HomeMy WebLinkAboutCSD-10-034 - Kitchener Blues Community Inc. - Ontario Cultural Attractions Fund Grant LoanREPORT
REPORT TO:
Community Services Committee
DATE OF MEETING:
May 10, 2010
SUBMITTED BY:
Keith Baulk, Director, Enterprise
PREPARED BY:
Don Chapman, Manager, Special Events (Ext. 2388)
WARD(S) INVOLVED:
N/A
DATE OF REPORT: April 28, 2010
REPORT NO.:
CSD-10-034
SUBJECT:
2010 Kitchener Blues Festival Ontario Cultural Attractions
Loan Guarantee
RECOMMENDATION:
That the Corporation of the City of Kitchener enter into a Guarantor Agreement with
Kitchener Blues Community Inc., such that the City will act as the guarantor for a $20,000
Ontario Cultural Attraction Fund loan from the Ontario Ministry of Culture to the
Kitchener Blues Community Inc. for the purpose of operating the 2010 Kitchener Blues
Festival;
That the Mayor and Clerk be authorized to execute a Guarantor Agreement with the
Kitchener Blues Community Inc., and with any other parties to the transaction as
required, said Guarantor Agreement to be subject to the satisfaction of the City Solicitor.
BACKGROUND:
Kitchener Blues Community Inc. which operates the Kitchener Blues Festival applied for and
received a grant and loan from the Ontario Cultural Attractions Fund (OCAF) for the 2010
festival. The grant approved was in the amount of $50,000 with a fixed repayment of 40% or
$20,000. This will allow the festival to increase attendance by adding a new tent stage at
Victoria Park This will also help toprotect the audience, programming and festival revenue in
adverse weather. Since the festival does not have audited annual financial statements, OCAF
has requested that the festival secure a guarantor for the loan portion of the contribution.
Attached is the confirmation letter from OCAF along with the conditions on which the grant/loan
was awarded.
REPORT:
The Kitchener Blues Community Inc. Board of Directors has many years of experience in
producing the festival and is benefiting from a high degree of board stability and accountability.
The KBCI consists of 11 board members, with a chartered accountant as the board treasurer.
Over this time board members have partnered successfully with the City of Kitchener, the
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Kitchener Downtown Business Association and private sector partners to support and
responsibly grow the event. Support from Celebrate Ontario, OCAF, The Trillium Foundation
and other grant funding organizations as well as corporate sponsors have been instrumental in
enabling the festival to grow.
As a result of the uncertainties associated in receiving corporate sponsorships, the board has
decided that the funds that would be required for annual audited statements are best used in
providing operational funding for the festival. The festival treasurer is a Chartered Accountant
and has excellent financial mangement systems in place. The festival board is looking into
having a Review Engagement or Reader Review of their financial statements at the end of this
year’s festival.
OCAF has indicated that without the audited statements, there must be a guarantor for the
$20,000 loan portion of their contibution. Staff are recommending that the City act as the
guarantor and believe that providing this guarantee is low risk based on the successful financial
track record of the festival and the fact that the annual Tier One Community Investment Funding
the festival receives could be used as collateral. Staff will work with festival organizers and legal
to develop any agreement required around the guarantee.
COMMUNICATIONS:
Event organizers have received a copy of this report.
FINANCIAL IMPLICATIONS:
None as the Tier 1 Community Investment Strategy 2011 funding can be used as collateral in
the event the festival does not fulfill the obligation to repay the loan amount.
ACKNOWLEDGED BY:
Pauline Houston
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