Ontario Lottery Corporation - Advance Funding Program

The Strategic Policies and Priorities Committee recommends the adoption of the following joint report (July 21, 1998) from the Commissioner of Corporate Services, the Commissioner of Community and Neighbourhood Services and the City Clerk:

Purpose:

The purpose of this report is to update Council on the recently announced Ontario Lottery Corporation Advance Funding Program and to recommend next steps.

Funding Sources, Financial Implications and Impact Statement:

The City is not currently resourced to administer this new project. However, guidelines provided by the Ontario Lottery Corporation allow for a municipality to charge administration fees on a cost recoverable basis. No further information is currently available on the fee formula and cost limits from the Ontario Lottery Corporation.

Recommendations:

It is recommended that:

(1)the appropriate City Officials be authorized and directed to clarify and negotiate if necessary, allocations criteria, schedules, program delivery options, compensation and other program related issues with the Ontario Lottery Corporation and other appropriate provincial officials for the Advance Fund;

(2)the appropriate City Officials be authorized and directed to recover full costs for the administration of the Advance Fund on a fee for service basis directly from the Ontario Lottery Corporation;

(3)subject to the successful negotiation of the content of recommendations (1) and (2) staff report to City Council regarding the City's participation in the Advance Fund program; and,

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

Background:

The Alcohol and Gaming Commission licensed all roving three-day roving charity casino events across Ontario. In May of 1996, the provincial government announced that it would be replacing the roving charity casinos with permanent charity gaming club sites. On March 31, 1998, all licensing for three-day roving charity casino events was discontinued in anticipation of the permanent casino initiative. To assist charities financially in the interim until the permanent locations were set up, the Province announced that it would be setting up a $40 million Advance Fund. This advance funding would be accessible to all charities eligible for timeslots in the permanent charity casinos and would be repaid from proceeds from future charity casino events.

On June 26, 1998, the provincial government announced the cancellation of its permanent charity casino initiative. Any future casino expansion in Ontario will now require municipalities to hold referenda concurrent with municipal elections. It was also announced that the Ontario Lottery Corporation would be operating four charity casino pilot projects located in communities that had already had positive municipal referendum decisions. The pilot projects will be located in Thunder Bay, Sault Ste. Marie, Brantford and Point Edward.

The $40 million Advance Fund Program will remain in place to help charities in need this year. However, there is currently no provincial allocations process in place to distribute these funds. Therefore, the province is turning to local municipalities to step in and perform these duties on behalf of the Ontario Lottery Corporation for the next eight months. This program is "one time funding" for this year only. The framework for distributing future casino revenues to charities will be developed by the charities, the province and the Ontario Trillium Foundation, an agency of the Ontario government, over the next few months.

Staff have been advised that the City of Toronto's allocation under the Advance Funding program is $8.8 million. Priority for the Advance Fund is to be given to groups that were previously licensed to conduct roving charity casino events; however, the funding is also extended to other organizations who meet the established eligibility criteria as set out in the Alcohol and Gaming Commission (AGCO) Lottery Licensing Policy Manual. Approximately 4,600 charities would be eligible for this funding in the City of Toronto. Each municipality is responsible for reviewing the applications and submitting recommendations for allocations to the Ontario Lottery Corporation based on local needs and priorities. The recommended roster of charities and allocations is then reviewed by the Ontario Lottery Corporation for eligibility in consultation with the AGCO for final approval. The charities' cheques are produced by the OLC.

Discussion:

Since the recent provincial announcements and distribution of the application forms, city staff have received numerous phone calls from charitable organizations inquiring about the Advance Fund program. When the Advance Fund program was first announced, it was described as an advance against proceeds from future charity casino events. Since the province has effectively cancelled the permanent charity casino initiative, and most municipalities, including the City of Toronto, have rejected the proposal for permanent charity casinos in their communities, the opportunity for charities to repay funds from charity casino events no longer exists. City staff addressed this concern with provincial officials and were advised verbally that the Advance Funding program is in fact a grant program open to eligible charitable organizations in all municipalities. We have requested confirmation of this in writing and will forward this information to Council as soon as it is received.

The provincial guidelines state that the size and budgetary needs of a charitable group and the benefit of their services should be used by municipalities as benchmarks for determining an individual allocation. Groups who demonstrate a definite financial need, will be given precedence over agencies with operating surpluses. Municipalities are allowed to set an administrative fee for this grant allocation service on a cost recoverable basis. This means that charities would be charged a fee for the processing of their grant request. The City of Toronto has never charged a fee for the administration of a grant application from any charities and would be very concerned in principle about the appropriateness of levying an administrative charge upon request for financial assistance. All administrative costs should be recovered directly from the Ontario Lottery Corporation.

Actions to be taken:

Applications under the Advance Funding program have already been received by City Clerk's staff at all civic centre locations, as per the directions outlined in the provincial letter to the charities. Staff are prepared to answer documentation requirement queries and assist charities with the completion of the application forms. A direct information line has also been set up to handle the large number of inquiries from the public (392-4275).

If authorized by Council, City Clerk's lottery licensing staff will conduct an initial eligibility review according to the AGCO criteria and will confirm which groups have previously held roving charity casino events. The next step is to establish a process for administrative review and prioritization of the funding requests for this group. To address this need, an internal staff team comprised of representatives of the Community Grants team and Clerk's lottery licensing group will be organized to undertake a more detailed review according to provincial criteria and local municipal standards. Recommendations for charity allocations for the priority group will be forwarded to Council for approval.

The internal staff team will also review the feasibility of establishing a review and approval process for the remaining applications from charities not previously licensed for casinos and report back to Council in the early fall. Council approved rosters for all allocations must be received by the Ontario Lottery Corporation by March 31, 1999. This constraint makes any recommended allocation process very time sensitive.

Conclusions:

This report outlines all available information on the Ontario Lottery Corporation's Advance Fund program and proposed recommendations for its management. The recommendations are based upon very preliminary discussions with representatives from the Ontario Lottery Corporation, the Ontario Gaming Secretariat, the Ontario Alcohol and Gaming Commission and staff from City Clerk's and Community & Neighbourhood Services. Further clarification and negotiation must take place with the province on program guidelines and criteria, schedules and process for recovering administration costs related to operating this Fund.

The development and implementation of the review and approval process for all charities will be contingent upon the City's ability to negotiate fair and equitable terms and schedules with the Ontario Lottery Corporation. Successful administration of the Advance Fund will require the coordinated partnership of City Clerk's Division and the various City departments who administer grants programs.

Contact Name:

Barbara McEwan, Director, Legislative Services. 392-4373.

(Copies of communications dated June 24, 1998, from Mr. Garth Manness, President, Ontario Lottery Corporation, have been forwarded to all Members of Council with the agenda of the Strategic Policies and Priorities Committee for its meeting on July 24, 1998, and copies thereof are also on file with the City Clerk.)