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HomeMy WebLinkAboutTR-65-85 �I 3 (a) 'S. 60 , 100 CORPORATION OF THE TOWN OF NEWCASTLE TREASURY DEPARTMENT K. CAMPBELL, C.A.,TREASURER 40 TEMPERANCE STREET TEL.(416)623-3379 BOWMANVILLE, ONTARIO L1C 3A6 REPORT TO THE GENERAL PURPOSE AND ADMINISTRATION COMMITTEE MEETING OF OCTOBER 21 , 1985 REPORT NO.: TR-65-85 SUBJECT: EXAMINATION OF MUSEUM SERVICES AND RECOMMENDATIONS TO COUNCIL BY THE NEWCASTLE COMMUNITY SERVICES PLANNING BOARD'S REPORT OF JULY 22, 1985 ITEMS #2 E,F,G and H RECOMMENDATION: It is respectfully recommended that the General Purpose and Administrative Committee recommend to Council that this report be received for information. BACKGROUND AND COMMENTS: The above mentioned items were referred to the Treasurer for review by Council resolution. Staff have met with Mr. Dakin to discuss the recommendations in more depth and to review the Board's financial analysis. The financial information which the Newcastle Community Services Planning Board presented was compiled from the annual financial statements of the two museum board s which are part of Town's financial records. The integrity of the numbers is not in question, however, staff did wish some clarification of the Board's methodology. (A) The museum purchases should be excluded from the operating budget of the museums. Highlighting these items in the capital budget requests may allow more careful scrutiny of the actual additions to TR-65-85 - 2 - the collection. The means of financing the additions, whether 1• Ca°�, through dispositions or capital funding, would also have more review. The Newcastle Community Services Planning Board's report comments on the Museum and archival collections, and their recognition for provincial grant purposes. It was their recommendation that the museum collections be reviewed and that the items to be retained, be in keeping with the basic intent of the museums as as outlined in their statements of purpose. With respect to the archives, consideration should be given to the advisability of combining the various archives, and the costs and benefits of such an action. In additon, any duplication of archival services and collections with the Library which may exist should be reviewed. A separate report will be forthcoming on archival materials. The report' s reference to an indepth audit was directed to a complete review of the inventory of artifacts held and whether the individual pieces met the statements of purpose of each museum, not to the financial audit of the records which is done annually. (B) The reasoning behind the exclusion of the annual insurance premiums from the net operating cost of the museums was questioned. The Newcastle Community Services Board felt that since all Community Hall Boards' and the Library's insurance coverage was provided through the Corporation's general budget, that these two boards should be given the same treatment. (C) In neither case did the financial analysis deal with the miscellan- eous revenues which the Boards raise each year. These monies were specifically excluded by the Newcastle Community Services Planning Board to deal only with the base data; being costs and government provided operating revenue. The Newcastle Community Services Planning Board hoped in this way to show the boards that they could operate within the grant ceilings which they have recommended for operating expenses. TR-65-85 - 3 - The records show that the provincial funding for museums has been declining over the years with more emphasis being placed on other funding sources. In the case of the Town, the museums have principally relied on tax dollars rather than community financial support to finance their activities. The Newcastle Community Services Planning Board has strongly recommended that this funding situation be examined and opportunities for non-tax supported funding be more actively pursued by the boards to make up any shortfall . Whether the boards have the human resources to undertake such a program can only be answered by them. (D) In the case of the Clarke Museum, the rent paid on the Orono location was excluded from the net operating costs because the location is being phased out and the Newcastle Community Services Planning Board felt the rent only served to cloud the issue. The costs to operate and maintain the two museums varies considerably because of facilities in which they are housed. Both boards have established reserve funds which could be used to help offset renovations or restorations which may take place in the future. However, if such projects are to come to pass a definite timetable and potential funding requirements and sources must be established. (E) Finally staff questioned the reasoning for the exclusion of the 1985 budget requests in the Newcastle Community Services Planning Board's analysis. The Board felt that the 1985 requests were so far removed from the historical pattern of funding that they could not be reasonably included in their analysis. The principal reason put forward by the museums for the necessity of the full time staff, etc. was to meet regulations for the provincial funding. The Newcastle Community Services Planning Board questions the financial wisdom of this level of expenditure to obtain provincial funding which is minimal . Perhaps, the Town can not afford to avail itself of the provincial funding if so many strings are attached. TR-65-85 - 4 - Those clarifications aside, with the additions and subtractions taken into consideration, the annual net operating position in staff' s U C analysis does not vary significantly from that provided in the Newcastle Community Services Planning Board's report. Once those clarifications were made staff could review the recommendations which were referred. Recommendation Number 2(e) , 2(f) and 2(g) are restated below: 2.