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RPO Presents 2009-09 Fiscal and Financial Results at Annual Meeting

January 20, 2010

President & CEO Owens Announces Million-Dollar Community Challenge

Rochester, NY– At its Annual Meeting today, Wednesday, January 20, the Rochester Philharmonic Orchestra looked at both the successes and challenges of the past year, reporting on the financial and artistic results of its Fiscal Year 2008-09 ending August 31, 2009, and announced a million-dollar community challenge, $500,000 of which already has been pledged.  The meeting took place at Kilbourn Hall at the Eastman School of Music, with a subsequent reception at Max of Eastman Place.

A musical fanfare by the RPO Brass Quintet opened the Meeting, followed by RPO Board Chair Suzanne Welch calling the Meeting to order and giving preliminary remarks. Courtney Spitz from The Bonadio Group verified the board election results, Board Treasurer Elizabeth Rice presented the financial review, and Music Director Christopher Seaman and Principal Pops Conductor Jeff Tyzik gave brief artistic remarks.  A musical interlude of Rachmaninoff’s Liebesfreud was performed by Joseph Mohan, the 2009 Special Award Winner of the Rochester Philharmonic League’s Young Artist Auditions.  RPO President & CEO Charles Owens took the podium for the President’s Report, followed by concluding remarks from Suzanne Welch.  Questions and answers followed prior to adjournment.

In the context of George Eastman’s vision for the RPO and for the Rochester community, Board Chair Suzanne Welch thanked RPO supporters – which have grown to 4000 members – and reaffirmed the RPO’s commitment to its patrons.  She introduced the newly-elected board, as well as recognized all RPO Board and Honorary Board members, musicians, and staff.  Four key themes were outlined in Welch’s report:
• the 2008-09 Season was characterized by high artistic achievement and wide community engagement
• the recession interrupted the RPO’s strategic path, resulting in an operating deficit for 2008-09
• the RPO responded with cost-cutting and management measures implemented
• despite these challenges, the organization continues to hold fast to its core values and looks ahead to a secure future

RPO Treasurer Elizabeth F. Rice reported that the weak national economy resulted in an operating deficit of $776,000 for the RPO’s 2008-09 fiscal year. To that point, she called the season “A Year of Two Halves,” denoting an “on track” period for ticket revenues from September 1 through early January – when the RPO was tracking at 109% -- then decreasing to 70% of concert goals for the remainder of the season.  Donations to the Annual Campaign were similar; with a net loss of 769 donors, accounting for 11% of the RPO’s donor base.  The “swooning” stock market resulted in a shortfall in endowment earnings.  The RPO responded with revenue-generating and cost-cutting measures, including administrative staff cuts.  However, she noted that despite the difficult economic climate, there was significant growth in that subscription revenue was up 5%, Philharmonics Series revenue grew 1%, Pops ticket revenue grew 10%, summer season ticket revenue grew 45%, corporate support and government funding increased by 10% and 17%, respectively.

Music Director Christopher Seaman reminded the attendees that artistically, the orchestra is at a very high level, and that the financial challenges have not impacted the quality of the many artistic highlights and accomplishments of last year.  While addressing the economic situation, Jeff Tyzik paid tribute to Christopher’s accomplishments, and pointed out additional artistic and community engagement successes.

Following pianist Joseph Mohan’s brief musical interlude, President & CEO Charles Owens took the stage for the President’s Report.  He began with a contextual reference to where the RPO was on September 1, 2008, at the beginning of its fiscal year, moving forward with a three-year Transformation Plan.  The nationwide economic downturn hit the RPO as it did symphony orchestras and arts organizations throughout the country.  In addition to reiterating some financial points, he also shared that by the summer of 2009, it had become clear that a course correction would be necessary to bring the current budget into balance, and in December, the musicians of the RPO approved a package of concessions in wages and benefits totaling $300,000 for the current 2009-10 fiscal year.  (In late December, French hornist and Musicians Union representative David Angus noted that “while the musicians are disappointed to be making concessions to a positive three-year contract ratified just 14 months ago, we understand that the RPO’s current financial challenges are not self-inflicted.  We look forward to returning to the positive trajectory as soon as it is possible.”)

Owens expressed gratitude for the personal demonstration of support from the RPO musicians, conductors, and staff, who this year, have given back a total of $520,000 toward the RPO’s deficit reduction.  Owens also acknowledged the Board and Honorary Board’s Annual Campaign support in 2008-09 of a record-breaking $592,000.  Looking ahead, Owens mentioned the preparation for the multi-year Celebration Beyond Measure, honoring Christopher Seaman during his farewell season in 2010-2011, and looking forward with anticipation to the international Music Director search, as well as transformation of the patron experience with the future addition of the Eastman School of Music’s new wing.

Owens’ final “reveal” came at the end of his remarks, in which he shared that just this week – inspired by the musicians, conductors, and staff of the RPO who have valiantly given back more than a half-million dollars in their salaries and benefits in order to help our organization move forward – a group of anonymous and remarkable donors have pledged $500,000 in matching funds.  These generous commitments will match, dollar-for-dollar, contributions equaling that amount from our community, launching a $1 Million Community Challenge. 

Suzanne Welch concluded the meeting with a quote from Jim Collins, author of Good to Great, after which she commented that “the RPO continues to be on the path to greatness, despite our temporary financial setbacks,” with a reassurance of fiduciary responsibility by the Board, and reiterating her thanks to Rochester’s community support.

 


 

Retiring Board Member:
Ann M. Huston, President, Ann Huston Corporation

New Board Member:
Dr. Kishan J. Pandya, Professor Emeritus of Medicine, University of Rochester School of Medicine & Dentistry
         
Returning Board Members:
Patrick C. Burke, Rochester Regional President, First Niagara Financial Group
Dr. Steven E. Feldon, Director, Flaum Eye Institute, University of Rochester Medical Center
Patrick Fulford, Retired Vice President of Finance, U.S. Customer Operations, Xerox Corporation
Marie Kenton, President, Ketmar Development Corporation
Dawn F. Lipson, Retired New York State Workers Compensation/Disability Benefits Board
Anne Sartori, Consultant, Insiders Network to Colleges
Ingrid A. Stanlis, Partner, Industry Learning and Development, KPMG LLP
Deborah Wilson, Director of Institutional & Foundation Marketing, Cooper/Haims Advisors, LLC
Keith M. Wilson, Executive Vice President & Chief Financial Officer, PAETEC Communications, Inc.


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