8. OTTAWA-GATINEAU PRIDE WEEK FESTIVAL REQUEST FOR EMERGENCY FUNDING

DEMANDE DE FONDS D’URGENCE POUR LA SEMAINE DE LA FIERTÉ D’OTTAWA-GATINEAU

COMMITTEE RECOMMENDATIONS AS AMENDED

That Council:

1. Approve in-kind City services to a maximum of $13,810 allocated from the City-wide Capital Reserve Fund, for police and paramedic services, on-site festival plaza services and office rent for four months in 2006;

2. Forgive the existing arrears of $16,425 owed to the City by the Pride Committee for unpaid City services from previous years' events, allocated from the City-wide Capital Reserve Fund;

3. Direct the Pride Committee to repay the 2004 letter of guarantee in the amount of $50,075, to the City of Ottawa, in instalments and at no interest, over a seven to ten year period beginning in 2007;

4. Direct the Pride Committee to develop and provide to the City of Ottawa a long-term financial sustainability plan by December 2006, including an Audited Statement by a certified Chartered Accountant, for staff review and approval;

5. Direct the City Auditor General to audit the Pride Committee's 2006 financial accounts at no cost to the Pride Committee; and

6. Direct staff to monitor the implementation of this long-term financial sustainability plan.

RECOMMENDATIONS MODIFIÉES DU COMITÉ

Que le Conseil :

1. approuve des services en nature de la Ville jusqu’à concurrence de 13 810 $ provenant du Fonds de réserve pour immobilisations de la Ville, pour les services policiers et paramédics, les services sur place de la place des Festivals et le loyer de bureau de quatre mois de 2006;

2. renonce aux arrérages au montant de 16 425 $, versés par le Fonds de réserve pour immobilisations de la Ville;

3. demande au Comité de la Fierté de repayer à la Ville, en versements échelonnés sur une période de sept à dix ans, sans intérêts, à partir de 2007, le montant de 50 075 $ de la lettre de garantie de 2004;

4. demande au Comité de la Fierté d’élaborer un plan de viabilité financière à long terme, incluant des états financiers vérifiés par une firme comptable accréditée, et de le présenter à la Ville d’Ottawa d’ici décembre 2006 à des fins d’examen et d’approbation par le personnel;

5. demande au vérificateur général municipal de procéder à la vérification des comptes financiers du Comité de la Fierté pour les exercices 2006, sans qu'aucun frais ne soit exigé du Comité de la Fierté; et

6. demande au personnel de surveiller la mise en œuvre de ce plan de viabilité financière à long terme.

DOCUMENTATION

1. Report from the Corporate Services and Economic Development Committee dated 06 June 2006 (ACS2006-CCS-CSE-0005).

2. Extract of Draft Minute, 20 June 2006 will be issued separately prior to the Council meeting of 28 June 2006.

Report to/Rapport au :

Corporate Services and Economic Development Committee

Comité des services organisationnels et du développement économique

and Council / et au Conseil

June 6, 2006 / le 6 juin 2006

Submitted by/Soumis par : Diane Holmes

Contact Person/Personne ressource :

(613) 580-2484 Diane.Holmes@ottawa.ca

City-Wide/ à l’échelle de la Ville

Ref N°: ACS2006-CCS-CSE-0005

SUBJECT:	OTTAWA-GATINEAU PRIDE WEEK FESTIVAL REQUEST FOR EMERGENCY FUNDING

OBJET :	DEMANDE DE FONDS D’URGENCE POUR LA SEMAINE DE LA FIERTÉ D’OTTAWA-GATINEAU

REPORT RECOMMENDATIONS

That the Corporate Services and Economic Development Committee recommend that Council:

1. Approve a one-time emergency grant in the amount of $20,000 for the Ottawa-Gatineau Pride Week Festival (Pride Festival), allocated from the City-wide Capital Reserve Fund, to help finance 2006 programming and immediate cashflow requirements. Emergency funds are not to be redirected to any outstanding arrears

2. Approve in-kind City services to a maximum of $13,810 allocated from the City-wide Capital Reserve Fund, for police and paramedic services, on-site festival plaza services and office rent for four months in 2006;

3. Forgive the existing arrears of $16,425 owed to the City by the Pride Committee for unpaid City services from previous years' events, allocated from the City-wide Capital Reserve Fund;

4. Direct the Pride Committee to repay the 2004 letter of guarantee in the amount of $50,075, to the City of Ottawa, in instalments and at no interest, over a seven to ten year period beginning in 2006;

5. Direct the Pride Committee to develop and provide to the City of Ottawa a long-term financial sustainability plan by December 2006, including an Audited Statement by a certified Chartered Accountant, for staff review and approval;

