Appendix B
BUSINESS CASE
STUDY
The Friends of the
Prepared pursuant to section 6 of Ontario
Regulation 599/06
“Municipal Services Corporations”
made under section 203(4) of the Municipal Act, 2001, S.O. 1990, c. M.45,
as amended
Presented to:
The Council of the Corporation of the
Town of
Prepared by:
Barbara M. Roth, Director, Recreation & Culture Services
Date Presented:
INTRODUCTION
The purpose of this
Business Case Study is to outline the requirements for creating “The Friends of
the
BACKGROUND
In June, 2005, Markham
Town Council received Phase I of the Museum Master Plan. One of the recommendations in the Master Plan
was the formation of a fundraising foundation for the Museum. Staff propose that the Museum Foundation be
set up as an
DISCUSSION
Prior to passage of a
resolution by Council authorizing the application for incorporation of the
Museum Foundation, the Town of
This Business Case
Study will consider the following issues:
1. Purpose
of the Corporation
It is proposed that
the Museum Foundation be incorporated for the following purposes:
i)
To receive
and maintain a fund or funds and to apply all or part of the principle or
income therefrom, from time to time, for the benefit of supporting the
ii)
To support
and promote the objectives of the
iii)
To assist
the
These purposes will
form the articles of incorporation once the Museum Foundation has been
incorporated.
In order to achieve the
above noted purposes, it is proposed that the Museum Foundation will undertake
the following activities:
i) Raising funds to support and promote the objectives of the Museum and to assist the Museum with its programs;
ii)
Assisting the Museum with the
formulation of policies, plans and strategies to ensure that the acquisition, collection
and retention of artifacts is carried out with the intent that the cultural
property and scientific specimens held by the Museum are meaningful to the
largest most diverse audience as possible;
iii)
Reviewing the Museum’s
collection holdings and making recommendations for deaccessions from the
collection according to collections policies and strategies for the Museum adopted
by Council;
iv)
Working with the Museum to
create strategies for the development of new exhibits and other interpretive
facilities;
v)
Planning, developing, funding
and coordinating lecture series and historically themed events;
vi)
Assisting with the improvement
of youth programming at the Museum by:
a.
providing advice and supporting
efforts to recruit youth to serve in a variety of roles;
b.
developing opportunities for
education, internship and employment in conjunction with the Museum and its
partners;
c.
working with the Museum staff
to provide a supportive, flexible work and educational environment to encourage
increased involvement of youth in the Museum as volunteers and staff; and
d.
supporting the Museum’s
commitment to the development of advanced information technologies for
processing and communication of a broad range of historical and scientific
data.
The proposed
activities to be undertaken by the Museum Foundation are activities which the
Town has the authority to undertake on its own behalf pursuant to section 11 of
the Municipal Act, 2001. Section 11(8) gives lower tier municipalities
non-exclusive jurisdiction over matters relating to culture, parks, recreation
and heritage. The activities noted above
fall within this sphere of jurisdiction.
2. Governance
and Operational Structure of the Corporation
A draft By-law No. 1
has been prepared for the Museum Foundation.
This by-law will be the organizing and procedural by-law for the Museum
Foundation once it has been incorporated.
After the Museum Foundation has been incorporated, the Museum Foundation
and the Town will execute a Memorandum of Understanding which outlines the
roles and responsibilities of the Town, the Museum Foundation and the Board of
Directors for the Foundation with respect to the operation of the Museum. These two documents, together, will set out
the roles, responsibilities and the governance and operational structure of the
Museum Foundation.
The corporation will
be wholly owned by the Town. The Voting
Members of the Museum Foundation will be the Mayor and all of the members of
Town Council as elected from time to time.
The Voting Members of a non-share capital corporation are akin to the
shareholders of a business corporation.
The Voting Members will be required, at minimum, to have an annual
general meeting once a year. Additional
meetings may be called as required.
The Voting Members will
have the authority to appoint a Board of Directors (“Foundation Board”) consisting
of eleven members, one of which shall be the Mayor as an ex officio voting
Director and up to two shall be members of Town Council. The remaining Directors shall be appointed
from the community at large. Each
Director shall be appointed for a three year term. The terms of the Directors shall be staggered
to allow for approximately one-third of the Directors to be elected each
year. At the first election of the Directors
following incorporation, two Directors shall be elected for a one year term,
two shall be elected for a two year term and three shall be elected for a three
year term.
The daily business of
the Museum Foundation shall be undertaken by the Foundation Board, which includes
fundraising, accepting donations, hiring staff for the Foundation, purchasing artifacts
or goods and entering into contracts on behalf of the Museum Foundation. The Foundation Board will have the authority
to establish a number of committees to assist them with their duties. The Foundation Board is required, at a
minimum, to establish the following committees to undertake the following
activities:
i)
Executive Committee will make
recommendations about the advice to be given to the Town on the operation of
the Museum, provide advice on the business affairs of the Museum Foundation, prepare
the Business Plan and Strategic Plans for the Foundation Board, and recommend candidates
to the Voting Members for appointment to the Board;
ii)
Museum Collections Committee
will make recommendations to the Foundation Board regarding all acquisitions
and deaccessions from the Museum’s collection;
iii)
Development Committee will be
responsible for developing the overall fundraising strategy of the Museum
Foundation; and
iv)
Volunteer Committee will be
responsible for the development of a volunteer program which supports the
objects of the Museum Foundation.
The Foundation Board
will be required to submit an annual report outlining the business of the
Foundation and certified and audited financial statements to the Voting Members
at the Foundation’s annual general meeting.
The Town’s auditor will be appointed by the Voting Members to act as the
auditor on behalf of the Museum Foundation.
