by Allyson Snelling

The Town of Gravenhurst may continue to subsidize the future operations of the Muskoka Boat & Heritage Centre at Muskoka Wharf after approving a four-year management agreement, including an immediate contribution of $65,000 to cover operating costs through the winter.

Town council approved the agreement between the municipality and the Muskoka Steamship and Historical Society (HISSO) to fund and manage the operations of the heritage centre without discussion last Tuesday.

“It’s an agreement to operate the heritage centre,” said John Miller, general manager of HISSO and The Real Muskoka Experience, which operates the two steamships in Gravenhurst. “We as an organization have the best resources and strengths to do that (for the municipality), as opposed to an outside organization or the town operating it.”

Last year, council approved a “servicing fee” of $130,000 in the 2007 budget that was used by HISSO to help finance the operations of the heritage centre. The society requested the fee last year based on predictions that the museum would require operations subsidies until attendance exceeds 50,000 visitors per year. Total visitation for 2007 was 23,000 while paid admissions were estimated at just over 17,000, the centre’s operations manager Ann Curley reported.

Gravenhurst chief administrative officer Cindy Maher explained future servicing fees for the management and operation of the heritage centre, including a fee for 2008, will depend on annual budget deliberations of town council and satisfactory annual financial statements from HISSO pertaining to the centre.

However the agreement, which was discussed by council several times in closed session, states that HISSO will be paid 50 per cent of the prior year’s contract on an annual basis by Jan. 15.

Miller said while the society’s 2007 financial statements are not yet finalized, he estimated last year the society was close to breaking even after receiving sponsorships, donations, the $130,000 contribution from the town and a provincial operating grant of $25,000.

The agreement requires HISSO to provide detailed financial statements to the town on an annual basis within 90 days of its fiscal year end.

He said it is recognized that operating a museum is not a profitable venture in its start-up years, and there are large costs associated with winter operations when very few people are coming through the door.

“We don’t have the cash flow to keep the centre open during those times, so we asked for an amount prior to negotiating the 2008 contract and servicing fee that will take place in the next month or two,” said Miller. “We cannot assume financial liability for the centre until such time as we start turning a profit.”

The agreement calls on the society to submit annual business plans to the town prior to Jan. 5 of each year, which will be ratified annually by council by the end of March. Maher said the business plan is expected from HISSO by the end of the week. It will be used in council’s 2008 budget deliberations.

The business plan is to set out the operational and capital requirements including exhibit renewal, operating budget, projected revenue expenses and surplus/deficit. Subsequent payments will be made upon approval of the town budget and the society’s budget, the agreement states, taking into consideration HISSO’s projections for each year.

Any net income over the sum paid by the town to the society annually will be shared equally between the two parties.

“This money goes straight into the operation of the centre, not to HISSO,” Miller emphasized. “HISSO is doing this as a service to the community because we believe having the centre open with activities and programming enhances the community. Our volunteers work hard year-round to maintain this community-based facility and we feel it’s of great benefit to have it viable and active on a 12-month basis.”

A separate four-year lease between the town and HISSO for the building itself was also approved by council requiring HISSO to pay an annual rent of $5, and provide liability insurance coverage of $5 million.