Semi-Annual Report		Print This Page Email This Page

Semi-Annual Report of the Scottsdale Cultural Council

May 2, 2006

Good afternoon, Mayor and members of City Council. I am Frank Jacobson, President and CEO of the Scottsdale Cultural Council.  It’s my great pleasure to be with you today to share with you our organization’s semi-annual report.

The Scottsdale Cultural Council is the non-profit organization that administers the arts and cultural affairs of the City of Scottsdale.  We manage the Scottsdale Center for the Performing Arts, the Scottsdale Museum of Contemporary Art and the Scottsdale Public Art Program under a master agreement with the City.

Our organization’s mission is: 360º Arts: Create diverse arts experiences that engage the community by:

• Encouraging the active participation and cooperation of government, business, education, and the private sector;
• Providing quality management, fundraising, and financial services to our operating divisions and other arts organizations desiring our services; and by
• Developing new and exciting cultural initiatives.

Our vision is bold but achievable:

• To become the premier multi-arts organization in the state of Arizona;
• To ensure innovation and leadership in the arts; and,
• To nurture a strong, vibrant, and vital arts community where people desire to live, work and visit.

For the next few minutes, I’d like to share how we plan to achieve our mission and vision.  The key to our success is driven by our strategic plan. 

We have four strategic priorities:

                         1.  Assure the relevance, diversity and leadership of arts programming in our  

                              community.               

                         2.  Achieve a high level of financial strength and stability while encouraging and

                              managing growth of the organization.

                         3.  Consider new opportunities to advance Scottsdale’s capacity as an arts and cultural 

                              hub with regional and national recognition; and,

                         4.  Facilitate a cohesive corporate structure with shared services in executive

                              management, finance, administration and facilities.

Reorganization

Last year, we reorganized our governance structure and created subsidiary operating division boards of directors to help us achieve these strategic priorities.   The operating divisions are: the Scottsdale Center for the Performing Arts, the Scottsdale Museum of Contemporary Art and the Scottsdale Public Art Program. 

While we have empowered our operating divisions and ensured responsible leadership, we have not lost sight of the benefits of a cohesive corporate structure.

The reorganization’s results have been positive.  In just one year, we have:

• Fostered more volunteer leadership;
• Focused our board of trustees on the community’s changing needs;  and,
• Increased the number of major donors to both the Center for the Performing Arts and SMoCA.

Budget

Our revenue is derived from a combination of private and public funding sources:

• The city contract – approximately 35% of our FY07 budget;
• Earned revenue, such as ticket sales – approximately 45%
• And donations, grants and sponsorships from fundraising – approximately 20%

The FY 07 draft budget approved last week by our Board of Trustees is $12.2 million, similar in size to this year.  However, it is based on new financial policies recently adopted by the Trustees.  This budget is year one of a three-year path to reduce personnel and administrative costs and to establish greater net assets to:  

• Increase our rainy day fund to 10% of our operating budget;
• Adequately fund critical capital replacement;
• Fund Plant Reserves; and,  
• Provide artistic reserves for the Center and SMoCA.

To achieve these numbers, we had to cut expenses, however the Trustees’ policy made it clear there should be no cuts to programs and staffing should reflect re-alignment of divisions based on size and growth. 

Out of a staff complement of approximately 100 FTEs, we will be reducing this year’s budgeted workforce by about 10%.  More than half these positions are either currently vacant or will be cut by attrition of hourly employees.

We are also engaged in a re-examination of our development program to establish a new plan to substantially increase contributed revenue over the next three years. 

The FY 07 budget includes specific new funding requests we have submitted to you totaling $538,000.  These requests went through an extensive vetting process by the operating division boards, the Cultural Council Finance Committee and the Board of Trustees, who made the final decisions on the requests to submit to the City.

We strongly believe that these additional investments, coupled with our own internal improvements, will help assure the relevance, diversity and leadership of arts programming in our community. 

Among our 2007 capital replacement and safety/security needs, we are requesting:

• Electrical and stage rigging repair for the nearly 31 year-old Piper Theater ($60,000);
• Replacement of out-dated security system components ($17,725); and
• Replacement of SMoCA’s humidification system to maintain museum-level climate control ($42,000).

