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HomeMy WebLinkAboutCAO-007-23Clarftwn Staff Report If this information is required in an alternate accessible format, please contact the Accessibility Coordinator at 905-623-3379 ext. 2131. Report To: General Government Committee Date of Meeting: February 27, 2023 Reviewed By: Mary -Anne Dempster, CAO File Number: Report Number: CAO-007-23 Resolution#: JC-039-23 By-law Number: Report Subject: Naming Rights and Dedication of Municipal Facilities Recommendations: 1. That Report CAO-007-23 and any related delegations or communication items, be received. 2. That the policy attached to Report CAO-007-23, as attachment 1, be approved. 3. That staff be directed to create a comprehensive book of business to support the Naming Rights, Sponsorship and Advertising Policy. 4. That staff be directed to create a Dedication and Civic Recognition program aimed at providing a means to recognize individuals and organizations for outstanding contributions to the community; 5. That Council revoke the existing Policy for Naming of Facilities; and 6. That all interested parties listed in Report CAO-007-23 and any delegations be advised of Council's decision. Municipality of Clarington Page 2 Report CAO-007-23 Report Overview Across Ontario, many municipalities are facing aging infrastructure, rising operating costs and other growth -related costs. Municipalities strive to remain affordable places to live by minimizing the impact to the tax levy by finding ways to offset the cost of delivering programs and services to its residents. Naming Rights, Sponsorship and Advertising has increased in popularity within the Public Sector to establish a new revenue stream into the Municipality, to offset costs of delivering their services. Municipal Facilities as defined in the policy, are the most valuable assets owned by the Municipality and are the largest potential source of new revenue, and there continues to exist other opportunities for sponsorships and advertising to bring in additional revenue streams. The policy attached to this report outlines the process, requirements, restrictions, and authorities with regards to implementing a comprehensive Naming Rights, Sponsorship and Advertising program. For this type of program to be successful, recommendations to alter the Municipal approach to Naming of Facilities is included in this report and the attached policy. The recommendation outlines the recommendation to move away from Naming Facilities, rather developing a comprehensive program to recognize outstanding achievements for individuals and organizations through a Civic Recognition and Dedication program. 1. Background Current State of Facility Naming and Naming Rights 1.1 Report CSD-003-20 introduced a Municipal Naming Rights, Sponsorship and Advertising program. While approved through this report, the program was not launched until July 2022 due to the COVID-19 pandemic. Many organizations halted their programs at this time as the pandemic impacted businesses and their ability to enter into these types of financial agreements. Upon evaluation, staff have identified ways to strengthen and improve the program which is the genesis of this subsequent report. 1.2 Prior to Report CSD-003-20, sponsorship sales were primarily focussed on event sponsorships. The chart below summarizes the 5-year trend for sponsorship sales. It is important to note, that the events marked as fundraising events do not represent revenue to the Municipality as that revenue is donated to community organizations once the event has been reconciled. Municipality of Clarington Page 3 Report CAO-007-23 Event 2018 2019 2020 2021 2022 Sports Hall of Fame $18,500 $10,000 Cancelled Cancelled Cancelled Canada Day $7,000 $7,000 Virtual Cancelled $0 Golf Classic Event *fundraising event $81,100 $73,400 $61,000 $67,900 $79,000 Art Gala Event *fundraising event $76,000 $71,000 $58,900 $62,000 $61,300 1.3 Other than event sponsorships, rink board and digital advertising in Municipal facilities was sold through an external company. Prior to the COVID-19 pandemic this represented a $43,500 budget allocation which offset Community Services Operating budget. Prior to this report, the Municipality had not entered into any widespread Naming Rights agreements, nor into Sponsorship agreements for Municipal Amenities. The one exception to that, is the agreement entered into for the Toyota Trail, which saw a $400,000 sponsorship to the Municipality. 1.4 When selling Naming Rights, Sponsorships and Advertising, external contractors are paid on a commission base for their work. Currently, commission rates are as follows: 30% on advertising sales, 25% on sponsorship sales, 20% on naming rights sales, 20% on all in -kind or contra sales. 1.5 Though this report and attached policy, staff will establish clear guidelines for pursuing these new revenue streams, restrictions on sales that will protect the Municipality's image and identify a path to minimize the internal competition for spaces for our most valuable assets. 