I think I'd be happy to. The issue which we look at with 1404 such difficulty, if the cuts were to go through, are both personnel and public hours, and obviously both of them could have an impact on the availability of the museum to the very large number of public school students and other young people that the museum serves, both through our education staff. As you may remember, up to several years and then it had been for many decades, we had actually two school teachers from the School District of Philadelphia seconded to the museum. They were actually at the museum. They taught school students. Then when the School District went through it's very difficult budget a few years ago, it had to take back those teachers into the school to teach at the schools themselves. So we have been making up for that difference.
Those two positions have never been restored. We worked very closely with the School District to 1405 maximize the effect of everything we do. As Gail Harrity mentioned, there are not very many alternatives you have when you look to cutting the budget. One is staff and one is program and one is public hours. Each one of those has a potential negative impact on our school programs. Our mission is public service. Our mission is to reach every child that we can. Our mission is to reach every citizen of Philadelphia and to offer Philadelphia and the museum as an experience to every tourist who comes. So any one of these curtailments obviously would have an impact on that. But this is getting more and more difficult. Because I think -- going to another point, if I may, for just a moment, is to say that the corporate sponsors of exhibitions, the private funders who support some education programs through foundations, they do look to the City to help keep the museum's doors open. And if it isn't a public/private partnership, that gives them less incentive to give the support that they give to -- the Atwater Kent 1406 Museum's testimony referred to leverage. It's exactly the same thing in the case of the museum.
My second and final question is very much tied to Councilman Frank DiCicco's observation, which I think is an excellent one. In your last screen there you spoke to the arts as an industry, and in fact that an investment of one dollar equals ultimately $4. To carry his line of thinking -- and you help me out, Councilman Frank DiCicco -- there's a question on what that means if you broke those dollars down between beverages and the hotel food, right, because on the beverage side X percentage go to the Philadelphia Public School System?
I think we'd have to do that calculation for you and get it to you, but we'd be glad to try to do that. I will say that the proprietors of a whole variety of restaurants, not only in the museums's neighborhood, but across the City, we've been getting extraordinary response to 1407 the Dali exhibition and to the influx of visitors and tourists and Philadelphians into the museum and the increase that they have sensed of people dining and having beverages at the same time. So we will try to get you that figure.
We would appreciate that. The detail here has been excellent. But Councilman DiCicco and I have taken it to another finite detail, which would be even more compelling for us. Thank you very, very much. Thank you, Madam Chair.
You're welcome. The Chair recognizes Councilman Rizzo.
Thank you, Madam Chair. We've all started off by paying you a compliment, and I want to do the same. No 23 matter when I speak to someone, via telephone in a foreign place, in another City, if I travel, they don't tell me about the famous 1408 restaurant that they ate at or the cheese steaks. They want to talk about how impressed they were with our museum.
This young man, when he came over to the luncheon, he didn't just eat. He listened. He leaned into my ear and said -- he did eat, but he paid attention also and he reminded of something that I should have remembered, accreditation. Also, if you lose your security people, certain exhibitions are in jeopardy where they're not going to come because they're concerned about their collection. That is very, very important. And I hope the people that aren't knowledgeable about what you do, understand that a minor adjustment in your budget could affect -- I don't know how many stars you have in the museum world, but we wouldn't want to lose the ability to get a collection like Dali and some of the others that you've had which, like you mentioned before, brought more revenue to the City than 1409 all the sports teams combined in Philadelphia. That is very, very important to me. I'd like to end also by thanking you. I'm a board member of the African-American Museum and we all know that that museum is having some difficulties. But they're in recovery. As busy and concerned as you are about your museum, you have stepped forward to try to lend some expertise and try to help where you can to make sure that that other jewel that we have, the African-American Museum here in the City of Philadelphia, can benefit by your experience and knowledge. So again, as a board member, I thank you and thank you for Cheryl's involvement in the board and the meetings and all that we're trying to do there.
