Item - 2015.EX7.15

The Executive Committee recommends that:

Operating Model

1.  City Council approve a new operating model that consolidates the operation of the City's three current civic theatres into a single organization with a mandate to provide quality performance and event facilities and to promote its contribution to the artistic, cultural and social vitality of Toronto and its communities.

2.  Effective July 9, 2015, City Council establish Civic Theatres Toronto as a new City board whose Board of Directors is to assume responsibility for overseeing the business and operational affairs of Civic Theatres Toronto, and initially to adopt an implementation strategy and oversee the transition process for consolidating the current civic theatre operations into a single organization under the new City Board.

‎Board Governance Structure and Appointments to Boards

3.  Effective July 9, 2015, City Council rescind the appointments of all members of the Boards of Directors of the Hummingbird (Sony) Centre for the Performing Arts, the St. Lawrence Centre for the Performing Arts and the Toronto Centre for the Arts.

4.  Effective July 9, 2015, City Council establish a Board of Directors for Civic Theatres Toronto, and amend the size and composition of the Board of Directors of the St. Lawrence Centre for the Arts, the Hummingbird (Sony) Centre for the Performing Arts, and the Toronto Centre for the Arts, to each consist of 5 members composed of:

-    the Mayor or a Council Member appointed by the Mayor as the Mayor's designate;

-    the Council Member for Ward 23;

-    the Council Member for Ward 28; and

-    2 Council Members;

with at least one of the Council Members appointed also being a member of the Economic Development Committee.

5.  Effective November 6, 2015, City Council amend the size and composition of the Board of Directors of Civic Theatres Toronto, the St. Lawrence Centre for the Arts, the Hummingbird (Sony) Centre for the Performing Arts and the Toronto Centre for the Arts, by adding 8 citizen members so that each board will consist of 13 members composed of:

-    the Mayor or a Council Member appointed by the Mayor as Mayor's designate;

-    the Council Member for Ward 23;

-    the Council Member for Ward 28;

-    2 Council Members; and

-    8 citizen members;

with at least one of the Council Members appointed also being a member of the Economic Development Committee.

6.  To ensure that the new Civic Theatres Toronto Board and the amended Theatre Boards are operational as soon as possible, City Council waive the requirement of Chapter 27, Council Procedures to canvass Members for their interest in appointment to these boards and make direct appointments, as set out in Recommendation 4 above, at its July 7 and 8, 2015 meeting.

7.  To provide stability and ensure consistent decision making by the four Theatre Boards during the transition period, City Council appoint the same 5 Council Members including a Council Member as Chair for the initial period, and the same 8 citizen members including a citizen member as Chair to replace the Council Member Chair after the initial period, to all four Theatre Boards for a term of office ending November 30, 2018 and until successors are appointed, on the understanding that should the current civic theatre boards be dissolved before the end of the appointment term, such appointments will be rescinded at that time.

8.  City Council waive the two-term limit provision of the Public Appointments Policy for the initial recruitment of members to be cross-appointed to the City's four theatre boards.

9.  City Council approve the board governance structure matters pertaining to the Board of Directors of Civic Theatres Toronto, the St. Lawrence Centre for the Arts, the Hummingbird (Sony) Centre for the Performing Arts and the Toronto Centre for the Arts, as set out in Attachment 1 to the report (June 16, 2015) from the Acting City Manager and the General Manager, Economic Development and Culture with respect to: the appointment of the Chair and Vice-Chair; the eligibility requirements, qualifications and appointments process for citizen members; Board meetings; and Board member remuneration, as amended by Recommendation 8 above.

Hummingbird Performing Arts Centre Corporation

10.  City Council request the Province of Ontario to repeal the Hummingbird Performing Arts Centre Corporation Act, 1998, as the Corporation has never been operationalized and is no longer required.

