Music Center May Be Short $3 Million : Finance: Chairman Ronald Arnault blames ‘inaccurate estimates’ on earlier announcement that 1991 goal had been met. Foundation will offer interim loan.
The chairman of the Los Angeles Music Center said Friday that “inaccurate estimates” led to an earlier announcement that it had met its 1991 Unified Fund goal of $17.6 million--and that new estimates project a shortfall of as much as $3 million.
The fund raises money from the private sector and provides operating support to Music Center resident companies, including the Los Angeles Philharmonic, the Center Theatre Group (the Mark Taper Forum and the Ahmanson), Los Angeles Music Center Opera, the Master Chorale and the Music Center Education Division.
For the record:
12:00 AM, Sep. 09, 1991 For the Record
Los Angeles Times Monday September 9, 1991 Home Edition Calendar Part F Page 2 Column 6 Entertainment Desk 2 inches; 38 words Type of Material: Correction
Clarification-- An article in Saturday’s Calendar reported that the Music Center Opera has a deficit of $1.34 million. That figure refers to Music Center Opera’s accumulated debt rather than an annual deficit. Music Center Opera has no operating deficit for fiscal 1991.
Music Center chairman Ronald Arnault said the shortfall will be covered with a loan of up to $3 million from the Music Center Foundation, which is an endowment fund with assets of approximately $50 million. The two fund-raising arms operate independently with separate boards of directors.
Arnault said the Music Center is examining its books and will not be able to place a precise dollar figure on the shortfall until the end of September, but said: “It will be covered by the $3 million (loan), we think.” He added that the exact figure will be made public following a scheduled Music Center Board of Governors meeting Sept. 30.
The loan from the foundation will be paid back over a six-year period by reductions in future disbursements to the Music Center, according to Arnault. The Music Center will pay all planned 1991 allocations to its resident group companies, two of which have million-dollar-plus deficits. The L.A. Philharmonic recently acknowledged a deficit of $1.15 million and Music Center Opera has a deficit of $1.34 million.
Arnault said the Music Center is examining the “systems and processes” that led to the inaccurate estimate. He would not comment on allegations that a Music Center financial officer has been placed on leave, saying: “As a matter of policy, we don’t get into discussing any employee.” He added the Music Center is “looking at everything” in order to reduce its expenses.
On July 1, the Music Center announced that it had met its 1991 Unified Fund goal of $17.6 million, calling it a 15% increase over last year and the highest ever raised to support its various resident companies.
In a prepared statement, the Music Center said a lower base of 1991 contributions, as well as difficult conditions in the economy at large, will result in “a revised and lower 1992 fund-raising goal.”