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Long Beach Museum of Art faces $400,000 cut in city funding

September 15, 2009 |  4:03 pm

Long Beach Museum of Art The Long Beach City Council is expected to pass a budget tonight cutting the funding of the  Long Beach Museum of Art -- and the museum isn't expecting a last-minute reversal of fortune.

Instead of the $569,000 it received in the fiscal year that ends Sept. 30, the museum has been tentatively penciled in for $169,000, based on a recommendation last week by the council's budget oversight committee, and adopted by a 6-3 vote of the full council.

That's more generous than the elimination of all funding that Mayor Bob Foster had proposed as payback for the museum's failure to pay the $3.06 million that the city had to fork over this month to retire expiring construction bonds for the museum's 2000 renovation and expansion. Whether the museum can sustain a $400,000 cut without having to lay off employees and close a second day a week could depend on whether donors are able to ramp up their gifts to offset the loss, Ronald Nelson, the museum's executive director, said today.

Nelson said he is "quite certain" that the  proposed funding cut -- which he calls "punitive and rather short-sighted" -- will stand after the final budget vote, as elected officials scramble to balance the $2.9 billion city budget at a time of faltering revenue. And although he hasn't gotten any official word yet, Nelson believes City Hall aims to keep the $400,000 reduction in force for years to come, anteing up a smaller contribution to the private, nonprofit museum until the bond principal is paid back.

The museum's trustees, Nelson says, are committed to sticking to a position that has brought the ire of RonNelson city officials: that the 1999 bond agreement between the museum and the city made it the city's sole responsibility to pay off the bonds if the museum's own fund-raising fell short.

"We've been compared to a deadbeat by some City Council people, but it's the opposite," Nelson said. "We're trying to be as responsible as we can to every donor and to the letter of the law. People have made the argument that we have this moral obligation and need to fulfill it," but he says museum trustees agree that funneling funds to the city for a bond debt the museum doesn't legally owe would be a violation of their obligation to shepherd the museum's resources for its mission of displaying art.

The wrangling is sure to continue beyond passage of a city budget. Under its operating agreement with the city, Nelson said, any cut in municipal funding triggers a 90-day negotiating period for the two sides to try to bridge their differences. If there's still no agreement, the museum foundation can walk away from a lease that extends to 2025, taking with it the 1,600 art objects it owns out of the 3,000-piece collection. Then the city would have to figure out what to do with the buildings and grounds and the rest of the art. Another possible scenario could find the museum suing over whether the city government has a right to slash annual payments to compensate for having shelled out $3 million on the bonds.

Nelson said he doesn't want to take the matter to court, and can't see pulling the plug on the operating agreement: "We're committed to continue to be here and be who we are."

Meanwhile, museum leaders have to figure out where to cut their planned $3.2 million budget, which Nelson and his staff had drawn up under the assumption that city funding would be pared back $250,000 to $319,000, which he says is the minimum payment called for under the operating agreement. Attracting more diners to the museum's restaurant, and more weddings and corporate events to its scenic oceanfront buildings and grounds could help. The museum has about $419,000 in reserves it can draw on -- donated funds that previously had been held back to cover bond-related interest and fees that the museum did manage to pay entirely from its own coffers.

But the failure to pay off the $3 million bond principal leaves the art museum with a big public relations problem, acknowledges Nelson, whose watch as museum director began in 2006 after the fund-raising campaign already had run aground under his no-relation predecessor, Harold Nelson.

"I don't think we're the bad guys in this, but we've been made out to be the bad guys," Ronald Nelson said. "I certainly hear more of that than I thought I would. I'm surprised."

-- Mike Boehm

Related stories

Long Beach Museum of Art battles city government over $3 million

Faced with bond debt, Long Beach threatens art museum with sale of artwork

Long Beach, meet Josef Stalin

Photo: Long Beach Museum of Art. Credit: Luis Sinco / Los Angeles Times

Photo: Ronald Nelson. Credit: Christine Cotter / Los Angeles Times

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