustainability plan.
Que le Conseil :
1.
autorise le Fonds de réserve pour
immobilisations de la Ville à verser une subvention unique d’urgence de
75 000 $ au Festival canadien des tulipes pour financer les activités
de 2006 et les décaissements immédiats;
2.
renonce aux 32 613 $ que
le Festival canadien des tulipes doit à la Ville pour le service de navette
d’OC Transpo en 2005;
3.
demande à OC Transpo d’assumer le
coût net du service de navette, qui devrait s’élever à environ 23 000 $, pour
le Festival canadien des tulipes en 2006;
4.
demande à OC Transpo et au Festival
canadien des tulipes d’élaborer conjointement une entente de partenariat à long
terme et de la déposer devant le Conseil d’ici décembre 2006;
5.
demande au Festival canadien des
tulipes d’élaborer un plan de viabilité financière à long terme et de le
présenter à la Ville d’Ottawa d’ici décembre 2006 à des fins d’examen et
d’approbation par le personnel;
6. demande
au personnel de surveiller la mise en œuvre de ce plan de viabilité financière
à long terme.
The Committee approved the following direction to staff:
That Corporate Services and Economic
Development Committee direct that staff of the Community and Protective
Services Department, in consultation with the Festival Network, develop a
sustainability support plan that includes corporate governance, financial,
strategic and organizational sustainability; and report back to the Health, Recreation
and Social Services Committee.
Le Comité a approuvé la directive
suivante :
Que le Comité des
services organisationnels et du développement économique enjoigne le personnel
des Services communautaires et de protection d’élaborer, en consultation avec
le Festival Network, un plan d’appui de la viabilité qui comprend la
gouvernance d’entreprise, la viabilité financière, stratégique et
organisationnelle, et de faire rapport au Comité de la santé, des loisirs et
des services sociaux.
1.
Community
and Protective Services, Deputy City Manager’s report dated
29 March 2006
(ACS2006-CPS-CSF-0007).
2. Director,
Cultural Services and Community Funding memorandum entitled “City Support to
Local Festivals” dated 3 April 2006.
3. An Extract of Draft Minute, 04 April 2006, will be distributed prior to Council’s meeting of 12 April 2006.
Report
to/Rapport au :
Corporate Services and Economic Development Committee
Comité des services organisationnels
et du développement économique
and Council / et au Conseil
29 March 2006 / le 29 mars 2006
Submitted by/Soumis par : Steve Kanellakos, Deputy City Manager/Directeur
municipal adjoint,
Community and Protective Services/Services communautaires et de
protection
Contact
Person/Personne ressource : Colleen Hendrick, Director
Cultural Services and Community
Funding/Services culturels et financement communautaire
(613) 580-2424 x 24366,
colleen.hendrick@ottawa.ca
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SUBJECT: |
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OBJET : |
DEMANDE DE FONDS D’URGENCE POUR LE FESTIVAL CANADIEN DES TULIPES |
REPORT RECOMMENDATIONS
That the Corporate Services and
Economic Development Committee recommend that Council:
1. Approve
a one-time emergency grant in the amount of $75,000 for the Canadian Tulip
Festival, allocated from the City-wide Capital Reserve Fund, to help finance
programming and immediate cashflow requirements for 2006;
2. Forgive
the existing arrears, in the amount of $32,613, owed to the City by the
Canadian Tulip Festival for OC Transpo shuttle bus service in 2005;
3. Direct
OC Transpo to cover the net cost, expected to be approximately $23,000, for the
2006 Canadian Tulip Festival weekend shuttle bus service;
4. Direct
OC Transpo and the Canadian Tulip Festival to jointly develop a long-term
partnership agreement and report back to Council by December 2006;
5. Direct the Canadian
Tulip Festival to develop and provide to the City of Ottawa a long-term
financial sustainability plan by December 2006 for staff review and approval;
and
6. Direct staff to monitor
the implementation of this long-term financial sustainability plan.
