Launched in 2014 by journalist Sean Baker, Med City Beat is an independent news source covering government, business and culture in Rochester, Minnesota.

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Rochester Art Center interim director: 'There is a pathway forward'

Facing heavy scrutiny over its financial viability, leaders of the Rochester Art Center sought to reassure members Wednesday evening that it has a plan to balance its budget.
“There is a pathway forward for the Rochester Art Center,” interim director Lee Koch told a room of more than 100 supporters gathered for the organization’s annual member meeting. 
Koch, who took over as interim director earlier this year following the loss of former director Megan Johnston, said the plans going forward would “not be without pain or trouble,” a reference to the five employees who were let go earlier this month.

"It has been tough around here," said Koch. "The changes we made were not ones we wanted to make, but they had to be made. We did the best we could with the budget we were handed."

The art center's financial troubles and staffing issues have been well-documented in recent months. According to a financial assessment presented at Wednesday's meeting, the organization's annual deficit nearly tripled from 2013 (-$48,765) to 2015 (-$140,208). Limited information was available for 2016.

“Our historical losses have really undermined the organization’s ability to operate,” said Koch. She added, "Unless we balance the budget, or come close, we will lose funder confidence.”

Diane Lund, the outside accountant who conducted the assessment, said while running a deficit for a few years is typically not an issue, the art center has reached a point that it can longer sustain deficit spending. She offered a series of recommendations, such as implementing project-based budgeting and providing the board with more frequent and meaningful financial reports.

“In terms of knowing in a timely basis what is affordable ... and having the ability to react a little sooner, is probably going to be helpful," Lund told members.

The organization offered projections that showed surpluses of $50,400 and $131,807 over the next two years. The outlook was based on the city chipping in $375,000 in 2017 and $325,000 in 2018. The center hopes to create a reserve fund by 2018.

But even as the center begins to shore up its financial situation, concerns linger about its ability to replace the energy and community engagement lost in the recent staffing cuts. 

As one attendee said, the decision to cut popular staff was a "real punch in the gut for the community."

You can view audits from '14 and '15 on the art center's website.

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