Locked out Minnesota Orchestra musicians say a Star Tribune report supports their argument for an independent financial analysis of the orchestra.
The report contends the orchestra drew deeply from its endowment in 2009 and 2010 to cover growing deficits at a time when it was requesting public money for an Orchestra Hall renovation. According to the report, it later drew less money from investments and declared a 2-point-nine million dollar deficit when it was demanding dramatic pay reductions from its musicians.
The report, based on hundreds of pages of financial information and orchestra board meeting minutes, raises questions as to whether the orchestra covered deficits with money from its endowment to both win public funding for an Orchestra Hall lobby renovation and later demand deep salary reductions from its players.
Chair of the musicians' negotiating committee Tim Zavadil said the report illustrates the need for an independent financial analysis of the orchestra.
"In order for us to get to the bottom of where the orchestra's finances are, we have to have an independent third party come in here, someone that is trusted by both sides that can verify where the actual true financial position is," said Zavadil.
According to Minnesota Orchestra President Michael Henson the orchestra was responding to one of the worst recessions in American history and its decisions were geared toward inspiring confidence and preparing the orchestra for a new financial future.
"All of us, whether you're running a for profit, or not-for-profit, have had to manage through tumultuous times, and find your own solutions as to how to maintain confidence, and at the same time facilitate change in all aspects of your organization, or in this case, the orchestra."
The Minnesota Orchestra says it was trying to cope with loss of revenue when it borrowed from endowments and tried to cut musicians' pay. The musicians have been locked out since October 1rst because of a contract dispute with the orchestra.
Why has it taken so long for a 3rd to get involved in the process. Finances have been the issue from the beginning. Why would the players trust the management without question? Come on Musicians Union Rep. Let's get your head in the game. Management does not play fair.
It has "taken so long" because the Orchestra refuses to have a third party become involved. The musicians well know that management isn't playing fair, but what is your solution to that?
The renovation is necessary. The musicians would complain if forced to play in a shack. Regardless of where the money came and went, the expenses are there, and need to be handled.
A 3rd party already looks at the MN Orch's finances every year. It's called an audit, and it's required for any non-profit of this size.
JB: It's not an audit that's needed; it's an independent analysis.
The question is not, say, whether somebody is embezzling money from the orchestra or failing to file correctly with the IRS.
The questions are things like: What operating expenses can the orchestra truly afford? Are current deficits structural? Cyclical and tied to the recession? Discretionary? How long would the organization last at current salary levels?
These areal questions your standard audit doesn't answer.