RECOMMANDATIONS DU
RAPPORT
Que le Comité des
services organisationnels et du développement économique (CSODE) recommande que
le Conseil :
6. autorise le Fonds de réserve pour immobilisations de la Ville à verser
une subvention unique d’urgence de 75 000 $ au Festival canadien des
tulipes pour financer les activités de 2006 et les décaissements immédiats;
7. renonce aux 32 613 $ que le Festival canadien des tulipes doit
à la Ville pour le service de navette d’OC Transpo en 2005;
8. demande à OC Transpo d’assumer le coût net du service de navette, qui
devrait s’élever à environ 23 000 $, pour le Festival canadien des tulipes en
2006;
9. demande à OC Transpo et au Festival canadien des tulipes d’élaborer
conjointement une entente de partenariat à long terme et de la déposer devant
le Conseil d’ici décembre 2006;
10.
demande au Festival canadien des
tulipes d’élaborer un plan de viabilité financière à long terme et de le
présenter à la Ville d’Ottawa d’ici décembre 2006 à des fins d’examen et
d’approbation par le personnel;
11.
demande au personnel de surveiller
la mise en œuvre de ce plan de viabilité financière à long terme.
BACKGROUND
Since its founding year in 1953, the Canadian Tulip Festival has grown into the largest Tulip Festival in the world. People from throughout North America, Europe and Asia attend the Festival that is now a 54-year Ottawa tradition. Tulips, a major concert series, multidisciplinary activities and events, floral programming, a flotilla and numerous Tulip partner sites offer residents and tourists an exciting spring package in Ottawa each May.
The Partnership Program for Festivals, Fairs and Special Events was approved by City Council in December 2002. Objectives of the Partnership Program are to support major, local festivals and fairs that:
· present the distinct, diverse and vibrant character of Ottawa to local residents and tourists;
· offer programming that is of high merit and quality; and
· enhance local quality of life and contribute to Ottawa's overall economic health.
Applicants to the Program are evaluated through a nationally recognized peer assessment process that uses festival, fair and event experts as jurors to assess and make funding recommendations. As is best practice across the country, strict conflict of interest and confidentiality guidelines apply. In addition, a rigorous reporting process is in place for all successful applicants. Failure to provide the required reporting to the City results in ineligibility for subsequent municipal funding.
In late 2002 and early 2003, the Canadian Tulip Festival experienced serious financial difficulty. In February 2003, City Council approved a one-time emergency line of credit in the amount of $300,000 for the Festival, with the understanding that failure to repay the line of credit by June 2003 would result in the organization being ineligible for future City of Ottawa funding.
The Canadian Tulip Festival was advised to develop a strategy that would remedy its unstable financial situation and improve its long-term sustainability. This plan was to be developed to the satisfaction of City staff, and no further grants were to be considered until a viable financial sustainability plan was presented.
At the June 2003 deadline for line of credit repayment, the Canadian Tulip Festival was able to repay $100,000 of the $300,000. The remaining debt of $200,000, plus interest, was repaid over the following three years (2004-2006), by deducting $75,900 each year from the Partnership Program for Festivals, Fairs and Special Events. During this timeframe, the Canadian Tulip Festival was ineligible to apply for municipal funding from the City's Festivals, Fairs and Special Events Program.
The Canadian Tulip Festival is currently experiencing an urgent cash flow crisis, which is jeopardizing both the 2006 event and the future existence of the organization. On March 17, 2006, the Festival wrote to the City, requesting:
1. That an emergency grant in the amount of $75,000 be provided to the Festival to help finance programming and to manage the cash flow crisis; and
2. That OC Transpo sponsor the 2006 Tulip shuttle at no cost to the Festival.
In addition, subsequent to this written submission, the Festival has requested that its existing OC Transpo shuttle service arrears of $32,613 be waived.
Since
the Canadian Tulip Festival was not eligible to apply to the City's Partnership
Program for Festivals, Fairs and Events in 2004, in 2005 or in 2006, Cultural
Services staff did not receive documentation from the festival during this time
period. Current and past Canadian Tulip
Festival documents were provided to Cultural Services staff on March 22nd,
2006.
This
new information demonstrates a serious crisis in cash flow and financial
stability. The critical issues are summarized
below:
1. Annual deficits have been incurred in three
of the last four fiscal years.
2. The Canadian Tulip Festival accumulated
deficit at 2005 year end (June) is $30,657; and no reserve funds are available
to allow for cash flow.
3. An additional $104,267 is still owed to
creditors from the 2003 event. These
debts were to have been repaid over a four year period from annual festival
surpluses; however, annual surpluses have not been posted.
