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HomeMy WebLinkAboutCSD-08-078 - Community Investment Strategy - Size of the Community Grants Pool & Tier 2 Target Funding Matrix1 R '' Community Services Report To: Community Services Committee Date of Meeting: September 8, 2008 Submitted By: Pauline Houston, General Manager, Community Services Prepared By: Ingrid Pregel, Manager, Cultural Development Ward(s) Involved: N/A Date of Report: September 2, 2008 Report No.: CSD-08-078 Subject: COMMUNITY INVESTMENT STRATEGY -THE SIZE OF THE COMMUNITY GRANTS POOL AND TIER 2 TARGET FUNDING MATRIX RECOMMENDATION: That the 2009 funding pool for community grants (all Tiers) be increased by $68,788 or 2.9%, for a total funding pool for 2009 of $2,440,788, subject to final 2009 operating budget approval; and, That $101,524 of the 2009 overall funding pool be allocated for 2009 Tier 2 grants, net of transfers outlined in Appendix 1 of report CSD-08-078; and, That the proposed formula for increasing the funding pool for community grants (all Tiers) for 2010 and subsequent years be approved in principle, subject to annual budget deliberations, to include the following factors: • increased cost measured by Bank of Canada inflation target, plus • population growth measured by assessment base growth, plus • community complexity factor of approximately 1 %; and further, That the Target Funding Matrix of a minimum of 20% and a maximum of 40% of the Tier 2 funding pool be allocated to each of the three major sectors (Arts, Culture, and Special Events; Sports and Recreation; and Community Support and Development) be approved as a guideline for the annual grant review process. BACKGROUND: At its August 18, 2008 meeting Council approved the recommendations contained in report CSD-08-070 that provided for the processes and transition plans to guide the implementation of the community grants program for 2009. Report No. CSD-08-078 Page 2 This report contains recommendations for the increase in the community grants pool (all Tiers) and the size of the Tier 2 pool for 2009, recommendations on the formula for increasing the funding pool for community grants (all Tiers) for 2010 and beyond, and a target funding matrix to guide the use of Tier 2 funds. REPORT: Community Grants Funding Pool (All Tiers) 2009 During the Community Grants cycle for 2009, staff will be focused on accomplishing the following for each of the 3 Community Grants Tiers: Tier 1 (annual grants): • Work with organizations to negotiate multi year agreements that outline mutual obligations Tier 2 (general provision): • Hold workshops to promote and explain new procedures to community groups and fine tune application assessment and selection procedures Tier 3 (new in collaboration with other funding partners) • Seek Council approval in October for Tier 3 process and 2009 pilot and work with funding partners to fine tune Tier 3 process for future years We expect the 2009 Community Grants cycle to result in a better understanding of the size of demand for community grants because: During negotiations with Tier 1 organizations we will learn about community needs, projected growth in memberslusers/participants and specifics of strategic and business plans. We will understand whether and how these organizations expect the City's Community Grants program to support these future plans After the process of assessing and selecting successful Tier 2 projects and services we will know the size of demand from both Tier 1 organizations with special projects and requests and other community organizations After discussion with funding partners about how the Tier 3 process might be fine tuned for future years we will have a better understanding of the scope for Tier 3 grants 2009 will be a development and learning year. We believe the City's current operating budget guideline increase for 2009 of 2.9% will provide sufficient growth in the total community grants pool to accommodate modest funds for the new Tier 3 grants and some additional needs in Tier 2. Based on recommendations for the Transition Plan for existing grant recipients contained in report CSD-08-063 Tier 1 organizations will receive increases of 2.0% for 2009. The additional 0.9% will generate approximately $20,000. Staff recommends this amount be added to the Tier 2 pool to accommodate some of the special needs Tier 1 organizations have that would otherwise have been the subject of Tier 1 organization appeals to Council in previous years. Report No. CSD-08-078 Page 3 Community Grants Pool for Tier 2 2009 Appendix 1 contains the proposed budget for Tier 2 grants for 2009. In addition to the proposed annual increase of 2.9% discussed above, amounts have been added and subtracted from the 2008 base amount of $100,000 to align with the 14 Funding Sources that now comprise the Community Investment Strategy. The result is a pool of $101,524 for 2009. Appendix 2 contains the Community Investment Strategy Framework of Funding Sources for reference purposes. Community Grants Funding Pool (All Tiers) 2010 and Beyond Over the past year that the Community Investment Strategy has been developed, the project consultant has been conducting research and