Thank you. Mr. Lenfest, I got very curious when we talked about the Capital Budget, so I had 1410 Mr. McPherson get it for me. I see in FY '06 we're budgeted for $465,000. And every year there will be an increase. But it's certainly is nowhere near the $200 million that you mentioned. We're going beyond 2010 when we will probably have less than $5 million in the Capital Budget. That's cumulative from '06 to '11. So with that, I will say to Councilman Nutter, you're being recognized.
Madam President, we just completed a master plan which has been months and months of study of what's needed to restore the museum to its original state. It's a 10-year program in different phases. But it's not just a figure that's pulled out of the air. We can go in great detail. I don't think we have the time today. But we'll be happy to send you a copy of the master plan and you'll see all the research from experts that have gone into it. But it's a long-term plan. It's not an immediate need because 1411 there's no way we could get the funding overnight.
Thank you very much. The Chair recognizes Councilman Nutter.
Thank you, Madam Chair. First, to Ann and Gail and Cheryl and Mr. Lenfest, thank you for being here this afternoon. Sorry that we kept you so late. I just have a couple items. I want to go to the testimony, probably on and then work my way back. What I'd like to better understand is how many visitors did we have at the Art Museum last year?
I'm going to say something like 782,000. I will give you the precise figure, but in that neighborhood. 755,000 says Mr. Rambo, our chief financial officer.
That's pretty close. Do you have any projections on what 1412 you think they'll be this year?
Is that a fairly consistent trend, somewhere north of 750 or so for the past couple of years?
It is. In fact, it has ranged between 750,000, 950,000, and it depends in part on the exhibition and part on weather. We've been extraordinarily fortunate to have a remarkable amount of visibility for the Dali exhibition, thanks to the corporate sponsors' extra support for advertising to the GPTMC. So that is all going into that.
Just to set a little bit of context to that, as we were thrilled with at least the run of it and it spans two Calendar years within the same fiscal year, but I think instructive, if my calculation is correct, I think we probably had down at Lincoln Financial Field this past season, probably two preseason games, I'm going to assume, the eight regulars and we 1413 were fortunate enough to ultimately have the big run to the Super Bowl, which I think got us probably two play-off games, a total of 5 at the facility. 6 I'm going to assume, knowing the 7 rabid Philadelphia sports fans we have here, I 8 think the stadium held somewhere in the 9 neighborhood of about 60, maybe upwards of 10 about 65,000 or at least the Vet held 65. It 11 might be smaller. That puts you somewhere up 12 in the 800 or so thousand neighborhood just in the context of the stadiums. Of course by agreement, we also provide, at least for that one, an excess of about $6 million in operating and maintenance support on a 20-plus year schedule that escalates every five years by about a million dollars or so. When we're finished with that exercise, we'll be at $11 million in annual support for one sports facility. I think it's important to keep some of this in context. Now, I want to go to . You obviously had a study conducted. As Councilwoman Reynolds Brown pointed in her 1414 comments, we've got one dollar spent and $4 of economic activity in the region. Are you aware of any other facility in Philadelphia -- and of course it would be almost an insult to call the Art Museum a facility -- but a venue that has that level of economic impact in Philadelphia?
Well, I think certainly in terms of attendance the Liberty Bell has -- sorry, Mr. Lenfest. It is not clear what that translates to into economic impact, because I believe a fair number of those tourists come in and out of the City in a single day. Unless my colleague, Gail Harrity, is aware of that.
I would only mention that the Convention Center also has a tremendous economic impact. I'm unaware of the number. But the museum works very closely with the Convention Center, and we have together attracted visitors and conventions to the City that have an enormous impact.
I have one further comment. When you compare attendance at the 1415 sports activities, you have to consider who the people are attending, will they stay in the City, will they stay in hotels, will they have dinner here or just go home. Whereas with the museum, when they come in from outside the City they stay in the hotels.
It's a much greater impact for the museum visitor than there is to a sports activity.