11.  Until the Corporation as per Recommendation 10 above is dissolved, and for the purpose of meeting legislative requirements including holding of annual general meetings, effective July 9, 2015, City Council rescind the appointment of all members of the Board of Directors of the Hummingbird Performing Arts Centre Corporation and appoint the following members so that the Board will be composed of:

-  the 5 Council Members who are appointed to the Board of Directors of Civic Theatres Toronto;

-  the City Manager or designate;

-  the Deputy City Manager and Chief Financial Officer or designate;

-  the Deputy City Manager Cluster A or designate; and

-  the General Manager, Economic Development and Culture;

for a term of office ending November 30, 2018 and until successors are appointed, on the understanding that should the current civic theatre boards be dissolved before the end of the appointment term, such appointments will be rescinded at that time.

Cultural Programming Trust

12.  City Council endorse additional research, in consultation with the Board of Civic Theatres Toronto, into the concept of an independent charitable Cultural Programming Trust to enhance programming opportunities and programming excellence, and to facilitate partnerships, sponsorships and donations in support of Civic Theatres Toronto and the performing arts sector in the Toronto region; and request the General Manager, Economic Development and Culture to conduct further research and consultation and report back on the concept to City Council through the Economic Development Committee by the third quarter of 2016.

Financial Plans and Budgets

13.  City Council give consideration as part of the 2016 Budget Process to combining the Capital Budget and Plan for the Sony Centre with the Economic Development and Culture Capital Budget and Plan to bring capital budgets and plans for all civic theatres under a single responsibility centre.

14.  City Council request that the Civic Theatres Toronto Board work with City staff to update the services and activities which comprise the program map and establish service standards and service levels for the Civic Theatres in time for the 2017 budget process.

15.  City Council approve an in-year adjustment to the Council approved 2015 Operating Budget to transfer $0.160 million from unspent funds in the Non-Program budget to Theatres to provide the Civic Theatres Toronto Board with one-time funding to facilitate initial operational requirements in 2015 as set out in Confidential Attachment 2 to the report (June 16, 2015) from the Acting City Manager and the General Manager, Economic Development and Culture.

16.  City Council direct that Confidential Attachment 2 to the report (June 16, 2015) from the Acting City Manager and the General Manager, Economic Development and Culture remain confidential in its entirety as it deals with information that involves the security of property belonging to the City and its agencies, and information about labour relations or employee negotiations.

Implementation Matters

17.  City Council request the City Clerk to communicate to the citizen members of the current civic theatre boards advising them of Council's decisions regarding the future of the theatres and expressing Council's appreciation for the valuable service and commitment that they have generously provided to the respective theatre boards.

18.  City Council appoint the City Clerk as the Secretary to the Board of Directors of all four Theatre Boards.

19.  City Council request the Board of Directors of Civic Theatres Toronto to develop a procedures by-law to be reported by the Board to City Council for approval through the Executive Committee in 2016 and, until such time, require the Board to follow the procedures in Municipal Code Chapter 27, Council Procedures, as it applies to committees of Council.

20.  City Council request the Board of Directors of Civic Theatres Toronto to implement a process to recruit a chief executive officer, including consideration of an acting or interim chief executive officer and engagement of an independent search consultant, as the Board considers appropriate.

21.  City Council approve the participation of Civic Theatres Toronto in the OMERS pension plan.

22.  City Council request the Board of Directors of Civic Theatres Toronto to develop a new strategic plan and 5-year business plan to be reported by the Board to City Council through the Executive Committee by the Spring of 2016 to inform the budget submission for the 2017 operating budget.

23.  City Council request the City Manager to develop a Relationship Framework for Civic Theatres Toronto and report to City Council through the Executive Committee on the proposed Relationship Framework as soon as practical.

24.  City Council request the City Manager to report to City Council through the Executive Committee as soon as practical on the dissolution of the current City boards for the three civic theatres.

