Item - 2013.EX34.7

The Executive Committee recommends that:

1.         City Council retain the Toronto Zoo and the Zoo Board of Management as a City Board and agency pursuant to the City of Toronto Act.

2.         City Council request that the Toronto Zoo Board of Management's forthcoming 2014 Strategic Plan include the following:

a.         A Facility Master Plan;

b.         Sources of capital and operating program funding including: fundraising, sponsorships and partnerships, with an emphasis on the promotion of wildlife and habitat conservation, environmental sustainability, and public education;

c.         Strategies to improve on site visitor spending, and possible addition of new compatible activities or other measures which boost attendance and net revenues;

d.         Possible joint programs and capital projects in partnership with Parks Canada within the implementation of the Rouge National Urban Park; and

e.         Service efficiencies that reduce the need for government operating funding.

3.         City Council request that the Province of Ontario take a strong role in the future of the Toronto Zoo given its function as a major regional attraction and its importance to the regional economy as a major tourism, recreation, wildlife conservation and education venue, and that the City Manager, in consultation with the Chief Executive Officer of the Toronto Zoo, initiate discussions with the Province on these principles and to establish a funding partnership for Toronto Zoo programming and shared capital infrastructure.

4.         City Council request Parks Canada to enter into an agreement with the Toronto Zoo, the City of Toronto, and the Toronto Region Conservation Authority for ongoing collaboration, joint programming and shared facility management related to the Rouge National Urban Park; and request the Government of Canada to provide funding for any new or shared joint capital infrastructure.

5.         City Council request the Chief Executive Officer of the Toronto Zoo, in consultation with the City Manager, to engage stakeholders such as the University of Toronto, the University of Guelph, the Toronto and Region Conservation Authority and other Greater Toronto Area municipalities on their financial and program participation in the future of the Toronto Zoo.

6.         City Council direct the City Manager, with appropriate City Officials and the Chief Executive Officer of the Toronto Zoo, to finalize the terms and report back to City Council on a revised Tripartite Agreement for the use of the zoo lands between the City, the Toronto Zoo Board and the Toronto and Region Conservation Authority.

7.         City Council request the Toronto Zoo Board of Management, in consultation with the City Manager, to create a separate and independent charitable foundation for fundraising, sponsorship, donation and partnership purposes in alignment with its 2014 Strategic Plan.

8.         City Council affirm that the Toronto Zoo Board of Management is solely responsible for any future decisions regarding the acquisition, disposition and overall management of the Zoo's animal and plant collection.

9.         City Council request that the City Manager, in consultation with the Chief Executive Officer of the Toronto Zoo and Zoo Board of Management, review the board governance and develop a Relationship Framework between the City and the Toronto Zoo for Council approval, incorporating the outcomes of Recommendations 1 to 8 within the report (September 10, 2013) from the City Manager.

The Executive Committee requested the City Manager to consult with representatives of the Toronto Zoo and report directly to the October 8, 2013 meeting of City Council with any amendments that may be necessary.

In October 2012, City Council requested the City Manager to cancel a Request for Expressions of Interest for Toronto Zoo operations, maintaining the Toronto Zoo as a City Board and agency. City Council also requested the City Manager to review an unsolicited proposal from the Zoo Board of Management, titled "the Future of Zoo Governance" taking into account the City's financial position and the Core Service Review. The following report is the City staff response to the Zoo Board proposal.

City Board and agency or separate non-profit corporation

The Zoo Board's proposal (the Proposal) (Attachment 1) recommends the Toronto Zoo separate from the City by reorganizing into a private non-profit corporation to operate and manage the Toronto Zoo through a management agreement with the City.