Most of the sports activities are a three-plus hour experience, in and out. Now, you've got $219 million in economic activity in FY '04. 3,800 plus full-time equivalent jobs, $15.6 million in tax revenues for the City and the Commonwealth. From Dali itself, $52 million in economic activity in the region and an additional $3.2 million tax revenue generated for the City and the state. These are spectacular numbers. And as you continue to generate revenues for both the City and the 1416 state, you continue to find yourselves in a position of declining funding from the City. Now, I know we went through this last year, but it's always important to maintain the record. We own the Art Museum; is that correct?
Madam Chair, is it possible to have Ms. Reed from the Budget Office?
Director Reed, I'm trying to understand, just from a pure economic standpoint, given the impact that the 1417 Philadelphia Museum of Art has for both the City and the region, the tax revenues generated, the larger economic impact, the job creation, why does the museum continue to find itself under attack by its owner?
Councilman, the Art Museum is falling into the pot with every funded City department and other entity. The Art Museum is not singled out. We are taking $688 million of revenue during the Street Administration.
Do any of our other departments generate anywhere near the tax revenues, the job impact or the economic impact as the Philadelphia Museum of Art, any of them?
I don't know the answer to that question at this time. However, we could find out from the Greater Tourism and Marketing Corporation, because they keep track of those numbers.
I understand that. But you know the operating departments as well as I do. Do you know any other 1418 component of the government that generates numbers like this?
The Mummers' Parade we fund for a mere $300,000 or so and that brings in millions of people.
Well, what's the economic impact of the Mummers' Parade?
Well, Ms. Reed, with every respect, we're engaged in an impact discussion. We know what the Art Museum does, and your response is that you want to put the Mummers' Parade up against the Art Museum?
Well, you asked for a City department. That's one thing that we fund out of the Recreation Budget. We also fund the Afro-American Museum and several others.
I understand 1419 that and I'd be glad to see the economic impact analysis of those. Tell me what the thought process is here, that given all these numbers, given what the museum does, given its prominence, given its history -- and I understand that we have a budgetary situation -- but just tell me what the thinking is that we would -- and demonstrate it through the Five-Year Plan -- that not only is the Art Museum proposed to take this hit, but there is a committed effort to zero out funding for our own Art Museum. Could you explain to me what the thought process is behind that?
As I understand it, the Art Museum is one of the few institutions in this City that has a highly prestigious board of very wealthy people, and that it is assumed to a far greater extent than the Atwater Kent Museum may have an expectation that could raise some funds privately that we cannot continue to fund through tax dollars since in fact our tax income is going down because of the tax cuts. 1420
Is there a belief somewhere within the government that the highly prestigious board members, one of whom happens to be sitting at the table, are not raising any money for the Art Museum?
Not that they're not, but that perhaps they could raise some more, given the City's financial situation.
But we own it. What's our obligation to our own citizens who pay taxes?
Well, I should say that this year we are funding the Art Museum nearly a half million dollars for capital program. We also gave them over a $200,000 productivity bank loan for the Dali show for the out-of-town advertising. So there was other support this year.
What was that number again? You gave them a $240,000 productivity loan, and it's estimated the current projection is $52 million in total economic activity and an additional $3.2 million in tax revenues for the City and the 1421 state. I'd say that's a fairly decent investment. I mean, I wish I could get that kind of return, I don't know, maybe like in the Pension Fund.
I don't care who gets the credit. That's kind of the beauty of it all. I'm a public servant. I do what I do, and when good things happen we all get the benefit of it. I just think that, notwithstanding our challenges, when you have an absolute winner, a bona fide documented cash cow, that you support it. And so we have our fiscal challenges. It's one thing to cut funding at a certain point and maintain it. But the philosophy that because the Art Museum, one of the best museums in the world, has been able to attract a certain prestigious board membership, that the City now takes the position that they should be virtually penalized and have their funding cut because we think that they should do more. 1422 All I'm suggesting to you is, what's our obligation. It's our building. We have a contractual obligation to provide certain services. Isn't that correct?