Among program initiatives, we are requesting:

• Support for Theater 4301 to continue live performances ($250,000).  While the Theater remains dedicated to activating downtown Scottsdale and providing quality live performances, we have found that it cannot thrive on ticket revenue alone. 
• Support for SMoCA’s Collection Preservation and Conservation Assessment ($78,200). When the Museum Collection was separated from the Public Art and municipal collections two years ago, the Museum assumed this budget responsibility without a commensurate source of City funding to preserve what is still a collection owned by the City.
• And, lastly, funds to conduct a Community Cultural Assessment to better gauge ways to attract future audiences and learn what kinds of programs and venues will be of interest to the community ($90,000).  I will discuss the Cultural Assessment in greater detail shortly.

Public Art Audit

As part of our mission and vision, the Cultural Council is committed to assuring the quality and transparency of our programs and operations.  Therefore, in response to the City’s recent audit of the Public Art Program, we have already implemented several of the recommendations to ensure an even greater level of detail and transparency. 

• We have revised our policies on travel and entertainment expenses;
• We are requiring more documentation of expenses;
• We have hired a new controller with internal audit experience and a new Chief Financial Officer who holds an MBA, MPA and is also a CPA with depth of experience in nonprofit financial management;
• And, the Joint Task Force for the Arts comprised of Council members Ecton, Drake and McCullagh and Trustees Hayslip, Roman and Bradley is regularly meeting to address revisions to the Public Art Ordinances.

Scottsdale Center for the Performing Arts Renovation

After months of discussion regarding seat-expansion to the Virginia G. Piper Theater, the Trustees and

the SCPA Board of Directors requested the city hire a theater consultant to help us assess what overall improvements should be made to the theater to assure it remains a “state-of-the-art venue.”

City Manager Jan Dolan wisely suggested taking a step back and recruit the services of a facility program manager along with the theater consultant to help us reassess the entire renovation of the Scottsdale Center for the Performing Arts.

This review should provide us with a fresh look to ensure the Center is competitive and able to handle the diversity of performances and educational programs for the next 30 years.

A contract for that Program Manager and project team should be ready for your consideration in June. 

Western Museum

Several weeks ago you were presented with the consultant study that offered an exciting and new concept of a western museum.  We failed to report to you at that time that all the funds were raised from the private sector to match the city’s $60,000 for that study.  I want to acknowledge and thank Chairman Jim Bruner and the committee for their hard work and commitment.

The committee has since met and discussed moving forward with the museum’s development.  They have raised nearly $60,000 more for the next phase which has a goal of $350,000.  I will be back to report to you on the further developments of this project.

After looking at the new Tourism Development Strategic Plan, I think the concept of the western museum will provide Scottsdale with just the kind of destination attraction described in the principal strategies.

Cultural Assessment

Though the Cultural Council’s reach and the audiences for the Center for the Performing Arts and SMoCA go beyond Scottsdale’s city limits, the Cultural Council is interested in an analysis and assessment of Scottsdale residents and visitors. 

Even with the financial success of programs and our ability to maintain artistic quality, participation by ticket buyers and membership have remained relatively flat while population growth in the community and surrounding Phoenix metropolitan area have increased.  

Clearly, factors of changing demographics, competition for leisure time and the growth of high-profile cultural offerings in neighboring communities influence these trends.

In response, a volunteer task force with expertise in the areas of market and program research, policy studies, tourism and the arts has assisted the Cultural Council in drafting a scope of work to engage a consulting team to prepare a Community Cultural Assessment and Analysis of Scottsdale’s residents and visitors.

This assessment will seek to answer two critical questions vital to our arts growth: how the current arts and cultural programs serve residents and what may be needed to better serve our community and visitors in the future.

We will use the data to shape strategic planning to improve programs and to increase visitor participation and financial support.  We strongly believe this research is a smart investment in our future.

Closing

In closing, I thank you for your attention and the support you’ve given to the arts in Scottsdale.  I hope you have a better understanding of the Cultural Council and our bold plans to assure that the arts remain a vital part of our community. 

I would like to also thank our audiences, donors, volunteers, board members and staff for their tremendous support and hard work.Without this help and support, we could not have made the Cultural Council and its operating divisions the huge success they’ve become.  We’re committed to keeping up the momentum.

I am happy to answer any questions you might have.