AGENDA #8
MEMORANDUM
TO: Mayor and Town Council
FROM: W. Calvin Horton, Town Manager
SUBJECT: The Chapel Hill Museum Petition: Staff Response
DATE: March 27, 2000
This report responds to the Chapel Hill Museum’s petition that the Town provide support of Museum programs ($20,000 annually), and upkeep of the 523 East Franklin Street facility it leases from the Town, including routine facility maintenance and capital asset management (Attachment A: Museum Petition, January 24, 2000).
We recommend that the Council maintain the current conditions of the lease with the Museum (Resolution A) but recognize that the Council could come to a different conclusion as a matter of public policy.
In 1995, a Council-appointed Museum Study Committee recommended that the Town “pledge the old library building as a museum facility (and) that the Town’s pledge be made conditional on successful future fund raising.”
At that time, we estimated the museum’s cost for facilities operations would be $42,000 annually for routine maintenance and $65,000 for near-term capital projects.
In September 1996, the Council leased the old library building to the newly incorporated Chapel Hill Museum (Attachment B: Museum Lease). The lease states that the Chapel Hill Museum is responsible for:
The museum lease has been amended twice (Attachments C and D). Both amendments relate to use of Museum premises.
The Museum operates on a calendar year. Its 1999 budget (Attachment E) totaled $103,375 in revenues and $95,900 in expenditures. Last year the Museum spent approximately $2,700 for routine maintenance, $12,400 for utilities and $525 for capital improvements. The Museum has a part-time director and is currently open to the public 21 hours per week.
In October, the Museum was designated as a Public Cultural Facility, which allows it greater flexibility in accessory uses, including meeting room use. Because of this, and because the Museum is planning joint programs with UNC departments and local public schools this year, they anticipate significant increased use by the public in 2000.
On January 24, the Chapel Hill Museum submitted a petition requesting that the Council:
We believe from review of the record that the Council’s original intent regarding its relationship with the Museum was that the Museum should be given free use of the old library building and no other financial support. It was expected at the time that the Museum would pay its own operating and routine maintenance costs and would provide for any necessary capital maintenance.
It appears that the Museum has not been able, to date, to raise sufficient revenues to support programs, routine maintenance and resources for capital maintenance. Revenue development is receiving additional attention, but is not at the level that the Museum Board believes will allow good programming and good maintenance. We understand the challenge. Indeed, we already are asking the Council to raise the tax rate this year to continue service programs and to improve the capital maintenance of Town facilities.
We offer an analysis of the Museum’s request for operations and maintenance support below and recommend that the Council not change its present relationship with the Museum, i.e. that the Museum receive no funding. There are two main reasons for this recommendation:
§ The Council has a difficult budget problem for 2000-2001, without this additional request.
§ We believe the Museum is better organized for fund-raising now than in the past, based on their reports.
In short, we believe it would be reasonable to ask that the Museum make another effort to become self-supporting in 2000-2001.
We recognize that the Council could choose to fund the operations and maintenance of the Museum, in portion or in full, as a public service. Such a change would be reasonable as a matter of public policy. If the Council wishes to provide such support, we recommend that the Council determine whether it wishes to provide funds for operating support, routine maintenance, capital maintenance or some combinations. We also recommend that the Council instruct the Manager as to the limit, if any, of support to be provided. We could then negotiate a performance agreement with the Museum and return to the Council for its considerations.
We offer this option because we understand that this matter is a policy decision for the Council, and that there are several reasonable responses to the petition on the Museum.
I. Support for Museum Programs ($20,000)
The Council could choose to provide $20,000 to the Museum for program support next year. If so, we would include this anticipated expenditure when preparing the 2000-2001 budget proposal.
Advantages to providing support for Museum programs include:
1. Continued citizen access to programs and artifacts significant to the history of Chapel Hill. The Museum is the only local facility dedicated to preserving Town history.
2. Town support could encourage private gifts and donations. Direct financial support by the Council would further identify the Museum as an established community organization. As such, the Museum may be more likely to receive donations and grants.
3. Town money could serve as local match money for museum grants. Federal and State grants for which the Museum could be eligible sometimes require a local match of 10-50% of the total grant. Town support money, up to a specified amount, could be used as local match, thereby encouraging applications for grants that would enhance Museum programming.
Disadvantages to providing support for Museum programs include:
1. Adding expenditure in a difficult budget year. The Council is working to maintain current levels of service to citizens in a difficult budget year. Adding Museum support would require either reallocation of funds from other programs or adding funds to the budget.
Recommendation: Because of the fiscal challenges facing the Council during the coming budget year, we recommend that the Council make no allocation for Museum operations.
II. Routine Facility Maintenance
The current lease requires the Museum to provide all routine interior and exterior maintenance. Duties include landscaping and parking lot maintenance, as well as mechanical and electrical equipment maintenance, after-hours emergency service and minor repairs.
