L.A. County Museum of Art to end fiscal year with $300,000 surplus
After two recession years that brought a hiring freeze, canceled exhibitions and a badly dented endowment, the Los Angeles County Museum of Art expects to finish the current fiscal year, which ends June 30, with a $300,000 surplus and has adopted an operating budget for the coming 2010-11 year that boosts spending about 11%.
The coming year’s budget adopted by the museum’s board last week comes to $59.1 million for regular operations, said LACMA President Melody Kanschat. Total spending is expected to reach $87 million, factoring in such additional costs as art acquisitions, construction and $13 million in interest on $383 million in bonds the museum issued to finance its ongoing expansion and renovation.
Attendance is expected to total about 900,000 for the 2009-10 year that’s about to end, Kanschat said, up about 50,000 from 2008-09.
Having raised $29 million this year to balance its operating budget, LACMA has set its sights at $33 million in donations for the coming year.
“Our projections are conservative,” Kanschat said, and if the “double-dip” recession that some economists fear should occur, LACMA is prepared to repeat the drill from the recent downturn by curtailing spending to avoid large deficits. The hiring freeze has been removed, Kanschat said, but the coming year’s budget calls for adding just three positions to the current staff of 325.
The museum’s investment portfolio has a long way to go to recoup steep losses during the meltdown. It had reached $168.5 million at its peak in mid- 2007, but fell to $99 million over the next 18 months, a drop of 41%. It rebounded to $114 million last December, the most recent figure the museum would share — still down 32% from its peak.
One consequence of those investment losses is that when the museum makes its annual 5% withdrawal from the endowment to be spent during 2010-11, it will come to $6.8 million, down from $8.2 million a year ago. That’s because LACMA, like most nonprofits, looks in a rear-view mirror when calculating the 5% withdrawal. The endowment spending it allows itself isn’t based on the current value of its investments, but an average of what they were worth one, two and three years before.
On the plus side for the museum, its public funding from Los Angeles County will rise more than $2 million, to about $26 million, as it receives the last of three annual bump-ups of $2 million that the county agreed to pay to help the museum keep up with rising expenses as it adds new facilities — the Broad Contemporary Art Museum, which opened early in 2008, and the Resnick Exhibition Pavilion, scheduled to open Oct. 2. LACMA’s increases from the county figure to be smaller after 2010-11, as it goes back to the regular funding formula, which is based on the inflation rate.
LACMA has budgeted about $3 million for events surrounding the opening of the Resnick Pavilion, Kanschat said. The coming year also will see construction on a new restaurant and ticket booth in the BP Entrance Pavilion, as well as completion of a garden designed by artist Robert Irwin. Planned renovations to the LACMA West building will remain on hold until the museum can get fundraising for its $450 million, multi-phase “Transformation” campaign back on track. Slowed by the recession, the once-booming campaign gained a bit of traction over the past year, taking in $7 million and pushing total gifts and pledges to $318 million since it was announced in 2005, museum officials said.
Spending on art acquisitions came to about $15.5 million in 2009-10, Kanschat said, all of it from donors who pitched in to acquire works the museum’s curators and acquisitions committees wanted to buy.