Museum of Art funding request
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MEMORANDUM
June 28, 2006
TO:
The Honorable Mayor and City Council Members
FROM:
Michael C. Van Milligen, City Manager
SUBJECT: Dubuque Museum of Art Loan Request
The Dubuque Museum of Art has submitted a request for the City to forgive the debt
they owe the City from a $300,000 loan they took out in July 1999 from the Downtown
Loan Pool to rehabilitate the Dubuque Museum of Art building.
I think approving this request would set a dangerous precedent. The Downtown Loan
Pool depends mainly on loan repayments to finance future loans, even though there are
also direct appropriations of downtown tax increment financing revenues that
sometimes capitalize the fund.
The program already has significant forgiveness components with grants of $10,000 for
fac;ade improvements, $10,000 for architectural and engineering fees, and $2,000 for
each job or housing unit created. Also, the program is a 20-year loan at below-market
interest rates with interest-only payments for the first five years.
The Dubuque Museum of Art requested a one-year deferral on interest payments in
April 2003. The City Council agreed to the deferment with interest payments due May 1
and June 1, 2005, and principal plus interest payments to commence July 1, 2004. An
additional request to defer came in April 2004, which was granted by City council
authorizing deferment until July 1, 2006, with a balloon payment of $52,713.60 due at
that time to "catch up" the deferred payments. The due date of that balloon payment
has triggered this request.
As a compromise, I would suggest that the unpaid principal be amortized over the
remaining life of the loan at the same interest rate.
This is affordable for the City at this time because the City will not need to pay Platinum
Hospitality, the management firm for the Grand River Center, the budgeted subsidy
payment for this year. That payment is not being claimed because the losses for the
Grand River Center have not exceeded the agree-upon threshold.
To go any further than this would be problematic because the Platinum Building is
waiting on their Downtown Loan Pool loan for their project, along with three other
important projects, which include the Fischer Company project in the old Betty Jane's
building, the Silver Dollar building, and another economic development project.
I respectfully request Mayor and City Council approval of the change in the loan
agreements for not-for-profit entities.
(1 JA t(~ rJL-
Michael C. Van Milligen
MCVM/ksf
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
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Dubuque Museum of Art
June 28, 2006
The Honorable Mayor and City Council Members
City of Dubuque
City Hall
Dubuque, IA 52001
Honorable Mayor and City Council Members:
I appreciate your willingness to consider options to settle the remaining debt the
Dubuque Museum of Art owes the City from a $300,000 loan to rehabilitate the
Museum's present facility,
Under present terms, a $52,713,60 balloon payment is due July 21,2006, After
discussing the Museum's present financial needs with Mike Van Milligen, he
agreed to present a recommendation for alternative terms to satisfy the debt In
his memo to you dated June 28, Mike recommended that the unpaid principal
on the loan be amortized over the remaining life of the loan's 15-year
amortization, Under this recommendation, the Museum's annual payment on
the loan would be approximately $2,337,
While we are certainly grateful for this recommendation, we respectfully ask you
to consider several other options that would provide additional support to the
Museum:
1, Extend the amortization of the loan over an additional five years, This would
reduce the Museum's annual payment to $1,805, While this may not seem
like a significant reduction in monthly payments, it certainly would be
meaningful to the Museum,
2, Forgive the unpaid principal balance of the loan. If the City could find a way
to forgive the debt, it would make a great statement about Dubuque's
commitment to the Arts.
Thank you for your past support of the Museum, and for considering our
request
Dubuque Museum of Art
July 6, 2006
The Honorable Mayor and City Council Members
City of Dubuque
City Hall
Dubuque, IA 52001
Honorable Mayor and City Council Members:
We appreciate your consideration of our request and for allowing us to present
background information regarding the Dubuque Museum of Art at last evening's
City Council Meeting.
Per your request, enclosed you will find the Museum's Annual Report, which
contains our most recent financial statements. We think you'll find that they
reflect an institution that is certainly viable. At the same time, the investments
that are contained in our endowment have minimal ability to assist in the short-
term cash flow needs of the Museum.
As a result, we again respectfully ask you to consider forgiving the $300,000
loan in its entirety. While this would be our first choice, we don't want to
overlook the other alternative of stretching the amortization of the loan over 20
years versus the 15 recommended by the City Manager. While it is a small
adjustment, it would certainly help.
With all this being said, we appreciate Mike Van Milligen and the City Staff in all
their efforts with assisting the Dubuque Museum of Art and the City Taxpayers.
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dbqart.com
Annual Report
Fiscal Year 2005
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The following remarks were made on the occdsion 0/ the
2006 Annual Meeting of the Dubuque Museum of Art,
May 23, 2006.
"On the occasion of my first Annual Meeting of the DMA, I
am very pleased to provide this Report for 2005, covering ac-
tivities Jlld the institution's finallcial condition as of the end of
December, the conclusion of ollr fiscal yeaf.