We estimate that assuming routine building and grounds maintenance for the Museum would cost the Town a minimum of $20,000-$30,000 annually, depending on the level of service provided.
In response to the Museum’s request that the Town assume the upkeep of the physical plant, the Council could choose any of the following options:
§ Perform the work in-house, with funds either added to the budget or reallocated from other services.
§ Contract for maintenance services.
§ Allocate maintenance funds annually to the Museum.
§ Continue the conditions of the current lease and provide no funding for routine maintenance.
Advantages of assuming routine maintenance of the Museum:
Disadvantages of assuming routine maintenance of the Museum:
Recommendation: That the Museum continue to be responsible for providing routine maintenance of the building and the grounds.
III. Capital Maintenance
The current lease requires the Museum to provide all capital expense to maintain the facility. Capital maintenance items would include but not be limited to such items as replacement of mechanical and electrical equipment, roof replacement and parking lot repaving.
Options available to the Council regarding the Museum’s request that the Town assume capital maintenance of the facility include:
§ Assume all or some of the capital costs associated with the Museum.
§ Continue the conditions of the current lease and assume no capital costs associated with the Museum.
Advantages of assuming all or some capital assets maintenance include:
1. Maintenance of a Town asset. The Museum indicates that, at its current level of funding, it cannot both support programming efforts at the level it desires and maintain the facility at a desirable level. By assuming responsibility for capital maintenance, the Town would determine the level of service to maintain the building.
2. Increased Museum programs. Additional funds could by directed to expanded Museum programs for residents if the Museum does not have to set aside funds for capital maintenance.
The main disadvantages of assuming some or all capital maintenance of the Museum is cost. Costs of maintaining the Museum building will result in fewer dollars being available for regular Town facilities.
That the Museum continue to be responsible for capital maintenance as contemplated in the present lease authorized by the Council.
CONCLUSION
We recommend that the Council decline to provide additional financial support for the Museum in 2000-2001 and that the Council ask that the Museum make another effort to become self-supporting in the coming year. Resolution A would implement this recommendation.
We also recognize that the Council could reasonably come to a different conclusion as a matter of public policy. Resolution B allows the Council to select additional support, at a level to be determined by the Council, for any or all of the Museum’s requests for additional funding. We welcome the Council’s direction.
Resolution A would authorize no additional financial support for the Museum in 2000-2001.
Attachment A: Museum Petition
Attachment B: Museum Lease
Attachment C: Amendment to Lease (September 10, 1999)
Attachment D: Amendment to Lease (November 12, 1999)
Attachment E: Museum Budget
RESOLUTION A
A RESOLUTION REGARDING THE CHAPEL HILL MUSEUM IN 2000-2001 (2000-03-27/R-18)
WHEREAS, the Chapel Hill Museum’s current lease with the Town requires the Museum to provide all maintenance and operations costs for the facility located at 523 East Franklin Street; and
WHEREAS, the Town Council has consistently indicated its desire to maintain a cost neutral arrangement with the Chapel Hill Museum;
NOW, THEREFORE BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council requests that the Chapel Hill Museum attempt to raise sufficient revenues in 2000-2001 so that the Museum is able to pay its own operating costs, routine maintenance and capital maintenance costs.
This the 27th day of March, 2000.
RESOLUTION B
A RESOLUTION AUTHORIZING THE MANAGER TO DEVELOP, AND TO SUBMIT TO COUNCIL FOR ITS APPROVAL, A NEW PERFORMANCE AGREEMENT WITH THE CHAPEL HILL MUSEUM THAT WILL PROVIDE ADDITIONAL FINANCIAL SUPPORT IN 2000-2001 (2000-03-27/R-19)
WHEREAS, the Chapel Hill Museum’s current lease with the Town requires it to provide all maintenance and operations costs for the facility located at 523 East Franklin Street; and
WHEREAS, the Chapel Hill Museum has petitioned the Town Council to provide additional funding for Museum programs, routine facilities maintenance and capital maintenance; and
WHEREAS, the Museum has indicated that these expenditures currently place burden on the Museum, diverting program development funds into maintenance of a Town-owned facility; and
NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council authorizes the Manager to develop, and to submit to the Council for its approval, a new performance agreement with the Chapel Hill Museum that will provide additional financial support for the Museum in 2000-2001 for purposes and in the amounts as indicated below:
· Program Support $
· Routine Maintenance $
· Capital Maintenance $
Or, as determined by the Council after negotiation of a performance agreement with the Museum.
BE IT FURTHER RESOLVED that the Council authorizes the Manager to negotiate and execute a lease amendment and a performance agreement consistent with any changes authorized by the Council.
This the 27th day of March, 2000.