working with members of the Steering Committee to identify an appropriate plan for funding the Community Grants program beyond 2009. The Phase I report provided best practices benchmarking information and concluded there is no easy way to target the size of the City of Kitchener's grants pool based on the pool in other cities. Staff recommends the grants pool be based on what we know, as follows: Community organizations will be subject to increased operating costs as cost of living increases overtime in our community Our population will continue to grow. Existing organizations will experience increases in membershiplparticipation/enrolment/users and will request additional funding to expand programs and services. New organizations will emerge seeking funding to support new community members with new programs and services. Appendix 3 contains a detailed discussion of how these 3 factors combine to result in a formula to increase the size of pool of funds for the Community Grants Program for 2010 and beyond. The recommended increase for 2010 is 5%, comprising 2% for cost of living increases, 2% for population growth and 1 % to accommodate new needs for our growing community. In each future year the result of applying the formula would be subject to approval by Council. Target Funding Matrix Tier 2 Community grants are provided to organizations providing services in three areas: arts, culture and special events, sports and recreation and community support and development. Although the organizations receiving general provision grants vary from year to year, in most years more than 50% of the funds are spent on projects and services in the arts, culture and special events sector. To support access to a wide and varied range of leisure opportunities for all our residents, staff recommends the City target a minimum of 20% and a maximum of 40% of the Tier 2 pool for each of the three sectors and that Council receive a report annually together with the recommendations for Tier 2 funding that shows applications and recommendations by sector. Next Steps Staff has developed a detailed work plan for the 2009 community grants cycle and is in the process of implementing it. On October 20th we plan to bring forward the following to the Community Services Committee: Overall Community Investment Strategy policy Tier 3 process Tier 3 pilot for 2009 Report No. CSD-08-078 Page 4 Linkage to Council's Transparency and Accountability Policy FINANCIAL IMPLICATIONS: This report recommends an increase of 2.9% for the 2009 Community Grants pool which translates to $68,788 on the 2008 base amount of $2.372M. COMMUNICATIONS: Phase I report has been available on the City's website since February 2008. We communicated with all those groups invited to participate in Phase I and invited feedback on the Phase I report. We also communicated the availability of the Phase II report to these same participants after the June 16, 2008 CSC meeting and invited feedback as well as providing an invitation to the meeting held on July 8, 2008 for feedback purposes. We met with 10 grant recipients to understand services provided in greater detail and apprised them of staff recommendations contained in this report. Report CSD-08-070 contained grants processes for 2009 that included a communications plan that will be rolled out in September 2008. CONCLUSION: Community Grants are one important way that the City uses to invest in our community. We are mindful of the need to balance community need with affordability. This report recommends a funding increase of 2.9% for 2009 while the new program is being fine tuned. It also recommends a formula to increase funding for 2010 and beyond. Ingrid Pregel Manager Cultural Development Report No. CSD-08-078 Page 5 Appendix 1 Community Investment Strategy Funding Source#14 Community Grants Tier 2 Proposed Budget for 2009 2009 BUDGET NOTES Base budget 2008 100,000 Plus 2009 increase 2.9% 2,900 Less grants in lieu of -30,500 2008 estimate = $29,658 taxes to be transferred to Estimated at 3% increase for 2009 Finance Department Less i n kind faci I ity g rants -3, 500 2005 = $2, 670 moved to operating 2006 = $ 727 2007 = $ 0 Less minor sports travel -3,500 2005 = $3,370 grants moved to operating 2006 = $3,350 2007 = $4, 650 Less pre-commitments 0 Plus transfer from 26,000 2009 budget = $36,000 Community Development Old CDIP account to retain $10,000 Infrastructure Program account Less transfer to Tier 3 -10,000 Plus balance of Tier 1 20,124 Tier 1 organizations receive 2.0% - 2009 increase remaining .9% contributes to Tier 1 requests for Tier 2 funding Balance: $101,524 Note: One index number will be set up to process payments for in kind facility grants and minor sports travel grants. Report No. CSD-08-078 Page 6 Appendix 2 Community Investment Strateav Framework of Funding Sources Source and Program for Staff Funding and Type of Request Responsibility Governance Next Steps 1. Is this a Youth, Community Community Programs & Neighbourhood Inclusion, Neighbourhood Programs & Services Division operating Development Association or New CDIP Services Division budget Strategy (CDIP and request? relevant program N.A.'s} manager 2. Is this a Community Operations Division Operations Division Revise process to Garden or Playground relevant program operating budget staff approval only Equipment request? manager 3. Is this request from a Enterprise Division Relevant operating budget Special Events special event group that relevant program e.g. Special Events, Strategic Plan has not received CIS Tier manager Auditorium/Arenas, etc. 2 funding? 