1. Performing Arts Center Use of Unrestricted Endowment Funds & FY 2013-14 Budget Amendment Request March 11, 2014

2. Introduction Provide overview of PAC history & review details of Endowment Fund structure Discuss historical financial performance of PAC productions and impacts on General Fund Provide overview of FY 2014-15 proposed production season Outline details of proposed 2014-15 In-house Production Program Introduce new concept for funding the PAC in- house productions

3. PAC History State-of-the-art facility completed in 1990 Funded partially with community member donations Provides valuable community service through affordable access to performing arts Totals 41,000 sq. ft. and houses 2 theatres Seats 550 patrons in the Nellie W. Codding Theatre and 125 patrons in the smaller Bette Condiotti Experimental Theatre Offers a variety of dance, music and theatre performances

4. PAC Endowment Fund Created in 1989 Intent is to: 1.Generate funds from earned interest to offset operational expenses 2.Keep rental rates and ticket prices affordable to community members 3.Use funds for general charitable purposes of the PAC Total value = $1,195,000 Consists of two funding types: 1.Restricted ($500,000) – secured as a base from which interest is generated 2.Unrestricted ($695,000) – can be used in a manner consistent with purpose of fund

5. PAC Financial Considerations In-house production revenues historically exceed costs Other revenue sources: o rental fees o interest income Some building overhead and other fixed costs funded by General Fund

6. PAC In-house Productions Nine (9) in-house productions since Aug. 2011 (Net earnings = $71,807) Events are very popular with over 20,000 attending in the past three years Cumulative revenue from ticket sales has exceeded production expenses by approx. 30% In-house productions have successfully reduced the overall financial impact to the General Fund

7. Historical Growth Chart

8. Historical Net Revenue Growth Trend *Note: productions cut in FY 2013-14 (2 Productions Projected)

9. PAC In-house Productions Upcoming FY 2013/14 productions include:

10. PAC In-house Productions

11. 5.Applause 6.Deathtrap 7. Mary Poppins 2015 Summer Youth Program Start-up (TBD) 1.Oliver! 2.Bell, Book and Candle 3.Guys and Dolls 4.Scrooge 7 productions proposed in FY 2014-15 (plus the Summer Youth Program) Projected net earnings = $55,490

12. Projected Net Earnings – FY 2014-15

13. General Fund Impact (Current Model) A large percentage of production costs must be committed months in advance Impacts the General Fund which must absorb upfront costs Upfront costs include expenses for: o Royalties, Marketing, Construction materials, PT labor Lag-time for repayment of production revenue to General Fund General Fund eventually paid back an amount > initial investment Excess Revenue covers some fixed costs (decreases GF impact)

14. General Fund Impact

15. Proposed In-house Production Program Propose using unrestricted endowment monies to fund in-house productions Benefits include: o Provides ‘seed’ money for in-house productions o Relieves impact on the General Fund o Furthers the intent of the endowment fund… ‘to provide affordable, high quality programs to the community’ ‘to be used for general charitable purposes of the PAC’

16. Other Ongoing Fundraising Efforts… PAC staff actively campaigns for ways to offset production expenses by utilizing the RP Foundation and by seeking the following: 1.Donations  Monetary  Production material items - costumes, equipment, etc.  Marketing - radio air time, mailers, printing services, etc. 2.Volunteers 3.Sponsorships

17. Fundraising Campaign in Development PAC staff has been working with community members to organize a volunteer group, ‘Friends of PAC’ The purpose of this volunteer organization is to accomplish the following goals: 1.Organize annual fundraising efforts to sell ads in event programs and advertising for the digital slide rotation in the lobby 2.Investigate grants under the umbrella of the RP Foundation 3.Explore other viable fundraising efforts

18. FY 2013-14 Proposed Budget Amendment Staff recommends amending the FY 2013-14 budget in the amount of $32,500 Money would be used as ‘start-up’ funding to re- establish the Summer Youth Program This program provides a valuable service to youth in the community by training participants for the FY 2014-15 production of ‘Oliver!’ Program spans two fiscal years (FY 2013-14 & 2014- 15) Anticipated net revenue is $17,000

19. Conclusion Launching this new model would: o provide a mechanism for uninterrupted, affordable, quality community service o have no negative impact on the General Fund – no risk o maintain reasonable rental and ticket rates at the PAC o Reduce General Fund impact for PAC operating expenses