Audit and Finance Standing Committee, Jan. 19, 2021
Meeting recap (the important stuff):
The HRM’s getting serious about putting money up for the new art gallery planned for the waterfront.
The Art Gallery of Nova Scotia is asking for the HRM to kick in five per cent of the $140 million required for the development. For the city that means $7 million (or 7.8 per cent of the annual Halifax Regional Police budget), spread out over five years.
In her presentation, the Committee Director and CEO of the Art Gallery of Nova Scotia, Nancy Noble, said that they’re planning for this building to last at least 75 years. Since this committee is all about money, that prompted questions about climate resilience from Councillor Paul Russell. He wanted to know if they had taken into account the fact that a massive waterfront property would be impacted by climate change concerns, such as sea level rise.
Other councillors wanted to know if the HRM would be on the hook for money down the road, either for operating costs, or budget overruns. Noble assured councillors that budget overruns and climate resilience were built into their process.
During the meeting, HRM’s Chief Financial Officer Jane Fraser explained that there were a number of different ways the city could pay for this project. The committee voted unanimously for a report from staff about how council could pay for this, if they want to, in the budget process.
Although they never formally put the motion on the floor in the meeting, on the assumption the intent of the vote overrides procedure, the report will go directly to the budget meeting where it’ll be discussed. Otherwise they never technically voted for the motion, so staff wouldn’t do the report. It may require an
They also received a report about the city’s investments, which are doing quite well in spite of being conservative. And they also okayed the higher costs for splitting the sewer line on Cathedral Lane (the road Smitty’s is on by Vic Park), which they sent to council for final approval.
Who said what (paraphrased):
Russell: The Art Gallery of Nova Scotia presentation.
Nancy Noble: Two years ago the art gallery funding was announced by McNeil. Great cities are grounded by great art galleries. We want to focus on contemporary art, grounded in the challenges and struggles people are facing today. We went with an international design competition, it worked out well. There have been some design issues, but that’s normal when turning building ideas into physical realities. The total project is $140 million and we’re asking for five per cent from the HRM ($7 million or 7.8 per cent of the annual Halifax Regional Police budget). The impact on the economy would be increased tourism, construction jobs, at least 12 art gallery employees, and a boost to the creative economy. We’re asking for $7 million over five years or $1.4 million per year. Questions?
Mayor Savage: This looks like a great project. What would this new art gallery allow that the old one wouldn’t? Especially with collections.
Noble: We don’t have the height or width in our current building to physically get some art into the building. The current buildings are lovely heritage buildings, but they’re not built to be art galleries. The new building will give us spaces to allow us to do all our programming. For example, some contemporary art requires Wi-Fi, and we can’t get Wi-Fi everywhere in our current building.
Savage: This has been announced a number of times, you have fundraising in place, sometimes we feel like we’re asked after the fact to give money, so what happens if we don’t give money?
Noble: It’ll be a lot more difficult to raise the full amount without some contribution from the city. The $40 million, is hard to raise, but I also see this as a partnership with the city.
Deagle-Gammon: Is there a contingency in your budget plan for going over budget?
Noble: Yes. It’s no one’s intention to go over budget. All of the designs were over budget, so we’re scaling them back.
Morse: The ambition is to host international events, which are expensive, can you elaborate on the plan for those?
Noble: Our consultations were done pre-COVID, so we’ll have to re-do them. But the location alone will change our business model. We’re hoping to design it in a way to get rentals and have a business model that’s less reliant on government money.
Morse: Is music part of this at all?
Noble: The auditorium for sure, but yes we’re hoping to get music integrated with all of the various arts, even though we’re visual art based.
Hendsbee: Why the waterfront with the sea level rise, storm surge, etc. Are you building in climate resilience? Is this a good place for a very valuable art collection?
Noble: We’re a coastal community, so there’s a lot of coastal buildings. I’m not an expert in this, but one of our partners is a world class expert in climate resilience. We also currently don’t store all of our art on site at the moment. And we’re designing with a 75-100 year projection for climate.
Hendsbee: The storage space part of the capital costs?
Noble: No, that’ll be the province.
Hendsbee: Is there an option to have a joint storage space with the archives?
Noble: And the museum! And we can share skills, there’s a lot of skill overlap.
Russell: How high above the current water level are you planning on building the site?
Noble: I can get you that, but there will be a setback, and it’ll be sloped.
Russell: How long is the building designed to last? Some purpose-built buildings are built with a 50 year life span.
Noble: We’re looking for sure at 75-100 years, but 50 years seems very short. I’d hope it lasts longer than that.
