Simi Cultural Center Still Operating in the Red

Nearly a year after opening its doors, the Simi Valley Cultural Arts Center is still hemorrhaging money, often losing thousands of dollars in a month.

To city leaders and the center’s backers, the deficits are no surprise. Preliminary plans for the converted Methodist church predicted that even once the center established itself in the community, box office receipts alone would not cover operating costs. Fund-raising efforts, and the interest from an endowment those efforts would build, were supposed to take care of that.

But those plans failed to correctly predict how long it would take to scrape up enough cash to keep the center afloat. “That was the flaw in the preliminary plan,” Deputy City Manager Brian Gabler said. “It may not have been fully explored at first.”

On Monday, the Simi Valley City Council is scheduled to review the center’s finances and vote on a $259,750 budget that would use grant money and stepped-up fund-raising to ease the center’s cash crunch.

Although a city report raised the possibility that city officials may have to pour more money into the effort, the center’s general manager, David Ralphe, said the center should be able to survive its infancy without another city loan.

“The budget that we’re operating on for 1996-1997 is realistic, and that does not include going back to the city for additional funding,” he said.

According to a report the council will discuss Monday, the center lost money every month from December 1995 to May 1996. The amounts lost varied from as much as $6,212 in one month to $722.

Before the center opened, backers had forecast a deficit of $75,000 during the center’s first year of operation. However, the fund-raising efforts that were supposed to fill the gaps are still getting underway and will take years to produce the kind of endowment the center needs.

Peggy Sadler, president of the center’s fund-raising foundation, said that so far, the foundation has collected about $40,000 in cash and has pledges of more than $700,000 for the endowment. The foundation ultimately hopes for a $2-million endowment, the interest on which would pay for much of the center’s operating expense.

Since contributors have as long as five years to pay after deciding to give money, the center is slowly accumulating the cash its supporters have pledged.

“A lot of decisions have been made, and that’s wonderful, but it doesn’t all come in one fell swoop,” Sadler said. “I can’t imagine how we could be having income from the endowment this year, because so much of it is pledges.”

As the endowment slowly grows, the center has leaned on the city for support, taking out two city loans totaling $246,500 to cover start-up costs and operating expenses. The city has also committed to spending $75,000 on the building’s utilities and basic maintenance for the first few years.

Councilman Bill Davis, who heads the center’s operations committee, said city leaders understood before the center opened that the new arts showcase would need their financial help to get off the ground.

“We knew that we were probably going to be doing that for the first three to five years, so it was not a shock,” he said.

In a report on the center’s finances, City Manager Mike Sedell raised the possibility that the center would need more money from the city. Davis said that although the center would require the $75,000 infusion promised for the coming year, it probably would not need another city loan after that. Of the previous two loans, $30,000 remains to be spent.

Instead, Davis and Sadler point to several ways the center may be able to raise more revenue this year. Fund-raising efforts should be given a boost by a recent federal government decision to grant the center’s foundation tax-exempt status, Sadler said. That decision also will allow the center to pursue grants from foundations that benefit nonprofit arts organizations.

The operating committee may also raise the building’s rental fees, charging a nonprofit group $300 for a weekend performance, for example, instead of the current $275.

Councilwoman Sandi Webb, who also serves on the committee, said the group will also ask the City Council to pay for a series of advertising brochures similar to those printed for the center’s opening. The original brochures, she noted, were used by the Chamber of Commerce to promote the entire Simi Valley community by showing off one of the city’s cultural assets.

Although Webb originally opposed the city’s involvement in the center’s creation--fearing the building could become a burden on taxpayers--she said the theater is slowly establishing itself.

“Whenever you start a new business, it takes several years to build a base of customers, and from what I’ve seen, the little theater is doing a pretty good job of doing that,” she said.

Times staff writer Mack Reed contributed to this report.