2. Recommendations Changes and Implementation to Policy 2.1 Currently there is only a formal policy in place for the Naming/Renaming of facilities. This was established through report CSD-03-04. The current policy guides the Naming/Renaming of Facilities based on dedicating those names for outstanding contributions by community members. The new policy changes the recommendations Municipality of Clarington Page 4 Report CAO-007-23 around dedications. It is recommended, that moving forward, Municipal Facilities (building envelopes) no longer be the means to recognize outstanding contributions to the community. Staff will develop a new Civic Recognition and Dedication program that will provide a means to recognize these outstanding contributions. 2.2 Moving away from using buildings as a means of recognizing outstanding contributions recognizes the potential value of our Municipal Facilities relating to Naming Rights. There is potential to sell Naming Rights on existing Named facilities (Garnet B Rickard Recreation Complex, Alan Strike Squash and Aquatic Centre, Diane Hamre Recreation Complex); however, the value of subsidiary Naming Rights (i.e., Garnet B Rickard powered by) are less than the value of a full Naming Right. 2.3 Staff are recommending that dedications no longer be considered for Naming Municipal Facilities and that the associated policy be revoked. Moving forward, dedications and civic recognition would be achieved through a new program to be developed to staff and be brought back to Council for approval. This new program for civic recognitions and dedications will continue to provide Council and residents a means to recognize outstanding achievements and contributions to the community by individuals or organizations, while maintaining the ability to maximize revenues outside of taxation with the Naming Rights and Sponsorship programs. 2.4 Naming of facilities will be changed to dedication of facilities under this proposed policy and will be reserved to recognize a donation or sponsorship contribution in return for the dedication or naming of that Municipal Amenity. 2.5 The proposed policy clearly outlines the delegated authority for approvals of sponsorship partnerships. The policy ensures that all Naming Rights for Municipal Facilities (defined as the entirety of a facility, building or park, exclusive of all amenities), come to Council for consideration and approval. 2.6 The proposed policy also outlines what types of businesses the Municipality will entertain entering a sponsorship partnership with and which businesses we will not entertain. Businesses that do not promote or align with the Municipal service delivery in support of a healthy and active lifestyle, such as companies that promote alcohol, cannabis, tobacco, or other addictive substances will not be considered. The restricted list further excludes companies that promote life -threatening products (i.e., firearms), pornography, or companies that do not fully support any of the Council approved strategic priorities. 2.7 Under the proposal, naming rights is clearly defined. Naming rights refers to an exclusive sponsorship partnership, whereby a company holds the exclusive rights to promote their product or service, with the understanding that the Municipality will not place competing advertising within that facility. This exclusivity is what provides increased value of as Naming Rights agreement. Municipality of Clarington Page 5 Report CAO-007-23 2.8 To ensure the success of this program, staff through the recommendations of this report, are directed to develop the "book of business" that will form the basis for the Naming Rights, Sponsorship and Advertising program. This will be a comprehensive list of the Municipal Facilities and Municipal Amenities that will be included for consideration under the program. The development of this book of business will ensure that sales align with the policy and will clearly outline opportunities are for sales (i.e., firehalls, facilities, parks, ice-resurfacers, rooms, programs, rink boards etc.). 2.9 To ensure the interests of the Municipality are upheld, all Naming Right and Sponsorship agreements/contracts are reviewed and approved by the Municipal Solicitor. 3. Financial Considerations 3.1 Prior to the pandemic, the average yearly sponsorship sales were $21,250 (2018/19). This was specifically for Municipal events and went to offsetting the costs of that service delivery. This does not include consideration of fundraising event sponsorship, as the excess funds (after event operational expenses are considered) are donated back to community organizations and have no positive financial impact on the corporation. Further, prior to the COVID-19 pandemic, advertising accounted for $43,500 of revenue within the Community Services budget. 3.2 Naming Rights and Sponsorships can provide a valuable source of revenue to offset the reliance on the tax levy to offer and provide services. Recent examples in other communities show the success of this type of program. Most recently, the City of Peterborough announced an agreement for the Naming rights of their outdoor square for approximately $240,000 over 15 years. This is a strong example of how Naming Rights supports offsetting of costs associated with new and existing service delivery. 3.3 The goal of this program would be to reduce the operational dependence on the tax levy. The Department responsible for the program will prepare as part of their 2024 budget, adjustments to their revenues for the sale of Naming Rights and Sponsorships, thereby reducing the reliance on the tax levy for delivery of services. 