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December 21, 2007

What $3 million deficit

John Stoehr

The lock-out continues in Jax. The musicians and management for the Jacksonville Symphony Orchestra made some progress last week in negotiations. Both sides made concessions, but nothing was set in stone. The administration and board of directors said they could not reconvene until the first half of January.

Meanwhile, because terms for a new labor contract had not been finalized, the administration and board of directors told musicians they would continue with plans to cut off health care coverage by Dec. 31.

Yeah, you're right. Seems petty. That's exactly what it looks like.

Why get so close to an agreement just to put it off till January? And why cut off musician's healthcare when it's in the administration's power to avoid that? This is a huge black eye for Jim Van Vleck's board of directors and Alan Hopper's administration. It's Christmas, for Christ's sake!

As I noted in a post last week, there are big-time failures of leadership in Jacksonville.

It's clear to me that Hopper and Van Vleck are passing the buck. This is evidenced by Van Vleck's letter to the mayor, John Peyton, explaining the board's position. But the mayor isn't too far behind. After Van Vleck sent his letter, it was reported in the Jacksonville Daily Record that Peyton would step aside.

But the mayor does so at his own risk. Hopper and Van Vleck have said numerous times there is a $3 million deficit. In order to keep the enterprise going, according to Van Vleck, the musicians need to take the pay cut. He keeps saying this even though budgets are the concern of boards, not musicians. If an orchestra doesn't have enough money, the board needs to trim expenses and raise money, not just trim expenses.

So they say it's $3 million. Fine. Show me.

If it's really that bad, that figure -- $3 million -- should be reflected in the Federal tax forms submitted to the Internal Revenue Service every year by nonprofit organizations, right? That would be the legal thing to do, right?

Yet, when one looks at the form for 2006, the most recent form available, (they are called Form 990s and they are used by all 501(c)(3) nonprofits, like the Jacksonville Symphony Orchestra, and they can be found by using websites like Guidestar), one does not see the deficit.

In fact, expenses and revenue for that fiscal year are about equal.

And total assets are worth more than $11.6 million. Where's the problem?

I'm not the only one to notice this.

Bill Eddins, music director for the Edmonton Symphony Orchestra, in Alberta, Canada, wrote about his experience trying out for a position with the Jacksonville Symphony some years ago. In that post, he points out that the $3 million deficit is a figure that cannot be trusted:

. . . there seems to be a $3 million dollar deviation in the budget between the numbers that the Board is presenting and what everyone else is finding. This smacks of the gerrymandering that goes on in our federal government. The Feds can get away with it. The government can just print money or pass the buck to future generations . . . But because we live in the non-profit world an orchestra can't get away with this. You simply cannot cook the books. An independent audit of the finances of the Jacksonville Symphony would seem to be an absolute necessity at this point. At this moment none of the numbers coming out of this mess can be trusted.

Furthermore, when I called Leonard Leibowitz, the attorney representing the musicians in a formal complaint with the National Labor Relations Board that the lock-out is illegal, he said that he didn't see the deficit in question either.

"They are trying to establish that the orchestra is poor, so when it was time to negotiate with the musicians, they'd be justified in asking the union for money," Leibowitz told me on Dec. 3.

If Hopper and Van Vleck hope to have credibility, they need to show the paperwork. Better yet, as Eddins recommends, an independent audit of the orchestra's bookkeeping. Jacksonville's honorable mayor, John Peyton, has evidently decided to stay quiet on this issue after reading Van Vleck's letter.

But that decision was made on trust and the evident thus far doesn't indicate much reason for that.

Cross-posted from Charleston City Paper's Unscripted.

Posted by John Stoehr at December 21, 2007 10:22 AM