Report from Wayne Ritchie, City Manager, unanimously accepted without debate by Owen Sound City Council at Monday's meeting:


Owen Sound City Council directs that: the 2018 the Operating Budget for the Tom Thomson Art Gallery be prepared by City staff with input from staff of the Art Gallery; for 2018 the Art Gallery operates as a City department reporting to City Council through the City Manager's Office; any deficit from Art Gallery operations in 2017 be recouped from City funding of the Art Gallery over the next ten years.


The Tom Thomson Art Gallery Board appointed a Transition Committee and approached City Council with a request to investigate becoming a separate legal entity to operate an art gallery in the City of Owen Sound.
In response to this request Council appointed an Ad Hoc Gallery Incorporation Committee with three Council members and two members appointed by the Tom Thomson Art Gallery Board.
The Ad Hoc Committee met on a numerous times to discuss and find agreements on a number of key issues. These included: the City's art collection; governance of the new incorporated entity; ongoing City financial contribution; lease of the current art gallery building; property tax status; termination and transfer of current City employees at the gallery; and ongoing benefit coverage for transferred employees.
At the City Council meeting of August 8, 2016 staff reported that we had reached satisfactory agreement on principals that would allow the Art Gallery Board to incorporate the proposed operating entity.
The Board of the Tom Thomson Art Gallery has provided oversight to the Curator for the 2016 and 2017 budgets and operations of the gallery.
For 2016 the Tom Thomson Art Gallery reported a deficit from operations of approximately $85,000. The Board assured Council and City staff that the 2017 budget would be achievable and they would put measures in place to more closely monitor monthly operating results to budget. Throughout the year City financial staff consulted the Tom Thomson Art Gallery staff and no concerns were raised regarding actual results tracking to budget.


The Chair of the Tom Thomson Art Gallery Board made a deputation at the October 20, 2017 Council meeting and informed Council of an impending deficit from operations of the gallery for 2017. She noted that the Boards plans for incorporation and expansion of the gallery are now on hold.
Shortly before the Chair made that deputation City financial staff were informed by the Tom Thomson Art Gallery that they were now anticipating a significant operating deficit for 2017. Since receiving that information City staff have spent many hours reviewing the financial records of the Tom Thomson Art Gallery and working with gallery staff to determine what the level of the deficit may be. Due to the complexity of several of the multi-year programs and the funding agreements that support those programs City
staff are not able at this time to inform Council of the exact amount of the deficit. We can confirm that it will be significant, and will require a multi-year pay back plan.

City Council values the collection of the Tom Thomson Art Gallery as a treasure for the City, its residents and visitors. Council was appreciative of the Tom Thomson Art Gallery Boards vision and efforts to increase the profile of the gallery and to make it an even broader attraction. The Board feels that under the circumstances it is time to move away from that vision and I agree. It is imperative that the operation of the Tom Thomson Art Gallery are aligned with the financial support that the City tax payer can provide. This will occur if the operating budget is prepared under the direction of the City's Finance Department with input from the Tom Thomson Art Gallery staff.
To ensure that the gallery operations conform to the work plan approved during budget review it is recommended that the Tom Thomson Art Gallery operates as a City department reporting to City Council through the City Manager's Office.
It is further recommended that once the full magnitude of the deficit for 2017 is established that it be repaid to the City via a reduction in the City budgetary support to operate the gallery over the next ten years.
Moving forward, working with the staff of the Tom Thomson Art Gallery, and the support of the many long standing local supporters of the gallery, it can continue to be a valuable asset to the City.



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