$877,000 Shortfall May Doom Season for S.D. Symphony

Raising for the first time the possibility that the entire concert season could be canceled, San Diego Symphony officials Wednesday divulged that management had overestimated its 1985-86 fund-raising projections by $2 million, leaving the symphony with an $877,000 debt.

The announcement was made in a morning press conference at Symphony Hall during which a 10-year plan for fiscal “stabilization, recovery and growth” was presented by Executive Director Wesley O. Brustad. The symphony’s board of directors approved that plan and a sharply reduced budget Tuesday. The fiscal plan also envisions a change in winter programming to include pops music along with traditional classical fare.

With contract talks between musicians and the symphony at a stalemate, Tuesday’s approval of a $6.5-million budget--down $1.5 million from last year’s budget--gives credence to speculation that the orchestra’s winter season may be canceled. The two sides are $500,000 apart on compensation, and now there is little room for compromise.

“Our backs are right at the limit,” Brustad said. “I don’t know what to do on that one (paying the musicians a higher wage) unless there are more creative ways to carve up the pot.”

The fact that next season’s budget for the first time includes a projected $700,000 shortfall--past budgets have not projected a deficit--makes a labor agreement all the more unlikely.

Herbert Solomon, who assumed the presidency of the symphony board in June, said that rather than continuing to cancel concerts in three-week blocks, “we may have to cancel the entire season.” Earlier this month, symphony officials canceled the first three weeks of the winter concert season after talks with the musicians broke off.

Brustad, who said he had used deficit budgeting in other arts organizations, denied that it would make fund raising more difficult. “I’ve never had problems with that. I think it affects it positively,” he said. “You can’t lie. People expect integrity.”

Last year, officials threatened bankruptcy if the community failed to rescue the fiscally weak orchestra from its indebtedness.

“We’re not here saying the symphony has a crisis and it wants (you) to bail it out,” Solomon said.

He openly acknowledged that last year the symphony board overestimated anticipated income and said that the orchestra has expanded too rapidly over the last 10 years. He pointed out that in only one season was there no operating debt. That was in 1976-77, when the board used a Ford Foundation grant that was to have been the basis for an endowment.

The $877,000 debt was incurred despite an extraordinary emergency fund-raising campaign. As a result of that 10-day crisis campaign in March, $2.4 million was raised to wipe out an advertised debt of $1.8 million--it proved to be $1.9 million--and cover the year’s projected expenses.

In its “worst-case scenario,” management earlier this year projected an $820,000 deficit, but the symphony’s board assured the community that the orchestra would wipe it out by fiscal year’s end. That was not to be.

While the staff brought expenses in $150,000 under budget, the anticipated income fell far below projections. Even when a special group of patrons allowed $385,000 that was originally pledged for an endowment to be applied to operating costs, revenues were still $877,000 short of expenses.

“We were overly optimistic and unrealistic in our income projections,” Solomon said. “The community wants the symphony to operate in a financially responsible manner and pay its bills. We will not promise instant gratification.”

Instead, Brustad unveiled a 10-year plan he and his staff prepared that he says will put operations on a stable footing. A key element of the plan is realistic budgeting. Income projections are only slightly more than last year’s--not counting the extraordinary income from the crisis campaign and the gala event that opened Symphony Hall.

Brustad has projected that, over the next five years, the symphony will need $5.5 million to eliminate its debt. That includes money to reduce the cumulative operating deficit that will grow to $1,840,000 by the end of 1988. The remainder comes from $3.6 million needed to pay the principal and debt service on various loans.

Another element is a $2.34-million cash reserve fund that a board committee is attempting to raise from the community. The cash reserve will be used to cushion the annual cash flow problem.

The final element of Brustad’s stabilization plan is an endowment fund. Another committee will begin to develop the $15-million fund that is to take shape between 1991 and 1996.

Musicians’ representative Greg Berton praised management for “coming up with a plan,” but said the musicians were not budging from their position “until we’re offered adequate compensation.”

Under his plan, Brustad said, beginning next year the winter programming would take on a different look.

“You’re going to see quite a difference . . . some pops programming to attract various segments of the market,” he said. “Perhaps four nights a week is too much. We may need to reconsider that.”

Brustad, who has been hailed as the symphony’s savior because of his skill as a manager, is the eighth symphony manager in 10 years.

“I have no intention of disappearing,” he said. “The symphony’s not bankrupt even if the season is canceled. An orchestra can be very successful in this town if it just once gets the proper base underneath it.”