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posted: 1/26/2013 8:00 AM

Elgin Symphony asks skeptical city council for money

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The Elgin Symphony Orchestra, already in arrears with its rent, is asking the city to restore its annual allocation, and to kick it up to $150,000 a year for the next three years.

The city council, which cut off its annual $90,000 allocation two years ago, was skeptical about relaunching it when the symphony has struggled with finances.

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ESO Interim CEO David Bearden asked the city for the money -- equal to the city's allocation in 2000-01 -- this week.

The symphony had financial troubles in the last few years and owes the city back rent for use of the Hemmens Cultural Center, Bearden acknowledged. He says ESO owes about $185,000; city officials put the figure at about $200,000.

Bearden said he wants to meet with the city staff to work out arrangements for repayment. The organization has a balanced budget this year and a viable business plan even without an allocation from the city, Bearden said.

But he added, "It makes it easier if we have support."

The ESO gives Elgin prestige by being one of its most important cultural organizations, and brings customers to downtown restaurants and businesses, Bearden argued.

Guidelines for the allocation could be established, such as semiannual progress meetings and even having one or more city representatives on the ESO board, Bearden suggested.

But city council members expressed concerns about the past financial management of ESO, which ran deficits of up to $700,000 in 2010-11 and 2011-12. ESO was able to keep up its cash flow by gradually spending down about $2 million in endowments raised in the early 2000s.

Councilwoman Tish Powell pointed out Elgin managed its financial struggles with two rounds of layoffs in the last five or so years as a result of the economic downturn. The ESO took action only last year.

Bearden said the ESO balanced its $2.2 million budget this fiscal year by cutting its staff from 12 to 6 people and by mandating furlough days for three months. A one-time estate gift of $600,000 also helped balance the books, he said.

"I'm just not comfortable with what I've seen in terms of financial management from the organization. You could find several donors that could come up with the $150,000 per year that you are asking the city," Powell said.

Councilman Robert Gilliam said he wants the ESO to pay back the city first, and then resume discussions about the allocation.

The city stopped its $90,000 or so annual allocation of Riverboat-generated funds to the symphony in 2011, when it announced that all nonprofits would have to apply to get grant money. That's also when ESO stopped paying rent for the Hemmens.

Councilman John Prigge, who pointed out the ESO is the largest debtor the city's ever had, asked Bearden why the payments stopped. Bearden, who took the post without pay in May, said he didn't know.

Prigge floated the idea of leasing the Hemmens operations to the ESO, which would then be in charge of booking all acts there. Bearden said he's open to the idea of a no-cost lease; Gilliam, however, pointed out the Hemmens loses money on a yearly basis.

"If we can't make it profitable, they can't," he said.

Councilman Richard Dunne also said he had concerns. "What collateral do you have to offer us?" he asked.

"There are no assets to this organization. The collateral is the promise, and you have to monitor what we're doing," Bearden responded.

The city provides rent-free space downtown for the ESO offices, an estimated value of about $25,000 yearly.

"Our goal is to cover our cost, not tack on additional costs," Councilwoman Anna Moeller said.

Mayor David Kaptain said he's been disappointed in the ESO.

"Anything we do to move forward, you guys have to be as crystal clear as you can be," he said. "It's been pretty murky."

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