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11/26/2007
The Fox Cities PAC... and the rest of the story
What did we ever do without it? It’s a good question – downtown Appleton and all of the Fox Cities are reaping the benefit of the prestige of the beautiful Performing Arts Center, the dollars it brings to downtown Appleton, especially on a “Broadway night,” and of course, the inherent cultural benefits of the diversity of arts programming added to the rich palette already available in the Fox Cities.
The local paper ran an article touting the benefits of the PAC – and only touched on its tenuous financial position. So a few more numbers appear below.
Contributions
Of the $2.28 million (M) listed as cash contributions in the PAC’s annual tax return (Form 990), $536,695 is room tax revenue. Funny that the officers have complained to me they must operate with “no government support.” So, 23.5% of PAC revenues are taxes. I’d say that’s hefty government support.
Of the remaining $1.76M, over 50% comes from 11 donors, including the Bergstrom Corporation, Thrivent Financial for Lutherans and The Boldt Company.
Deficit getting better – “only” $525,000 this year
Per the local paper: For the year ended June 30, 2006, the PAC operated with roughly a $250,000 deficit.
The actual: The PAC’s tax return shows cash income of $6,441,506 and expenses, net of depreciation, of $6,718,956.
Of the $6.4M in revenue, at least $248,000 is revenue intended to fund the endowment, i.e., not available to be spent. That leaves an operating deficit of over $525,000.
Calculating that deficit of $525,000 assumes garnering every cent of interest earned on funds at the Community Foundation (probably a capital fund for paying off the mortgage and the PAC’s endowment fund - “Future Fund”) – interest that totaled $1,442,960 in 2006. This would assume a policy of pulling all interest earned out of the funds every year – which is not the policy of the Community Foundation – and is probably not the intended policy of the PAC.
The news article claims “Early deficits common among performing arts centers.” Not true. Yes, it’s common to see an operating deficit that requires funding by contributions. It’s “common” in a theatre the size of the PAC to see the need for $300,000 to $400,000 in contributions. It’s not common to see $1/2 million deficits over and above $1.77 million in donations.
Managing the ongoing deficit
Laura Braun, PAC VP, finance and operations, is quoted as saying the deficits are funded by money raised early on “for the startup of the organization.” Braun must have Broadway stars in her eyes; yes modest funds were raised for startup deficits, in anticipation of $300,000 to $500,000 annual deficits. Absolutely no plan anticipated $1 and $2 million deficits. It continues to be my understanding that this year’s deficit of at least $525,000 is again being financed primarily by borrowing from monies donors gave specifically to be used to pay the mortgage in future years.
Salary Watch
The PAC’s newly released Form 990 gives us updated information on salaries and benefits of top earners at the non-profit Performing Arts Center.
Year-ended June 30, 2006 - Susan Stockton, President: $262,000 (Salary, $175,000, deferred comp, $87,000).
- Laura Braun, VP, Finance: $108,768 (Salary, $90,640, deferred comp, $18,128).
- Maria Van Laanen, VP Communications: $108,768 (Salary, $90,640, deferred comp, $18,128).
Year-ended June 30, 2007 - Susan Stockton, President: $279,968 (Salary, $185,000, deferred comp, $94,968).
- Laura Braun, VP, Finance: $112,031 (Salary, $93,359, deferred comp, $18,672).
- Maria Van Laanen, VP Communications: $112,031 (Salary, $93,359, deferred comp, $18,672).
A 6.8% increase for Stockton, 3% increases for Braun and Van Laanen.
Braun has announced that the PAC was on the “leading edge,” moving forward on a “financial accountability plan.” I wouldn’t call it “leading edge,” but per this “accountability plan,” the 2006 Tax Report and three years of PAC Annual Reports are up on the PAC web site for all to see.
COMMENTS
Thanks Jo, for giving us "The rest of the story."
Maybe you can tell us why, yes why, the P. C. didn't give us the other side of the coin?
Richard H. Griesser (Mon Nov 26 08:26:07 2007)
The room tax must be being paid for the private events that they do. I don't know all the ins and outs of how a non profit operates where some activity is taxable and some is not.
If, as a non profit (but not public) facility supported by the patrons, the theater is running shows at whatever kind of deficit that fluctuates from year to year for their amusement, I have no qualms.
If the patronage wants to pay high prices for 'performing arts' like jugglers, redneck comedians, stale Broadway remakes and Disney roadshows it says more about the audience than it does about the management.
But think of this: In the current year there's a Broadway show which is coming off of run in March, 2008. It's called Spring Awakening: a rock musical based on a 19th Century play. The musical was awarded 8 Tonys this year (2007.) Susan Stockton sits on the board that votes the Tonys and her 40 room day stay in New York City annually is part of her job.
Will we see Spring Awakening if it goes on tour? Or will more properties like "High School Musical" and "My Fair lady" continue to be the sorts of things that Clear Channel allows to be part of its distribution package? My understanding is that while Stockton has some status with the Tonys, Clear Channel is the provider of content. Hence the redneck
comedians, jugglers etc. style of entertainment foisted on the locals as 'performing arts.'
In the end, the patrons get what they deserve and deserve what they get.
The room tax is paid by people who stay in hotels and motels in the Fox Valley. I believe 3% of the 6% tax paid in Appleton hotels (1/2 of it) goes to the PAC to pay off a below-market interest rate loan that helped to pay for the building. JE
Lon Ponschock (Mon Nov 26 13:09:39 2007)
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