4. An additional $240,000 is owed to creditors
for the 2005 event, including $32,613 for OC Transpo shuttle bus service.
DISCUSSION
The current financial crisis has been caused by a history of alternating successful and unsuccessful financial years. Weather-sensitive programming has placed some revenue sources in annual jeopardy. Corporate sponsorship has proven more difficult to obtain in recent years due to increased competition. Cancellation of the federal government’s Sponsorship Program resulted in a substantial loss of revenue for the Tulip Festival. There are few government programs that provide operating funding to community festivals.
The Canadian Tulip Festival has worked to develop a 2006 Financial Stability Strategy to mitigate the financial issues cited above, including the following directions:
· reduce overall cost;
· minimize overhead and logistical expenses;
· reduce dependence on weather sensitive revenues;
· emphasize the festival’s core business – the celebration of tulips;
· pursue tourism funding from the Province of Québec;
· pursue revenue from private and public foundations; and
· investigate the establishment of a Tulip Festival Foundation aimed at long-term financial stability.
Details of the 2006 Tulip Festival are set out in the following section.
The Canadian Tulip Festival Board of Directors, in collaboration with its new 2006 management, has announced that the 2006 Festival will take place from May 4 to 22 in Ottawa-Gatineau. This year's festival will celebrate "Tulips 2006 - World Flower Rendezvous!" and will feature over 20 official Tulip and Attraction/Partner sites along a 15 km. route through Ottawa and Gatineau.
The 2006 Canadian Tulip Festival program will include:
· A Tulip Promenade, an International Tulip Friendship Village, a Family Zone, an Artisans Marketplace, and a Music in the Tulips concert series at Major's Hill Park;
· Tulips, art and musical entertainment at Commissioners Park, Dows Lake;
· A Flotilla on the Rideau Canal;
· A Dows Lake Parade of Lights;
· A Tulip Tour of the World at the Casino du Lac Leamy;
· Tulip Explosion, a flower and design show, at the Hilton Lac-Leamy; and
· Hosting of the XXIII annual World Flower Council Summit from May 18 to 22.
The Canadian Tulip Festival Board has approved both a balanced budget for the 2006 festival and a 2006 Financial Stability Strategy. The 2006 budget plans for a modest annual surplus of $8,689, with total revenue of $1,821,600 and total expenses of $1,812,911.
The 2006 projected revenue sources include the following:
Ticket Sales $ 495,000 ( 27%)
Event Revenues $ 480,900 ( 27%)
Sponsorship $ 385,000 ( 21%)
Merchandising and Concessions $ 276,000 ( 15%)
Government Partners $ 157,900 ( 9%)
Administration $ 26,800 ( 1%)
$1,821,600 (100%)
The projected government revenue within the Canadian Tulip Festival's budget includes funding from Ontario Tourism ($50,000), Canadian Heritage ($30,000), Ville de Gatineau ($30,000), City of Ottawa ($27,900), and other government sources ($20,000).
It is recommended that the City assist the Canadian Tulip Festival both with its financial stability for 2006 and with longer-term financial sustainability. There are major direct and indirect economic impacts as results of the annual Canadian Tulip Festival. Festival organizers expect over 650,000 visitors in 2006 and a $50 million economic impact.
A one-time emergency grant, in the amount of $75,000, would help the Festival with its current, urgent cash flow crisis. Cash flow affects payroll, contracts with suppliers and payments to creditors. The Canadian Tulip Festival's 2006 revised budget projects municipal funding in the amount of $27,900. The remaining $47,100 would, therefore, most likely be aimed at creditor payback and cash flow.
OC Transpo Shuttle
Bus Service Partnership
2005 Arrears
In 2005, OC Transpo provided 19-day shuttle bus service to the Canadian Tulip Festival, for which the festival owes $32,613. The City currently has a payment block on the Canadian Tulip Festival, requiring all new allocated funds to be directed to this arrears. In addition, Financial Services best practice stipulates that any organization in arrears is required to pay for any future City services upfront.
This report recommends the forgiveness of the 2005 arrears in the full amount. This will assist the Canadian Tulip Festival with its current cash flow problems.
