Sawdust holding its own

The Sawdust Art Festival is doing just fine this year, according to one official, despite reports that the 44-year-old festival has been operating in the red for the past two years.

Executive Director Tom Klingenmeier said that paid attendance at the Sawdust was up by 1.8% the first week of August compared with the same time last year.

“The Sawdust is not in critical condition,” Klingenmeier said. “Our reserves are down a couple thousand dollars. We will be in a solid position at the end of the season.”

The festival’s last day is Aug. 30.

Controller pessimistic

Sawdust Controller Henry Youngstead, who announced his retirement July 29, has a bleaker view of the festival’s financial future.

Youngstead has been at the helm of the festival’s finances for 20 years.

“We’re losing money, the gate is going down, and expenses continue to go up,” Youngstead said. “The gate’s been going down for 20 years. I don’t know what to do. Somebody will have to turn things around.”

Youngstead, who is 72, will stay in the controller position through the end of September.

The Festival of Arts is also experiencing tougher times, with ticket sales down for the Aug. 29 Pageant of the Masters Gala, a major fundraiser, said spokeswoman Sharbie Higuchi.

Extraordinary expenses

Klingenmeier acknowledged that a news report indicating that the Sawdust has been using reserves to cover expenses is accurate; but he denied that the organization was forced to use its reserves to pay for operating costs.

The Sawdust has had a number of extraordinary expenses over the past few years, he said.

“We spent $42,000 to improve the electricity and $20,000 to bury phone lines,” Klingenmeier said. The group also paid $20,000 to purchase an adjacent property from the Boys & Girls Club of Laguna Beach, and spent money to convert the Coke sales booth to a pizza kitchen.

Another $10,000 went for a green water heater and other equipment upgrades, including a new fire suppression system that cost more than $20,000.

Art sales increase

The festival also hired an advertising agency last year, which resulted in a 2% increase in attendance, and, while attendance has flagged this summer, art sales are up, Klingenmeier said.

“The artists are happy, sales are up this year even with the bad economy,” he said.

Some Sawdust artists have reduced their prices to keep their inventory moving.

Weddings, campouts

Klingenmeier said the festival is looking for new ways to raise revenues, including holding weddings at the venue.

Other possibilities under discussion by the Resource Committee include a car raffle and overnight campouts for attendees of the off-season art classes.

The Sawdust may also ask the city for grant money from Business Improvement District funds paid for by a tax on hotel rooms.

The committee started its work 1 1/2 years ago.

“We anticipate we are going to be fine, and generate enough income to replenish the reserve,” Klingenmeier said.

One of the Sawdust’s strengths is its reserve, which Youngstead is credited for creating years ago.

“He worked to build a $1.2-million reserve so we didn’t have to borrow money,” Klingenmeier said.

The reserve came in handy when the facility had to become handicapped-accessible three years ago, he said.

The Sawdust is a major summer employer in Laguna Beach, with 150 seasonal employees.

There are five full-time employees, and the top salary is $60,000, which is paid to the executive director, groundskeeper and controller, Klingenmeier said.