January 25, 1999

To:Budget Committee

From:City Clerk

Subject:Delegation of Authority - Grants Administration

Recommendation:

The Municipal Grants Review Committee on January 25, 1999, recommended to the Budget Committee the adoption of the attached report (January 20, 1999) from the Commissioner of Community and Neighbourhood Services respecting delegation of authority related to grants administration.

City Clerk

R. Dyers/tl

Item No. 4

(Report dated January 20, 1999, addressed to the

Municipal Grants Review Committee from the

Commissioner of Community and Neighbourhood Services)

Purpose:

This report recommends the delegation of authority to provide agencies with grant advances under defined criteria and to sign letters of agreement between the City of Toronto and funded agencies. Terms and conditions in addition to those contained in the City of Toronto Grants Policy which will apply to all funded organizations are also recommended in this report.

Funding Sources, Financial Implications and Impact Statement:

Approval of Recommendation No. (1) will result in the pre-commitment of up to 40 percent of the Community Services Grant Program and Recreation Grants Program budgets.

Recommendations:

It is recommended that:

(1) the authority to issue grant advances to agencies with an established funding relationship as defined in this report, up to an amount of 40 percent of the previous year's allocation be delegated to the respective Commissioners responsible for the Community Services Grants Program and the Recreation Grants Program, or her/his designate, subject to the criteria contained in this report;

(2) the terms and conditions contained in Appendix "A" of this report be approved for use in all City of Toronto grants programs;

(3) the authority to sign letters of agreement in the form or substantially in the form in AppendixA, with agencies approved for funding by Council, be delegated to the Commissioners, or their designates; and

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

Council Reference/Background/History:

On December 16 and 17, 1998, Toronto City Council approved a report titled "City of Toronto Grants Policy", Clause No. 5 of Report No. 26 of the Strategic Policies and Priorities Committee. This report contained the City of Toronto Grants Policy to which all City grant programs must conform. The report identified that a number of more detailed administrative guidelines were required. This report identifies additional administrative guidelines and the required delegation of authority.

Discussion:

City Council approved a report titled "Administration of Municipal Grants Programs" on February4,5, and 6, 1998, which provided authority to Commissioners to issues advances on grants to organizations receiving ongoing funding from the former municipalities. Grants cannot be awarded prior to Council approval, normally in early July of each year for most grant programs.

The timing of funding approval has, in some cases, created cash flow problems for organizations during the months of January to June. In this situation organizations have turned to bank loans to finance the operation while waiting for City funding. The advance authority is not unlike the City's internal practice of approving interim appropriations in order to finance City operations prior to budget approval. Over the past ten years, agencies receiving ongoing funding from the former Metro grants programs were eligible to request an advance on their previous year's allocation. In 1997, 19of the 268 agencies funded under the Metro Community Resources Fund were approved for advances of 25 percent of the previous year's allocation.

The criteria for providing advances are designed to minimize the risk of pre-committing a portion of the grants budget, and address the need to provide continuity for a small portion of grant recipients which provide critical community services. The cash flow issues experienced by some community-based agencies can be addressed by establishing a system of advance payments to organizations experiencing severe cash flow problems.

Advance Payment Method:

To qualify for an advance payment, an organization must:

(1) have demonstrated an ability to provide services to the community on a consistent basis;

(2) have stable sources of ongoing funding;

(3) have received annual grants under the program through which the advance is being requested for a minimum of two years;

(4) be in good standing with the City of Toronto, having met the terms and conditions of any previous grants provided to the applicant by the City; and

(5) indicate that cash flow problems exist related to the timing of the payment of grants.

The ability to provide grant advances will be authorized for the Community Services Grants Program and Recreation Grants Program only.

The amount of each advance payment will be based on 40 percent of the previous year's allocation to the agency. This amount has been set using the internal interim appropriation formula used by Council. To obtain an advance payment the organization must submit a written request to the appropriate department, documenting the need for an advance payment, and outlining the cash flow problem. Staff will review each request and advise each organization as to the Commissioner's decision.

If an advance is warranted, the Commissioner will authorize staff to request the issuance of a payment. Should an organization not agree with the decision taken by the department, the group may appeal directly to the Municipal Grants Review Committee.

Terms and Conditions:

As indicated in the City of Toronto Grants Policy, Terms and Conditions have been developed for use in all City grants programs. During the development of the generic "Letter of Understanding" to be used between the City and all grant recipients, staff identified a number of specific requirements which were not contained in the "City of Toronto Grants Policy" approved by Council in December. Approval of the following additional terms and conditions will facilitate consistent and effective grants administration.

Grants Payments:

This will require the City to advise grant recipients in writing as to the amount, timing and payment schedule once a grant has been approved by Council.

Acknowledgment of Funding:

This condition will require all grant recipients to acknowledge the support of the City of Toronto on any materials, reports, events, signage or publicity, which are paid for, in full or in part with this funding.

Reports:

This condition will require all grant recipients to provide reports on activities and financial statements in a format satisfactory to the City. The reports will be submitted according to a time schedule set out in the letter of understanding.