2006 Service
Before 2005, the Tulip Festival Shuttle service ran only on weekends for a total of seven days. The net cost to provide weekend service during the three weekends of the 2006 Tulip Festival is expected to be approximately $23,000. It is recommended that OC Transpo cover the cost of a weekend Shuttle service for the Tulip Festival for 2006. OC Transpo will be obligated to allow Tulip Festival passport holders to ride on the shuttle free of charge, due to existing Canadian Tulip Festival promotion.
Longer Term Partnership
Development of a Partnership Agreement between OC Transpo and the Canadian Tulip Festival is required for the longer term. In 2005, a legal agreement was signed by the Canadian Tulip Festival and the City of Ottawa (OC Transpo) that defined OC Transpo shuttle service during the Festival. This agreement also outlined the revenue sharing formula that was promised to the City of Ottawa from the sale of Tulip Festival passports. OC Transpo has indicated that this legal agreement was not honoured.
It is recommended that, following the 2006 Festival, OC Transpo and the Canadian Tulip Festival develop a new mutually beneficial partnership agreement that can be upheld for the future. This partnership agreement should be brought to Committee and Council by December 2006 for approval.
Long-Term Financial
Sustainability Plan
The Canadian Tulip Festival Board and Management have accomplished some good work in their development of a 2006 Financial Stability Strategy. In order to ensure longer term stability, however, it is recommended that the Canadian Tulip Festival be directed to develop, with a recognized financial specialist, a long-term Financial Sustainability Plan. This critical plan should be aimed at ensuring the Festival's ongoing financial health, and should be submitted to City staff by December 2006 for review and approval.
Approval and ongoing monitoring of the implementation of the Financial Sustainability Plan by the Cultural Services and Community Funding Branch will help to move the Canadian Tulip Festival towards sustainability and renewed eligibility to the City's Partnership Program for Festivals, Fairs and Events.
CONSULTATION
There has been no public consultation on this report. Consultation with the Canadian Tulip Festival is on-going.
FINANCIAL IMPLICATIONS
In 2006, there is no current budget identified to fund the $75,000 emergency grant request, the $23,000 OC Transpo Shuttle service or the $32,613 arrears from 2005. Subject to Council approval, one-time funding in the amount of $130,613 from the City Wide Capital Reserve Fund is recommended to address this requirement.
As part of the 2007 budget, the Public Works and Services Department will bring forward a budget pressure that identifies the funding requirement. The tax increase forecast for 2007 as presented in the 2006 Draft Budget Summary document was projected to be 8.1%. The impact of this additional requirement in 2007 will result in a 0.003% tax increase. All additional requirements approved by Council that have a 2007 budget implication will be summarized and presented in the City’s quarterly status reports.
In the City’s 2005 Budget Review, Council directed that special transit services provided by the City must, at a minimum, achieve full cost recovery.
Forgiveness
of current City arrears will result in a loss of revenue of $32,613 for OC
Transpo and provision of special transit service for the 2006 festival will be
at a net cost of $23,000 to OC Transpo.
Neither of these OC Transpo costs have been budgeted for and will need
to be covered from one-time funding.
SUPPORTING DOCUMENTATION
None.
DISPOSITION
If emergency funding is approved, the Cultural Services and Community Funding Branch will attach a related Terms and Conditions document to the Canadian Tulip Festival grant. This document will set out the City’s standard terms and conditions for municipal grants and will also include any terms particular to this report that are intended to promote fiscal responsibility and sustainability in the longer term.
OC Transpo will implement any City Council direction related to Canadian Tulip Festival Shuttle Bus Service.
M E M O /
N O T E D E S E R V I C E
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To / Destinataire |
Mayor and Councillors
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File/N° de fichier: |
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From / Expéditeur |
Colleen Hendrick,
Director, Cultural Services and Community Funding Branch
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Subject / Objet |
City Support to
Local Festivals
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Date: April
3, 2006 |
The purpose of this memo is to provide background information regarding the level of support provided to local festivals by the City of Ottawa. The following information is being provided to you as background information for the two reports: Tulip Festival Request for Emergency Funding, and; Franco Ontarien Request for Emergency Funding, which will be discussed at Corporate Services and Economic Development Committee on April 4, 2006.