25.  City Council authorize the City Solicitor to introduce the necessary bills to give effect to the changes in governance structure approved by City Council, including repeal/amendment of Toronto Municipal Code Chapter 9, Arts Centres, amendment of former Toronto Municipal Code Chapter 11, Arts Centres, repeal of Metropolitan Toronto By-law No. 133-96, and enactment of a new Toronto Municipal Code Chapter for Civic Theatres.

In December 2013, City Council was advised of initiatives to establish a Theatres Working Group and engage a consultant to examine options for operating and governance models for the City's three civic theatres – the St. Lawrence Centre for the Arts (St.LCA), the Sony Centre for the Performing Arts (Sony Centre), and the Toronto Centre for the Arts (TCA). The Theatres Working Group and the consultant reinforced the fact that the civic theatres have value as foundational public assets that create the conditions for a vital and vibrant performing arts sector in Toronto.

Following extensive work done by external consultants, and taking into consideration advice from the Theatres Working Group, City staff propose a new direction for the future of the City's civic theatres. Changes are proposed both to the operating model and the governance structure with the objective of enhancing the relevance of theatres to the communities they serve, increasing theatre usage and improving the financial viability of the theatres. All three theatres are underutilized and the cost per seat of operating the combined seven stages within them continues to rise with few prospects for reversing the trend under a status quo scenario.

Increasing utilization of the theatres is the most effective way to create more efficient operations and support the overall mandates of each theatre. Sharing resources amongst the civic theatres has the best chance of increasing utilization and improving their performance. It will allow the consolidation of some functions such as IT, accounting and payroll, while increasing capacity for other functions such as programming, marketing, and event bookings   across all theatres. To accomplish that operationally, it is necessary to consolidate at the governance level.

This report recommends consolidating the operations of the St. Lawrence Centre for the Arts, Sony Centre, and Toronto Centre for the Arts into one new organization under the direction of a single City board, and to commence the governance and operational transition process. Immediate governance steps include establishing a new board and determining the executive leadership to champion the change process. A new City board, Civic Theatres Toronto, would oversee the business affairs of the management and operation of the civic theatres, and initially also oversee the process of integrating operations. As a necessary element of transition, each of the three theatres' boards would continue in the short term with board membership recommended to be identical on all four boards. The individual theatre boards would be dissolved as soon as practical based on progress with the operational transition.

Operational transition involves complexities associated with integration of functions, harmonization of policies and the transfer of employees, and can be time-consuming. The integration of operations will be phased-in, following an implementation strategy developed under the direction of the new Board of Directors of Civic Theatres Toronto, with advice from management at the civic theatres as well as the City.

Key changes and implementation measures being proposed include:

-   a mandate for Civic Theatres Toronto to provide quality performance and event facilities and to promote the contribution of Civic Theatres Toronto to the artistic, cultural and social vitality of Toronto and its communities;

-   establishing a 13-member Board of Directors for Civic Theatres Toronto to initially consist of 5 Council Members, with 8 citizen members to be added after a recruitment process;

-   amending the Board of Directors for each of the three current civic theatres to mirror the size and composition of the new Board of Directors for Civic Theatres Toronto until consolidation is completed;

-   appointing the same 5 Council Members and 8 citizen members to all four theatre Boards;

-   adopting new board governance structure requirements for all four theatre Boards including such matters as the appointment of the Chair and Vice-Chair, and the eligibility requirements, qualifications and appointments process for citizen members;

-   expediting a search process by the Board of Directors of Civic Theatres Toronto for a chief executive officer, including consideration of an acting or interim chief executive officer;

-   development by the Board of Directors of Civic Theatres Toronto of an implementation strategy to guide the operational transition process;

-   development of a procedures by-law, a strategic plan, 5-year business plan and a Relationship Framework for Civic Theatres Toronto;

-   endorsement of the concept of an independent charitable Cultural Programming Trust to enhance programming opportunities and programming excellence in the performing arts sector as a broader initiative, which will require further research and consultation; and

-   a future report from the City Manager on dissolving the three current civic theatre boards.