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Cultural center business plan, finances still works in progress

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RUSKIN — This community’s developing center for exhibiting creative arts is exhibiting a flair for creative financing.

Reviews by both county staff and local entities of the Firehouse Cultural Center’s (FCC) draft business plan and proposed three-year budget are prompting specific questions springing from missing information and shaky figures.

Additionally, a recently awarded $100,000 Hillsborough County grant for the new center is being held up as the administration double checks its policies regarding monies funneled to such not-for-profit operations.

Planning for a cultural center headquartered in the now-vacant former Ruskin Fire Station at First Street and First Avenue in the heart of the business district began in earnest about a year ago. The former fire station structure and site, replaced earlier this year with a new and larger facility on East College Avenue, are owned by Hillsborough County.

Envisioned as a cultural “hub” functioning as an exploratory “lab” of the arts, the center is to be operated under the umbrella of the Ruskin Community Development Foundation (RCDF), a long-established non-profit which also partners with the county to operate the Camp Bayou environmental learning center, now open only on a limited schedule.

Guided by a committee composed of representatives from local arts, education and business organizations, the plan calls for establishing a center to provide “diverse programs, classes, workshops and performances in all the Arts; Performing, Visual and Literary,” according to the project’s business proposal. Prepared by Bruce Marsh, artist, University of South Florida professor emeritus and artistic leader of the local annual Big Draw programs, the business plan and accompanying budget documents were submitted to the county in June.

In mid-August, Tom Fesler, director of Hillsborough’s business and support services, produced a three-page review of the entire FCC proposal, outlining its weaknesses and strengths as he called for additional information. Fesler also summarized in his report the staff recommendations which suggest county tax dollars should not yet be invested in the center as it currently is described.

Nonetheless, in September, county commissioners approved a $100,000 grant for the center in the 2011-2012 budget at the urging of Commissioner Sandra Murman, whose District 1 includes Ruskin. The county’s budget year begins on October 1.

None of that money, however, has been disbursed nor is it likely to be until commissioners approve new policies covering public monies for non-profit entities, Fesler said this week. Updated policies are to be discussed during the November 2 commission meeting, he added.

 The budget specialist alluded briefly to The Regent, an upscale, marbled structure in the Winthrop area between Riverview and Brandon built with millions of state and local public dollars but without sufficient oversight by officials on behalf of the public. Rental rates for use of the lavishly appointed building have been too high for most organizations to pay and it actually is not suited for its originally stated purpose as an emergency services facility.

Apparently aiming to ensure that no Hillsborough tax dollars are squandered on a cultural center not sufficiently fiscally sound to succeed, Fesler’s review takes on several aspects of the FCC plan, including its initial budget.

 For its first year of non-profit operation, the budget prepared by Marsh projects $166,500 in expenses, balanced by the same amount in income. Which in that first year is not designated. Among the expenses are $48,000 in salaries for a director and assistant, $52,000 for programs including an artist in residence, arts classes and workshops, performances and community series, plus $26,700 for equipment and furnishings. Another $39,000 is estimated for routine operating costs such as utilities, insurance and grounds maintenance, including $8,000 for a new ventilation system and $7,400 for publicity and advertising.

The budget’s start-up costs do not include line items related to the reconstruction or reconfiguration of the former fire station that may be required to make it functional as a public venue for the purposes outlined in the business plan.

As for income during the first year, the Marsh budget assumes $36,000 from programming, including $5,000 from the USF School of Art, $4,000 in unnamed sponsor fees, $10,000 incoming from class and workshop fees, $6,000 from summer arts camps and $10,000 in a NEA Community Arts Grant.

Additionally, he foresees on paper another $23,000 contributed from fund raising activities undertaken by Keller-Williams Realty in March ($3,400) by M&M Printing in December, 2010, ($1,300 from printed calendars), from unlisted performances ($4,300) from the local Tomato Festival ($5,000) and from unnamed “Other Events” ($9,000). Marsh also projects $5,000 coming from rental of the facilities including $3,200 from Hillsborough Community College drawing classes held there and another $2,600 from “other rentals.”

The proposed year one budget anticipates $16,000 in donations including $15,000 from “Private” unnamed sources and $85,700 in grants - $60,700 from the Community Foundation of Sun City Center and $25,000 from unlisted corporate givers.

The income side of the projected balance sheet is made particularly shaky by the revenues stated but not sourced, by the fact the business plan includes several letters from private corporations and public officials commending the cultural center effort but none committing any funds of any sort, and by inclusion of such assumed money generators as the annual tomato festival which has not been held for two years and for which no future plans have been announced.

The projected second and third year budgets call for lower overall expenses of $152,000 and $152,500 respectively, but higher salaries for the director and assistant as well as increases in programming costs attributed to the artist in residence, etc. The third budget projects a $500 shortfall.

The succeeding years’ income figures rely on the same named and unnamed sources and contributors as listed in the first year. However, at least one of them has no knowledge of the figures plugged into those budgets.

Both the second and third year budget projections include substantial sums each year from M&M Printing, But Wes Mullins, the firm’s CEO, said this week no such commitments were made. The company assisted with the calendar fund raising as a community service, and may well help out in the future, he noted, but no specific contributions have been promised at this time.

In his assessment of the FCC business plan, Fesler noted that it “does an adequate job of describing the project and the benefits that will accrue to Hillsborough County and the Ruskin community.” It also demonstrates support from community organizations, he added.

On the other hand, the budget analyst pointed to several areas of insufficient information. For example, he emphasized any formal agreement would be between the county and RCDF because it is the foundation that is acknowledged as a not-for-profit corporation with 501(c) 3 designation under the federal tax code. Yet, the last available RCDF 990 or federal tax filing required of non-profits is for 2008.

Fesler also stated the plan does not establish reserves, does not explain how financial records will be maintained, does not provide for internal controls to protect assets and does not detail banking activities.

He suggested that added information about the relationship between RCDF and the FCC is required, that support of the line items for salaries is needed and that explanation of the SCC Community Fund grant totaling more than $120,000 over three years is necessary. In addition, he said firm revenue commitments should be identified.

Fesler’s review concluded with staff recommendations that the FCC business plan be updated to address deficiencies, that no direct financial support be given to FCC or RCDF “unless they can meet the standards set for other County funded nonprofits,” and that the county maintain ownership of the fire station and make any necessary modifications.

The report went on to note that based on examination of the 2008 RCDF tax return “it appears they are a very small organization” and therefore unlikely to be able to meet standards currently imposed on other county-funded non-profits “(ie-an annual audit).”

Fesler told The Observer this week that staff members met with FCC representatives to explain the concerns and that he is awaiting the updated FCC business plan. Marsh, the artist and retired academic who authored the FCC business plan and budgets, did not respond to a telephone call from The Observer.

However, Arthur “Mac” Miller, another retired academic and an RCDF director, said the foundation’s board to date has not formally approved any funds for the FCC, nor, he added, has Fesler’s review been either brought to the board’s attention or mentioned in FCC meeting minutes “as far as I know.”

He went on to say that speaking as a local resident, not as a board member, he views Fesler’s analysis as “entirely fair” and that the remedies recommended are” essential for a realistic budget that can be defended in detail.”

© 2011 Melody Jameson

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