Yes, we do. I have had a chance to review those agreements. We do not have to fully fund them. We do have to provide support, but not fully fund, according to the Law Department.
Well, we don't have enough time in either of our lifetimes -- or at least for tonight -- to have the debate on the distinction between, we have the obligation to provide it, but we don't have the obligation to fully fund it. What does that mean? We either have the obligation or we don't. I've read the contract as well. I'm not a lawyer, and as much as I love debating the Law Department, sometimes I win, sometimes I lose. Are you now saying that there's a dispute, there's a question under the lease terms as to what our obligations are?
That is the 1423 interpretation of the Law Department. I don't know that there is a dispute.
Well, give me that interpretation again and how does it translate financially?
That there is no 8 guarantee that we will pay the full cost of those services, but that we will make a contribution toward them.
Was that in anticipation of budget hearings or is this 1424 further justification for what the City is doing?
No. I just, since I'm new, try to understand what some of these agreements in other funding issues are, and that was one of the many things I had asked for more information on.
Has the opinion been shared with either the Art Museum or the Council?
Has the opinion been shared with either the Art Museum or City Council?
Do you have any dispute about any of the numbers or figures or calculations?
Well, I used to be head of the Pennsylvania Economy League and we did do economic impact studies of the arts. We did Pittsburgh. We did Philadelphia. It's true that the arts in general -- which I would include the zoo and some other venues in this cultural institution impact, so we cannot discount the white tiger and the mole rat either. They do provide a lot of benefit. They do create a destination. You know, I haven't seen the latest study. I think the one to eight ratio is quite dramatic. I mean, some economic multipliers tend to be more conservative than that. I haven't read the study, looked at the study compared to other studies, so I cannot tell you definitively what I think about that.
And possibly extraordinary as compared to other entities that we support?
I appreciate it. Madam Chair, I would only conclude with in an even stronger fashion the same comments that I made with regard to the Atwater Kent Museum. I know a number of other colleagues who have stated the same. Obviously, we have a ways to go in this budget process, but I think that it's important for this Council to seek to establish a line beyond which we will not go, notwithstanding the latest opinions out of the Law Department. I think that through our work we get to establish a certain opinion ourselves about what our, not only contractual, but I think more importantly our moral obligation is to our own Art Museum, to our Atwater Kent 1427 Museum, to the African-American Museum and to other similar facilities that provide for the very young and the not so young an incredible array of opportunities and learning experiences from which we would never see the same benefit from a whole host of entities that we've supported at much higher dollar commitments. So that's where I'll be in the course of this process. I appreciate it, Madam President.
Thank you, Councilman. The Chair recognizes Councilwoman Brown.
Thank you, Madam President. To follow-up on Councilman Nutter's comment, and since we're offering opinions, I'd like to direct my comments to Mr. Lenfest and other members of the board and acknowledge the fact that the museum has always been a public/private partnership. I will say as long as Blondell Reynolds Brown is a Member of this legislative 1428 body, we will endeavor to ensure that it continues to be a public/private partnership. We know that that works. We know that that's the history. When you read the contract and know that this is a City building, we have to endeavor to figure out a way to, as I said before, work it out. So know that there's a desire on my part to see a continuation of a public/private partnership. Thank you very much. Thank you, Madam Chair.
Thank you. Are there any other comments or questions from Members of the Committee? (No response.)
Seeing none. I thank you all so very much for your patience. I'm sure we'll see you again. Thank you.
This Committee will stand in recess until tomorrow, 1429 Wednesday, March the 23rd at 10:00 a.m. The first department to testify will be the Health Department. Thank you all so very much. Good evening. (Council adjourned at 6:25 p.m.) - - - - 1430 C E R T I F I C A T I O N I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of Tuesday, March 22, 2005, were reported fully and accurately by me, and that this is a correct transcript of the same. RE: COMMITTEE OF THE WHOLE _________________________ Lisa C. Bradley, RPR