November 20, 1998

To:Budget Committee

From:City Clerk

Subject:1999 Funding Levels for Municipal Grants Programs

Recommendation:

The Municipal Grants Review Committee on November 20, 1998, recommended to the Budget Committee the adoption of option (a) in Recommendation No. (2), as amended, and Recommendations Nos. (3) to (5) contained in the attached report (November 10, 1998) of the Commissioner of Community and Neighbourhood Services, viz:

"(2)the 1999 consolidated grants appropriation be maintained at the 1998 level, redirecting available funding within the 1998 grants appropriation based on Committee priorities to initiate levelling up/service enhancement in 1999;

(3)available funds in the 1998 consolidated grants budget be used to address one-time financial adjustments required in the AIDS Prevention grants programs up to $526,400.00;

(4)any remaining available funds in the 1998 consolidated grants budget after Recommendation No. (3) be used to address one-time financial adjustments required in the Arts and Culture grants program; and

(5)the appropriate City officials be authorized and directed to take the necessary action to give effect thereto."

The Municipal Grants Review Committee reports, for the information of the Budget Committee, having:

(a)deferred consideration of Recommendation No. (1) of the Commissioner of Community and Neighbourhood Services until the next meeting of the Municipal Grants Review Committee, with a request that she provide a detailed report on all aspects of the grants programs with a view to establishing priority services areas for 1999, and on other requests for levelling up across all grants program areas; and

(b)referred the communications from the Canadian Opera Company and The National Ballet of Canada to the Commissioner of Economic Development, Culture and Tourism, in consultation with the City Auditor, for a report thereon to the Municipal Grants Review Committee.

Background:

The Municipal Grants Review Committee had before it the following report and communications:

-(November 10, 1998) from the Commissioner of Community and Neighbourhood Services regarding the 1999 funding levels for the Municipal Grants Program;

-(October 29, 1998) from Ms. Jennifer Ginder, Director of Government Relations, Canadian Opera Company, advising that a one-time fiscal year-end adjustment will be needed in order to bring the Canadian Opera Company and The National Ballet of Canada into the same financial cycle as all other arts and culture grant recipients at both the City and the Toronto Arts Council;

-(November 11, 1998) from Ms. Valerie Wilder, Executive Director, The National Ballet of Canada, requesting that consideration be given to changing the timing of their grant, in that the National Ballet's fiscal year-end is June 30, rather than on a calendar year basis; and noting that this results in their grant being split between two different fiscal years;

-(November 19, 1998) from Mr. Peter Clutterbuck, Co-Director, Community Social Planning Council of Toronto in support of Recommendation No. (2)(c) embodied in the report of the Commissioner of Community and Neighbourhood Services; and

-a Petition from approximately 165 agencies recommending that the consolidated grants budget be increased to accommodate a full levelling up and service enhancement in all programs.

City Clerk

R. Dyers/tl

Item No. 1

Sent to:Budget Committee

Commissioner of Community and Neighbourhood Services

Commissioner of Economic Development, Culture and Tourism

City Auditor

Ms. Jennifer Ginder, Canadian Opera Company

Ms. Valerie Wilder, The National Ballet of Canada

Mr. Peter Clutterbuck, Community Social Planning Council of Toronto

(Report dated November 10, 1998, addressed to the

Municipal Grants Review Committee from the

Commissioner of Community and Neighbourhood Services)

Purpose:

This report is in response to the Municipal Grants Review Committee's request for budget options regarding incremental increases to the 1999 consolidated grants budget to achieve leveling up and service enhancements.

Funding Sources, Financial Implications and Impact Statement:

The impacts on the 1999 consolidated grants appropriation of the three budget options contained in this report are as follows: reallocation within the existing consolidated grants appropriation negating the need for additional 1999 funds; incremental increases over five years requiring an addition of $673,000.00 in 1999 and $1,397,000.00 in each of the remaining four years; and incremental increases over three years requiring an addition of $1,605,000.00 in 1999 and $2,329,000.00 in each of the remaining two years.

Upon review of this report the Chief Financial Officer and Treasurer and Chief Administrative Officer have highlighted option (a) of Recommendation No. (2) for consideration given the City's financial constraints and in light of potential reduction targets all City departments face.

Recommendations:

It is recommended that:

(1)the Municipal Grants Review Committee provide direction with respect to establishing priority service areas/functions as described in this report for funding increases or considering all grants service areas equally;

(2)the Municipal Grants Review Committee provide direction with respect to the following budget options:

(a)maintain the 1999 consolidated grants appropriation at the 1998 level, redirecting available funding within the 1998 grants appropriation based on Committee priorities to initiate levelling up/service enhancement in 1999; or

(b)request an increase of $673,000.00 to the 1999 consolidated grants budget to incrementally level up all programs over a five-year period; or

(c)request an increase of $1,604,700.00 to the 1999 consolidated grants budget to incrementally level up all programs over a three-year period;

(3)available funds in the 1998 consolidated grants budget be used to address one-time financial adjustments required in the AIDS Prevention grants programs up to $526,400.00;

(4)any remaining available funds in the 1998 consolidated grants budget after Recommendation No. (3) be used to address one-time financial adjustments required in the Arts and Culture grants program; and

(5)the appropriate City officials be authorized and directed to take the necessary action to give effect thereto.