4. Concurrence N/A 5. Conclusion It is respectfully recommended that this report, along with the attached policy be adopted by Council. Approval as such, will direct staff to create a book of business to support the Naming Rights, Sponsorship and Advertising program, create a Civic Municipality of Clarington Report CAO-007-23 Page 6 Recognition and Dedication program, and consider the levels to which Naming Rights, Sponsorships and Advertising are able to offset the cost -of -service delivery. Staff Contact: Lee -Ann Reck, Manager, Corporate Performance, and Innovation, Ireck(Dclarington.net. Attachments: Attachment 1 — Naming Rights, Sponsorship, Advertising and Dedication Policy Attachment 2 — Naming of Facilities Policy Interested Parties: List of Interested Parties available from Department. Corporate Policy Attachment 1 to Report CAO-007-23 ciffftwn If this information is required in an alternate format, please contact the Accessibility Co-ordinator at 905-623-3379 ext. 2131 POLICY TYPE: Operational SUBSECTION: Community Services POLICY TITLE: Naming Rights and Naming of Facilities POLICY #: XXX POLICY APPROVED BY: TBD EFFECTIVE DATE: March 14, 2023 REVISED: Replace 05-02-02 APPLICABLE TO: All Staff 1. Purpose This purpose of this policy is to provide standards to guide the review of external sponsorship and advertising materials to determine whether such materials are appropriate to display in association with Municipal activities. Sponsorship and Advertising opportunities shall be undertaken with a view to ensure that advertising on Municipal property, at Municipal programs, and in Municipal media is appropriate and meets specific criteria, while increasing the opportunity to neutralize costs and/or generate revenue. 2. Scope This policy applies to all relationships between the Municipality of Clarington and external sponsors and advertisers for all: • Sponsorship Programs and special events • Sponsorship for Naming/renaming of Municipal properties, buildings, and structures. • Sponsorship for Branding of City assets • Paid advertising on Municipal property, at Municipal events and in Municipal publications. 3. Definitions r Advertising — means any paid or in -kind communications that are used to influence, educate, or inform the public. This denotes the sale or lease of advertising or signage space on municipally owned property. This involves the use of public advertising contracted at pre -determined rates for a set period. Corporate Policy cic'1C1114011 If this information is required in an alternate format, please contact the Accessibility Co- ordinator at 905-623-3379 ext. 2131 ➢ Sponsorships — a mutually beneficial arrangement between the Municipality and an external company, organization, or person(s) where the external company, organization, or person(s) contributes funds, goods, or services to the Municipality in return for recognition, acknowledgement, or other promotional consideration. Because of these marketing benefits, a sponsorship partnership does not qualify for a tax receipt. ➢ In -Kind Contributions — non -monetary donation in the form of either goods or services rather than cash. The Municipality is not required to provide sponsorship partnership benefits for in -kind donations. ➢ Naming Rights — means a mutually beneficial contractual agreement where an external company, organization, enterprise, association, or individual purchases the exclusive right (no competing advertising) to name a Municipal Facility (see definition, applies to building envelope) for a fixed period. This is a written agreement signed by the interested parties and has a specified end date to the contractual obligations. ➢ Municipal Property — means all Municipally -owned and controlled properties facilities and amenities. These include but are not limited to indoor and outdoor recreation fields; parkland and trails; buildings and rooms; furniture; equipment and fixtures; vehicles. This does not include streets. ➢ Municipal Facility — the entirety of a facility (building, park) refers the building envelope, inclusive of all amenities. ➢ Municipal Amenities — components that comprise facility. These include but are not limited to rooms, ice pads, pools, pavilions, trails, play structures, ball diamonds, etc. ➢ Municipal Programs/Activities — means any program, activity, or service, which is operated by the Municipality. This includes any Municipal special events. 4. Policy 4.1 Naming Rights, Sponsorship and Advertising a) The placement of any naming right, sponsorship or advertising on Municipal Property, at Municipal programs and/or in Municipal media on behalf of an external party does not represent or imply any legal partnership between the advertiser/sponsor and the Municipality. Policy Number/Sale of Municipal Sponsorships (including Naming Rights) and Advertising Page 2 of 6 Corporate Policyf1W. n If this information is required in an alternate format, please contact the Accessibility Co- ordinator at 905-623-3379 ext. 2131 b) It does not imply the Municipality's endorsement of any product, service, person(s), company, organization, beliefs, views, or the contents contained in the advertisement. The advertisement/sponsorship also does not constitute information or communication by or on behalf of the Municipality. c) The CAO or designate(s) will have the following specific responsibilities: Be responsible for the administration of this Policy, including the development and implementation of guidelines, procedures, and