I wanted to take an opportunity to address recent reports on finances at The Centre In The Square and to clarify some facts.
The Centre has managed a precarious operating gap for almost a decade. In past years, the gap was managed through infrastructure grants, deferring maintenance and capital expenditures, summer layoffs and applying certain salaries and project costs to our reserves.
With the Board’s approval, decisions were made not to continue with these previous strategies, as they weren’t sustainable long-term. We believed the time had come to address a number of ongoing issues despite the level of discomfort which would result in the short-term.
In 2013, we invested heavily in the building and deferred maintenance. We covered losses from the previous 12-13 season, which were substantial in some cases, and we continued on with the launch of the strategic plan that included restructuring, improving our business operations, market research and launching new branding and programming activities in the fall of 2014. The new leadership of CITS was directed to address issues stemming from past practices in the areas of HR, IT, finance and maintenance. These operating and capital expenditures were paid for out of The Centre’s accumulated reserves and are a long-term investment in the organization.
It’s true that part of the 2013 deficit came from shows that did not do well. But show losses were not the main cause of the deficit, and are not our main problem. Two other challenges strike me as more difficult.
The first is that The Centre is well over thirty years old and requires much more repair and maintenance than in the past. Basic items like roofing and heating must be replaced, along with the specialized equipment that is required to run a performance hall by today’s standards. Rather than patching up or putting off, the Board agreed to shoulder many of these expenses this year. We can expect more of these expenses in the future.
Our new CEO, Sandra Bender, deserves credit for alerting the board to these issues – which were building long before she arrived – and for developing and implementing a plan to address them.
The second challenge is that The Centre provides a home for local arts organizations, including the KW Symphony and the KW Art Gallery. These organizations are very important to our community, but quite understandably, they have a limited ability to pay for their use of The Centre. The reality is that we support these organizations through rents that do not come close to covering our operating costs. This support does not “stabilize” our financial statements, but actually creates additional pressure. We welcomed the external review (currently in progress) to find solutions to this problem, but we do not expect them to be easy.
Finally, the Board is very proud of the 2013-14 season. From Bandaloop to Wanda Sykes to John Legend, Ms. Bender and her team presented exciting fresh content that attracted new audiences to The Centre and gave us a new sense of what was possible in our community.
We look forward to welcoming you back to The Centre for the Opening Party on September 12 and 13.
Chair, Centre In The Square