Municipal art facilities need to pay for themselves

Municipal art facilities need to pay for themselves
Posted on November 10, 2013 | Earle Rheaume | Written on November 10, 2013
Comments
Letter type:
Personal

I was shocked to learn the Shenkman Arts Centre in Orleans showed a deficit of almost $14 million dollars since opening some five years ago. Why this happened is the question that can only be answered by city councillors as they approved it.

This is how the system works:
 
·         A motion is presented to city council for its consideration
·         Council approves the motion and sends it to the City Manager’s office to be researched
·         The City Manager’s office develops a business plan
·         The business plan is presented to city council for its consideration
·         City council recommends changes and sends it back to the city manager. Changes are made and sent back to city council
·         City council takes a yes or no vote
 
The key question is why was it approved by council? Are these councillors capable of analysing a business plan?
 
Here is what the City had to say:

Earle,

From your questions, I perhaps get the feeling that you expect this facility and others that the city operates to generate a profit?  Is that a correct assessment?

While it is always the City’s objective to provide services to the public at an efficient and low cost to the taxpayers of the City, services such as Parks & Recreation and the facilities from which services are delivered (sports or cultural facilities), do not break even or generate a profit. These are services which Council has deemed should be provided as a community benefit to the residents of the city.
 
For information, I’ve attached some links to reports / background on the Shenkman Centre.
http://ottawa.ca/en/residents/water-and-environment/green-living/orleans...
http://ottawa.ca/calendar/ottawa/citycouncil/occ/2006/05-24/csedc/ACS200...
 
Tom Fedec
Manager - Budgets & Financial Planning
Financial Services Branch
City of Ottawa
100 Constellation - 4th Floor West
Ottawa, ON  K2G 6K8
(613) 580-2424 ext 21316
tom.fedec@ottawa.ca

Until Shenkman, Centrepoint and other similar developments throughout the city have been audited and the results provided to the public by the media, all proposed projects, including the $34 million Arts Court (see below), need to be put on hold immediately.
 
http://www.ottawasun.com/2013/10/29/city-finds-money-for-arts-court-taki...
 
Regards,

Earle Rheaume

Letter Response

Earle
From your questions, I perhaps get the feeling that you expect this facility and others that the city operates to generate a profit?  Is that a correct assessment?
While it is always the City’s objective to provide services to the public at an efficient and low cost to the taxpayers of the City, services such as Parks & Recreation and the facilities from which services are delivered (sports or cultural facilities), do not break even or generate a profit.  These are services which Council has deemed should be provided as a community benefit to the residents of the city.
 
For information, I’ve attached some links to reports / background on the Shenkman Centre.
http://ottawa.ca/en/residents/water-and-environment/green-living/orleans...
http://ottawa.ca/calendar/ottawa/citycouncil/occ/2006/05-24/csedc/ACS200...
 
Tom Fedec
Manager - Budgets & Financial Planning
Financial Services Branch
City of Ottawa
100 Constellation - 4th Floor West
Ottawa, ON  K2G 6K8
' (613) 580-2424 ext 21316
tom.fedec@ottawa.ca

About The Author

Earle Rheaume's picture

Looking back over 72 years I had the good fortune to have had a wonderful mom, a great wife and family, a successful career in business and excellent health. Sure there were ups and downs but they were too few to... More

Comments

Darcy Neal Donnelly

This is why enterprises ought not to be initiated, managed nor funded by mandatory tax funded governing agencies. If the market doesn't support these community enterprises, these failed enterprises ought to defunct.

D'Arcy

D'Arcy,

If a private enterprise can't make it in the market place it will go under. When the City Council of Ottawa spproves city taxpayers hard earned dollars for a project it does so without a "professional" business plan developed by the Office of the City Manager. Even if one were to be developed most councillors would not have the background, skills or experience to understand it anyway. Then when it comes to managing the project we have few if any General Managers who have any business sense in marketing, sales or management. The project doesn't go under because the taxpayer simply continues to keep it afloat with annual tax increases and user fees.

David Barbour

here we go again....someone who thinks the Arts have no value to our city....the arts are subsidized like sports...perhaps make a comparison to what is spent on art facilities to all the hockey arenas, baseball fields, swimming pools....the arts like sports makes an individual a better person which equals a healthier, happier society...and by the way the art facilities inspire people to be a photographer, painter, musician etc....thousands of people in this city spend millions of dollars being creative...local business like Wallacks, Labworks and many other benefit from this investment in our economy and way of life...millions are spent on the arts in this city by people who want to exhibit their work or play in an orchestra or act in a play....think about it

Danny Handelman

If an enterprise is losing money, wouldn't that suggest the population are not sufficiently supportive of the enterprise? Non-profits are subsidized through a 30% rebate of the property tax bill (provincial legislation), preferential sales and capital gains tax treatment, tax deductibility of contributions and exempt from corporate income tax. The use of taxpayers money results in less money being available for taxpayers to direct toward enterprises. If there were more consumers within walking distance (through increased immigration rates and making it more profitable for builders to build upward rather than outward through changes to zoning, development charges, property taxes and land transfer taxes), the probability and severity of deficits would decrease.

Alecz_dad

Earle,

I'm curious where does the $14 million deficit figure come from?

I think it is especially significant that the Shenkman Centre is ballyhooing it's 5th anniversary, yet there remains silence on its deficit.

My understanding is that the Shenkman family/foundation contributed very little to the cost of the construction, to be able to get naming rights.

Maybe it's time to ask globe-trotting billionaire Bill Shenkman to cover his pet project's deficit -- it's pocket change for him really -- or else have his family's name removed from this facility.

It seems like folks such as Shenkman and his OSEG partners in the Lansdowne privatization are happy to spearhead projects that cost them little, but end up costing taxpayers plenty.

Earle Rheaume

David,

I called Tom Fedec and he advised that Dan Chenier, General Manager Parks, Recreation and Cultural Services is investigating this issue. I called Mr. Chenier and asked him to call me. I e-mailed the same message. I'll follow up with him next week and keeep you posted.

Regards,

Alecz_dad,

Thanks fdor your interest,

I am waiting on that information from Dan Chenier General Manager Parks, Recreation & Cultural Services. I expect it this time next week. I will otherwise deal with his boss and City Manager Kent Kirkpatrick.

Earle Rheaume

GM Dan Chenier hasn't replied to my phone calls or e-mail messages.

Senior city solicitor/clerk Rick O'Connor replied to my letter but did not provide any accountability or business plan that I requested over a monthe Ago.

City manager Kent Kirkpatrick as usual had nothing to add even though his deputy city manager and other subordinates developed the business plan.