the book of business. Ensure business transactions are conducted ethically and professionally. iii. Prepare or assist the originating department and the Municipal Solicitor in preparation of the agreements when requested. iv. Supply copies of the policies and procedures to all staff that have partnership authority and train staff as required to ensure clear understanding of the Naming Rights, Sponsorship and Advertising policies and procedures. V. Maintain account records as required. d) Departments shall have the following responsibilities relating to the Naming Rights, Sponsorship and Advertising potential: Ensure that all assets, programs, events, activities etc., are reviewed for their Naming Rights, Sponsorship, or advertising potential. Approve advertising spaces, areas of an asset to be named and Municipal programs, events, and activities to be sponsored. If unsure, a department director will seek direction from the CAO or designate(s) or Council as appropriate. iii. Ensure that all departmental staff are aware of this policy and forward Naming Rights, Sponsorship, and advertising opportunities to the appropriate department. e) The Municipality will consider offering naming rights, sponsorship, and advertising opportunities for sale to external businesses based on, but not limited to the following criteria: The value of the product, service and cash provided to the Municipality. Whether the relationship is mutually beneficial to both parties. Policy Number/Sale of Municipal Sponsorships (including Naming Rights) and Advertising Page 3 of 6 Corporate Policyff; 11 If this information is required in an alternate format, please contact the Accessibility Co- ordinator at 905-623-3379 ext. 2131 iii. Whether the opportunity enhances the development, awareness, and sustainability of one or more Municipal programs, services, or facilities; and iv. Whether the opportunity optimizes revenue opportunities and results in a net financial benefit to the Municipality. f) Naming Rights, Sponsorship and advertising opportunities will be subject to the following: i. The Municipality will retain control over the planning and delivery of sponsorship activities. ii. There shall be a written contract between the advertiser/sponsor and the Municipality or the agent of the Municipality. iii. Naming Rights, Sponsorship and Advertising agreements shall not in any way invoke future consideration, influence, or the perception of influence over the decision making of the Municipality. iv. The contents of any advertising/sponsorship materials shall adhere to the Canadian Code of Advertising Standards. V. The advertising/sponsorship does not conflict with any existing Municipal advertising or sponsorship agreements or contracts. vi. The physical placement of any advertising/sponsorship materials shall have no adverse effects on public safety. vii. The advertising/sponsorship materials shall not incite violence or promote hatred. viii. The advertising/ sponsorship materials shall not present demeaning or derogatory portrayals of individuals or groups. ix. The advertising/sponsorship materials shall not be of questionable taste in style, content, or presentation method. X. The advertising/sponsorship materials shall not detract from the image of the Municipality and/or its employees. A. The advertising/sponsorship materials shall obey all applicable laws and regulations. xii. Naming Rights will be considered for Municipal Facilities, while sponsorships and advertisings will be considered for Municipal Amenities or designated advertising spaces. Policy Number/Sale of Municipal Sponsorships (including Naming Rights) and Advertising Page 4 of 6 Corporate Policyff; 11 If this information is required in an alternate format, please contact the Accessibility Co- ordinator at 905-623-3379 ext. 2131 g) The Municipality will not consider Naming Rights, Sponsorship or Advertising proposals from the following: i. Proposal that promotes alcohol, cannabis, or other addictive substances. ii. Promote the sale of tobacco. iii. Promote pornography. iv. Promote the support or involvement in the production, distribution and sale of weapons and other life -threatening products. V. Promote actions that are not aligned with the Corporate Climate Action Plan (i.e., waste) or other Council approved strategies. vi. Present demeaning or derogatory portrayals of individuals or groups or contain any message that is likely to cause deep or widespread offence. vii. Promote religious or political messages that might be deemed prejudicial or other religious or political groups. viii. Convey a religious or political message, promote a political party or election candidate. h) The proposed location of the Naming Rights, sponsorship and advertising materials may have an impact when determining whether the criteria of this policy have been met. i) Specific advertisers/sponsors will generally be secured from direct solicitation by an agent of the Municipality. Unsolicited requests for advertising/sponsorship will be reviewed and evaluated as per the availability of opportunities and the provisions of this policy. j) All advertising/sponsorship contracts shall be evaluated prior to the end of their term for a determination of their continued benefit. The term of an advertising/sponsorship agreement will not exceed 10 years. k) All advertising/sponsorship agreements should include provisions allowing for early termination by the parties and should specify the terms and conditions of early termination. 