The Proposal identifies potential benefits of a privately managed Zoo. A Best Case financial model projects that a City operating subsidy would be not be required by 2018, and a Base Case model projects a reduction in the City's operating subsidy to $170 thousand by 2022. It must be noted that these projections rely on an assumption that the Zoo can generate significant additional revenues. City staff note that if these additional revenues are not realized it would present a considerable risk to the projected financial model. Under the Proposal, the City would retain ownership of all facilities and contribute $6 million annually on an ongoing basis while ownership of the animals would be transferred to the Zoo.

The Proposal also recommends the creation of a new board structure of up to thirty members to engage in governance activities, with expanded emphasis on fundraising, sponsorship, partnerships and public outreach. The new board would include a minimum of three members of City Council and one City staff ex-officio position.

City staff have reviewed the Proposal and have identified a number of potential risks to the City. Although the City's subsidy may be reduced, staff note that there is no assurance of financial sustainability for the Zoo within a ten year timeframe. Zoo and City staff analysis indicates that zoos restructured to become more independent of government control still require municipal and other government funding. Other potential risks include the Zoo's ability to maintain City assets, the ability to secure commercial financing, and the protection of City interests in investment policies and activities. In addition, the City would remain the owner of the Zoo's assets and provide an ongoing capital subsidy. In staff's view, the potential risks of a privately managed zoo, with considerable ongoing financial liability to the City, outweigh the potential financial benefits.

Further, staff advise that the proposed governance structure does not adequately reflect the degree of participation and access for members of City Council necessary to oversee the significant public funds provided to the Toronto Zoo by the City of Toronto.

As a result, this report recommends that the Toronto Zoo be retained as a City Board and agency as it is unlikely the Toronto Zoo will become financially independent of the City. Moreover, given that the City will be providing an ongoing and significant operating and capital subsidy to the Zoo, the proposed separation from the City without adequate City Council representation on a new board cannot be supported.

Partnership with other governments

This report discusses the Toronto Zoo within a regional context and recommends the Province of Ontario take a strong role in the future of the Zoo, and to consult with other GTA municipalities and learning and research institutions to inform the future vision of the Toronto Zoo. The importance of the Rouge National Urban Park is emphasized as a major opportunity and catalyst to increasing the Toronto Zoo's focus on wildlife and habitat conservation, environmental sustainability and outdoor recreation. This report requests that Parks Canada collaborate and enter into an agreement with the City of Toronto, the Toronto Zoo and the Toronto and Region Conservation Authority (TRCA) on potential shared programming and regional attraction planning within the future vision of the Rouge National Urban Park, and the Government of Canada to contribute funding towards shared capital infrastructure.

This report also recommends that the Tripartite Agreement with the TRCA, which is the licence for use of Zoo lands, be revised to support the ongoing and future needs of the Zoo.

2014 Zoo Strategic Plan, Facility Master Plan and new charitable foundation

The Proposal outlines many positive and innovative approaches including plans for increased revenue and attendance, improved stakeholder and community involvement, fundraising opportunities, and furthering conservation and environmental objectives. Staff advise that these initiatives can be advanced under the current City agency structure. This report recommends that the Toronto Zoo Board's Strategic Plan, which is scheduled for completion in 2014, build on these approaches and detail future programs and capital requirements, including a Facility Master Plan. This report also recommends that the Zoo Board establish a separate and independent charitable foundation for fundraising, sponsorship, donation and partnership purposes in alignment with its Strategic Plan.

Zoo management and operations, and City-Zoo relationship framework

It is important to note that this report recommends that Council affirm that future decisions regarding the acquisition, disposition and overall management of the Zoo's animal and plant collection is the responsibility of the Toronto Zoo Board of Management.

Finally, the Proposal identifies a desire to broaden Zoo Board composition to include stakeholder groups and high profile citizens to improve community and stakeholder engagement. This report recommends that the City Manager review the existing City agency governance structure and prepare a Relationship Framework, in consultation with the Chief Executive Officer of the Toronto Zoo, for Council approval, incorporating the outcomes of discussions with the Province of Ontario, the Government of Canada, consultations with key stakeholders, and the 2014 Zoo Strategic Plan.