While the Colorado Springs Philharmonic celebrates Josep Caballe-Domenech's debut as new music director this past weekend, its Denver counterpart, the Colorado Symphony, finds itself in a considerably less enviable position.
The Colorado Symphony Association (CSA), which prides itself on having the state's only full-time professional orchestra, sent out a statement Wednesday evening offering "clarity and corrections" to media reports about its financial woes. At the same time, it noted that closed-door negotiations with the musicians union over proposed salary cuts will continue through Friday.
While the statement doesn't refer to a specific media outlet, it appears to be in response to a recent Denver Post story about an internal document warning that the symphony could disappear within the next two years.
The release, which you can read in its entirety below, takes particular issue with a reported $1.2 million cash shortfall, which it says is ameliorated by a "muti-year pledge campaign" that, in accordance with generally accepted accounting principles, must be accounted for in the year of the initial pledge. The Symphony statement also objects to the Post's characterization of its "Sustainability Committee" as an "emergency committee," a semantic issue that seems largely beside the point in the face of much larger issues.
The most pressing of those issues, as evidence by current negotiations, is the orchestra's plan to increase performance time while enacting a 14% pay cut for musicians whose base salaries have already been reduced to less than half of what their counterparts in Dallas earn.
Interestingly, the statement does not appear to take issue with those figures.
FOR IMMEDIATE RELEASE
COLORADO SYMPHONY ANNOUNCES THAT NEGOTIATIONS CONTINUE
DENVER — September 21, 2011 — The Colorado Symphony Association (CSA) announces that negotiations with the musician’s union are scheduled to continue until Friday, September 23.
The Colorado Symphony is negotiating in good faith, and will do so in private, behind closed doors and will appropriately not publicly discuss details of those negotiations.
What the CSA can do at this time is to provide some clarity and corrections to the figures printed recently in the media.
The Colorado Symphony’s preliminary statements for the fiscal year ending June 30, 2011 show a $52,000 surplus. Therefore, the Colorado Symphony has neither a deficit, nor an accumulated debt.
The Colorado Symphony does have a cash shortfall of approximately $1.2M from the fiscal year ended June 30, 2011 (FY11) which is a serious financial and operational challenge that the organization must overcome to complete the season as scheduled. Even with a balanced budget for FY12, the organization has forecast cash shortfalls due to normal operations by mid-November without extraordinary fundraising necessary to bridge the need to fund operations with cash.
The reason that these facts are concurrently factual is due to: 1) a very successful multi-year pledge campaign which, according to GAAP, must be accounted for in the year pledged; 2) shortfall in budgeted cash donations for FY11, and 3) a 2% over-run in expenses including two weeks of furlough give-backs to the musicians of the orchestra.
The assembly of the 11-member Sustainability Committee which included three Board of Trustee members, three musicians from the orchestra, three community members, the Board Chair and the CEO of the Colorado Symphony, should not be characterized as an emergency committee. The committee was established by the Board of Trustees many months prior in September of 2010, and was discussed as early as June of 2010 to explore long-term solutions to ongoing industry challenges. The committee actively functioned from April through July 2011.
After a very difficult and lengthy budgeting process with administrative staff and several rounds of detailed vetting with the Board Finance Committee containing several musician representatives from the orchestra, a balanced budget for FY12 was prepared for approval which contains expense reductions in all operational areas as well as significant increases in earned revenues amounting to an approximate net positive change of $2M prior to asking for changes to the existing musician’s contract. The fixed costs in the CSA’s annual budget comprise nearly 70% of total expenses, the largest component of which is artistic staff salaries (the musicians of the orchestra). The Board of Trustees have prioritized their work around implementing a balanced and an approved FY12 operating budget and establishing an environment of donor confidence which will assist with advancing major gifts to help solve cash flow issues.
The Colorado Symphony Association (CSA) announces that negotiations with the musician’s union are scheduled to continue until Friday, September 23.