4. Is this a request fora Finance Finance Department handles Finance to confirm grant in lieu of taxes? Department grants in lieu of taxes process 5. Is this a request for To be determined Perhaps the Community CIS Project Team to capital funding for a non Loan Fund - to be work with Finance City owned asset? determined 6 Is this a request for To be determined To be determined CIS Project Team to funding from a City owned work with Finance building, e.g. Centre in the Square, Children's Museum, Homer Watson House, Registry Theatre 7. Is this a request from a Operating Purchase of Service Purchasing policy for profit supplier to a department Agreement with relevant applies special event or project? operating budget owner 8. Is this a request for Aquatics & Aquatics & Athletics budget Allocate funds from minor sports travel Athletics -Athletics general provision - assistance? Coordinator process to be reviewed 9. Is this an `in year' Finance Council emergency budget Finance and Council request that does not fit Department to determine process any other funding envelope that could not be planned for during the annual budget that Council wishes to support, e.g. local crisis or national/international emergency? 10. Is this a request from a Economic Purchase of Service Current process supplier for services Development Agreement with Economic related to economic Division Development Division, e.g. development? CTT, Communitech, Small Business Report No. CSD-08-078 Page 7 Source and Program for Staff Funding and Type of Request Responsibility Governance Next Steps 11. Is this an in kind facility Community Department in kind facility Allocate funds from request? Services grant budget general provision - Department - process to be Grants Coordinator reviewed 12. Is this an Development & Department operating Current process environmental grant? Technical Services budget De artment 13. Is this an economic Economic Department operating Current process development grant? Development budget Division 14. Is this a Community Community Community grants budget CIS Work Plan Grant Tier 1, 2 or 3 funding Services request? Department - Grants Coordinator Report No. CSD-08-078 Page 8 Appendix 3 Growing the Community Grants Allocation Current Situation At present (2008) there is a total of $2.372 million dispensed to the local and regional organizations by the City of Kitchener in the form of community grants; this is distributed as follows: T e of Allocation yp Total Amount x$000) % of Total AnnualO eratin Grants $1.556 65.6% Minor Sports Grants $0.680 28.7% General Provision Grants $0.100 4.2% Communit Develo ment Infrastructure Grants $0.036 1.5% Total $2.372 100.0% The question is how to increase the allocation to keep pace with community growth as well as anticipate new and emerging needs of the community and the resulting demand for support. Approach Taken A small working group from the Steering Committee on the project was assigned the task of developing a rationale and formula with which to increase the community grants amount. This group came up with an approach that suggests that funding increases should reflect three factors or dynamics. These are: 1) the increased operating costs of fhe groups themselves: This factor would recognize the increasing cost of living, and the fact that the costs incurred by community organizations will rise in each year; 2) population growth in fhe community: As population grows in the community, there will be either an increase in the numbers of persons served by existing organizations, or new groups arising that will provide similar service to those already being provided (if existing organizations cannot cope with larger numbers). Either way more resources will be required to deal with population growth, quite apart and separate from the greater cost of operation imposed by the increase in the cost of living; and 3) community complexity: A third factor that was recognized was `community complexity', caused by the fact that some of the population growth in the community represents new Canadians, recent immigrants to the K-W area, minority cultures, etc. This increasing diversity of the City brings with it opportunities for new types of organizations with new types of needs and demands that may not have been historically responded to by the City. With a new emphasis upon diversity and accessibility, however, it is incumbent upon the City to recognize and respond to these new types of demands. Metrics Used The next step was to design a system that enabled measurement for each of the three factors articulated above. The recommendations of the working group in this regard were as follows: Report No. CSD-08-078 Page 9 1) the increased operating costs of the groups themselves: Here it was felt that the fairest and most transparent metric to use was likely the projected Consumer Price Index, as forecast by the Bank of Canada. The current inflation target for the Bank is 2.0%' . 