Council to Question Arts Center Operator Over $1.5-Million Loss

City Council members are expected to publicly question the operator of the troubled Performing Arts Center for the first time Tuesday, seeking an explanation for why the city-owned facility has lost $1.5 million over the last two years.

The council has asked center Manager Jack Lavin and auditors who recently scrutinized center operations to appear at the evening council meeting.

Lavin, who remains in charge of the facility, could not be reached for comment Friday.

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A report by the accounting firm KPMG Peat Marwick released last month pointed to numerous unprofitable practices at the center, including poor record-keeping and special rental rates. During the past two years, the center has posted losses of about $1.5 million, according to city officials.

Problems pinpointed by auditors also included a practice at the Performing Arts Center of scheduling events without any analysis of how profitable they would be, the report stated. And in some instances, operators agreed to accept lower fees from performers after poor ticket sales, auditors found.

Other problems were numerous discounts and waivers issued without City Council approval, which resulted in the loss of about $100,000. Failure to track concession revenues closely was another issue.

Stan Kleinman, the city’s interim finance director, said the goal of Tuesday’s question-and-answer session is to find ways to turn around the center’s balance sheet.

“There was very little follow-up collection [on money due],” he said. “And they weren’t accounting for a profit and loss on each event. These were bad business practices.”

The Performing Arts Center hosts a variety of events, from political fund-raisers to performances by private jazz bands and ballet troupes. Council members were scheduled to discuss the auditor’s report several weeks ago, but that meeting was canceled because Lavin was on vacation.

Councilman Tom Holden said he will push Tuesday for the city to hire a business manager to replace Lavin as the top manager of the center. Lavin would have to apply for the new post, he said.

“It’s all alarming to me, the lack of accountability,” Holden said.

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Councilmen John Zaragoza and Bedford Pinkard defended Lavin, saying the manager has been hampered by the elimination of several bookkeeping positions over the past couple of years.

“I think we need to tighten the accounting and contract procedures,” Zaragoza said. “But I don’t think we need to replace Jack.”

Pinkard was one of numerous community members who used the center during the nine-month period scrutinized by auditors. His reelection committee opted to pay $101 in catering and equipment fees, rather than a flat $280 room rental for a fund-raiser last year.

Pinkard said several community groups exercised the same money-saving option his committee did. He said some civic events should be subsidized because part of the center’s mission is to give local groups a place to meet and perform.

Citing similar financial problems at the closed Ventura Theatre, Pinkard said the Performing Arts Center will never become an arena for well-known, revenue-generating performers.

“We don’t have that clientele,” Pinkard said. “It’s not going to be a major moneymaker. You’re going to serve the community.”

Zaragoza and Pinkard did not offer specific suggestions for the Performing Arts Center, saying they wanted to meet Tuesday with auditors and Lavin to hear more about the problems.