Consultation:

This term allows the City to consult and/or involve other organizations and/or individuals in the review and determination of eligibility of grant applicants.

Status of the Organization:

This condition requires that grant applicants must be in good standing with the City of Toronto, having met the terms and conditions of any previous grants provided to the applicant by the City.

Indemnity:

The existing indemnity clause in the Terms and Conditions contained in the City of Toronto Grants Policy requires the following revision: The recipient shall indemnify the City, its officers, employees and agents, against all costs, damages and expenses incurred as a result of a claim or proceedings related to the grant recipient's operations, unless such costs, damages or expenses arise from the negligence or wilful act of an officer, employee or agent of the City.

Letter of Understanding:

It is recommended that the grants best practice of entering into a letter of understanding with agencies receiving a grant from the City of Toronto be adopted for all City grant programs. In addition to the Terms and Conditions, the Letter of Understanding will contain specific information regarding the amount of the allocation, the purpose for which the funds have been allocated, and any special conditions or reporting requirements attached to the funding approval.

Appendix "A" contains the Terms and Conditions and a generic Letter of Understanding to be used by all City grant programs. These terms and conditions will form part of the legal agreement between the City of Toronto and funded organizations.

Authority to Sign Letters of Agreement:

Delegation of authority to sign letters of agreement is required. Once Council has approved an allocation, commissioners or their delegates require authority to sign letters of agreement on behalf of the City of Toronto. This does not include authority to determine or approve allocations.

Conclusion:

This report requests the approval for a number of administrative guidelines required to facilitate the administration and management of City grant programs.

Contact Name:

Chris Brillinger

Tel: 392-8608

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Appendix A

Conditions of the Grant:

At its meeting of December 16 and 17, 1998, City Council approved the report "City of Toronto Grants Policy" which sets out a City of Toronto grants policy. The purpose of the policy is to establish standards and common practices for all its grant-making activities to ensure consistency and fairness. The list of conditions includes general conditions for all organizations receiving grants from the City of Toronto, as well as terms specific to the administration of the (name of program).

Additional reports on grants administration will be reviewed by the Municipal Grants Review Committee (MGRC) in 1999. Grant applicants will be notified should any of the MGRC decisions affect the terms and conditions of City grants for 1999.

If funding is granted by the City of Toronto (the "City") from the (name of grant program) the applicant (the "Recipient"), by signing the application authorization (Page # of the (program name) application form), acknowledges the following conditions and agrees to them.

(1)Use and Purpose of the Grant:

(1.1)The grant shall be used only for the purposes approved by City Council, as further described in the grant application form and set out in the Letter of Understanding. (Program name) grants will be used by the Recipient to (statement of program purpose) for people within the City of Toronto.

(1.2)The grant Recipient shall notify the City of any proposed material changes to the nature of, or budget for, the activities for which the grant has been made and shall use the grant for such altered activities only with the prior written consent of the City.

(1.3)The grant recipient shall not transfer or assign the grant or any part thereof to another organization or individual, without the prior written consent of the City.

(1.4)Any funds awarded will be put to their intended use by (date) unless the City has provided prior written approval regarding extension.

(1.5)Any unused portion of a grant remains the property of the City. If an unused portion of the grant has already been paid by the City to the Recipient, it shall be repaid by the Recipient to the City on request.

(2)Municipal Freedom of Information and Protection of Privacy Act:

The information provided in the grant application and progress reports is subject to the provisions of the Municipal Freedom of Information and Protection of Privacy Act. All granting decisions are publicly available.

(3)Anti-Racism, Access and Equity Guidelines:

The Recipient must complete and file a Declaration of Non-Discrimination, indicating the organization has adopted and upholds a policy of access and non-discrimination based on the City's Human Rights Policy. The Recipient will work actively to integrate anti-racism, access and equity, throughout their operations, in accordance with the City's approved Anti-Racism, Access and Equity Policy as it relates to all grant recipients.

(4)Repayment of Grants:

(4.1)The grant recipient shall, at the request of the City, repay to the City the whole or any part of the grant as determined by the City, if the grant recipient:

(a)ceases operating;

(b)ceases to operate as a non-profit organization or collective;

(c)winds-up or dissolves;

(d)merges or amalgamates with any other party;

(e)commences or has commenced against it, any proceedings in bankruptcy or is adjudged a bankrupt;

(f)has knowingly provided false information in its grant application;

(g)uses grant funds for purposes not approved by City Council;

(h)breaches any of the terms or conditions of the grant; or

(i)breaches any of the provisions of the Ontario Human Rights code in its operations.

(4.2)The Recipient shall notify the City of the occurrence of any of the events referred to in clauses (4.1) (a) through (e).

(4.3)The City may, in its sole discretion, require the Recipient to pay interest on any amount required to be repaid pursuant to this section at the prime rate of the Royal Bank of Canada from the date of the request for repayment to the date of repayment.

(5)Accounting:

(5.1)The Recipient shall keep and maintain all records, invoices and other documents relating to the grant in a manner consistent with generally accepted accounting principles and clerical practices, and shall maintain such records for a period of three years from the date of approval of the grant by City Council.

