A brief, bleak state of the orchestra

Against the dark backdrop of financial crisis and a leadership overhaul in progress, the Philadelphia Orchestra Association met yesterday to present its traditional state-of-the-orchestra snapshot.

The annual meeting, in the Kimmel's Perelman Theater, was briefer than usual.

Finances were sketched out: The orchestra ran a $3.4 million deficit for the fiscal year ended Aug. 31, and the endowment, though bouncing back a bit, is still down substantially.

The volunteer committees raised $1.7 million.

Bylaws were adjusted to suspend the requirement that board members rotate off the board for a year before rejoining - the change intended "to provide continuity in this time of transition," a board member said.

New members were welcomed to the board, old ones thanked. Elise du Pont, who resigned from the board in November, agreed to rejoin.

The meeting adjourned after an hour, presumably so the crisis could be discussed in greater detail by the board, and then by the executive committee.

Both of those sessions were closed to the public.

This year's annual meeting was notable for what it did not cover. The proposed $15 million emergency bridge fund, meant to carry the orchestra through the next two years, came up only in passing.

There was no report from the artistic committee and no presentation from the chairman of the Philly Pops, which is part of the orchestra. Electronic media (recording, Webcasts) were barely mentioned.

No update was provided on the music director search, except when interim chairman Joseph Jacovini said the orchestra needed a "dynamic young music director."

No mention, either, was made of Allison Vulgamore, who is in discussions to become president. Vulgamore announced her decision Tuesday to conclude her tenure with the Atlanta Symphony Orchestra.

What did happen, behind closed doors, was the beginning of a three-year term for new board chairman Richard B. Worley.

In broad strokes, leaders emphatically articulated the seriousness of the orchestra's financial condition.

"We have continued substantial operating losses that have significantly depleted our reserves," said Jacovini, who has acted as interim chairman since January. Of the $3.4 million loss, he said "it was a herculean effort to keep the number at that."

Another loss, perhaps as high as $7.5 million, is projected for the year ending Aug. 31, 2010.

"We understand the problem. We understand that the old model does not work," Jacovini said. "In the face of all the challenges . . . we as an organization made a significant choice. We made a determination that we will not allow this luminous world-class organization to fail."

Interim executive director Frank P. Slattery Jr. praised the artistic quality of the organization - the way the orchestra is playing under chief conductor Charles Dutoit, and "the extraordinary talents of Peter Nero."

Unlike previous years, when the musical leadership made an appearance, neither Nero nor Dutoit attended.

Slattery said the orchestra was in talks with a major corporation "about ways for us to get paid for our product," as well as with a government agency to "touch hundreds of thousands of schoolchildren." He did not elaborate.

Both ventures, if initiated, would "produce significant monies" for the orchestra, he said.

Orchestra chief financial officer Mario Mestichelli reported that the orchestra endowment was at $120 million as of Aug. 31. That's an improvement over the $100 million level to which it had dropped in April, but well south of the $250 million the group previously had hoped it would be operating with by this time.

He said that the orchestra transferred $4 million from unrestricted endowment to cover shortfalls, and that the last of that money would be used up this week or next.

Mayor Nutter made an appearance at the board meeting, an orchestra spokeswoman said, and gave a speech of about five minutes pledging "to help the orchestra through tough times."

No specific monetary assistance from the city was offered, she said.