6. Direct the City Auditor to audit the Pride Committee's 2002 to 2005 financial accounts at no cost to the Pride Committee; and

7. 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 recommande au Conseil :

1. D'approuver une subvention unique d'urgence de 20 000 $ pour le Festival de la semaine de la fierté d'Ottawa-Gatineau (Festival de la fierté) provenant du fonds de réserve de la Ville afin de contribuer au financement de la programmation 2006 et aux exigences de trésorerie immédiates. Les fonds d'urgence ne doivent pas être réaffectés à des arriérés;

2. D’approuver des services en nature de la Ville jusqu’à concurrence de 13 810 $ provenant du Fonds de réserve pour immobilisations de la Ville, pour les services policiers et paramédics, les services sur place de la place des Festivals et le loyer de bureau de quatre mois de 2006;

3. De renoncer aux arrérages au montant de 16 425 $, versés par le Fonds de réserve pour immobilisations de la Ville;

4. De demander au Comité de la Fierté de repayer à la Ville, en versements échelonnés sur une période de sept à dix ans, sans intérêts, à partir de 2006, le montant de 50 075 $ de la lettre de garantie de 2004;

5. De demander au Comité de la Fierté d’élaborer un plan de viabilité financière à long terme, incluant des états financiers vérifiés par une firme comptable accréditée, 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. De demander au vérificateur municipal de procéder à la vérification des comptes financiers du Comité de la Fierté pour les exercices 2002 à 2005, sans qu'aucun frais ne soit exigé du Comité de la Fierté; et

7. De demander au personnel de surveiller la mise en œuvre de ce plan de viabilité financière à long terme.

BACKGROUND

The Pride Festival is an opportunity to promote the positive contribution made by the diversity of sexual orientation and gender identity in our local community, and to encourage all segments of the gay, lesbian, bisexual, transgender (GLBT) community and heterosexual supporters to celebrate, and to foster greater understanding and acknowledgement of the diversity of sexual orientation and gender identity in Canada’s Capital Region.

The first gay pride celebration was organized in 1986 by Gays of Ottawa (GO). In 1989, the first parade and picnic took place with Mayor Jim Durrell proclaiming Equality Day. That year, the pride celebration became a weeklong event (still managed by Gays of Ottawa) and included many activities such as dances, exhibits, films, sporting events, and receptions. Attendance was a modest 300 strong. Since then, attendance has risen to estimates of 5,000 in 1996 (year incorporated), and as high as 28,000 in 2005.

Each year, both the City of Ottawa and the City of Gatineau publicly declare their support of the Pride Festival, through the raising of the Pride Rainbow Flag at their respective City Halls. The organization is growing in energy and support to the fourth largest Canadian Pride Festival and is one of the few that recognizes both official languages and actively promotes their use.

The Pride Festival goals are: to showcase artists from within the GLBT community; to provide opportunities for local community groups to raise awareness of their work; and to help our community's most vulnerable.

This year’s theme is Platinum! 20 Years of Pride / Platine: 20 ans de Fierté. As in recent years, the proposed activities for the 2006 festival are: the Parade, Info Fair, Stage shows, Film screenings, dances, cruises and various media and public events. 2006 marks the beginning of the third decade of the community coming together to address issues of inequality, celebrate diversity and to demonstrate that they are an integral part of the region’s political, social, cultural and economic fabric.

Pride Festival Municipal Funding History

Since incorporation as a not-for-profit organization in 1997 and until 2003, the Pride Week Committee consistently received municipal support (in the range of $3,000 to $5,000 annually) through Council approved funding programs. In 2004, the Pride Committee did not apply to the City's Partnership Program for Festivals, Fairs and Special Events; however Council approved a letter of guarantee for a $50,000 line of credit for the organization.

In 2005, Pride Week applied to the funding program, but then chose to withdraw its application due to an inability to provide required documents. In 2006, the Pride Committee requested $3,500 and received $1,000 through the Festivals, Fairs and Special Events program. The jury rated the group's application as a low priority due to the major deficit and organizational effectiveness issues. Jurors recommended $1,000 as a sign of good will, support and encouragement.

Partnership Program for Festivals, Fairs and Special Events

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.

