Report to: Development Services Committee Report Date: June 1, 2010

SUBJECT: Review of Heritage Financial Assistance Programs

PREPARED BY: Regan Hutcheson, Manager, Heritage Planning, ext. 2080

RECOMMENDATION:

That the staff report dated June 1, 2010 entitled “Review of Heritage Financial Assistance Programs”, be received.

EXECUTIVE SUMMARY:

Not Applicable

PURPOSE:

To provide an update on the current heritage financial assistance programs, and to respond to the request for staff comment on the concept of creating one overall fund for the purpose of heritage property improvement.

BACKGROUND:

Council requested further information on the heritage financial assistance programs

As part of the approval of the Markham Designated Heritage Property Grant Program on January 19, 2010, Council asked staff to undertake two tasks:

· Provide an update on the program criteria, costs and participation in the current heritage financial assistance programs; and

· Investigate and report back on the concept of one overall fund for the purpose of heritage property improvement using the current Heritage Loan Fund, and accrued interest as the base funding.

OPTIONS/ DISCUSSION:

A summary of the existing financial assistance programs related to heritage properties is provided

Appendix ‘A’ illustrates a summary of the current heritage financial assistance programs by providing a brief description of the program, how and when the program was created, how the program is funded and the review and approval process. A summary of costs for each program has also been included. Each program is briefly discussed below:

Heritage Loan Fund (A-1)

• Council established a permanent loan fund of $200,000 in 1981 by municipal by-law using the provisions of the Ontario Heritage Act.
• This funding was actively used in the 1980s and 90s when interest rates were high. The loan fund has not been used in the last 5 years due to the low interest rates available from commercial banks.
• The fund has been accruing interest for a number of years and as of 2010, the fund had $387,266.64.
• In January 2010, Council authorized the transfer of $95,000 from the Loan Fund Reserve (for a revised balance of $292,266.64) to fund the new Designated Heritage Property Grant Reserve Fund in the amount of $120,000 ($25,000 had been previously transferred from the Loan Reserve in 2008).

Designated Heritage Property Grant Program(A-2)

• Council created this new grant program in January 2010 as a four year program (2010-2013) offering $30,000 in grant assistance each year.
• The program was very well received during its inaugural year with 22 applications received.
• Council approved 9 applications totally $29,560 on May 25, 2010

Commercial Façade Improvement Grant Program and Commercial Signage Replacement Grant Program (A-3, A-4)

• These two programs have been available since 2004 and the signage replacement grant has been incorporated into the funding for the façade improvement program.
• Since 2004, $178,524.90 has been allocated to 19 specific projects (24 projects have been approved, but 5 have withdrawn and do not intend to proceed)
• Council has been providing an allocation to this funding as required (top up through the DSC capital/other programs budget).

Heritage Property Tax Reduction Program (A-5)

• In effect since 2003, this program has 41 active participants each having a Heritage Easement Agreement registered against their property.
• The program rewards good stewardship and promotes regular investment in conservation and maintenance.
• The average tax reduction is just over $1,000 and the annual cost to municipality is in the order of $17,230 (2008).

Heritage Preservation Reserve (A-6, A-7)

• These funds have been obtained through cashed heritage letters of credit since 1991.
• There are specific guidelines adopted by Council as to how this funding can be used, and it is primarily directed to public/municipal heritage projects.
• The funding has been used for heritage district plan preparation, heritage district newsletters, heritage entry signage and recently Council has funded the Interpretive Plaque Program for Heritage District Properties from this account ($9,300).
• Total funds remaining as of January 2010 are approximately $60,000.

Public notification of financial assistance programs

All heritage financial assistance programs and application forms are available on the Town of Markham website (Heritage Section). In addition, each year, the grant programs and the tax reduction program are advertised on the Town of Markham page of our local newspapers. The availability of all programs is also promoted in the Heritage District Newsletter which normally is delivery to all property owners in the three heritage districts twice a year. Town staff also notify clients of the existence of these programs if it is apparent they may be eligible for assistance.

Current programs are funded through a variety of sources

The existing programs are funded through the following means:

Heritage Loan Fund – a permanent reserve fund ($200,000) that accrues interest.

Designated Property Grants – funded through the accrued interest of the Loan Fund ($120,000)

Commercial Façade and Signage Grants – annual tax based funding as required.

Heritage Property Tax Reductions – funded through the Allowance Account-Operating Budget for Assessment Appeals. Revenue is provided by application fees and renewal fees (20% and 10% of reduction amount for that specific year)

Heritage Preservation Reserve – funded by cashed heritage letters of credit.

Concept of creating one overall fund for the purpose of heritage property improvement

Council asked staff to explore using the current Heritage Loan Fund, and accrued interest as the base funding for an overall fund for the purpose of heritage property improvement. At present, the Loan Fund has a base of $200,000 with accrued interest remaining in the Fund account of approximately $92,000 (in January 2010, $95,000 of accrued interest was transferred to the Designated Property Grant Reserve to fund this new 4 year program).

At present, the only program requiring tax based funding allocation on an annual basis is the Commercial Façade Grant Improvement/ Signage Replacement Program. The new Designated Property Grant program is currently funded for four years (2010-2013) using the accrued interest from the Loan Program. In future years, Council may choose to use some or all of the accrued interest from the Loan Fund to assist in the funding of the Commercial Façade Grant Program as opposed to tax based funding.

It is also more efficient from an administrative, accounting and tracking perspective to maintain separate program administration of the various grant programs. Therefore, at this time, there does not appear to be a demonstrated need to create one overall fund for the purpose of heritage property improvement.

FINANCIAL CONSIDERATIONS AND TEMPLATE: (external link)

Not applicable

HUMAN RESOURCES CONSIDERATIONS

Not applicable

ALIGNMENT WITH STRATEGIC PRIORITIES:

Heritage financial assistance aligns with the Growth Management priority by working to preserve and protect resources and features of cultural heritage value in order to create an enhanced community.

BUSINESS UNITS CONSULTED AND AFFECTED:

Finance Department comments have been incorporated into this report.

RECOMMENDED BY:

____________________________ ______________________________

Biju Karumanchery, M.C.I.P., R.P.P. Jim Baird, M.C.I.P., R.P.P.

Senior Development Manager Commissioner of Development Services.

ATTACHMENTS:

Appendix ‘A’ Summary of Heritage Financial Programs

File path:

Q:\Development\Heritage\SUBJECT\Financial Incentives-Heritage and Downtown\DSC JUne 1 2010 rh.DOC