2) population growth in the community: Population growth in Kitchener as measured in the 2006 Census (over the 2001 - 2006 period) was 1.44% per annum. However, as was discussed by the working group, another way to take straight population growth into account would be to look at the overall rate of growth in the assessment base of the community. Growth in the assessment base takes into account not only population growth (which contributes to growth in the residential tax base of the community) but also growth in the commercial and industrial tax base of the community. Assessment growth is a truer measure of the wealth of the community and thus its ability to pay for population growth. Accordingly, it was decided that this was a preferred measure to use. Assessment growth in Kitchener in recent years has been 2.03 percent per annum: 2.0% is used in this projection. 3) community complexity: Because this concept is rather more vague than `population growth' or `the consumer price index', there is no objective and transparent measure that can be used to directly reflect this dimension (although it should be noted that the lack of an objective measure does not make the factor any less read. It was felt by the working group that a 1% factor would be a reasonable reflection of this dimension. (A way of interpreting this would be that the community is getting 1 % more complex each year2.) As each of these factors is essentially separate, it is appropriate to combine them into a composite measure by simply adding them together. Thus: A B C Composite Factor: Increased Population Community Increase cost Growth Complexity Factor Bank of Measured Canada Assessment Assumed A + B + C by: inflation base growth factor target Amount: 2.0% + 2.0% + 1.0% 5.0% Funding Scenario The following chart shows as an example, the kind of growth in the community grant allocation that would be implied by this approach. Specific assumptions relating to the projection are: • in 2009, the increase is pegged at 2% (the recent historical rate) • in 2010 and thereafter, the annual increase is 5%. 1 See: http://www.bankofcanada.ca/en/monetary/inflation_target.html z There may, though, be some evidence supporting this as a reasonable percentage. For example, in the 2006 Census, some 1,885 of the total population of 204,688 of Kitchener were new immigrants to Canada who had lived in another country one year ago. These new immigrants to Canada who happen to live in Kitchener will likely have the types of needs for which the `Community Complexity' dimension is a proxy. This represents 0.921% of the population -quite close to the 1% figure suggested. Assuming that this is an annual rate, and assuming that it is representative of the situation today, itwould appear to justify 1% as being a reasonable benchmark. Report No. CSD-08-078 Page 10 The table below shows the results of the application of this approach over the next 10-year period. It also shows, for comparison purposes, the amount that would have been allocated had the recent `2% increase per annum' approach been followed over the time period, and the difference between the two (the difference, of course, reflects the additional amounts that would accrue to community groups under this approach}. Amount Under Amount Under Incremental Status Quo 'Growing Difference in Cumulative Year Approach (2% Allocation Year Difference per year) ($ Approach) ($ (~ million) ~~ million) million) million) 2009 $2.419 $2.419 $0.000 $0.000 2010 $2.468 $2.540 $0.073 $0.073 2011 $2.517 $2.667 $0.150 $0.223 2012 $2.568 $2.801 $0.233 $0.384 2013 $2.619 $2.941 $0.322 $0.555 2014 $2.671 $3.088 $0.417 $0.739 2015 $2.725 $3.242 $0.518 $0.934 2016 $2.779 $3.404 $0.625 $1.143 2017 $2.835 $3.575 $0.740 $1.365 2018 $2.891 $3.753 $0.862 $1.602 Thus as shown, in 10 years' time under this approach, the total amount of community grant support given would be approximately $3.75 million, $862,000 more than had the recent 2% per annum approach been followed over the decade. On a cumulative basis, this would result in an additional $1.6 million being allocated to community groups over the 10-year period than would have otherwise been the case. Need for Annual Review Process The hypothetical example above shows the how this philosophy and method would impact upon the actual funding for community grants, assuming that the percentages allowed for the three components as discussed above are stable from one year to the next. In reality, however, there may well be change from year to year in terms of the rate of inflation, or the assessment base of the community. `Complexity' may be more difficult to track year to year, but there quite conceivably could be reasons in future that cause Council and staff to believe that the `1 factor' as outlined earlier may be too low or too high. In any event, it will be important for Council to each year review the factors as outlined here and agree upon the appropriate incremental amounts to allow for each in determining the total amount of support that will be provided.