Oxnard Hears From Arts Center Manager on Financial Woes

Searching for answers to the Performing Arts Center’s financial troubles, City Council members Tuesday night heard from the center’s embattled manager and consulted a team of auditors who uncovered sloppy record-keeping and unprofitable business practices at the publicly owned facility.

The council meeting marked the first time veteran center manager Jack Lavin has spoken publicly on the auditors’ findings. The center has lost about $1.5 million during the past two years.

The KPMG Peat Marwick accounting firm scrutinized the records from 803 events at the center between July 1996 to March. Auditors flagged numerous money-losing practices, such as providing rent discounts to community groups and a failure to properly track concessionaires’ revenues.

Lavin, a veteran city employee, defended himself Tuesday night. He maintained the loss of several key positions at the center during city government restructuring a few years ago had made if difficult for the remaining record keepers.

Lavin said the number of employees at the center had dropped from 14 to 10 and that his requests for additional staff members were not granted.

“I asked for a grants writer, a researcher and a marketing/public relations person,” he said. “We can have great events, but we can’t market them.”

The manager also attacked the auditors’ report, saying it exaggerated problems at the center.

“In this audit there are some overstated concerns. It takes a simple staff oversight and uses it to contaminate a total process.”

For instance, Lavin said the auditors said the center typically waited six months to collect its bills from those using the facility, though most bills are paid immediately.

Mayor Manuel Lopez argued the city-owned facility often needs government subsidies to remain in operation.

“They just don’t pay for themselves, and that’s something we know,” Lopez said.

But other council members agreed that steps to tighten the center’s financial controls are necessary.

“I’m very concerned when I look at the report,” Councilman Dean Maulhardt said. “I have a department that receives cash and spends cash. We don’t have accounting for it. Those are basic problems.”

Councilman John Zaragoza recommended reassigning several city employees to help the arts center keep track of its finances.

But Councilman Tom Holden criticized that suggestion, saying it would just increase the center’s operating costs.

“To implement that type of program, we’re looking at $150,000 to $250,000 in salaries,” he said.

The 1,600-seat Performing Arts Center is used for various activities, including theater performances and political fund-raisers.

In the report released last month, auditors divided the center’s financial troubles into 13 categories--ranging from a failure to provide performers and publicists with proper tax forms, to a reliance on verbal contracts with the center’s users.

Some groups were able to use the center at no cost, the report states. For instance, Honda/Saturn of Oxnard displayed automobiles in the center’s courtyard without compensating the center.

Auditors also found the center did not conduct any analyses to determine whether events would be profitable before booking them.

“It was communicated to us that the management’s operating philosophy is that some revenue coming in the door is better than no revenue,” the report states.