News

By Jane Smith

    The Arts Garage in Delray Beach must present better financial records before its chief public provider will release any more money, the city’s Community Redevelopment Agency board voted unanimously in late January.
    The CRA had committed to providing $68,750 for the fourth quarter of the last financial year, which ended Sept. 30. That amount represents 18 percent of the popular performing arts venue’s budget. The CRA also had allocated a similar amount of $275,000 for the current financial year.
    But the Arts Garage did not follow the deadlines for the fourth-quarter report or for requesting an extension, according to CRA staff. The audits submitted in December for the two previous financial years did not separate the CRA dollars, as was required, Lori Hayward, finance and operations director, told the board.
    Alyona Ushe, Arts Garage president, said, “The first audit is clean.” She told the board that the underlying implications of financial mismanagement are “damaging to us and our reputation.” The day after the CRA meeting, the Arts Garage started an email blitz to the media to correct what it sees as misinformation.
    At the CRA meeting, Ushe apologized for submitting the documents late. “It’s my fault,” she said. She asked for a partial payment.
    CRA Chairman Reggie Cox said no. “This is not an ambush. You’ll have to do some heavy lifting going forward. It’s gut-check time,” he said.
    Ushe received advice from other CRA board members.
    “Your organization needs a strategic plan. You can ride the wave only so long,” said board member Cathy Balestriere. She said the box of checks and invoices that Ushe had dropped off that afternoon was not what the agency needed in terms of financial records.
    The Arts Garage did submit in January an updated audit for the 2013-2014 financial year that complied with CRA rules about accounting separately for the agency’s money, allocated for education and programming expenses.
    But it also contained a management letter that pointed out basic accounting problems, such as: no documentation for expenses, assets, receivables, payroll and the like; no indication that the executive director had approved credit card purchases; using a restricted grant of $200,000 to offset costs that were not allowed; and a bank overdraft of $70,089.
    Brian Rosen, vice president of the Arts Garage board, said the checks for the grant money were cut two days after the financial year changed.
    “We don’t have a lot of fancy spreadsheets,” Dan Schwartz, Arts Garage finance director, told the CRA board. “But we have the checks and accounts to show you.”
    Ushe indicated she could present the financial records in two weeks.
    The Arts Garage also has a major deadline looming on the Ides of March.
    It rents 10,000 square feet from the city for $800 a month. The organization has not raised the money needed to buy the building for $2.5 million. The sale was supposed to close March 15. Its lease also expires on that date.
    Instead, Ushe wants a 10-year lease with an option to purchase. Her letter to the city dated Jan. 15 explains the role the Arts Garage plays in Delray Beach: a $2 million-plus annual economic impact where its patrons pay to attend an Arts Garage show, pay for parking, purchase dinner at a local restaurant and buy dessert after the show.
    To bolster its case, the Arts Garage has started a social media campaign with email blasts to its patrons urging them to contact commissioners and a petition to save the Arts Garage. The petition also is accessible on the organization’s Facebook page. As of late January, nearly 500 people had signed the petition.
    In addition, the Arts Garage has started a money drive on Facebook after the CRA suspended payments. Rosen, the board’s vice president, wrote the Arts Garage has a “clean audit opinion.”
    Last fall, Mayor Cary Glickstein wanted the Arts Garage and the Old School Square to merge because of their arts focus and proximity. Glickstein said back office operations could be combined, the Old School Square could share its liquor license with the Arts Garage and the merger would lessen the burden on taxpayers. The city contributes to both venues.
    But Ushe prefers to remain independent. In her lease-extension request, she said that merging would decrease the amount of grant money available to each organization from state and county sources.
    But Bill Branning, a CRA board member and chairman of Old School Square, offered up this suggestion to his fellow board members: The CRA should buy it. That way, the space would be used for cultural purposes and the purchase would help the city.