Previous Pride Committee Financial Status

In 2002 the then Pride Festival Committee moved the event from the Festival Plaza to the Bank Street venue (Ottawa’s Gay Village) with support from the Bank Street BIA. That year the Committee organized an Indigo Girls concert at the Congress Centre and an All Night Dance Event at the Rideau Curling Club and a Pride Parade that started in Gatineau. Attendance increased significantly. Unfortunately, the cost of liability insurance skyrocketed due to changes in the insurance industry related to the September 11, 2001 terrorist attacks and the increase in natural disasters. As well as the cost of liability insurance, office space and policing increased significantly. Other financial obstacles included unrealizable revenues such as, inability to obtain their negotiated share of revenues with Bank Street merchants. The agreement to provide Pride with 10% of the liquor and food sales was not realized due to the ineffective mode to capture sales put in place. In addition a $15,000 funding agreement with the Federal government was not respected by the Ministry responsible for Sponsorships. As a result a $70,000 deficit was accumulated.

Current Pride Committee Financial Status

Five of the current eight members of the Board of Directors are serving in their second year, which provides much-needed continuity. (Please refer to attachment 1 for current Board membership.) Despite scaling down the event in 2004 - 05 to an affordable level, the Festival has maintained its profile and attendance dropped very little (28,000 according to police estimates). Moreover, the Board reduced the year-to-year deficit in 2004-05. However, the Pride Committee is currently experiencing substantial expenses for the 2006 year, reflecting in part the Board's commitment to repay their creditors based on a restructuring offer.

The critical issues are summarized as follows:

1. Annual deficits have been incurred every year over the last four fiscal years.

2. The Pride Committee accumulated deficit as of May 29, 2006 is $136,653; and minimal reserve funds are available to allow for cash flow.

3. Accumulated deficit includes: $17,220 for 2005 event; $69,358 for pre-2005 arrears (including $16,425 for City of Ottawa services); and $50,075 for the 2004 letter of guarantee.

DISCUSSION

2006 Pride Committee Financial Stability Strategy

The current financial crisis has been caused by a four-year period (2001 - 2004) of instability at the Board level at a time when logistical fees were sky-rocketing. Board members had not planned for the additional costs and new sources of revenue were not found to compensate for the expenses. Corporate sponsorship has proven more difficult to obtain in recent years due to increased competition and reluctance by some segments of the private sector to sponsor GLBT events. There are few government programs that provide operating funding to community festivals.

The Pride Committee has worked to develop a 2006 Financial Stability Strategy to mitigate the financial issues cited above, including the following directions:

· maintain a downsized Festival;

· cut administrative expenses to the mimimum necessary to organize a successful event;

· plan fundraising initiatives over the summer with the goal of raising $10,500 (special events - $3,000; Rainbow Party - $7,500);

· secure corporate sponsorship ($13,000 in cash sponsorship has been secured to date);

· launch an e-mail based donation solicitation campaign;

· launch a debt rescheduling intitative for creditors;

· develop a long-term plan;

· build a reserve of $5,000, minimum annually;

· increase registration fees for Community and Vendor Information Fair and for the Pride Parade;

· charge a nominal admission ($3 in advance; $5 at the door) to the Festival.

Deficit Reduction Plan

The Pride Committee has developed a restructuring plan with current creditors that offers payment of 25 cents on the dollar for all outstanding payables as of November 15, 2005 with payment to be made no later than September 30, 2006. The most recent Interim Treasurer's Report shows the 2005 accumulated deficit of $205,931 has been reduced to $136,653 through this plan to date. The Pride Committee will provide written confirmation that the majority of its creditors have accepted the payback offer.

Status of $50,000 City Letter of Guarantee Payback

In April 2004, City Council approved a letter of guarantee for a line of credit in the amount of $50,000 for the Pride Festival. No terms and conditions were attached to this guarantee. The City's Financial Services staff maintained contact with the Bank to ensure the Pride Committee fulfilled its payment obligations on the line of credit. The Bank indicated that the payments were sporadic but acceptable.

On May 30, 2005, the Bank sent a demand letter to the Pride Committee, advising the festival that its guarantee letter would be called. The Bank did not notify the City of its intentions in this regard. On June 20, 2005, the City's bank account was debited for the outstanding line of credit ($50,000) and an additional $75. Again, the Bank did not notify the City in advance of this transaction. The Pride Committee indicated it had been in the process of meeting with the Bank to discuss repayment options. It had sent a repayment proposal to pay off the line of credit within a five year term (i.e. $5,000 every six months). This was not acceptable to the Bank. The Bank was charging interest at the rate of prime plus three percent.

When the Pride Committee defaulted, the City (as guarantor) took responsibility. The $50,000 line of credit plus $75, is currently considered a City of Ottawa long-term receivable.

According to the Pride Committee's 2006 festival funding application, the Pride Committee has requested from the City a deferral of the $50,075 loan payback payment in 2006, including no accumulation of fees or interest. The Pride Committee has indicated that it would commit to pay back a portion of this $50,075 annually, beginning in 2006.

