Revised Alternate, Alternate on Overture

I really don’t know what to call these things anymore, but this is the Schmidt/Bidar-Sielaff and now Rummel proposal for tonight, revised. Actually, they’re calling it the “Public Authority” Model or the “MCAD Reboot”.

NOVEMBER 30, 2010
ATLERNATE – 2011/2012 Transition Period: A Public Authority Model – MCAD Owner and Operator
Title: Establishing the Madison Cultural Arts District (MCAD) as the owner and operator of the Overture Center as of January 1, 2012; Establishing a transition 2011-12 transition period; Establishing a City commitment to future grants to MCAD subject to annual appropriation, and setting terms and conditions for such grants; Establishing a Madison Commission on Overture

Sponsors: Alder Schmidt, Alder Bidar-Sielaff and Alder Rummel

WHEREAS, an interest in the long-term success of the Overture Center is shared by everyone in our community, and,

WHEREAS, an agreement was reached between the Overture Center’s lenders and the Overture Parties (not including the City of Madison) to resolve the Center’s remaining debt, and,

WHEREAS, under that agreement, the 201 State Foundation or a new entity would become the operator of the Overture Center facility upon payment of approximately $15 million in gifted funds to the Overture lenders before December 30, 2010, and the City has been informed by the Overture Parties that the debt will be paid by the donors only if the City accepts ownership of the building for $1, and,

WHEREAS, the Madison Cultural Arts District (MCAD) was created under the authority of Wis Stats Sec. 229.842(1) as a quasi-governmental body to ensure public accountability over and public access to the Overture Center, and to develop Block 65 into a world-class cultural arts facility while limiting taxpayer contributions, and,

WHEREAS, no fewer than three currently operating 501 c.3 organizations (201 State Foundation, Overture Development Corporation, and the Overture Foundation) currently have an interest in Overture, creating a complex and unsustainable governance and fundraising structure, and,

WHEREAS, a staffing study recently conducted by the City of Madison showed that the costs of carrying municipal, unionized employees was not a primary factor in the poor financial performance of the Overture Center, as based on an analysis of the alternative provided by the AMS Focus Model, despite claims to the contrary, and,

WHEREAS, the timelines, deadlines, and terms under which Overture decisions have been made in the last ten years have not allowed for an open dialogue and engagement of all stakeholders in order to make Overture an ongoing, sustainable success, and,

WHEREAS, it is critical that Overture have a sustainable, resilient, open, and inclusive plan in place for its future operations,

NOW, THEREFORE BE IT RESOLVED, that the City of Madison appreciates the donors for their generosity in supporting Overture as a vital community asset and for offering to resolve the debt and respectfully requests that they act on their generous offer to settle the Overture’s existing debt, and,

BE IT FURTHER RESOLVED, that the City acknowledges the ownership change of the facility, and, contingent upon the debt on the Overture Facility being fully paid, waives and releases its option to purchase the facility for $1, and,

BE IT FURTHER RESOLVED, that the City will provide support to MCAD for Overture in the form of a grant, subject to annual review and appropriation, starting at $2.5 Million (Two Million Five Hundred Thousand Dollars) per year in 2012 and adjusted by the change in Consumer Price Index methodology in the State’s Expenditure Restraint Program each year thereafter, and,

BE IT FURTHER RESOLVED, that the City will provide its ongoing support to MCAD only if the following conditions are met:

1. MCAD becomes the owner-operator of the Overture Center by purchasing the building for $1 from ODC, free and clear of all existing liens.

2. MCAD board members resign effective February 1, 2011, and are subject to reappointment, with no guarantee of reappointment.

3. Current operations with MCAD shall remain the same until December 31, 2012, unless otherwise terminated or amended by agreement of both parties. City employees working at the Overture Center shall remain City employees until the earlier of December 31, 2012 or the effective date of a statutory change that will allow MCAD employees to be enrolled in the State of Wisconsin Retirement System. A final decision of the employee model shall be taken by December 31, 2011.

4. The MCAD Board shall have oversight over Overture’s budget, and budget decisions shall not be made during closed sessions, except as required by state statute.

5. A Development Committee is established by MCAD and its relationship to other Overture fundraising entities such as 201 State is clearly defined.

6. MCAD pays to the City an annual payment in lieu of taxes (PILOT), starting at $500,000 per year in 2012 and adjusted annually by the same method as the grant described above. In the event that the City grant falls short of the full amount as described above, MCAD may reduce the amount of the PILOT by an amount equivalent to the shortfall.

7. An annual audit is performed by an independent CPA selected by the City and conducted in accordance with GAAP, and paid for by MCAD.

8. MCAD commits to an annual plan with objectives with respect to fund-raising, paid attendance, non-paid or reduced price attendance, seats sold, community programs and program diversity.

9. MCAD provides an annual report is provided to the community comparing actual results of the objectives described in the annual plan and identifying causes of any failures to meet those objectives and strategies to meet those objectives in the future.

10. The Mayor shall appoint and the Council shall confirm by February 1, 2011, members of a Madison Overture Commission, which, shall be charged to work with a consultant to conduct a study and making a report on the future ownership, operation, staffing and financial support of the Overture Center. The report, which shall be completed by October 30, 2011, shall also address the potential for long-term private giving that will lead to a building endowment fund, an independent examination of the building and its financial needs, and an inventory of Madison’s artistic needs. The members of the Commission shall be composed of representatives from City government, MCAD Board, 201 State Foundation, Overture represented and non-represented staff, prospective donors, Overture resident companies, members of the arts community with no direct association with Overture, and citizens with no allegiance to any specific arts organization or Overture. The City will take appropriate action on the Commission’s report in the 2011 budget.

BE IT FINALLY RESOLVED, that the Mayor and city clerk are authorized to execute any and all documents with 201 State Foundation, Overture Development Corporation, and the Madison Cultural Arts District, all in a form approved by the city attorney, as shall be necessary to accomplish the purposes of this resolution.