To: HONORABLE MAYOR AND From: Jim McBride
CITY COUNCIL
Subject: ARTS VENTURE FUND Date: July 23, 2003
COUNCIL DISTRICT: City-Wide
RECOMMENDATION
Adoption of a resolution authorizing the City Manager to augment approved FY 2003-04 Operating Grants, Project & Program Grants, and Festival, Parade and Celebration Grants with proportional increases from the Arts Venture Fund, in a total amount not to exceed $234,412.
BACKGROUND
The 2003-04 Adopted Operating Budget includes a General Fund appropriation of $234,412 to the Arts Venture Fund (AVF). This fund was established in 1999-2000 to support the new Arts Venture Grants Initiative, a grants program with a matching case requirement that supports artistic opportunity projects, builds cash reserves or funds capital investment.
As the economy weakened over the last two fiscal years, the City Council redirected the AVF to meet pressing needs of the arts community: the 2001-02 AVF was carried forward to supplement reduced Transient Occupancy Tax (TOT) allocations for the 2002-03 Project & Program Grant and Operating Grant Programs (the City’s two core arts grants programs); and the 2002-03 AVF was utilized for a special program of one-time challenge grants to encourage non-City contributed income.
In April 2003, the Arts Commission, in anticipation of City Council approval of the AVF appropriation, referred to its Programs Committee the task of considering and recommending the best use of the 2003-04 AVF in light of the current fiscal circumstances.
In July 2003, the Arts Commission approved the Programs Committee recommendation.
ANALYSIS
The Programs Committee considered four primary options:
1) Conduct a new cycle of the Arts Venture Grant Initiative (AVGI): This option would have offered organizations another opportunity to apply for City support. However, the committee felt that encouraging organizations to develop new projects and initiatives for this highly competitive program would strain their resources in the present economic climate. Also, the nature of the AVGI would most likely not provide funding for activities for which unsuccessful applicants to the standing programs had sought grants.
2) Establish a reserve fund: The committee perceived that it could be a challenge to ensure that AVF funds would remain in reserve and not be reallocated for another purpose if they were not used in 2003-04. The committee also suggested that the reserve’s purpose and policies regarding its use should be defined before funds are set aside.
3) Award grants to some or all of the unsuccessful 2003-04 Project & Program Grant applicants: Although several members expressed concern for unsuccessful applicants, the committee concluded that there was no reasonable basis for re-opening the review, and that it was not appropriate to offer a second round of any of the standing programs specifically for unsuccessful applicants.
4) Restore 2003-04 Festival, Parade and Celebration (FPC), Project & Program, and Operating Grants to the level recommended by grant review panels: After the 2003-04 grant review panels had made their recommendations based on an estimated TOT arts allocation, the Budget Office revised the estimate downward, which required a proportionate reduction of the grant awards. The reduced awards were approved by City Council on June 24, 2003. The 2003-04 AVF allocation is sufficient to restore grant amounts to pre-reduction proposed awards.
Over 25 members of the public, primarily representatives of local arts organizations, attended the committee meeting. Thirteen addressed the committee, nearly all of whom supported Option 4. The committee discussed the question at length before resolving unanimously to recommend that the AVF be directed towards restoring the 2003-04 grant program budgets as nearly as possible to levels initially recommended by the Arts Commission in March, and to supplement grant awards accordingly.
On July 9, 2003, the Arts Commission reviewed the programs committee recommendation and recommended that the 2003-04 Arts Venture Fund, in a total amount of $234,412, be utilized to augment 2003-04 grants with the following distribution: FPC Grants - $26,063 (attachment 1), Project & Program Grants - $28,660 (attachment 2), and Operating Grants - $179,689 (attachment 3).
PUBLIC OUTREACH
This item has been reviewed and discussed at the publicly noticed meetings of the Programs Committee of the San José Arts Commission, and the Arts Commission. Broad notice of the meetings was distributed to encourage public input.
COORDINATION
This memorandum has been coordinated with the City Attorney’s Office, the Budget Office, and the San José Arts Commission.
COST IMPLICATIONS
This memorandum’s recommendation supports the General Principles of the February 4, 2003, Mayor’s Proposed Budget Strategy: Principle #2 - The recommended use of funds is focused on the core services provided in support of the arts, as prioritized by the San José Arts Commission; Principle #3 - Recommended grants effectively leverage City dollars to stimulate the local economy, by underwriting hundreds of events, performances and exhibits that draw visitors and residents to the City of San José.
BUDGET REFERENCE
Fund: General Fund (001)
Appropriation: 2602 - Arts Venture Fund
Amount: $234,412
Budget Document: Proposed FY 2003-04 Operating Budget
Page 679
CEQA
Not a Project.
JIM McBRIDE
Acting Director,
Conventions, Arts & Entertainment
Attachments (3)