Council Reference/Background/History:

The Municipal Grants Review Committee on October 26, 1998, had before it a report, titled "Funding Levels for Grants Programs," which provided a number of possible approaches to the 1999 consolidated grants budget. In consideration of the report, the Committee recommended the adoption of the following Option (2) amended to read as follows:

"(2)that the consolidated grants budget be increased to allow for an incremental increase in all or selected service areas, phased in over a three to five-year period, and that the required funding be found from within departmental budgets or from other sources of funding;

and further that the appropriate staff be requested to continue to report on any further efficiencies that could be achieved by community agencies, including slippage from line-item grants."

The Committee also recommended the adoption of the one-time fiscal adjustments for the AIDS Prevention grants program and the Arts and Culture grants program, and directed that the Commissioner of Community and Neighbourhood Services include the appropriate recommendation and budget amounts required for the adjustments in the consolidated report.

Comments and/or Discussion and/or Justification:

At the October 26, 1998, Municipal Grants Review Committee meeting, Committee members considered the demands on the consolidated grants budget as indicated through the various service area review reports. At the same time, Committee members recognized that the City will be facing increased financial constraints while deliberating the 1999 budget.

There was also concern expressed by some Committee members and staff that a full leveling up in 1999 may not be the most effective way of addressing City-wide service needs. In some service areas it may be useful to level up over a period of years, allowing programs to adjust and time for affected departments to review and assign the required staffing associated with increased grants funding.

In light of these concerns, the Municipal Grants Review Committee directed staff to provide a number of options for incremental increases to achieve leveling up and service enhancement over a three or five-year period.

Budget Options:

Staff have prepared an outline of the budget implications for the incremental increases to the consolidated grants budget to achieve the leveling up and service enhancements now being considered by the Municipal Grants Review Committee. The impact of increases over five and three-year periods have been calculated and are outlined below.

The percent increases identified represent the increase required over the approved 1998 consolidated grants appropriation of $45,768.00, including a contingency amount of $200,000.00. One-time fiscal adjustments have not been included in these calculations as they will not have an ongoing impact on the budget.

Funding Sources:

A full review of the availability of funds will be completed by Finance staff as part of the 1999 Operating Budget review. A preliminary review has determined that approximately $724,000.00 is available in the consolidated grants appropriation which could be utilized for leveling up and service enhancement. The year-end report will provide a complete analysis of funds contained in the 1998 consolidated grants budget and may identify additional funds not required in 1999 and beyond.

The direction to find funding within departmental budgets poses particular challenges in light of the direction to departments to develop budget reduction options up to 10 percent, address service rationalization issues and/or maintain existing service levels. At this stage of the budget process it is difficult to determine the funding that may be available within the City to offset any increases to the consolidated grants budget. No other specific sources of funding for the increases to the consolidated grants budget have been identified. Notwithstanding this, the appropriate departments will be notified of the direction given by the Municipal Grants Review Committee to determine whether this request can be accommodated within their respective 1999 Operating Budgets.

Priorities:

Priorities between service areas contained within the consolidated grants budget have not been set. As identified in the Municipal Grants Policy, establishing priorities without the guidance of key municipal policy documents such as a strategic plan or social development strategy is difficult. In the absence of priorities the approach to the budget options presented above has been to accommodate the proposed increases to all grants service areas on an equal priority basis. The Municipal Grants Review Committee may wish to consider establishing interim funding priorities, in the absence of a strategic planning process. Such priorities should not affect the 1998/1999 base funding levels but only the allocation of incremental funding increases.

One approach to interim priorities raised by Committee was to identify direct services as priority over advocacy and/or public education activities. Grants service areas would be affected to varying degrees given the range of program mandates.

One-Time Adjustments:

Two service areas have identified the need for one-time adjustments. A fiscal adjustment of $526,000.00 is required to bring the funding period for the AIDS Prevention grants in line with the municipal fiscal year. Currently Council is requested to pre-commit 50 percent of this program budget each year. Staff have identified available funds in the 1998 consolidated grants budget to be used for this purpose, eliminating any need for prior approvals in the future.

As a result of the amalgamation of various Arts and Culture funding programs, some former municipalities funded in advance of a "season" and some after the fact. The result is that the current funding may cover a two-year period and overlap with previous allocations. An amount up to $350,000.00 will be required from underexpenditure within the consolidated grants budget to accommodate this adjustment. It is recommended that any available funding from the 1998 consolidated grants budget, after addressing the more immediate issue related to the AIDS Prevention grants program, be used to address the Arts and Culture fiscal adjustment.

Conclusion:

A number of options for the consolidated 1999 grants budget have been presented for the Municipal Grants Review Committee's consideration. In light of financial constraints facing the City, these decisions cannot be made in isolation of the 1999 Operating Budget process. However, in advance of final budget approval, staff require some direction with regard to what degree existing grants programs will be leveled up. Without such direction it will be difficult for staff to properly plan for program administration in 1999 and ensure accurate and timely communication to clients.

In consideration of the above challenges and pressures, option (a) in Recommendation No. (2) provides for both modest increases in grants service area envelope budgets and a zero percent increase in the consolidated grants budget.

Contact Names:

Marie McCutcheon

Tel: 392-0437/Fax: 392-6963

Chris Brillinger

Tel: 392-8608/Fax: 392-8492