Operrltiol1ally, the Museum ended 2005 in J stronger fincll1ci,ll
position than faced at the end of FY 04. Robust 05 Art Auc-
tion revenuE'S, attainment of llew program and operational
grants, <15 \vell as a steady increase in the Director's Circle
memhership level, mdde much of the difference ,,15 did contain-
ing costs as much as possible. A report is included within.
Embrace Art.' Tod7}-' for Tomorrow, the capital campaign that
began in late 2004, concludecl on the occasion of the Mu-
seum's M,l}' 23rd Annual Meeting. The campaign successfully
raised $1.5 million in spite oj the 6 month [ull in 2005. while
the Museum W,lS hetween Directors. These funds will be a big
assist in casing capitell obligations from 1999. A complete list
oj donors to this eiiort is found in our Summer 2006 News[et-
ter.
fundraising is an ongoing proposition - a reality of our life. At
current operating levels, the Museum would require a $7 mil-
[ion endovvrnent corpus to dttain sell' sufficiency'. Conse-
quent[y, while Embrace Art is concluded, we will continue to
he actively fundraising for both capitil! and operdtiona[ pur-
poses. Thus far in 2006, we have been awarded over $46,000
in grants that wlll corne in hetore December 2006. Some of
1[1('Se ;In' for gt'ller,ll o[wr.lling - from the City of Dubuque and
the 5teHe of [OvVd through the Iowa Arts Council, some ,1fe Spe-
cia[ Project gr,lIlts. m,lcle from both of these agencies, as wel[
as from the A[liant Energy Foundation and the Duhuque Racing
Association. We helVe been successful in attaining sponsor-
ships (at some leve[), for every cxhibition offered in the
200S/200() schedule ,1Ild h,lVe been developing rw\\! iundrais-
ing pro[ccts (ficirloom Discovery 5aturcby this f~hlst Mi.lrch and
the Art Raffle this past April), ewgmenting the fundraising eHorts
of our nO\\' legendary Ho[iday PMly and Art Auction every
November.
In the ~al[ oj 2005. \ve re-introduced ,1n art sJ[es component in
the lobhy, {Pdturing wmk by artists exhibiting in our temporary
exhibition galleries. While not a major revenue conteI', we
hilVe l1liHle sales and find this venue to serve ,lS an ddditionill
W..1Y to provide service support to the artists we are exhibiting.
Programs:
The Museum presented 12 temporilrY exhihitions during 2n()')
ranging from I\rt Geisct't's book illustrations to paintings by
memhers of the famed Sellmagundi Club - from all installation
of furniture by fr,lnk Lloyd \.Vright to the [elrgc selic, black and
white landscapes of Clyde Butcher - from paintings by Grant
Wood to contemporary American studio glass.
Additionally, we IJI"esented the Museum's fit'st f'ver off-site tem-
porclry exhibition: Voices hom the IY,lIchollsC D/~~-trict. Tc'n
artists were invited to instal[ contemporary \vorks of sc<lIe in
10,000 square fect of open \'Velrl'house Sp,lCC~. This exhibition
proved to be J \,vinning collahoration belvveen the Museum,
t!l(' ilftist5 ,lncl Wilmac Property Comp,lny ,15 wel! as olle of the
most popular events vve have heen associated with, garnering
huge atten(ll1lce numhers during its short run.
Dubuque Museum of Art - 2005 Annual Report
V Dices From the Warehouse District - 2 will be presented
during the same approximate time period in 2006 before be-
coming part of a rotating schedule with the Museum's new
Biannual juried exhibition to be held in 2007.
We look forward to
generating more ex-
hibitions in-house
rather than using
outside exhibition
purveyors. Already
this year, two exhibi-
tions will be forth-
coming from within
the permanent col-
lection, one of water-
colors and another of
photography, that
begin to highlight the
collection's breadth.
A modification to the
Lengeling Gallery
will be made this
summer to accom~
modate a more per-
manent installation of
works from our hold-
ings of Grant Wood. An additional goal will be to work to-
ward the establishment of an exhibition and collection en-
dowment vehicle into which contributions can be sought to
reduce the continual need for seeking sponsorship funding for
these programs.
Collections - 79 objects were added to the collection during
2005 including another large number of engravings by Art
Geisert's from his book Pigaroons, as well as the painting Rab-
bit Hole, by Mary Kline-Misol. Additionally, the grant re-
ceived in 2005 from the Dubuque Racing Association, pur-
chased five steel, sliding screen for secure storage of two di-
mensional art work that has radically remedied storage con-
tainment issues.
Educational Opportunities: - Our Summer 2006 newsletter
details the plethora of educational activities that occurred at
the Museum; thus far in 2006 but a great many others were
held in 2005, particularly from the period of July - December.