This report recommends that the City negociate with the Pride Committee a seven to ten year repayment program at no interest on the balance outstanding. Should the Pride Committee be unable to adhere to the negotiated repayment schedule, an interest rate of prime plus two percent will be charged. The repayment program should be reviewed with the potential for renegotiation in 2011.

2006 Pride Festival Budget

The Pride Committee Board of Directors, in collaboration with its new 2006 management, has announced that the 2006 Festival will take place from August 18 to 27, 2006 in Ottawa-Gatineau. This year's festival will celebrate "Platinum! 20 Years of Pride."

The 2006 budget plans for total revenue of $108,933 ($13,615 confirmed) and total expenses of $136,426. The 2006 projected revenue sources include the following:

Fundraising $19,241

Event Revenues $64,780

Sponsorship $13,000 (confirmed)

Merchandising and Concessions $8,050

Cash on hand $3,862

Total $108,933

Economic Impact

According to a study by Ottawa Tourism and Convention Authority, the oveall economic impact of festivals in 2003 was $94 million. The study reviewed 21 of the city's approximate 30 festivals (including Pride Festival) showing direct spending by tourists brought in $57 million with $5.5 million returned to the city in taxes.

In support of diverse, inclusive and vibrant communities, municipalities from across Canada are investing in their Pride Festivals. For example, the City of Toronto has recently increased its funding to its Pride Week organization from $10,000 in 2004 to $100,000 in 2005; Montréal's Pride organization, Divers/Cité, receives $25,000 for the City of Montréal; and Vancouver Pride Society receives both municipal funding and in-kind services annually in the average amount of $44,000.

These investments reflect widespread recognition that vibrant GLBT communities are essential to building communites of choice and drive cultural and economic development. They also reflect the fact that Pride Festivals contribute to healthy populations. These festivals are a vital occasion for GLBT citizens who may live in fear, shame and seclusion to develp a sense of self-esteem that contributes to healthy lifestyle choices.

One-Time Emergency Grant

A one time emergency grant, in the amount of $20,000 would help the Pride Committee with its current cash flow crisis. Cash flow affects contracts with suppliers and payments to creditors.

Waiving of 2006 In-kind Services

Waiving of the Pride Committee's 2006 City services would greatly assist the organization in its ability to produce this year's event. The Pride Committee's revised 2006 budget projects City in-kind services in the amount of $ 9,765 including the following:

· On-site festival plaza services $3,265

Police Services $5,000
Paramedic Services $2,545 (2 ambulances and 1 supervisor on-site)
Office rent (four months) $3,000 (estimated value)

_______

Total in-kind costs: $13,810

Recommendation One allocates in-kind City support to a maximum of $13,810 based on the above breakdown.

The City Auditor has indicated that if Council directs his office to conduct the Pride audit, the City Auditor will not charge the organization for this service.

Municipal Arrears

The City currently has a payment block on the Pride Committee, requiring all new allocated funds to be directed to the organization's municipal arrears in the amount of $16,425. 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 full arrears ($16,425) to be allocated from City-wide Reserve Funds. This will assist the Pride Committee with its current accumulated deficit and cash flow problems.

Long-Term Financial Sustainability Plan

The Pride Committee 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 Pride Committee 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 Pride Committee towards sustainability.

CONSULTATION

There has been no public consultation on this report. Consultation with the Ottawa-Gatineau Pride Week Committee is on-going.

FINANCIAL IMPLICATIONS

In 2006, there is no current budget identified to fund the $20,000 emergency grant request or to waive the $16,425 arrears from 2005 or the provision of 2006 in-kind services to a maximum of $13,810. Subject to Council approval, it is recommended that all funds required to address this request be taken from the City Wide Capital Reserve Fund.

SUPPORTING DOCUMENTATION

Attachment 1 - Ottawa-Gatineau Pride Week Committee Board of Directors 2006

Attachment 2 – Letters of Support

DISPOSITION

Should the following recommendations be approved, (the forgiveness of arrears and/or 2006 in-kind services), the Cultural Services and Community Funding Branch will require the Pride committee to sign the City of Ottawa's standard Terms and Conditions document. This document, and accompagnying letter of agreement, will set out the City’s required terms and conditions for municipal assistance and will also include any terms particular to this report that are intended to promote fiscal responsibility and sustainability in the longer.

ATTACHMENT 1

Ottawa-Gatineau Pride Week Committee

Board of Directors 2006

Executive:

Darren Fisher Chair

Tamara Stammis Vice-chair

Gordon Boissonneault Treasurer

Lee Callan Secretary

Directors and committee chair:

John Gazo Events and Planning

Ian McLeod Communications

Marion Steele Advocacy