I welcome the opportunity to respond to Paula and Cy DeCosse’s recent questions to Minnesota Orchestra board and management. As a member of the orchestra’s board — which bears a fiduciary responsibility to the organization — and as a personal donor to the orchestra, it is important to me that these issues are answered fully.
Why is management only now tackling the budget deficits that have been mounting for at least three years?
- Management did not wait until now to tackle this structural deficit problem. Management has been assessing the problem and its options continually since before the recession even hit.
- To understand how we’ve tackled the issue, it’s important to recognize that our organization has two primary cost structures: our administrative budgets and staffing costs, and our musicians’ costs.
- With regard to administrative budgets and staffing, our management made immediate and significant cutbacks in response to the recession. Orchestra staff took a wage freeze, salary reduction and had their pension contributions from the Minnesota Orchestral Association reduced by more than 40 percent — and the size of the staff has decreased by 20 percent since 2009. (We’ve done a very good job of managing these costs over the long term, too. Over the last decade, all costs in the organization — minus those of musician costs — have actually decreased by 6 percent.)
- With regard to our musicians, who are a unionized work force governed by a labor contract, we don’t have the flexibility to make immediate changes in response to the economy. The best we can do is request that our players consider midterm contract modifications, and this is exactly what we did in both 2009 and 2010. The musicians agreed to a one-year wage freeze in 2009, but they turned down our request for a 22 percent salary reduction in 2010. It was the musicians’ legal right to do so, but it has made the cliff we face today all the steeper. Indeed, the expiration of the musicians’ contract in October was our first real opportunity to address these challenges with musicians, and that is at the heart of our current contract negotiations.
If the orchestra is in a financial crisis, why did the management undertake a huge and costly building project?
- Our Building for the Future Campaign was launched in 2005 — before the recession and well before the last musicians’ contract was signed.
- The building project was smartly downsized, following the recession, from $95 million to $50 million. Our community has responded enthusiastically to it, understanding that a renovated Orchestra Hall is part of the solution to the financial issues the orchestra faces. This should be emphasized: Generating more incremental revenue from an expanded and improved hall is one of the primary revenue-generating initiatives in our strategic plan – and it should benefit musicians.
- It is important to note that there is a difference between one-time capital expenditures, which often attract donors for a variety of reasons, and ongoing expenditure commitments, like salaries and benefits. The vast majority of donations we received for the hall campaign would not have been contributed to the orchestra if there were not a building project to support.
Why was the mission statement changed?
Our mission statement was changed in our new strategic plan to signify a new emphasis around serving our community. This language change is important, not because the “orchestra” isn’t part of it, but because it communicates a pivotal shift in what we see as the role of symphony orchestras in the 21st century. A shift to a more community-minded and responsive organization is a positive and needed repositioning for our orchestra.
Where is the trust that is imperative to maintaining a great organization?
- Our Board of Directors is made up of 80 volunteers who support the Minnesota Orchestra with our time and personal donations to the Annual Fund, Symphony Ball and the Building for the Future campaign. Why would we want anything but the best for the organization?
- Our board negotiating committee trusted musicians enough to share exhaustive amounts of information with musicians in these negotiations in order to be transparent. This information includes our most recent audited financials; three years of monthly finance committee, board and executive committee minutes; detailed reports on all our fundraising activity; quarterly investment reports dating back three years; our investment policies and objectives; and a comprehensive actuarial report on our defined benefit plan.
- The information all portrays the same picture: The Minnesota Orchestra is doing an excellent job of raising money in a difficult environment – but it needs to realign its income and expenses in the aftermath of a major recession – exactly as many other organization’s have already done.
What kind of future are we building?
- We are building a future in which the Minnesota Orchestra plays a new role in its community, offering not only great performances onstage but also community outreach as a necessary part of the orchestral player’s job, rather than as an occasional extra;
- We are building a future in which a renovated Orchestra Hall draws new audiences to an art form in need of enlivening;
- We are building a future in which the orchestra responsibly spends each year the income that it generates and no more;
- We are building a future in which the orchestra focuses its fundraising on artistic initiatives rather than on bridging growing financial gaps each year.
- Most important, we are building a future in which an artistically and financially strong Minnesota Orchestra thrives for decades to come.
We are asking for our musicians’ partnership in building that future. The board knew these negotiations would be challenging, and we deliberately shared our contract proposal on the first day of negotiations back in April to allow ample time for discussion. Almost eight months later, we are still waiting for a counterproposal from our musicians. We believe the board and the community that supports the Minnesota Orchestra deserve that level of respect. It is only a counterproposal, and ensuing conversation, that will bring our orchestra back to the concert stage — where we all want it to be.
Jon Eisele is a member of the Minnesota Orchestra board of directors.
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