(5.2)The grant recipient shall keep records of names, titles and salaries of persons whose positions are funded by the City, in whole or in part, and provide this information to the City on request.

(5.3)The Recipient authorizes the City and its agents at all reasonable times to inspect and copy any and all records, invoices and documents in the custody or control of the Recipient which relate to the grant, for a period of three years from the date of approval of the grant by City Council. This right of inspection includes the right to perform a full or partial audit of the aforementioned records, as considered appropriate by the City.

(6)Limitation of Liability and Indemnification:

(6.1)The City shall not be liable for any damages, injury or any loss of use or profit of the recipient arising out of, or in any way related to, the grant recipient's operations.

(6.2)The Recipient shall indemnify the City, its officers, employees and agents, against all costs, damages and expenses incurred as a result of a claim or proceedings related to the grant recipient's operations, unless such costs, damages or expenses arise from the negligence or wilful act of an officer, employee or agent of the City.

(7)Further Conditions:

The City shall be entitled, at any time, to impose such additional terms and conditions on the use of the grant which, in its sole discretion, it deems appropriate.

(8)Grant Payments:

When a grant is approved, the Recipient will be advised in writing as to the amount, timing and payment schedule for the grant.

(9)Acknowledgment of Funding:

The recipient will acknowledge the support of the City of Toronto, through (name of Department or program) on any materials, reports, events, signage or publicity, which are paid for in full or in part with this funding.

(10)Reports:

The Recipient will provide reports on activities and financial statements for (name of program) grants in a format satisfactory to the City. The reports will be submitted according to a time schedule set out in the Letter of Understanding. Reports are to be submitted to the (name of program) contact person for the City as set out in the Letter of Understanding.

(11)Consultation:

The City will involve individuals with appropriate expertise in the review process, which may include a peer/citizen review mechanism. The City reserves the right to consult with other funding agencies to determine the eligibility of an organization or project to receive a grant.

(12)Status of the Organization:

The applicant must be in good standing with the City of Toronto, having met the terms and conditions of any previous grant provided to the applicant by the City.

(13)Sample Letter of Understanding:

(Date)

(Agency name,

Address etc)

RE: 1999 (name of program) (name of project)

Dear (contact person),

At its meeting of (date) City Council authorized that a grant in the amount of ($) be made to (organization's name) for (service or project name). This represents the total amount of the grant, including any applicable taxes and disbursements. The grant will be payable in (#) instalment(s) according to the following schedule:

(Examples: one payment after the signed letter of understanding is received, or two equal payments, the first payment after the letter of understanding is received, and the second payment after a satisfactory progress report for the period up to October 15, 1999, is received.)

(Add any conditions specific to this grant here, e.g., release of the funds in conditional on the organization providing ......)

The services which are to be provided with this funding must take place within City of Toronto boundaries unless otherwise specified. The services to be provided are:

(Description from allocations report.)

These services are to be completed by (date). Material changes to the nature of, or budget for the activities for which the grant has been made, must receive prior written consent from the City. (Spending will be in accordance with the attached budget.)

The support of the City of Toronto (Department or program name) must be acknowledged by the recipient on any materials, reports, events, signage or publicity which are paid for, in full or in part with this funding.

Reports outlining the progress in providing services or activities, and including a financial statement for the period of the report are to be submitted in accordance with the following schedule (and attached guidelines); (Insert reporting schedule. For example, a progress report by November 15, 1999, and a final report by July 30, 1999.) Please submit all reports to (staff name) your City contact for this grant.

Any unused portion of the grant remains the property of the City of Toronto and shall be returned immediately to the City. If you breach any of the terms and conditions of the grant, as set out in this letter and in Section (#) of the (program name), or if you cease operating; cease to operate as a non-profit organization or collective; wind up or dissolve; merge or amalgamate with any other party; commence or have commenced against you any proceedings in bankruptcy, or are adjudged a bankrupt; knowingly provide false information in the grant application; use grant funds for purposes not approved by City Council; or breach any of the provisions of the Ontario Human Rights Code in your operations, the grant must, at the request of the City be repaid in whole or in part to the City.

The City shall not be labile for any damages, injury or any loss of use or profit of the Recipient arising out of, or in any way related to, the grant Recipient's operations. The grant recipient shall indemnify the City, its officers, employees and agents, against all costs, damages and expenses incurred as a result of a claim or proceedings related to the grant recipient's operations, unless such costs, damages or expenses arise from the negligence or wilful act of an officer, employee or agent of the City.

Two copies of this Letter of Understanding are provided. Please retain one copy for your files. Sign and return the second copy to your City contact person for the grant at the address below:

(Program contact name and address)

When a signed copy of the Letter of Understanding is received by this office, arrangements will be made for you to receive your cheque.

Yours Truly,

(Authorized City Official)

I/we have read, understand and agree to comply with the terms and conditions contained in this Letter of Understanding. I/we have authority to bind the organization.

Name_____________________________________________

Title______________________________________________

Signature__________________________________________

Date_______________________________________________

Name_____________________________________________

Title______________________________________________

Signature__________________________________________

Date______________________________________________