1. Summary of Cultural Funding for Festivals, Fairs and
Special Events
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2002 |
2003 |
2004 |
2005 |
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Arts Festivals: |
$ |
$ |
$ |
$ |
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Canada Dance Festival
Society |
28,000 |
30,000 |
30,000 |
30,000 |
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Canadian Urban Music
Festival |
5,500 |
5,500* |
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Carnival of Cultures |
15,869 |
15,869 |
20,000 |
18,000 |
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Festival Franco-Ontarien |
69,000 |
69,000 |
69,000 |
69,000 |
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Making Scenes Film and
Video Festival |
*3,000 |
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Ottawa Bluesfest |
36,000 |
43,000 |
44,000 |
33,000 |
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Ottawa Chamber Music
Society |
107,000 |
110,000 |
110,000 |
105,000 |
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Ottawa Folk Festival |
17,000 |
33,000 |
35,000 |
37,000 |
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Ottawa Fringe Festival |
20,000 |
20,000 |
20,000 |
20,000 |
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Ottawa International
Animation Festival |
17,000 |
20,000 |
20,000 |
21,000 |
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Ottawa Children’s Festival |
32,500 |
38,000 |
42,684 |
43,684 |
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Ottawa International Jazz
Festival |
66,000 |
66,000 |
72,000 |
74,000 |
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Ottawa International
Writer’s Festival |
13,000 |
18,000 |
N/A |
15,000 |
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Community Builder
Festivals: |
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Arts Bureau for the
Continents (ABC) Festival |
N/A |
N/A |
3,000 |
2,500 |
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Canadian Canoe and Kayak
Festival |
N/A |
*3,350 |
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Caribe-Expo |
N/A |
0 |
2,000 |
3,500 |
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Fête Caribe |
*4,000 |
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Italian Week |
10,000 |
10,000 |
10,000 |
5,000 |
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Ottawa Dragon Boat Race
Festival |
4,000 |
4,000 |
6,000 |
10,000 |
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Pride Week Festival |
4,000 |
3,000 |
N/A |
N/A |
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Tourism Festivals: |
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Canadian Tulip Festival |
82,900 |
75,900 |
**75,900 |
**75,900 |
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Fairs: |
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Carp Fair |
6,150 |
8,000 |
9,500 |
10,000 |
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Gloucester Fair |
N/A |
N/A |
1,000 |
1,000 |
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Metcalfe Fair |
2,500 |
5,500 |
9,000 |
10,000 |
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Navan Fair |
9,500 |
8,000 |
8,500 |
8,500 |
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Richmond Fair |
7,665 |
8,000 |
8,500 |
9,000 |
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SuperEX |
10,000 |
10,000 |
12,000 |
10,000 |
*
Organization closed after this year due to financial hardship
**
$75,900 based on 2003 funding applied to line of credit in 2004, 2005 and 2006
($200,000 plus interest) based on the Feb. 2003 Council report which approved
one-time emergency line of credit in the amount of $300,000. City funding. In 2005, the Tulip Festival
received $100,000 from the 150th Anniversary funding envelope. In
both cases, funding was approved by Council and was separate from the
Festivals, Fairs and Special Events Program. In January 2006 the Tulip
Festival’s line of credit was fully repaid.
2.
Summary of Arrears as of March 31, 2006
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Festivals: |
2002 |
2003 |
2004 |
2005 |
2006 |
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$ |
$ |
$ |
$ |
$ |
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Canadian Tulip Festival |
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29,228 |
32,614 |
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Festival franco-ontarien |
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3,071 |
2,288 |
2,345 |
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Pride Week Festival |
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14,428 |
16,111 |
16,516 |
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Cisco Systems Bluesfest |
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52,801 |
41,438 |
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Canadian Urban Music
Festival |
2,158 |
3,768 |
4,477 |
4,323 |
4,432 |
Note: The amounts shown are
cumulative and what was owed at the end of each year.
The
City’s Financial Services Unit (Accounts Receivable) require that any funding
allocations made to an organization in arrears will have funds frozen and redirected
to City debts. In addition, organizations in arrears are required to pay for
all future City services up-front prior to receiving additional City services
Accounts
Receivable currently has a payment block on each of the above mentioned
organizations.
Colleen
Hendrick
Director
Cultural
services and Community Funding Branch
c.c.
Steve Kanellakos, Deputy City
Manager, Community and Protective Services
