Overture

I’ve been on a quest to find information on the Overture, so far, I’ve been able to get this . . . it will cost the city up to $50M over the next 15 years. I’m hoping I made an adding mistake. For more info, here’s my radio show on the topic on A Public Affair on WORT. Also, here’s my previous post on how cranky the council was about this.

MCAD AUDIT
(MCAD is the group that runs the Overture on a daily basis. There is a good description of what they do on pages i. – v. There is a organizational chart for the staff on page vi.)

With a very quick review, points of interest include:
– Of their $201M in assets, they have $27M in liabilities, so $174M in assets. But, $172M in capital assets and $2.5M is restricted for debt service, leaving them $655,000 in the hole.
– Their income for the 6 month period was $6.7
– Their expense for the 6 month period were $7.9
– Revenues come from:
– – 46% revenues from shows (Overture Presents)
– – 17% City of Madison
– – 11% Resident Companies
– – Other items on page x.
– Only 3% of revenue comes from Arts Endowment fund and 4% from 201 State St. group.
– They were under by $200,000 in their projections for revenues in all categories.
– 56% of their costs go to overhead
– Interest income was under by $124,000
– They have already laid off 16 members of the staff.
– They only expect 76% occupancy for their shows, but in 2008 it was only 67%
– Losing the Rep means they expect a 27% decrease in revenues from that income category of about $1M.
– In several catergories their expenses are over the budgeted amount by 20% or more

201 STATE AUDIT
– Wow, they really don’t raise much money to support the Overture, somehow I expected it to be more.

EXPECTED CAPITAL COSTS THROUGH 2025
Check out the costs that we will have to absorb to maintain the building. In 2013 they will need $3.5M to replace the carpeting. That’s coming up pretty soon. And another $1M in 2014. And later there are a few years where it will cost us $1M to do the necessary improvements to the building. See note below from the Mayor’s office. It’s unclear to me if the City also has to pay the maintenance costs on the page two of the spreadsheet. At the moment, the costs to maintain the building the city could be responsible for are:

Owner Major Capital Costs $14,275,000
Owner Annual Maintenance Costs $595,500
Operating Major Capital Costs $7,630,000
Operating Annual Maintenance Costs $3,185,000

In other words, $25.6M or more over 15 years, nearly the same as is currently owed in debt.

That, of course, doesn’t include the annual operating costs. Or about $1.6M per year. Or another $24M in the next 15 years.

BUGHER REPORT FROM 2008
I hope we get more than a brief 6 page report from the group this time around.

STILL WAITING FOR . . . .
Consultant reports on various models. They are going over them on Thursday, but they don’t seem to be linked to the agenda. Again, with the hiding of information.

Also, this is interesting spin from the Mayor’s office that came out yesterday . . . the document he is talking about is the one linked above as the 3rd document, with the capital costs. I can see that we won’t be responsible for all the costs, but the major costs are the owners responsibility.

From: Statz, Andrew
Sent: Monday, August 16, 2010 11:39 AM
To: ALL ALDERS
Cc: Carto, Thomas
Subject: Overture — starting point for long-term capital plan

Attached is a copy of two spreadsheets relating to the long-term capital maintenance plan for the Overture Center. These will be the starting point for the workgroup responsible for the Overture facility study and review of long-term plans as requested by CCOC.

One of these draft schedules outlines what may be the responsibility of a new non-profit operator. The other outlines what may be the responsibility of the City as owner of the facility.

To propose which entity is responsible for which projects, we have discussed looking at these through a filter of “what makes the building a building” versus “what makes the building a performance space”. So, performance related features and systems would be the responsibility of the operator. More general facilities related features and systems would be the responsibility of the owner.

These two draft schedules are the foundation of our workgroup’s efforts. These two drafts came from Overture staff. None of the projects on the list have yet been the subject of negotiation.

If you have any questions, please let me know.

Andrew J. Statz
Fiscal Efficiency Auditor
Office of Mayor Dave Cieslewicz
608-266-4611

WRAP UP
Here’s a thought, if we can give, or at least consider giving $50M in 15 years to the Overture, how about just $5M for the Affordable Housing Trust Fund? Arts are important, but is affordable housing and maybe there are other ways to spend that money to help the economy for efficiently and better serve the community.