Of particular note, are the
series of Museum Family
Matinees that are provided
on about a monthly sched-
ule, from September
through June and included
family program offerings in
ballet and modern dance,
theatre, music and art. In
2005, and I am pleased to
report that again in 2006,
the Mati nees are sponsored
by the Alliant Energy
Foundation.
The Museum also provides
hands-on art instruction for -..:..-..""
middle and high school
students throughout the
year as evidenced by the ,--_______~~________~_
After School Art classes. From TfwKi"!:I,,,,df,Cr;lndOpf'r,1Ik,uSl'2llllC,:
IlfOducliol\.
Page 2.
Budding Artists" from the Spring
2006 After School Art class for
middle schoolers Maggie Sulentic,
Stephanie Greene and Michaela
Hennings, pictured above, take a
break at the end of such a class.
Second grade elementary school
students are serviced by Museum
programming during March and
April through Arts Trek program-
ming that provides an opportunity
for a Museum site visitation
with students, their classroom
, teacher and, this year because
J of a special project grant from
11Io. the City of Dubuque, the
school's visual art specialist.
Arts Trek students toured all
Museum exhibitions during
their fifty minute excursions
over these two months. Seen
above are students from Irving
Elementary school admiring
the clay sculpture of Elizabeth
Shriver with a Museum docent. Below, Irving students discuss photo+
graphs they saw with art teacher Terry Spyrison. This exhibition featured
work by photojournalists working at Dubuque's Telegraph Herald daily
newspaper. As an added feature, members of the TH photographic staff
were present during the Arts Trek
programs to talk about their work
and show some of the equipment
they use to make photographs for
use in the newspaper.
While it has not quite been a year
since coming to the Museum (I am
still connecting the dots on those
Dubuque family trees), I am feeling
extremely confident about the Mu-
seum's future and our ability to
achieve and grow.
I am exceedingly fortunate to have
inherited an excellent group of
people with whom I am pleased to
work. Diane Sass, Margi Buhr,
Stacy Gage and Bill Parker have welcomed me into their work family and
we are hard at it - having fun at the same time - and that, it seems to me, is
as good as it gets to still be called work. Margi has "survived" to her 10
year anniversary with the Museum this year while Diane is working on #9.
These two ladies have, I expect, more than held this place together during
past, sometimes turbulent times that always accompany a change in loca-
tion in the Museum business.
I am happy to report that those times are over as we work toward expand-
ing our presence in the Dubuque and tri-state community, working as of-
ten as we can with our community sister arts agencies in a variety of future
projects and concentrate on showing off what we have and are all about."
Edwin Ritts, Jr.
Director
Dubuque Museum of Art - 2005 Annual Report
Page 3.
DUBUQUE MUSEUM OF ART
DUBUQUE, IOWA
STATEMENT OF FINANCIAL POSITION
DECEMBER 31, 2005
ASSETS
Assets:
Cash
Investments
Prepaid Insurance
Unconditional promises to give (net of $9,774 discount)
Beneficial Interest in assets held by others
Property and equipment - net of $544,227 accumulated depreciation
Art Collection
$240,433
809,045
1,737
269,468
10,390
2,199,505
1
T ota I Assets
$3,530,579
LIABILITIES AND NET ASSETS
Liabilities:
Accounts payable
Accrued salaries
Accrued payroll taxes
Other accrued expenses
Deferred revenue
Notes payable
Total liabilities
$ 9,004
5,813
3,914
2,225
22,892
694.681
$ 738,529
New Assets:
Unrestricted:
Undesignated
Temporarily restricted
Permanently restricted
$2,049,536
140,764
601.750
Total Net Assets
$2,792,050
Total Liabilities and Net Assets
$3,530,579
Dubuque Museum of Art
2005 Board of Trustees
Dubuque Museum of Art
Staff
john K. Schmidt, President
Malltc<l Schmid, Vice Pr('sident
Stephanie Savage, SCOf'{,-lfY
Eel Ulvc. Treasurer
John Chapman, Immediate Pas! President
Edwin Ritts, Jr.
Direc/()r
Diane Sass
Deputy Director
Ed Bahka Alan Bird Susan Butler
Penny Cli.lrk Tim Conlon Kim D,wicl
Jim Etheredge Susan Fdrbcr William Kruse
Randy Lengcling Wi1lter PC'tcrson )c,lnnc Quann
Dave Schaller Don Shine Rill Skemp
Julie Steffen Chuck Stolz M<lrk Wahlert
Chris Wand Nick Yizlnnias
Margaret Guh,.
Director 0/ EduCt1tio17
Stacy Gage
Co//ections ,& Exhibitions Ivl,1I1dgC{
William Parker
A1.1intC17dnCC Specia/isl
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Us PostJge Paid
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