1) Money obtained through advertising/sponsorship agreements will be budgeted to offset Tax levy requirements. Policy Number/Sale of Municipal Sponsorships (including Naming Rights) and Advertising Page 5 of 6 Corporate Policyff; 11 If this information is required in an alternate format, please contact the Accessibility Co- ordinator at 905-623-3379 ext. 2131 4.2 Dedication Naming of facilities for purposes of dedication is restricted to amenities within municipal facilities or a feature in a park (i.e., bench, gazebo, room within a facility). Dedication naming will only be considered when: i. It is to recognize the donation or sponsorship contribution of an individual or organization to the facility when an agreement is not in place. ii. Honour the original inhabitants of the facility by using the family name or name used by the original inhabitants to describe the facility. iii. Does not duplicate another name or cause confusion due to similarity to an existing name. iv. Recognizes the historical significance of the area. V. Reflect the unique characteristics of the site, such as ecological or scenic qualities. a) Dedications to recognize individuals to honour their contributions to the community should be recognized under the Corporate Civic Recognition Program. 5. Delegated Authorities a) Chief Administrative Officer (CAO) —can enter into agreements over $100,000 up to $500,000 for a term up to 10 years. b) Director — can enter into agreements of up to $100,000 for a term up to 5 years. c) Council — required to approve all facility naming rights (building envelope) and any awards above the dollar or term values listed above. Policy Number/Sale of Municipal Sponsorships (including Naming Rights) and Advertising Page 6 of 6 Attachment 2 to Report CAO-007-23 MUNICIPALITY OF CLARINGTON NAMING OF MUNICIPAL BUILDINGS/FACILITIES POLICY PURPOSE The purpose of naming municipal buildings/facilities is to provide identification, foster community pride and provide an opportunity to recognize significant leadership within our community. IMPLEMENTATION The policy establishes a process that will assist Council in approving names of new and existing municipal buildings/facilities. The implementation is the function of the Municipal Clerk's Department who will receive the nomination, exercise due diligence and research additional background information, if warranted, and prepare a report to Council for final approval. All names submitted will be considered but preference will be given to submissions that meet the criteria. CRITERIA Municipal buildings/facilities, either new or existing, must be named to recognize individual(s) or an organization(s) having made a significant contribution to public life and well being of the Municipality of Clarington, the Province or the Country, or recognize significant local geographical or historical features/ events. Elements/components of the buildings/facilities may also be named according to this policy. 2. Names shall be chosen based on the following criteria: a) The contribution of an individual/group must be well documented and broadly acknowledged within the Municipality of Clarington before the name may be used. b) Names of individuals or groups who have donated money/land towards the purchase or development of a building/facility may be used. c) Names may recognize local history (people, events, etc.) or cultural diversity (aboriginal, pioneer, ethnic). d) Names may reflect the servile, function or programming of the building. e) Names may make reference to the neighborhood, area or street on which the building is located and can take into consideration any naming themes in the area. f) Names of living political figures shall not be used. g) Names shall not insinuate any political affiliation. h) Names shall not duplicate or sound similar to existing municipally -owned assets. i) Names which are cumbersome should be avoided. j) Names which are discriminatory/derogatory in terms of race, sex, colour or creed will not be considered. PROCESS 1. Anyone submitting a name to be considered for a municipal building/facility must complete a "Naming of Municipal Buildings/Facilities Nomination Form". 2. Each nomination must be submitted in writing to the Municipal Clerk's Department using the "Naming of Municipal Buildings/Facilities Nomination Form". All nominations shall be accompanied by background information with the reason supporting the nomination, a biography (if applicable) and letter from the group/individual or his/her next -of -kin giving permission to proceed with the request. 3. Upon receiving a nomination, the Municipal Clerk's Department will exercise due diligence in researching and provide additional background information including checks and balances, if warranted, as to the merits of the nomination and then prepare a report to Council. The report will identify the criteria in the policy which supports the request being considered for approval. 4. Council will consider each nomination. Approval will be based on the nominations meeting the criteria as laid out in the Naming of Municipal Buildings/Facilities Policy. 5. Upon approval of the nomination, the nominator as well as the individual/group or next -of -kin will be advised of Council's decision.