(e) That the operational grant be tied to a formula of $2.00 grant money for every $1 .00 raised by the Board's activities; (f) That the Bowmanville Museum operational grants be limited to $15,000 in 1986, $15,000 in 1987 and $15,000 in 1988. Note: Inflation rates on the previous year should be added to the above ceiling. (g) That the Clarke Museum operational grants be limited to $12,000 in 1986, $12,000 in 1987 and $12,000 in 1988. Note: Inflation rates on the previous year should be added to the above ceiling. The two for one ratio is meant to apply to all funds raised by the Boards including provincial grants, federal grants, bequests, fundraising, etc. up to the grant ceilings. Using 1984 as an example the following grants would have resulted. Bowmanville Museum Provincial Grant 8,813 Other 5,328 Miscellaneous Revenue 11 ,546 25,687 Municipal Operational Grant Calculation * (25,687 x 2)= 51 ,374 Maximum 15,000 Total Projected Revenue 40,687 Total Operating Expenses 31 ,474 Excess 9,213 * Indexed to Inflation TR-65-85 - 5 - Clarke Museum Provincial Grant 5,543 Other 750 �--' Federal Grant 6,750 Miscellaneous Revenue 1 ,084 14,127 Municipal Operational Grant Calculation (149127 X 2)= 28,254 Maximum 12,000 Total Projected Revenue 26,127 Total Operating Expenses 22,873 Excess 3,254 * Indexed to Inflation `v In addition to the operating expenses, each of the Museum Boards incurred capital expenditures in 1984 which were funded through their reserve monies and operational funding, to some degree. As you can see the calculations show that the Museums could have operated at their historical level under the recommended grant ceilings. Using the 1985 budget for this comparative purpose proves more difficult as the Board's did not submit full revenue projections with their 1985 grant requests. Based on the submitted information the following analysis can be drawn: Bowmanville Museum Provincial Grant 8,500 Other - Miscellaneous Revenue - 8,500 Municipal Operational Grant Calculation * ( 8,500 x 2)= 17,000 Maximum 15,000 Total Projected Revenue 23,500 Total Operating Expenses 41 ,900 Shortfall (18,400) *Indexed to Inflation TR-65-85 — 6 — Clarke Museum Provincial Grant 5,200 Other 7,100 12,300 Municipal .Operational Grant Calculation * (122300 X 2)= 24,600 Maximum 12,000 I Total Projected Revenue 24,300 Total Operating Expenses 23,336 Excess 964 * Indexed to Inflation The Newcastle Community Services Planning Board anticipated that any shortfall in the funding requirements of the museum boards would be made up through fundraising activities, charges for use of the archives, admission fees, donations, etc. They felt that the limitations which they set for annual operational grants were in line with the historical level of activities of the boards which had been supported by the municipality for the past 10 years. In 1985, both museum boards have moved to full time curators' positions with the associated costs of such positions within the operations. This has added a new dimension to their funding needs which council must assess in light of its perception of the museum services to be provided within the Town of Newcastle. Under the Town's present museum operations, the limited provincial funding puts in question the reasonableness of trying to meet the regulations when you consider the costs of doing so. Recommendation Number 2(h) is restated below: 2.(h) That the Town's share of the feasibility implementation be limited to $1 .00 for every $1 .00 raised by the Bowmanville Museum Board, not including present reserves and capital funds; TR-65-85 - 7 - The Newcastle Community Services Planning Board's recommendation �-- intends that the Town match any funding (Wintario, Heritage Grants, Donations, Bequests, etc) dollar for dollar, which is received specifically for the implementation of the feasability study. They have exluded existing reserves as those monies were provided in a large part by the Town and from Ontario Hydro in impact funding. The Bowmanville Museum has already completed its feasibility study and substantial costs were outlined in that report to update the Silver Street location. The Clarke Museum is in the process of considering a feasibility study and the impact of consolidation on their activities at the Kirby School House. Both projects will require substantial infusions of capital to meet the desired and perceived needs of the boards. Staff have attempted to draw the concerns and recommendations of the Newcastle Community Services Planning Board together, so that Council can more clearly see the matter at hand. The very difficult decision of an appropriate level of museum services and hence the funding still remains for Council to resolve, either now or through the budget process. Respectfully submitted, Kathryn �. Campbell , C.A., B.Comm. , Treasurer. *gf