The Foundation Board shall be required to prepare and present at the
annual general meeting of the Voting Members a Strategic Plan which will set
out the long term fundraising plans and business objectives of the Board. The Foundation Board shall also prepare an
annual Business Plan which will set out the fiscal plan of the Board for the
next three business years which includes the planned and proposed fundraising
initiatives and campaigns, and the proposed annual operating and capital
budgets for the Museum Foundation.
3. Accountability
Requirements of the Corporation to the Town
The Museum Foundation shall
provide Town Council with a copy of its annual Business Plan and Strategic Plan,
a copy of the annual report of the activities of the Foundation Board and a
copy of the audited financial statements for the Museum Foundation. In addition, all cheques executed on behalf
of the Foundation Board shall be executed either by two appointed Town staff or
by one of two appointed Directors plus one of two appointed Town staff. The Foundation Board will also be required to
obtain the approval of the Voting Members prior to accepting any donations or
bequests of real property or before purchasing any goods or services or
entering into any contracts of a value of $100,000.00 or greater. The restriction placed on the acceptance of
any donations of real property without approval of the Voting Members will ensure
that the Town has sufficient resources to accept and maintain the real property
donation. In addition, these
restrictions will also ensure that significant funds are not expended without
the approval of Council acting as the Voting Members of the Museum
Foundation.
The Museum Foundation
will comply with, adopt and apply relevant Town policies, including policies
relating to purchasing, employment policies for non-union employees and the
Museum’s Collection Management policies.
The Museum Foundation shall also comply with the provisions of the Municipal Freedom of Information and
Protection of Privacy Act as it is deemed to be an “institution” for the
purposes of this legislation.
4. Assistance
to be Provided to the Corporation by the Town
Ontario Regulation
599/06 authorizes a municipality to give assistance to a corporation if the
corporation is a wholly owned corporation and is limited by its articles of
incorporation to providing services to the owners or members of the
corporation. The types of assistance
that a municipality can provide are:
i)
giving,
lending or selling any property of a municipality, including money;
ii)
guaranteeing
borrowing;
iii)
providing
the services of employees of or persons under contract with a municipality.
In this instance
because the Museum Foundation will be wholly owned by the Town and the proposed
articles of incorporation restrict the Museum Foundation to providing services
directly to the Town to support the Museum, the Town will be permitted to
provide the Museum Foundation with assistance.
It is proposed that
the Town will transfer the endowment fund balance to the Foundation in order to
provide start up monies for the Foundation.
The Town will transfer these funds from the Museum Endowment Fund currently
held by the Town.
It is also proposed
that the Town will provide the Museum Foundation with assistance through the
following administrative support services:
i)
the Town’s
Finance Department will provide routine financial, banking and investment
services;
ii)
the Town’s
Legal Services Department will provide routine legal services; and
iii)
the Town’s
Clerk’s Department will provide administrative services which includes
providing secretarial support for meetings of the Foundation Board or the
Members of the Foundation.
These services shall
be provided at no cost to the Museum Foundation however, the Town may recoup
from the Museum Foundation any direct expenses or costs incurred by the Town
for the provision of these services.
5. Financial
Impact on the Town
The Museum Foundation
shall have authority to raise funds through fundraising activities, donations,
bequests, corporate or other types of sponsorships and provincial or federal
grant programs. They will also have the
authority to borrow money on the credit of the Museum Foundation. Any funds acquired by the Museum Foundation
shall be used for the purposes outlined in the articles of incorporation.
At present, it is
proposed that the Town will transfer the endowment fund’s balance to the Museum
Foundation as a start up fund to assist the Museum Foundation until it has
raised sufficient funds to be self sufficient.
In the future, Town Council might consider providing the Museum
Foundation with assistance through the grant of additional funds which could be
used to offset the Museum Foundation’s annual operating budget as may be
required from time to time. The
Foundation Board will be required to prepare a Business Plan and a Strategic
Plan on an annual basis. The Business
Plan will set out the fiscal plan for the Foundation Board for the next three
business years and will include planned or proposed fundraising initiatives and
campaigns, and the proposed annual operating and capital budgets for the Museum
Foundation. The Museum Foundation shall
provide the Town with a copy of its Business Plan by May 1st for the
following business year so that it can be reviewed by the Town and incorporated
into the Town’s annual budget planning process as required. The Strategic Plan will set out the long
range strategic direction of the Foundation Board, including the long term
fundraising plans and business objectives of the Board. The Strategic Plan will be presented by the
Foundation Board to the Voting Members for approval at the annual general
meeting.
There will be little
to no financial risk assumed by the Town relating to the corporation or its
activities since it will be a non-share capital, non-profit corporation primarily
responsible for fundraising to support the activities of the Museum.
Upon incorporation,
the Museum Foundation will seek registered charitable status with Canada
Revenue Agency. There should be no
direct tax implications for the Town.
6. Asset
Transfer by the Town to the Corporation
The Town does not
intend to transfer any Town owned assets to the Museum Foundation at the time
of incorporation. The Municipal Act, 2001, requires that if a
municipality intends to transfer any assets to a municipal service corporation
that it shall adopt and maintain polices on asset transfers. In the event that the Town determines it is
necessary to transfer assets to the Museum Foundation in the future, then Town
staff will prepare an Asset Transfer Policy for approval by Town Council.
It is proposed that
the Museum Foundation will be required to transfer any artifacts that it
acquires through purchase or bequest, subject to any legal restrictions, to the
Town so that the artifacts can be included as part of the Museum’s
collection.
7. Private
Investments
There will be no
private investment since the Museum Foundation will be incorporated as a
non-share capital, non-profit corporation.
8. Public
Participation
RECOMMENDATION
THAT Council receive
and adopt this Business Case Study;
AND THAT Council
authorize Town Staff to make an application for
incorporation of “The Friends of the