Russell: Have you considered partnering with the library or museum to fill the gaps with your current building limitations?
Noble: Yes, well before COVID, yes we do. We have a lot of partnerships in the community. But the library, for example, also physically can’t be an art gallery.
Deagle-Gammon: Biggest event space, will the new art gallery be in competition with the Convention Centre?
Noble: I meant outdoor events, like the Jazz Fest, Oyster Fest, Rib Fest (Fest Fest!).
Russell: The winning design had challenges with being an art gallery and I was just wondering what the impact was on the timeline, cost, etc.
Noble: There’s no real impact because we never really expect the concepts to be final designs so it’s built into the process. I’m not saying it’s going to fully change, because it’s not, but flexibility is built in. We’re going to take the changes we ask for back to the community for their input. But we’re aiming for summer.
Russell: What should we do with this? Staff report?
Savage: This will have to come to the Budget Committee, I think, but I’ll move for a staff report for more information and a recommendation.
Cleary: How does this staff report dovetail into the budget process?
Jane Fraser: It would go to council, but it would depend on what the funding model looked like.
Cleary: Would this qualify for the strategic capital fund? Or would it come from a reserve?
Fraser: It would depend, it qualifies for some, but not others. Since we won’t own the building, it wouldn’t qualify for the capital fund.
Staff: Normally a report comes back to the committee that asks for it, perhaps send the report directly to the budget process.
Morse: Once the building is constructed, will we be on the hook for operating costs? Should that be in the report?
Staff: The ask is just for the capital cost.
Russell: There’s no mention of operating costs.
Morse: But it might come to a future council?
Jaques Dubé: We own the street adjacent to the property, and we’ve been looking at transferring the ownership of the street to the gallery. Just to say, we look at all the potential outcomes when we’re writing a report. We haven’t planned on spending this money, but we’ll look into it, should the committee request it.
Savage: The closest parallel would be the Discovery Centre, we contributed to the build, but no operating costs.
Russell: So the motion is to request a staff report on the request for funding and sent it to the budget process.
Hendsbee: Can it also include the question I asked about tax exemption status?
Dubé: It’ll be in there.
M/S/C – Vote – Unanimous – Aye
Russell: Next motion is our investment activities reports (quarter ending Dec. 31, 2019, quarter ending March 31, 2020, quarters ending June 30 and Sept. 30, 2020).
Cleary: (Reads the motion for agenda item 12.2.1 as written)
Russell: Is there a presentation?
Fraser: No, but I have someone who can answer questions.
Cleary: It seems like we’re invested conservatively, but doing well. How are we doing so well without conservative investments?
Staff: We’re generating higher balances than expected. When compared to other cities, everyone’s slightly different, so that’s the difference.
Russell: The question
M/S/C – Vote – Unanimous – Aye
Russell: Can I get someone to put the sewer separation motion on the floor?
Savage: (Reads the motion for agenda item 12.2.2 as written) Couple of questions, this is money we will recoup?
Peter Duncan: We will be recovering this expense.
Savage: Can you explain why we’re being asked to pay more?
Duncan: I can’t say how Halifax Water calculated the amount. We had set some money aside, but it was less than we intended.
Savage: Halifax Water did an analysis, did they share that with us?
Duncan: Yes, they shared their tenders with us, and it’s similar to what we’ve been seeing. We think it has to do with COVID.
Savage: Construction costs are going up, all the more reason to do this as quick as we can I suppose.
Hendsbee: I wish we had a diagram of who’s going to be paying the charge that’s going to recoup the costs. With the Rapid Housing Initiative on College Street, are they benefiting from it? If so can we take some of that money for this?
Duncan: I expect they’ll benefit from it, but I can’t tell you if they’ll be paying the fee.
Hendsbee: Can we make sure that any exemptions from paying the fee are included in the report?
Duncan: Yes.
Russell: Question!
M/S/C – Vote – Unanimous – Aye
*Meeting adjourned*
Present:
Councillor Paul Russell, Chair (District 15)
Councillor Cathy Deagle-Gammon, Vice-Chair (District 1)
Councillor David Hendsbee (District 2)
Councillor Trish Purdy (District 4)
Councillor Shawn Cleary (District 9)
Councillor Kathryn Morse (District 10)
Absent:
N/A
Interviews:
N/A – COVID
Previous meeting minutes and current agenda:
A former Naval Officer turned journalist, Matt Stickland is committed to empowering his community to ensure that everyone has access to the information they need to make their city a better place.
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